Visa (V) 10-K risk factor changes: FY2018 vs FY2017

Increased regulation of the global payments industry, including with respect to interchange reimbursement fees, operating rules, [added: risk management protocols] and [added: other] related practices, could harm our business.

Even though we generally do not receive any revenue related to interchange reimbursement fees in a payment transaction [removed: (those] [added: (in the context of credit and debit transactions, those] fees are paid by the acquirers to the [removed: issuers),] [added: issuers; the reverse is true for certain transactions like ATM),] interchange reimbursement fees are a factor on which we compete with other payments providers and are therefore an important determinant of the volume of transactions we process.

For example, [added: regulations adopted by] the U.S. Federal Reserve [removed: caps] [added: cap] the maximum U.S. debit interchange reimbursement rate received by large financial institutions at 21 cents plus 5 basis points per transaction, plus a possible fraud adjustment of 1 cent.

EU member states have the ability to further [removed: restrict] [added: reduce] these interchange levels within their territories.

[removed: More recently,] [added: For example,] in March 2017, [removed: Argentina's] [added: Argentina’s] central bank passed regulations that cap interchange fees on credit and debit transactions.

[removed: For example, government] [added: Government] regulations or pressure may [added: also] require us to allow other payments networks to support Visa products or services, or to have the other [removed: network's] [added: network’s] functionality or brand marks on our products.

We are also subject to central bank oversight in some markets, [removed: including] [added: including, Brazil, Russia,] the United Kingdom and within the European Union.

[removed: Regulators] [added: Finally, regulators] around the world increasingly take note of each other’s approaches to regulating the payments industry.

[removed: For example, the] [added: The] Reserve Bank of Australia initially capped credit interchange, but subsequently capped debit interchange as well.

Government-imposed restrictions on [added: international] payment systems may prevent us from competing against providers in certain countries, including significant markets such as [removed: China] [added: China, India] and Russia.

[removed: Furthermore, due] [added: Due] to our inability to manage the end-to-end processing of transactions for cards in certain [removed: countries,] [added: countries (e.g., Russia and Thailand),] we depend on our close working relationships with our clients or third-party processors to ensure transactions involving our products are processed effectively.

Co-badging and co-residency regulations may pose additional challenges in markets where Visa competes with national [removed: schemes] [added: networks] for issuance and routing.

Mir and UnionPay have grown rapidly in Russia and China, respectively, and are actively pursuing international expansion [removed: plans.][added: plans, which could potentially lead to regulatory pressures on our international routing rule (which requires that international transactions on Visa cards be routed over VisaNet).]

[removed: Although] [added: Furthermore, although] regulatory barriers shield Mir and UnionPay from competition in Russia and China, respectively, alternate payment providers such as Alipay and WeChat Pay have rapidly expanded into [removed: e-commerce,] [added: ecommerce,] offline, and cross-border payments, which could make it difficult for us to compete even if our license is approved in China.

[removed: Earlier this] [added: Last] year, with strong backing from China’s government, a new digital transaction routing system known as Netlink was established.

In general, national laws that protect domestic [added: providers or] processing may increase our costs; decrease our payments volumes and impact the revenue we generate in those countries; decrease the number of Visa products issued or processed; impede us from utilizing our global processing capabilities and controlling the quality of the services supporting our brands; restrict our activities; limit our growth and the ability to introduce new products, services and innovations; force us to leave countries or prevent us from entering new markets; and create new competitors, all of which could harm our business.

[removed: We] [added: As discussed in more detail below, we] may face differing rules and regulations in matters like interchange reimbursement rates, preferred routing, domestic processing requirements, currency conversion, point-of-sale transaction rules and practices, privacy, data use or protection, and associated product technology.

As a result, the Visa [added: operating] rules and our other contractual commitments may differ from country to country or by product offering.

Our compliance programs and policies are designed to support our compliance with a wide array of regulations and laws, such as anti-money laundering, [removed: sanctions and] anti-corruption, [added: competition, privacy] and [added: sanctions, and] we continually enhance our compliance programs as regulations evolve.

For example, the [removed: GDPR, which becomes effective in May 2018,] [added: GDPR] extends the scope of the EU data protection law to all companies processing data of EU residents, regardless of the company’s location.

The law requires companies to meet new requirements regarding the handling of personal [removed: data, including new rights such as the “portability” of personal] data.

Although we have an extensive [added: data privacy] program [removed: underway to address] [added: that addresses the] GDPR requirements, our [added: ongoing] efforts to comply with GDPR and other privacy and data protection laws [added: (such as the new California Consumer Privacy Act effective as of January 2020 and the Brazilian General Data Protection Law effective as of February 2020)] may entail substantial expenses, may divert resources from other initiatives and projects, and could limit the services we are able to offer.

In addition, changes in existing laws, such as [removed: recent proposals for fundamental] [added: future regulatory guidance on the] U.S. [added: Tax Cuts] and [removed: international] [added: Jobs Act,] tax [removed: reform] [added: law changes in the United States] or [added: foreign jurisdictions, or] those resulting from the Base Erosion and Profit Shifting project being conducted by the Organization for Economic Cooperation and Development, may also [removed: increase] [added: materially affect] our effective tax rate.

See also Note [removed: 18—Income] [added: 16—Income] Taxes to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

We are involved in numerous litigation matters, investigations, and proceedings asserted by civil litigants, governments, and enforcement bodies [removed: alleging] [added: alleging, among other things,] violations of competition and antitrust law, consumer protection law, and intellectual property [removed: law, among others] [added: law] (these are referred to as [removed: "actions"] [added: “actions”] in this section).

Details of the most significant actions we face are described more fully in Note [removed: 19—Legal] [added: 17—Legal] Matters to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

In the event we are found liable in any material action, particularly in a large class action [removed: lawsuit or] [added: lawsuit, such as one involving] an antitrust claim entitling the plaintiff to treble damages, or [added: we incur liability] arising from a government investigation, we may be required to pay significant awards, settlements, or fines.

In addition, settlement terms, judgments, or pressures resulting from actions may harm our business by requiring us to [removed: modify] [added: modify, among other things,] the default interchange reimbursement rates we set, [removed: revise] the Visa [removed: rules,] [added: operating rules] or the way in which we enforce [removed: our] [added: those] rules, [removed: modify] our fees or pricing, or [removed: modify] the way we do business.

The outcome of these actions may also influence regulators, investigators, governments, or civil litigants in the same or other jurisdictions, which may lead to [removed: the assertion of] additional actions against Visa.

Finally, we are required by some of our commercial agreements to indemnify other entities for litigation [removed: asserted] [added: brought] against them, even if Visa is not a defendant.

For certain actions like [removed: the] [added: those that are] U.S. covered litigation [removed: and the] [added: or] VE territory covered litigation, [removed: which are] [added: as] described in Note [removed: 3—U.S.] [added: 2—U.S.] and Europe Retrospective Responsibility Plans and Note [removed: 19—Legal] [added: 17—Legal] Matters to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report, we have certain [added: financial] protections [removed: as provided in] [added: pursuant to] the respective retrospective responsibility plans.

The two retrospective responsibility plans are different in the protections they provide and the mechanisms by which we are [removed: able to either fund settlements or judgments in the case of the U.S. covered litigation or recoup covered losses in the case of the VE territory covered litigation.][added: protected.]

As technology evolves, new competitors [removed: emerge] [added: or methods of payment emerge,] and existing [removed: clients,] [added: clients] and competitors assume different roles.

Our products compete with cash, checks, electronic funds, virtual currency payments, global or multi-regional networks, other [added: domestic and] closed-loop payments systems, and alternate payment providers primarily focused on enabling payments through ecommerce and mobile channels.

As the global payments space becomes more complex, we face increasing competition from our clients, emerging payment providers, and other digital and technology [removed: companies.][added: companies that have developed payments systems enabled through online activity in ecommerce and mobile channels.]

[removed: Additionally, some of our] [added: Our] competitors may develop substantially better technology, [added: have] more widely adopted delivery channels or have greater financial resources.

They may offer more [added: effective,] innovative or a wider range of programs, products, and services.

Some of our competitors, including American Express, Discover, private-label card networks, virtual currency providers, technology companies that enable the exchange of digital assets, and certain alternate payments [removed: systems,] [added: systems like Alipay and WeChat Pay,] operate closed-loop payments systems, with direct connections to both merchants and consumers.

Similarly, regulation in Europe under PSD2 and the [removed: IFR, and in the United Kingdom through the PSR,] [added: IFR] may require us to open up access to, and allow participation in, our network to additional participants, and reduce the infrastructure investment and regulatory burden on potential competitors.

| • | competitors, clients and others are developing alternate payment networks or [removed: products] [added: products, such as mobile payment services, ecommerce payment services, P2P payment services, faster payment initiatives and payment services] that [added: permit ACH or direct debits from consumer checking accounts, that] could [added: reduce our role or otherwise] disintermediate us from the transaction processing or the value-added services we provide to support such processing. Examples include initiatives from The Clearing House, an association comprised of large financial institutions that is developing its own faster payments system, and Early Warning Services, which operates Zelle, a bank-offered alternative network that provides another platform for faster funds or real-time payments across a variety of payment types, including P2P, corporate and government disbursement, bill pay and deposit check transactions; |

More recently, countries in Latin America have also adopted interchange caps.

In March 2018, Brazil adopted interchange caps on debit transactions.

For example, governments such as in India may use regulation to further drive down merchant discount rates, which could negatively affect the economics of our transactions.

Similarly, the Payment System Regulator’s review of the acquiring market in the United Kingdom could lead to additional regulatory pressure on our business.

With increased merchant lobbying, we could also begin to see regulatory interest in network fees.

In addition, the European Union’s requirement to separate scheme and processing adds costs and impacts the execution of our commercial, innovation and product strategies.

As we develop new product and service offerings to support our clients, the potential scope of regulatory obligations and scrutiny could also increase.

For instance, new products and capabilities, including tokenization, and mobile and push payments, could bring increased licensing or authorization requirements in the countries where the product or capability is offered.

Recent regulatory initiatives in India also suggest growing nationalistic priorities, including a recent data localization mandate passed by the government, which has cost implications for us and could affect our ability to effectively compete with domestic payment providers.

Furthermore, regional groups of countries, such as the Gulf Cooperation Countries in the Middle East and a number of countries in Southeast Asia, are considering, or may consider, efforts to restrict our participation in the processing of regional transactions.

The African Development Bank has also indicated an interest in supporting national payment systems in its efforts to expand financial inclusion and strengthen regional financial stability.

Geopolitical events, including sanctions, trade tensions or other types of activities could potentially intensify this activity, which could adversely affect our business.

In addition, earlier this year, India adopted a data localization law that requires all payment system operators to store domestic transaction data only in India.

Such data localization requirements have cost implications for us, impact our ability to utilize the efficiencies and value of our global network, and could affect our strategy.

In addition, we face intense competitive pressure on the prices we charge our financial institution clients.

For example, in the United States, certain stakeholders have raised concerns regarding how payment security standards and rules may impact the cost of payment card acceptance.

In addition to ongoing litigation related to the U.S. migration to EMV-capable cards and point-of-sale terminals, U.S. merchant-affiliated groups and processors have expressed concerns regarding the EMV certification process and some policymakers have concerns about the roles of industry bodies such as EMVCo and the Payment Card Industry Security Standards Council in the development of payment card standards.

The current trade environment reduces the likelihood of having our Bank Card Clearing Institution application in China approved.

This and other Brexit-related issues may require changes to our legal entity structure in the United Kingdom and the European Union.

As a result, we expect new services and technologies to continue to emerge and evolve.

For instance, on June 1, 2018, our European authorization systems suffered a partial service disruption that prevented many cardholders from using Visa’s European systems for payments for several hours that day.

Although that service disruption was caused by a switch malfunction, rather than a cyber-attack, and was limited to the European authorization system, which has since been decommissioned with the processing migration to our global platform, the fact remains that our systems are highly technical and complex and are not immune from errors and vulnerabilities.

In some cases, the mitigation efforts may be dependent on third parties who may not deliver to the required contractual standards or whose hardware, software or network services may be subject to error, defect, delay, or outage.

In addition, the European Union’s requirement to separate scheme and processing adds costs and continues to impact the efficient integration of Visa Europe; the execution of our commercial, innovation and product strategies; our ability to provide effective account holder services; the amount of data available for use in fraud and risk systems; and loyalty services.

Additionally, regulation in an individual country could expand.

For these reasons, increased global regulation of the payments industry may make our products less desirable, diminish our ability to compete, reduce our transaction volumes, and harm our business.

Many of these providers have developed payments systems enabled through online activity in ecommerce and mobile channels, and are seeking to expand into other channels that compete with or replace our products and services.

| | |

| --- | --- |

| • | competition may increase from alternate types of payment services, such as mobile payment services, ecommerce payment services, P2P payment services, faster payment initiatives and payment services that permit ACH or direct debits from consumer checking accounts; |

| • | we may need to adjust our local rules and practices to remain competitive amidst evolving regulatory landscapes and competitors’ practices; |

| • | we may be asked to develop or customize certain aspects of our payment services for use by consumers, processors or other third parties, thereby increasing operational costs; |

For example, in the United States, the cost of payment card acceptance has emerged in the context of payment security.

A number of merchant trade associations claim that EMV cards without PIN cardholder verification are not worth the investment.

The October 2015 liability shift and ongoing transition to EMV resulted in calls for a PIN verification mandate.

U.S. merchant-affiliated groups and processors have expressed concerns regarding the EMV certification process.

Some policymakers have called upon U.S. competition authorities to consider potential

concerns arising from the roles of industry bodies such as EMVCo and the Payment Card Industry Security Standards Council.

For example, in the United States, the EMV migration has been resisted by certain merchants, leading to conflicts and litigation concerning the timing and scope of the liability shift, chargebacks, and debit routing, among others.

We may not succeed in addressing consumer confusion and brand disintermediation due to the challenges of evolving digital form factors and ecommerce technologies.

If we or our partners fail to adapt or keep pace with new technologies in the payments

As these threats continue to evolve and increase, we may be required to devote significant additional resources in order to modify and enhance our security controls and to identify and remediate any security vulnerabilities.

If we are sued in connection with any data security breach or system failure, we could be involved in protracted litigation.

If unsuccessful in defending such lawsuits, we may have to pay damages or change our business practices, any of which could harm our business.

In addition, any reputational damage resulting from a data security breach or system failure at one or more of our clients, merchants or other third parties could decrease the use and acceptance of our products, which could harm our payments volume, revenues and future growth prospects.

Finally, a breach or failure may also subject Visa to additional regulations or governmental or regulatory investigations, which could result in significant compliance costs, fines or enforcement actions, or potential restrictions imposed by regulators on our ability to process transactions.

Failure to maintain interoperability with Visa Europe's systems during the integration could damage the business and global perception of our brands.

In June 2016, we acquired Visa Europe.

While Visa Europe's systems are being integrated with our legacy systems, we will continue to maintain mostly separate authorization, clearing, and settlement systems.

As a result, we have to ensure that the two systems can process every transaction involving both of our territories, regardless of where the transaction originates.

Visa Europe's independent system operations could present challenges to our business in

the event of increasing costs or difficulties in maintaining the interoperability of our respective systems during the integration phase.

The separation of payment card scheme and processing may also exacerbate this risk.

Any inconsistency in the payment processing services and products between Visa Europe and our legacy operations could negatively affect the experience of consumers using Visa products globally.

Moreover, we are beginning the process of migrating European activity onto VisaNet's systems in 2018 and successfully integrating our systems is expected to be time consuming, costly and technologically challenging.

Failure to authorize, clear, and settle inter-territory transactions quickly and accurately could harm our business and impair the global perception of our brands.

For example, we believe the acquisition of Visa Europe positions us to create additional value through increased scale, efficiencies realized by the integration of both businesses, and benefits related to Visa Europe’s transition from an association to a for-profit enterprise, although there can be no guarantee that we will realize these benefits.

[removed: As a result of the reorganization, during fiscal 2017, we recorded] [added: | ▪ |] a [added: $1.5 billion] non-recurring, non-cash income tax provision [removed: of $1.5 billion] primarily related to the elimination of deferred tax balances originally recognized upon the acquisition of Visa [removed: Europe.][added: Europe; and |]

See Note [removed: 8—Debt] [added: 6—Debt] to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

Our financial results for fiscal [added: 2018,] 2017 [added: and 2016] include the impact of several significant one-time items.

| | [removed: Fiscal] Year [removed: Ended] [added: ended] September 30, [added: 2018] | | | | | | | | | | | | [removed: % Change(1)] | | | | | [added: | | | | |]

| | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2017] [added: 2018] vs. [removed: 2016] [added: 2017] | | | [removed: 2016] [added: 2017] vs. [removed: 2015] [added: 2016] | |

| Net income, as reported | $ | [removed: 6,699] [added: 10,301] | | | $ | [removed: 5,991] [added: 6,699] | | | $ | [removed: 6,328] [added: 5,991] | | | [removed: 12] [added: 54] | % | | [removed: (5] [added: 12] | [removed: )%] [added: %] |

| Diluted earnings per share, as [removed: reported(2)] [added: reported] | $ | [removed: 2.80] [added: 4.42] | | | $ | [removed: 2.48] [added: 2.80] | | | $ | [removed: 2.58] [added: 2.48] | | | [removed: 13] [added: 58] | % | | [removed: (4] [added: 13] | [removed: )%] [added: %] |

| Net income, as [removed: adjusted(3)] [added: adjusted(2)] | $ | [removed: 8,335] [added: 10,729] | | | $ | [removed: 6,862] [added: 8,335] | | | $ | [removed: 6,438] [added: 6,862] | | | [removed: 21] [added: 29] | % | | [removed: 7] [added: 21] | % |

| Diluted earnings per share, as [removed: adjusted(2),(3)] [added: adjusted(2)] | $ | [removed: 3.48] [added: 4.61] | | | $ | [removed: 2.84] [added: 3.48] | | | $ | [removed: 2.62] [added: 2.84] | | | [removed: 22] [added: 32] | % | | [removed: 8] [added: 22] | % |

| [removed: (3)] [added: (2)] | Adjusted net income and adjusted diluted earnings per share in fiscal [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] exclude the impact of certain significant items that we believe are not indicative of our operating performance, as they were either non-recurring or had no cash impact. For a full reconciliation of our adjusted financial results, see tables in Adjusted financial results below. |

We recorded net operating revenues of [removed: $18.4] [added: $20.6] billion for fiscal [removed: 2017,] [added: 2018,] an increase of [removed: 22%] [added: 12%] over the prior [removed: year] [added: year,] primarily reflecting [removed: the operating revenues of Visa Europe and] continued growth in [added: processed transactions,] nominal payments [removed: volume, processed transactions] [added: volume] and nominal cross-border volume.

The effect of exchange rate movements, as partially mitigated by our hedging program, resulted in an approximately [removed: negative] one [removed: and a half] percentage point [added: positive] impact to our [removed: total] [added: net] operating [added: revenue] growth.

Total operating expenses for fiscal [removed: 2017] [added: 2018] were [removed: $6.2] [added: $7.7] billion, compared to [removed: $7.2] [added: $6.2] billion in fiscal [removed: 2016.][added: 2017.]

[removed: The decrease over the prior year was] [added: Total operating expenses decreased in fiscal 2017] primarily due to the $1.9 billion loss [removed: in fiscal 2016 resulting from] [added: related to] the effective settlement of the Framework Agreement between [removed: us] [added: Visa] and Visa Europe [removed: upon consummation of the transaction, offset by the inclusion of Visa Europe's operating expenses following the acquisition.][added: recorded during fiscal 2016.]

See Note [removed: 18—Income Taxes] [added: 6—Debt] to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

Our financial results for fiscal [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] reflect the impact of certain significant items that we do not believe are indicative of our ongoing operating performance in the prior or future years, as they were either non-recurring or had no cash impact.

| • | Elimination of deferred tax balances. During [removed: the second quarter of] fiscal 2017, in connection with our legal entity reorganization, we eliminated deferred tax balances originally recognized upon the acquisition of Visa Europe, resulting in the recognition of a non-recurring, non-cash income tax provision of $1.5 billion. |

| [removed: •] [added: ▪] | [removed: Charitable contribution.] During [removed: the second quarter of] fiscal 2017, associated with our legal entity reorganization, we recognized a [removed: non-recurring,] non-cash general and administrative expense of $192 million, before tax, related to the charitable donation of Visa Inc. shares that were acquired as part of the Visa Europe acquisition and held as treasury stock. Net of the related cash tax benefit of $71 million, determined by applying applicable tax rates, adjusted net income increased by $121 million. |

| • | Severance cost. [removed: In the fourth quarter of] [added: During] fiscal 2016, we recorded a $110 million charge for severance costs related to personnel reductions, including planned reductions at Visa Europe. Although we routinely record severance expenses, these charges are larger than any past quarterly accrual due to the acquisition and integration of Visa Europe. Net of related tax benefit of $38 million, determined by applying applicable tax rates, the adjustment to net income was an increase of $72 million. |

| • | Remeasurement of deferred tax liability. [removed: In September] [added: During fiscal] 2016, we recorded a non-cash, non-recurring $88 million gain upon the remeasurement of a deferred tax liability, recorded upon the acquisition of Visa Europe, to reflect a tax rate change in the United Kingdom. |

| • | Visa Europe Framework Agreement loss. [removed: Upon] [added: During fiscal 2016, upon] consummation of the [added: Visa Europe] transaction, [removed: on June 21, 2016,] we recorded a non-recurring loss of $1.9 billion, before tax, in operating expense resulting from the effective settlement of the Framework Agreement between us and Visa Europe. Net of related tax benefit of $693 million, determined by applying applicable federal and state tax rates, the adjustment to net income was an increase of $1.2 billion. |

| • | Revaluation of Visa Europe put option. During [removed: the first quarter of] fiscal [removed: 2016 and the third quarter of fiscal 2015,] [added: 2016,] we recorded a decrease of $255 million [removed: and an increase of $110 million, respectively,] in the fair value of the Visa Europe put option, resulting in the recognition of non-cash income [removed: and expense] in other non-operating income. [removed: These amounts are] [added: This amount is] not subject to income tax and therefore [removed: have] [added: has] no impact on our reported income tax provision. |

Adjusted operating expenses, operating margin, non-operating [removed: (expense) income,] income [removed: taxes,] [added: (expense), income tax provision,] net income and diluted earnings per share are non-GAAP financial measures and should not be relied upon as substitutes for measures calculated in accordance with U.S. GAAP.

The following tables reconcile our as-reported financial measures calculated in accordance with U.S. GAAP to the respective non-GAAP adjusted financial measures for fiscal [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015:][added: 2016:]

| (in millions, except percentages and per share data) | Operating Expenses | | | | Operating Margin (1),(2) | | | Non-operating [removed: (Expense)] Income [added: (Expense)] | | | | Income [removed: Taxes] [added: Tax Provision] | | | | Net Income | | | | Diluted Earnings Per Share(2) | | |

| (in millions, except percentages and per share data) | Operating Expenses | | | | Operating Margin (1),(2) | | | Non-operating [removed: (Expense)] Income [added: (Expense)] | | | | Income [removed: Taxes] [added: Tax Provision] | | | | Net Income | | | | Diluted Earnings Per [removed: Share (2),(3)] [added: Share(2)] | | |

[removed: During fiscal 2017, we repurchased 77] [added: Of the 63] million [removed: shares of our class A common stock] [added: shares, 58 million were repurchased] in the open market using [removed: $6.9] [added: $7.2] billion of cash on hand.

As of September 30, [removed: 2017,] [added: 2018,] we had remaining authorized funds of [removed: $3.9] [added: $4.2] billion.

All share repurchase programs authorized prior to [removed: April 2017] [added: January 2018] have been completed.

See Note [removed: 13—Stockholders'] [added: 11—Stockholders’] Equity to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

Nominal payments volume over the prior year posted [added: low] double-digit growth in the United States, driven mainly by consumer [removed: credit.][added: credit and debit.]

[removed: Growth on] [added: On] a constant-dollar basis, which excludes the impact of exchange rate movements, [removed: on] our international payments volume [removed: was not significantly different from] growth [removed: on a nominal-dollar basis for the 12 months ended June 30, 2017(1) and] [added: rate] was [removed: 13%] [added: 11%] for the 12 months ended June 30, [removed: 2016(1).][added: 2018.]

Growth in processed transactions [added: for fiscal 2017] reflects the inclusion of Visa [removed: Europe's] [added: Europe’s] processed transactions for the [removed: 12 months ended September 30, 2017 and] [added: full year compared to] three months [removed: ended September 30,] [added: in fiscal] 2016.

The following [removed: tables] [added: tables(2)] present nominal payments [removed: volume.(2)][added: and cash volume:]

| | United States | | | | | | | | | | | [removed: International] [added: International(7)] | | | | | | | | | | | Visa [removed: Inc.] [added: Inc.(7)] | | | | | | | | | |

| Consumer credit | $ | 1,309 | | | $ | 1,079 | | | 21 | % | | $ | [removed: 2,224] [added: 2,177] | | | $ | 1,720 | | | [removed: 29] [added: 27] | % | | $ | [removed: 3,533] [added: 3,486] | | | $ | 2,799 | | | [removed: 26] [added: 25] | % |

| Cash volume | [removed: 543] [added: 544] | | | | 520 | | | | 5 | % | | [removed: 2,357] [added: 2,348] | | | | 1,775 | | | | [removed: 33] [added: 32] | % | | [removed: 2,900] [added: 2,892] | | | | 2,294 | | | | 26 | % |

| Consumer debit(3) | [removed: 1,320] [added: 1,373] | | | | [removed: 1,201] [added: 1,320] | | | | [removed: 10] [added: 4] | % | | [removed: 454] [added: 1,491] | | | | [removed: 462] [added: 454] | | | | [removed: (2] [added: 229] | [removed: )%] [added: %] | | [removed: 1,774] [added: 2,864] | | | | [removed: 1,663] [added: 1,774] | | | | [removed: 7] [added: 61] | % |

The following table presents nominal and constant payments [added: and cash] volume growth.(2)

| | [removed: International] [added: International(7)] | | | | | | | | | | | | Visa [removed: Inc.] [added: Inc.(7)] | | | | | | | | | | |

U.S. Tax Reform Legislation.

On December 22, 2017, the U.S. government enacted comprehensive tax reform legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”).

The Tax Act transitions the U.S. tax system to a new territorial system and lowers the statutory federal corporate income tax rate.

As a result of the reduction in the federal corporate income tax rate, we remeasured our net deferred tax liabilities as of the enactment date and the remeasurement resulted in a one-time, non-cash tax benefit of $1.1 billion and was recorded in the year ended September 30, 2018.

In transitioning to the new territorial system, the Tax Act requires us to include certain untaxed foreign earnings of non-U.S. subsidiaries in our fiscal 2018 taxable income.

This tax, referred to as the “transition tax”, was estimated to be $1.1 billion and was recorded in the year ended September 30, 2018.

See Note 16—Income Taxes to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data.

Financial overview.

| | For the Years Ended September 30, | | | | | | | | | | | | % Change(1) | | | | |

Highlights for fiscal 2018.

Our business performance during fiscal 2018 reflects solid global consumer spending growth, supported by favorable U.S. economic conditions and tempered by volatility in some emerging markets.

The increase over the prior year was primarily driven by a higher litigation provision and continued investments to support our business growth.

| • | Charitable contributions |

| ▪ | During fiscal 2018, we donated available-for-sale investment securities to the Visa Foundation and recognized a non-cash general and administrative expense of $195 million, before tax, and recorded $193 million of realized gain on the donation of these investments as non-operating income. Net of the related cash tax benefit of $51 million, determined by applying applicable tax rates, adjusted net income decreased by $49 million. |

| • | Litigation provision. During fiscal 2018, we recorded a litigation provision of $600 million and related tax benefits of $137 million associated with the interchange multidistrict litigation. The tax impact is determined by applying applicable federal and state tax rates to the litigation provision. Under the U.S. retrospective responsibility plan, we recover the monetary liabilities related to the U.S. covered litigation through a reduction to the conversion rate of our class B common stock to shares of class A common stock. |

| • | Remeasurement of deferred tax balances. During fiscal 2018, in connection with the Tax Act’s reduction of the corporate income tax rate, we remeasured our net deferred tax liabilities as of the enactment date, resulting in the recognition of a non-recurring, non-cash income tax benefit of $1.1 billion. |

| • | Transition tax on foreign earnings. During fiscal 2018, in connection with the Tax Act’s requirement that we include certain untaxed foreign earnings of non-U.S. subsidiaries in our fiscal 2018 taxable income, we recorded a one-time transition tax estimated to be approximately $1.1 billion. |

| As reported | $ | 7,655 | | | 63 | % | | $ | (148 | ) | | $ | 2,505 | | | $ | 10,301 | | | $ | 4.42 | |

| Charitable contribution | (195 | | ) | | 1 | % | | (193 | | ) | | 51 | | | | (49 | | ) | | (0.02 | | ) |

| Litigation provision | (600 | | ) | | 3 | % | | — | | | | 137 | | | | 463 | | | | 0.20 | | |

| Remeasurement of deferred tax balances | — | | | | — | % | | — | | | | 1,133 | | | | (1,133 | | ) | | (0.49 | | ) |

| Transition tax on foreign earnings | — | | | | — | % | | — | | | | (1,147 | | ) | | 1,147 | | | | 0.49 | | |

| As adjusted | $ | 6,860 | | | 67 | % | | $ | (341 | ) | | $ | 2,679 | | | $ | 10,729 | | | $ | 4.61 | |

| (in millions, except percentages and per share data) | Operating Expenses | | | | Operating Margin (1),(2) | | | Non-operating Income (Expense) | | | | Income Tax Provision | | | | Net Income | | | | Diluted Earnings Per Share(2) | | |

| (1) | Operating margin is calculated as operating income divided by net operating revenues. |

| (2) | Figures in the table may not recalculate exactly due to rounding. Operating margin, diluted earnings per share and their respective totals are calculated based on unrounded numbers. |

Interchange multidistrict litigation.

During fiscal 2018, we recorded an additional accrual of $600 million to address claims associated with the interchange multidistrict litigation, resulting in an accrued litigation balance related to U.S. covered litigation of $1.4 billion at September 30, 2018.

We also deposited $600 million of operating cash into the U.S. litigation escrow account.

See Note 2—U.S. and Europe Retrospective Responsibility Plans and Note 17—Legal Matters to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data.

Reduction in as-converted shares.

During fiscal 2018, total as-converted class A common stock was reduced by 63 million shares at an average price of $124.29 per share.

Of the 63 million shares, 58 million were repurchased in the open market using $7.2 billion of operating cash on hand.

Additionally, in June 2018, we deposited $600 million of operating cash into the litigation escrow account previously established under the U.S. retrospective responsibility plan.

Also, we recovered $56 million of VE territory covered losses in accordance with the Europe retrospective responsibility plan during fiscal 2018.

The deposit and recovery have the same economic effect on earnings per share as repurchasing our class A common stock, because they reduce the class B common stock conversion rate and the UK&I and Europe preferred stock conversion rates and consequently, reduce the as-converted class A common stock share count.

See Note 2—U.S. and Europe Retrospective Responsibility Plans and Note 11—Stockholders’ Equity to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data.

In January 2018, our board of directors authorized an additional $7.5 billion share repurchase program.

As of September 30, 2018, the program had remaining authorized funds of $4.2 billion for share repurchase.

See Note 11—Stockholders’ Equity to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data.

Overall economic conditions.

Our business performance during fiscal 2017 reflects continued uneven economic growth around the world.

Legal entity reorganization.

In February 2017, we completed a reorganization of Visa Europe and certain other legal entities to align our corporate structure to the geographic jurisdictions in which we conduct business operations.

Associated with this reorganization, the newly-formed Visa Foundation received all Visa Inc. shares held by Visa Europe, which were previously recorded as treasury stock.

Debt issuance.

In September 2017, we issued fixed-rate senior notes in an aggregate principal amount of $2.5 billion, with maturities ranging between 5 and 30 years.

Subsequent to our fiscal year-end, in October 2017, we used the majority of the proceeds from this new debt to redeem the $1.75 billion of senior notes that was scheduled to mature in December 2017.

Financial highlights.

| (2) | The per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the second quarter of fiscal 2015. |

During fiscal 2015, we recognized a tax benefit of $296 million resulting from the resolution of uncertain tax positions with taxing authorities.

Of the $296 million benefit, $239 million relates to prior fiscal years.

| | Fiscal 2017 | | | | | | | | | | | | | | | | | | | | | |

| | Fiscal 2016 | | | | | | | | | | | | | | | | | | | | | |

| | Fiscal 2015 | | | | | | | | | | | | | | | | | | | | | |

| As reported | $ | 4,816 | | | 65 | % | | $ | (69 | ) | | $ | 2,667 | | | $ | 6,328 | | | $ | 2.58 | |

| Revaluation of Visa Europe put option | — | | | | — | % | | 110 | | | | — | | | | 110 | | | | 0.04 | | |

| As adjusted | $ | 4,816 | | | 65 | % | | $ | 41 | | | $ | 2,667 | | | $ | 6,438 | | | $ | 2.62 | |

| (3) | The per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the second quarter of fiscal 2015. |

Common stock repurchases.

Nominal international payments volume growth was positively impacted due to the inclusion of nominal payments volume related to Visa Europe for the 12 months ended June 30, 2017(1).

| Consumer debit(3) | 1,372 | | | | 1,320 | | | | 4 | % | | 1,545 | | | | 454 | | | | 241 | % | | 2,917 | | | | 1,774 | | | | 64 | % |

| Commercial(4) | 506 | | | | 450 | | | | 12 | % | | 309 | | | | 147 | | | | 110 | % | | 815 | | | | 598 | | | | 36 | % |

| Total nominal payments volume(5) | $ | 3,187 | | | $ | 2,849 | | | 12 | % | | $ | 4,078 | | | $ | 2,321 | | | 76 | % | | $ | 7,265 | | | $ | 5,170 | | | 41 | % |

| Total nominal volume(5),(6) | $ | 3,730 | | | $ | 3,369 | | | 11 | % | | $ | 6,435 | | | $ | 4,095 | | | 57 | % | | $ | 10,165 | | | $ | 7,464 | | | 36 | % |

| | 2016 | | | | 2015 | | | | % Change | | | 2016 | | | | 2015 | | | | % Change | | | 2016 | | | | 2015 | | | | % Change | |

| Consumer credit | $ | 1,079 | | | $ | 980 | | | 10 | % | | $ | 1,720 | | | $ | 1,676 | | | 3 | % | | $ | 2,799 | | | $ | 2,656 | | | 5 | % |

| Commercial(4) | 450 | | | | 412 | | | | 9 | % | | 147 | | | | 150 | | | | (2 | )% | | 598 | | | | 562 | | | | 6 | % |

| Total nominal payments volume(5) | $ | 2,849 | | | $ | 2,594 | | | 10 | % | | $ | 2,321 | | | $ | 2,288 | | | 1 | % | | $ | 5,170 | | | $ | 4,882 | | | 6 | % |

| Cash volume | 520 | | | | 491 | | | | 6 | % | | 1,775 | | | | 2,015 | | | | (12 | )% | | 2,294 | | | | 2,506 | | | | (8 | )% |

| Total nominal volume(5),(6) | $ | 3,369 | | | $ | 3,085 | | | 9 | % | | $ | 4,095 | | | $ | 4,303 | | | (5 | )% | | $ | 7,464 | | | $ | 7,388 | | | 1 | % |

| (3) | As a result of changes in Russian National Payment System law, we transitioned the processing of Russian domestic transactions to the Russian NSPK during the third quarter of fiscal 2015. The number of transactions processed by the Visa network does not reflect Russian domestic transactions processed after this transition. |

Visa Inc. Fiscal 2017, 2016 and 2015

| • | Personnel expenses increased in fiscal 2017 driven by higher incentive compensation, combined with continued increase in headcount reflecting our strategy to invest for future growth. The increase in fiscal 2016 was primarily due to a severance charge related to personnel reductions including planned reductions at Visa Europe. This increase was partially offset by a decrease in contractor costs, an increase in personnel costs that were invested in and capitalized as part of technology development projects and lower incentive compensation. |

| • | Network and processing expenses increased in fiscal 2017 and 2016 due to fees associated with the processing of Russian domestic transactions that transitioned to the Russian NSPK during the third quarter of fiscal 2015. |

| • | Professional fees increased in fiscal 2016 primarily due to transaction costs incurred in connection with our acquisition of Visa Europe in 2016. |

| • | Depreciation and amortization expenses increased in fiscal 2017 primarily due to additional depreciation from our ongoing investments in technology assets and infrastructure to support our digital solutions and core business initiatives. |

| • | General and administrative expenses increased in fiscal 2017 primarily due to $192 million of expense related to the Visa Inc. shares held by Visa Europe that were received by the newly-formed Visa Foundation, as well as an increase in expense to provide product benefits to our account holders as a result of business growth. The increase in 2016 was mainly due to costs incurred related to our acquisition of Visa Europe in 2016 as well as net foreign exchange losses incurred as a result of changes in the U.S. dollar exchange rate against other currencies in which we transact. |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

[removed: Risks] [added: We are exposed to risks] from foreign currency exchange rate fluctuations [added: that] are primarily related to [removed: adverse] changes in the functional currency value of revenues generated from foreign currency-denominated transactions and [removed: adverse] changes in the functional currency value of payments in foreign currencies.

The aggregate notional amounts of our foreign currency forward contracts outstanding in our exchange rate risk management program, including contracts not designated for cash flow hedge accounting, were [removed: $3.1] [added: $3.7] billion and [removed: $2.7] [added: $3.1] billion at September 30, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively.

The aggregate notional amount outstanding at September 30, [removed: 2017] [added: 2018] is fully consistent with our strategy and treasury policy aimed at reducing foreign exchange risk below a predetermined and approved threshold.

The effect of a hypothetical 10% increase or decrease in the value of the functional currencies is estimated to create an additional fair value gain of approximately [removed: $210] [added: $280] million or loss of approximately [removed: $250] [added: $350] million, respectively, on our foreign currency forward contracts outstanding at September 30, [removed: 2017.][added: 2018.]

See Note 1—Summary of Significant Accounting Policies and Note [removed: 11—Derivative] [added: 9—Derivative] and Non-derivative Financial Instruments to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

On the third anniversary of the [removed: Closing,] [added: closing of the Visa Europe transaction,] we will pay [added: an] additional purchase consideration of [removed: €1] [added: €1.0] billion, plus 4.0% compounded annual interest.

See Note [removed: 2—Visa Europe] [added: 1—Summary of Significant Accounting Policies and Note 9—Derivative and Non-derivative Financial Instruments] to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

A hypothetical 10% decline in the U.S. dollar against the euro, compared to the exchange rate at September 30, [removed: 2017,] [added: 2018,] would increase the deferred purchase consideration liability by $130 million, including interest.

A hypothetical 10% change in the euro against the U.S. dollar compared to the exchange rate at September 30, [removed: 2017,] [added: 2018,] would result in a foreign currency translation adjustment of [removed: $2] [added: $2.0] billion.

We designate a portion of our euro-denominated deferred consideration liability as a net investment hedge against a portion of the foreign exchange rate exposure of our net investment of $18.8 billion in Visa [removed: Europe.][added: Europe as of September 30, 2018.]

Changes in the value of the deferred cash consideration liability, attributable to a change in exchange rates at the end of each reporting period, partially offset the foreign currency translation of the [removed: Company's] [added: Company’s] net investment recorded in accumulated other comprehensive income in the [removed: Company's] [added: Company’s] consolidated balance [removed: sheet.][added: sheets.]

The fair value balances of our fixed-rate investment securities at September 30, [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] were [removed: $6.4] [added: $5.1] billion and [removed: $5.1] [added: $6.4] billion, respectively.

A hypothetical 100 basis point increase or decrease in interest rates would create an estimated change in fair value of approximately [removed: $29] [added: $31] million on our [removed: fixed-rate] investment securities at September 30, [removed: 2017.][added: 2018.]

The fair value balances of our adjustable-rate debt securities were [removed: $1.8] [added: $3.5] billion and [removed: $2.2] [added: $1.8] billion at September 30, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively.

At September 30, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] our U.S. defined benefit pension plan assets were $1.1 billion at each year end, and projected benefit obligations were [removed: $0.9] [added: $0.8] billion and [removed: $1.1] [added: $0.9] billion, respectively.

A material adverse decline in the value of pension plan assets and/or [added: in] the discount rate for benefit obligations would result in a decrease in the funded status of the pension plan, an increase in pension cost and an increase in required funding.

A hypothetical 10% decrease in the value of pension plan assets and a 1% decrease in the discount rate would result in an aggregate decrease of approximately [removed: $241] [added: $206] million in the funded status and an increase of approximately [removed: $44] [added: $35] million in pension cost.

At September 30, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] our non-U.S. defined benefit pension plan assets were [removed: $433 million and $415 million, respectively,] [added: $0.4 billion at each year end,] and projected benefit obligations were [removed: $433 million] [added: $0.5 billion] and [removed: $474 million,] [added: $0.4 billion,] respectively.

A hypothetical 10% decrease in the value of pension plan assets and a 1% decrease in the discount rate would result in an aggregate decrease of approximately [removed: $157] [added: $148] million in the funded status and an increase of approximately [removed: $11] [added: $13] million in pension cost.

We will continue to monitor the performance of pension plan assets and market conditions as we evaluate the amount of our contribution to the pension plan for fiscal [removed: 2018,] [added: 2019,] if any, which would be made in September [removed: 2018.][added: 2019.]

A material adverse decline in the value of pension plan assets and/or in the discount rate for benefit obligations would result in a decrease in the funded status of the pension plan, an increase in pension cost and an increase in required funding.

We are exposed to adverse fluctuations in foreign currency exchange rates.

[removed: Our advanced transaction processing network, VisaNet, enables authorization, clearing,] [added: VisaNet authorizes, clears] and [removed: settlement] [added: settles a diverse range] of payment [removed: transactions] [added: transactions,] and allows us to provide our financial institution and merchant clients with a wide range of products, platforms, and value-added services.

Our mission [removed: is] [added: —] to connect the world through the most innovative, reliable, and secure [removed: payment network –] [added: payments network,] enabling individuals, businesses, and economies to [removed: thrive.][added: thrive — is underpinned by seven strategic pillars:]

[removed: ][added: ]

[removed: Visa] [added: Visa’s] Network

[removed: ][added: ]

| [removed: (3)] [added: (1)] | Transacted on our payment products for the 12 months ended June 30, [removed: 2017] [added: 2018] |

We [removed: are not a bank and] do not issue cards, extend credit, or set rates and fees for account holders [removed: on] [added: of] Visa products.

[removed: Visa does] [added: We do] not earn revenues from, or bear credit risk with respect to, interest or fees paid by account holders on Visa products.

[removed: ][added: ]

Anchored on the notion that Visa is [removed: "everywhere] [added: “everywhere] you want to [removed: be,"] [added: be,” we believe] the brand stands for acceptance, security, convenience, speed, and reliability.

In recognition of its strength among clients and consumers, the Visa brand is ranked highly in a number of [removed: widely recognized] brand studies, including BrandZ Top 100 Most Valuable Global Brands Study, Forbes World’s Most Valuable Brands, [removed: Interbrand's] [added: Interbrand’s] Best Global Brands, and YouGov Brand Index.

Our brand strength helps us to deliver added value to financial institutions, merchants, [removed: and other] clients [added: and partners] through compelling brand expressions, [removed: expanded] [added: a wide-range of] products and services, and innovative marketing efforts.

[removed: Visa has] [added: We have] focused [removed: its] [added: many of our] investments, partnerships, and expertise to enhance the security of our network, and to enable consumers and businesses to pay and be paid with confidence.

As [removed: payments] [added: payment] methods evolve, we are focused on [added: the following] four [removed: primary] areas:

| • | Protecting payment data with a payments architecture that complies with industry [removed: standards;] [added: standards] |

| • | Rendering [removed: the use of] sensitive payment data useless by deploying technologies such as [removed: the] [added: EMV® chip,] EMV [removed: chip] [added: tokenization,] and [removed: tokenization;] [added: encryption] |

| • | Using predictive analytics, [added: artificial] intelligence, and insights [added: in an effort] to identify and prevent fraud before it [removed: happens; and] [added: happens] |

| • | Empowering consumers to actively protect their own financial information and [removed: transactions.] [added: transactions] |

[removed: ][added: ]

[removed: ][added: ]

[removed: | (2) |] [added: (1)] Please see Item [removed: 7—Management's] [added: 7—Management’s] Discussion and Analysis of Financial Condition and Results of Operations for a reconciliation of our adjusted [removed: financial results. |]

| [removed: (3)] [added: (2)] | For the 12 months ended June 30, [removed: 2017,] [added: 2018,] upon which fiscal [removed: 2017] [added: 2018] service revenues are based. |

Visa is [removed: primarily] a technology company.

How We Work with Partners – [added: Global] Innovation [removed: Centers,] [added: Network,] Visa Developer [removed: Program,] [added: Platform,] Certifications, and Startups

By providing access to Visa capabilities through [removed: an open network of] APIs, the Visa Developer Platform [removed: allows] [added: is designed to enable] global partners to transform ideas into new digital [removed: commerce experiences.][added: commerce, payment, or related experiences or solutions.]

[removed: Visa makes minority] [added: We also make] investments in companies around the world that we believe [removed: will] [added: may] further our vision and strategic objectives, support deeper engagement with key partners, [removed: and] [added: or] expand access to payment solutions worldwide.

Debit cards enable cardholders to transact [removed: –] [added: —] in person, online, or via mobile [removed: –] [added: —] without needing cash or checks and without accessing a line of credit.

Visa does not extend credit; however, we provide combinations of card benefits, including technology, authorization, fraud tools, and brand support that financial institutions use to [removed: support and] enable their credit products.

[removed: ][added: ]

[removed: Commercial:] [added: Business Solutions:] We offer a portfolio of [removed: commercial] [added: business] payment solutions including [added: small business,] corporate (travel) cards, purchasing cards, virtual accounts, and disbursement accounts covering [removed: all] [added: most] major industry [removed: segments.][added: segments around the world.]

[removed: The commercial category is a portfolio of] [added: Business] solutions [added: are] designed to bring efficiency, controls, and automation to [added: small businesses,] commercial and government payment [removed: processes] [added: processes,] ranging from employee travel to fully integrated, invoice-based payables.

VisaNet is built on a [removed: centralized architecture, which] [added: high-performance architecture that] allows us to analyze each authorization we process in real time and provide value-added processing services such as risk scoring and tokenization.

It provides the infrastructure for delivering innovation and other payment system enhancements for domestic [removed: payment systems] [added: payments] and cross-border international transactions globally.

Visa Checkout: Visa Checkout offers consumers an expedited and secure payment experience for online and mobile [removed: transactions wherever Visa Checkout is offered.][added: transactions.]

[removed: Visa Checkout helps merchants attain higher rates of completed purchases from their consumers, a] [added: This is] particularly important [removed: feature] as digital commerce [removed: shifts] [added: continues to shift] from desktop devices to mobile devices, where shoppers have [removed: been less likely to complete purchases from] [added: higher abandonment rates of] their [added: items in their] shopping carts.

Visa Direct: Visa Direct is [removed: Visa’s real-time “push” payments] [added: our push payment] platform that [added: facilitates fund transfers by our financial institution clients which] allows businesses, governments, and consumers to [removed: use the Visa network] [added: utilize VisaNet processing capabilities] to transfer funds from an originating account to another [added: account] via [removed: a debit, prepaid, or credit] card [removed: number.][added: credentials.]

This [added: global] platform enables faster payments solutions for a range of new use cases, including [removed: person-to-person (P2P),] [added: P2P, B2B and B2C] disbursements, [removed: bill pay,] [added: cross-border remittances] and [removed: micro merchant payments.][added: bill pay.]

[removed: Issuers,] [added: Global growth for Visa Direct means enabling] acquirers, processors, and merchants [removed: are able] to leverage [removed: our] [added: their] existing network connections to build new services, capabilities, and [removed: solutions.][added: solutions with global scale and reach.]

[removed: Additionally, in] [added: In certain] emerging markets, push payments [removed: enable mobile applications to] allow consumers to use their [added: enabled] mobile [removed: device] [added: applications] to “push” money to a business account [removed: via a] [added: conveniently using an alias (e.g.] QR [removed: code] [added: code),] for payment of goods and services.

Visa’s [removed: scan-and-pay] [added: QR code scan-to-pay] functionality enables low-cost, [removed: low-barrier] [added: quick to market] alternatives for promoting digital payment acceptance [removed: for] [added: at] small [added: and medium size] merchants.

Sixty years ago, in September 1958, the first BankAmericard credit card was issued in Fresno, California.

BankAmericard became Visa in 1976 and expanded globally.

Ten years ago, in March 2008, Visa Inc. completed the largest initial public offering at that time on the New York Stock Exchange.

These milestones have helped establish Visa as one of the world’s leading payments technology companies.

Though Visa has evolved and grown over the course of the last six decades, our fundamental business model has remained the same:

| • | We provide transaction processing services (primarily authorization, clearing and settlement) to our financial institution and merchant clients through VisaNet, our global processing platform. During fiscal 2018, we saw 182 billion payments and cash transactions with Visa’s brand, equating to an average of 500 million transactions a day. Of the 182 billion total transactions, 124.3 billion were processed by Visa. |

| • | We offer a wide range of Visa-branded payment products, which our financial institution clients use to develop and offer core business solutions, credit, debit, prepaid and cash access programs for account holders (individuals, businesses and government entities). Our scale and reach are made possible by a network of 15,900 financial institution clients that issue Visa-branded products. During fiscal 2018, Visa’s total payments and cash volume grew to $11.2 trillion and more than 3.3 billion cards were available worldwide to be used at nearly 54 million business and merchant locations. |

| • | We provide other value-added services to our clients, including fraud and risk management, debit issuer processing, loyalty services, dispute management, digital services like tokenization, as well as consulting and analytics. |

| • | We manage and promote our brands to the benefit of our clients and partners through advertising, promotional and sponsorship initiatives with the Olympic Games, FIFA and the National Football League, among others. We also use these sponsorship assets to showcase our payment innovations. |

In recent years, we have evolved our organization to accelerate the migration of digital payments across new channels including ecommerce, mobile and wearables.

| • | We have adopted new digital payment and security technologies, such as contactless and tokenization. |

| • | We have accelerated the pace of change in digital payments by making application programming interfaces (APIs) available in an effort to increase access to our network, products and services, offering innovation opportunities at our ten global innovation network locations, and building partnerships with new players, such as financial technology companies, commonly known as fintechs. |

| (2) | As of June 30, 2018 |

| (3) | As of September 30, 2018 |

Two years ago, our industry reached a milestone when digital payments surpassed cash payments worldwide for the first time.

Despite this growth, we have a significant opportunity to displace cash payments.

In 2018, approximately $17 trillion of payments were conducted using cash and checks.

There is additional opportunity among new payment flows, including person-to-person (P2P), business-to-business (B2B), business-to-consumer (B2C) and government-to-consumer (G2C) payments.

Our four-party model seeks to facilitate secure, reliable and convenient transactions between financial institutions, merchants and account holders through our advanced transaction processing network, VisaNet.

In recent years, we have broadened our network model to incorporate fintechs in an effort to deliver additional value to clients and consumers.

As digital payments evolve, we are increasingly engaging new partners, including messaging platforms, technology providers, and device manufacturers to capture new payment flows.

We believe our network is core to the growth of our business and the expansion of digital commerce globally.

Account holder and merchant relationships are managed primarily by our financial institution clients and merchant acquirers, including processors and independent service organizations.

Visa is not a financial institution.

Strategic Focus

Visa’s vision — to be the best way to pay and be paid, for everyone, everywhere — guides our purpose.

Transform Technology

In recent years, we have shifted our proprietary technology architecture to a more open architecture across our software, hardware and networking platforms.

The Visa Developer Platform provides application developers with access to certain of Visa’s products, services and technology via APIs, in an effort to enable business partners to create new commerce experiences and increase the speed and depth of payment innovations that leverage Visa’s products, services and technology.

Champion Security

Leverage our World-class Brand

Develop the Best Talent

Visa’s employees are one of our most important assets.

Visa’s approximately 17,000 employees in 119 locations across the world embody our vision and drive our growth.

As a truly global enterprise with the integration of Visa Europe, we are adding new talent and expertise to Visa.

At the same time, Visa is building a culture of empowered leadership.

This focus is intended to provide functional and market leaders greater autonomy and authority to respond quickly and decisively to the needs of our clients and innovate to capture new digital commerce opportunities.

Drive Digital

Visa transactions today take place across a variety of devices and transaction types.

Visa has developed various products, partnerships and platforms in an effort to enable fast and secure commerce on cards, phones, laptops and other form factors.

Visa is a global payments technology company that enables fast, secure and reliable electronic payments across more than 200 countries and territories.

We facilitate global commerce through the transfer of value and information among a global network of consumers, merchants, financial institutions, businesses, strategic partners, and government entities.

To deliver on this mission, we are focused on seven strategic pillars:

Our focus, expertise, and assets have enabled Visa to become one of the world’s largest retail electronic payments networks based on payments volume and number of transactions.

Visa connects millions of consumers and businesses every day through the power of our network.

| (1) | As of September 30, 2017 |

| (2) | As of June 30, 2017 |

Visa operates in a four party model, which includes card issuing financial institutions, acquirers, and merchants.

Generally, our financial institution clients are responsible for managing account holder and merchant relationships.

Visa Brand

Payment Security

Fiscal 2017 Key Statistics (including Visa Europe)(1)

| (1) | Figures and period-over-period percentages reflect the inclusion of Visa Europe for the full year of fiscal 2017. We acquired Visa Europe on June 21, 2016. |

In fiscal 2017, we made significant progress on integrating Visa Europe into the broader Visa group following our completion of the acquisition in June 2016.

We streamlined and integrated our European functions with the global Visa organization and bolstered the European leadership team.

We invested in launching a suite of digital products, including Visa Checkout and Visa Commerce Network, and entered into new strategic partnerships, including Klarna and Paypal, to spur innovation and drive usage and acceptance.

We made significant progress in our multi-year effort to harmonize our respective technology systems and prepare for European client migrations onto VisaNet beginning in fiscal 2018.

Along with our new innovation center in London, we believe these efforts will help bring more enhanced capabilities as well as provide greater scale and additional levels of cybersecurity for our European clients.

In addition, we made significant progress in entering into new commercial agreements with our European clients to transition the business from the prior association business model to a for-profit model.

These new commercial arrangements have led to an increase in client incentives as we have replaced the rebates in effect under the prior model.

Technology Transformation

In fiscal 2015, we embarked on a multi-year journey to transform our use of technology.

We have increased our technology employee footprint by more than 2,000 globally over the past three years, including nearly 1,000 new college graduates, replacing a significant percentage of our contractor and vendor spend.

We are making steady progress on our technology strategic roadmap, resulting in enhanced services in the payments ecosystem and positive impacts to our infrastructure.

Since the launch of Visa’s Developer Platform (VDP) in fiscal 2016, we have made our application program interfaces (APIs) available to our developers, clients, and partners.

VDP offers them access to Visa technology, services, and tools, and provides safe testing environments for the development of new digital payments and commerce solutions.

We added new services to enable clients to develop support for tokenized transactions and create new and innovative solutions in mobile, ecommerce, and digital face-to-face transactions.

Cybersecurity remains a top focus, and in fiscal 2016 we launched our Threat Intelligence Fusion Platform, a cyber command and control center that provides integrated cybersecurity operations to further protect our data and assets.

In fiscal 2017, we continued to embed security earlier in the software development lifecycle to further strengthen our security posture.

New open technologies have been added systematically to our infrastructure and platform components.

We continue to bolster the resiliency of our infrastructure and application services to provide high availability of our client services.

To drive new solutions in the payments space and accelerate the proliferation of safe and fast digital payments, we opened a new innovation center in London in fiscal 2017.

Our innovation centers foster collaboration with our financial institution clients, merchants, partners, and developers across the regions to spur the creation of the next generation of payments and commerce applications and solutions.

Visa’s Everywhere Initiative is an innovation program in over 40 countries designed to generate and harness ideas within the start-up community to solve business problems, influence Visa's product development, and support Visa's clients.

Beyond payment processing, we provide comprehensive data management solutions, consulting and analytics support, and integration capabilities.

We support financial institutions, partners in the accounts payable space, and technology companies as they build and expand their commercial payment platforms.

VisaNet authorizes, clears, and settles transactions processed by Visa, excluding transactions within Europe, which are routed through different software and hardware platforms in the United Kingdom (UK) to perform authorization, clearing, and settlement in Europe.

VisaNet consists of multiple synchronized processing centers that are linked by a global telecommunications network and engineered for minimal downtime and uninterrupted connectivity.

We are in the process of integrating Visa Europe's processing systems with VisaNet.

Until that process is completed, we will continue to maintain the current authorization, clearing, and settlement systems in Europe while ensuring interoperability between such systems and VisaNet.

Refer to Note [removed: 19—Legal] [added: 17—Legal] Matters to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

For the fiscal year ended September 30, [removed: 2017][added: 2018]

[removed: ][added: ]

Indicate by check mark whether the registrant has submitted [removed: electronically and posted on its corporate website, if any,] [added: electronically,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

| Non-accelerated filer o [removed: (Do not check if a smaller reporting company)] | [removed: |] Emerging growth company o | [added: |]

The aggregate market value of the registrant’s class A common stock, par value $0.0001 per share, held by non-affiliates (using the New York Stock Exchange closing price as of March [removed: 31, 2017,] [added: 29, 2018,] the last business day of the registrant’s most recently completed second fiscal quarter) was approximately [removed: $164.1] [added: $214.1] billion.

As of November [removed: 10, 2017,] [added: 9, 2018,] there were [removed: 1,813,463,251] [added: 1,759,797,999] shares outstanding of the registrant’s class A common stock, par value $0.0001 per share, 245,513,385 shares outstanding of the registrant’s class B common stock, par value $0.0001 per share, and [removed: 12,665,935] [added: 11,706,272] shares outstanding of the registrant’s class C common stock, par value $0.0001 per share.

Portions of the Registrant’s Proxy Statement for the [removed: 2018] [added: 2019] Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein.

Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the Registrant’s fiscal year ended September 30, [removed: 2017.][added: 2018.]

| Item 1 | [removed: [Business](#s95ED593739B054C8A635EDD7F1CE38F7)] [added: [Business](#sFDC5DA58EFEC506A82C8D919D50D7421)] | [removed: [4](#s95ED593739B054C8A635EDD7F1CE38F7)] [added: [4](#sFDC5DA58EFEC506A82C8D919D50D7421)] |

| Item 1A | [Risk [removed: Factors](#sF942A912D0F0503B8B533D3451C64C0F)] [added: Factors](#sB36C6B3184D05DB2AF0737D1AB1E67DE)] | [removed: [18](#sF942A912D0F0503B8B533D3451C64C0F)] [added: [18](#sB36C6B3184D05DB2AF0737D1AB1E67DE)] |

| Item 1B | [Unresolved Staff [removed: Comments](#sF32F733B0D1456FE95846C6F91B71336)] [added: Comments](#sBD044A492E455D649F47D417A84BBE9F)] | [removed: [28](#sF32F733B0D1456FE95846C6F91B71336)] [added: [29](#sBD044A492E455D649F47D417A84BBE9F)] |

| Item 2 | [removed: [Properties](#s598591A9D5B458B58C4CF42A399FC303)] [added: [Properties](#sA609C0B600DE5E6A8801132FCE54678B)] | [removed: [29](#s598591A9D5B458B58C4CF42A399FC303)] [added: [29](#sA609C0B600DE5E6A8801132FCE54678B)] |

| Item 3 | [Legal [removed: Proceedings](#sD22ECCA8D5C0595E87AEEFFD505E2D5B)] [added: Proceedings](#s975616B8840D51DDA756A337CBF352AA)] | [removed: [29](#sD22ECCA8D5C0595E87AEEFFD505E2D5B)] [added: [29](#s975616B8840D51DDA756A337CBF352AA)] |

| Item 4 | [Mine Safety [removed: Disclosures](#sA1A3182158105745AA1A065B7D02FB65)] [added: Disclosures](#sD6B79076BAEA5C1886CD70828083834E)] | [removed: [29](#sA1A3182158105745AA1A065B7D02FB65)] [added: [29](#sD6B79076BAEA5C1886CD70828083834E)] |

| Item 5 | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s0A7B004326A65D8B97B838D7C5EAA77B)] [added: Securities](#s55307714D1B752B19FD0E8243F4CA340)] | [removed: [30](#s0A7B004326A65D8B97B838D7C5EAA77B)] [added: [30](#s55307714D1B752B19FD0E8243F4CA340)] |

| Item 6 | [Selected Financial [removed: Data](#s84BF2634E40658D2B62EE12F0C77ACAF)] [added: Data](#s5BA6C801735459CA9EAFE6135B116286)] | [removed: [32](#s84BF2634E40658D2B62EE12F0C77ACAF)] [added: [32](#s5BA6C801735459CA9EAFE6135B116286)] |

| Item 7 | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s6D8D66981E2653DA892EEFBCE4586FF4)] [added: Operations](#sDA086A660872503F942A70F34A296CB6)] | [removed: [33](#s6D8D66981E2653DA892EEFBCE4586FF4)] [added: [33](#sDA086A660872503F942A70F34A296CB6)] |

| Item 7A | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sC981603F166259D29F8D49ED88F80643)] [added: Risk](#s778ACEE88E965C4DBE918405D22648CD)] | [removed: [50](#sC981603F166259D29F8D49ED88F80643)] [added: [51](#s778ACEE88E965C4DBE918405D22648CD)] |

| Item 8 | [Financial Statements and Supplementary [removed: Data](#s7956CFE8F79E51CC8364DF3D200DF130)] [added: Data](#s71668B3F15AF591E9B46C9DD2E29B706)] | [removed: [52](#s7956CFE8F79E51CC8364DF3D200DF130)] [added: [53](#s71668B3F15AF591E9B46C9DD2E29B706)] |

| Item 9 | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s826F417E57FB5AA3BD4A746B2A4E3F4E)] [added: Disclosure](#sD2714CE8D34A5B8486A951EDE063F3BF)] | [removed: [114](#s826F417E57FB5AA3BD4A746B2A4E3F4E)] [added: [109](#sD2714CE8D34A5B8486A951EDE063F3BF)] |

| Item 9A | [Controls and [removed: Procedures](#sAE8FA7D4D6EE5D239BA981300F382782)] [added: Procedures](#s765BD2892E9B577F929913D240E8C66B)] | [removed: [114](#sAE8FA7D4D6EE5D239BA981300F382782)] [added: [109](#s765BD2892E9B577F929913D240E8C66B)] |

| Item 9B | [Other [removed: Information](#s66B9A1A2CEA8515D93EFEB94F9E99706)] [added: Information](#sE80AFF3165BE5F28AD9F003631D25D03)] | [removed: [114](#s66B9A1A2CEA8515D93EFEB94F9E99706)] [added: [109](#sE80AFF3165BE5F28AD9F003631D25D03)] |

| [PART [removed: III](#sBD5366B53BC35272BBDBAC27181F0ED4)] [added: III](#sEE0FD8F9756F580EBA97EB5F37103621)] | | |

| Item 10 | [Directors, Executive Officers and Corporate [removed: Governance](#sD8239864B81159FC971ADF32E39CC135)] [added: Governance](#s1809E6324C0A5D7D9DB32CD47D4FC485)] | [removed: [115](#sD8239864B81159FC971ADF32E39CC135)] [added: [110](#s1809E6324C0A5D7D9DB32CD47D4FC485)] |

| Item 11 | [Executive [removed: Compensation](#sEF1D1C2B485B5D9BA39C787B566624F5)] [added: Compensation](#s2B3AAA240F9450D28F24354335ED22B7)] | [removed: [115](#sEF1D1C2B485B5D9BA39C787B566624F5)] [added: [110](#s2B3AAA240F9450D28F24354335ED22B7)] |

| Item 12 | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s570B4306DB035D4CB9C6DD6F2AD3D87A)] [added: Matters](#s991DFE50635F51958372C4C4BF74AD93)] | [removed: [115](#s570B4306DB035D4CB9C6DD6F2AD3D87A)] [added: [110](#s991DFE50635F51958372C4C4BF74AD93)] |

| Item 13 | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s5EC4EF526350596D9A517B393FF0D5B0)] [added: Independence](#s7052819BE773590CB07C345B0832D6F2)] | [removed: [115](#s5EC4EF526350596D9A517B393FF0D5B0)] [added: [110](#s7052819BE773590CB07C345B0832D6F2)] |

| Item 14 | [Principal Accounting Fees and [removed: Services](#s8530B0C6FDF15F6A92E9FF64D6C60509)] [added: Services](#s75710489ACD856C9AA4876F35DA6D9A5)] | [removed: [115](#s8530B0C6FDF15F6A92E9FF64D6C60509)] [added: [110](#s75710489ACD856C9AA4876F35DA6D9A5)] |

| Item 15 | [Exhibits, Financial Statement [removed: Schedules](#s2484AB0828A85CEFBE9083BB82020CD6)] [added: Schedules](#sEB78929EBEA352DFA9825DF555B468F6)] | [removed: [116](#s2484AB0828A85CEFBE9083BB82020CD6)] [added: [111](#sEB78929EBEA352DFA9825DF555B468F6)] |

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, our future operations, prospects, developments, strategies and growth of our business; [removed: integration of Visa Europe, including the migration of European activity to VisaNet and] anticipated [removed: benefits for our European clients; anticipated] expansion of our products in certain countries; industry developments; expectations regarding litigation matters, investigations and proceedings; timing and amount of stock repurchases; sufficiency of sources of liquidity and funding; effectiveness of our risk management programs; and expectations regarding the impact of recent accounting pronouncements on our consolidated financial statements.

10-K 1 v093018.htm 10-K

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

| [PART I](#sDC03E42EC5BC506B8E3B45ECF4084B4E) | | |

| [PART II](#s3187AE9E582759C0B4CC880253B2E72E) | | |

| [PART IV](#sEDB97D2DCC765C7598E29B715F117FB6) | | |

10-K 1 v093017.htm 10-K

| [PART I](#s7BD35915C53A515D98EF117994CA2E28) | | |

| [PART II](#sAA69D779F90E555686402D7AC0090F61) | | |

| [PART IV](#sEE5ADD5024075F0C8FD2BF2E3F4D4B1A) | | |

At September 30, [removed: 2017,] [added: 2018,] we owned or leased [removed: 100] [added: 115] offices in [removed: 69] [added: 72] countries around the world.

In addition, we [removed: own three data] [added: owned or leased a total of four global] processing centers [added: located] in the United [removed: States and the United Kingdom, and we lease three data processing centers in Japan,] [added: States,] Singapore and the United Kingdom.

At November [removed: 10, 2017,] [added: 9, 2018,] we had 362 stockholders of record of our class A common stock.

There were [removed: 1,604] [added: 1,537] and [removed: 608] [added: 559] holders of record of our class B and C common stock, respectively, as of November [removed: 10, 2017.][added: 9, 2018.]

[removed: During the fiscal years ended September 30, 2017 and 2016, we paid the following] [added: On October 16, 2018, our board of directors declared a] quarterly cash [removed: dividends] [added: dividend of $0.25] per share of [removed: our] class A common stock (determined in the case of class B and C common stock and series B and C preferred [removed: stock,] [added: stock] on an as-converted basis) [added: payable on December 4, 2018,] to [removed: all] holders of record [added: as] of [added: November 16, 2018 of] our common and preferred [removed: stock on the respective record dates.][added: stock.]

The table below sets forth our purchases of common stock during the quarter ended September 30, [removed: 2017.][added: 2018.]

| (1) | Includes [removed: 16,235] [added: 5,246] shares of class A common stock withheld at an average price of [removed: $99.15] [added: $140.71] per share (per the terms of grants under [removed: the Visa] [added: our] 2007 Equity Incentive Compensation Plan) to offset tax withholding obligations that occur upon vesting and release of restricted shares. |

| (3) | Our board of directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit. In [removed: April 2017,] [added: January 2018,] our board of directors authorized a share repurchase program for [removed: $5.0] [added: $7.5] billion. This authorization has no expiration date. All share repurchase programs authorized prior to [removed: April 2017] [added: January 2018] have been completed. |

The table below presents information as of September 30, [removed: 2017,] [added: 2018,] for the Visa 2007 Equity Incentive Compensation Plan (the [removed: "EIP")] [added: “EIP”)] and the Visa Inc. Employee Stock Purchase Plan (the [removed: "ESPP"),] [added: “ESPP”),] which were approved by our stockholders.

For a description of the awards issued under the EIP and the ESPP, see Note [removed: 15—Share-based] [added: 13—Share-based] Compensation to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

| (1) | The maximum number of shares issuable as of September 30, [removed: 2017] [added: 2018] consisted of [removed: 7,115,876] [added: 5,788,840] outstanding options, [removed: 4,673,701] [added: 5,204,454] outstanding restricted stock units and [removed: 937,675] [added: 999,416] outstanding performance shares under the EIP and [removed: 353,980] [added: 408,433] purchase rights outstanding under the ESPP. |

| July 1-31, 2018 | 2,767,789 | | | $ | 138.90 | | | 2,762,543 | | | $ | 5,406,314,588 | |

| August 1-31, 2018 | 4,898,688 | | | $ | 141.55 | | | 4,898,688 | | | $ | 4,712,814,749 | |

| September 1-30, 2018 | 3,869,153 | | | $ | 147.30 | | | 3,869,153 | | | $ | 4,142,815,994 | |

| Total | 11,535,630 | | | $ | 142.84 | | | 11,530,384 | | | | | |

| Equity compensation plans approved by stockholders | 12,401,143 | | (1) | $ | 75.30 | | (2) | 162,313,945 | | (3) |

| (3) | As of September 30, 2018, 145 million shares and 17 million shares remain available for issuance under the EIP and the ESPP, respectively. |

Price Range of Common Stock

The following table sets forth the intra-day high and low sale prices for our class A common stock in each of our last eight fiscal quarters:

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Fiscal 2017 | High | | | | Low | | |

| First Quarter | $ | 83.96 | | | $ | 75.17 | |

| Second Quarter | $ | 92.05 | | | $ | 78.49 | |

| Third Quarter | $ | 96.60 | | | $ | 88.13 | |

| Fourth Quarter | $ | 106.84 | | | $ | 93.19 | |

| Fiscal 2016 | High | | | | Low | | |

| First Quarter | $ | 81.01 | | | $ | 68.36 | |

| Second Quarter | $ | 77.00 | | | $ | 66.12 | |

| Third Quarter | $ | 81.73 | | | $ | 73.25 | |

| Fourth Quarter | $ | 83.79 | | | $ | 73.83 | |

Dividend Declaration and Policy

| | | | |

| --- | --- | --- | --- |

| Fiscal 2017 | Dividend Per Share | | |

| First Quarter | $ | 0.165 | |

| Second Quarter | $ | 0.165 | |

| Third Quarter | $ | 0.165 | |

| Fourth Quarter | $ | 0.165 | |

| Fiscal 2016 | Dividend Per Share | | |

| First Quarter | $ | 0.14 | |

| Second Quarter | $ | 0.14 | |

| Third Quarter | $ | 0.14 | |

| Fourth Quarter | $ | 0.14 | |

Additionally, in October 2017, our board of directors declared a quarterly cash dividend of $0.195 per share of class A common stock (determined in the case of class B and C common stock and series B and C preferred stock on an as-converted basis) payable on December 5, 2017, to holders of record as of November 17, 2017 of our common and preferred stock.

| July 1-31, 2017 | 2,311,218 | | | $ | 95.02 | | | 2,294,983 | | | $ | 5,310,521,927 | |

| August 1-31, 2017 | 5,594,044 | | | $ | 102.11 | | | 5,594,044 | | | $ | 4,739,175,366 | |

| September 1-30, 2017 | 9,019,355 | | | $ | 104.72 | | | 9,019,355 | | | $ | 3,794,467,851 | |

| Total | 16,924,617 | | | $ | 102.54 | | | 16,908,382 | | | | | |

| Equity compensation plans approved by stockholders | 13,081,232 | | (1) | $ | 50.17 | | (2) | 166,492,598 | | (3) |

| (3) | In January 2015, our class A stockholders approved the ESPP which permits eligible employees to purchase shares of Class A common stock at a 15% discount to the stock price on the purchase date, subject to certain restrictions. See Note 15—Share-based Compensation to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report. As of September 30, 2017, 149 million shares and 18 million shares remain available for issuance under the EIP and the ESPP, respectively. |

| Statement of Operations Data: | [removed: 2017(1)] [added: 2018(1)] | | | | [removed: 2016(1)] [added: 2017(1)] | | | | [removed: 2015] [added: 2016(1)] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | |

| Operating revenues | $ | [removed: 18,358] [added: 20,609] | | | $ | [removed: 15,082] [added: 18,358] | | | $ | [removed: 13,880] [added: 15,082] | | | $ | [removed: 12,702] [added: 13,880] | | | $ | [removed: 11,778] [added: 12,702] | | |

| Operating expenses | $ | [removed: 6,214] [added: 7,655] | | | $ | [removed: 7,199] [added: 6,214] | | [removed: (3)] | $ | [removed: 4,816] [added: 7,199] | | [added: (2)] | $ | [removed: 5,005] [added: 4,816] | | | $ | [removed: 4,539] [added: 5,005] | | |

| Operating income | $ | [removed: 12,144] [added: 12,954] | | | $ | [removed: 7,883] [added: 12,144] | | | $ | [removed: 9,064] [added: 7,883] | | | $ | [removed: 7,697] [added: 9,064] | | | $ | [removed: 7,239] [added: 7,697] | | |

| Net income | $ | [removed: 6,699] [added: 10,301] | | [removed: (2)] [added: (3)] | $ | [removed: 5,991] [added: 6,699] | | [added: (4)] | $ | [removed: 6,328] [added: 5,991] | | | $ | [removed: 5,438] [added: 6,328] | | | $ | [removed: 4,980] [added: 5,438] | | |

| Basic earnings per share—class A common [removed: stock(4)] [added: stock(5)] | $ | [removed: 2.80] [added: 4.43] | | | $ | [removed: 2.49] [added: 2.80] | | | $ | [removed: 2.58] [added: 2.49] | | | $ | [removed: 2.16] [added: 2.58] | | | $ | [removed: 1.90] [added: 2.16] | | |

| Diluted earnings per share—class A common [removed: stock(4)] [added: stock(5)] | $ | [removed: 2.80] [added: 4.42] | | | $ | [removed: 2.48] [added: 2.80] | | | $ | [removed: 2.58] [added: 2.48] | | | $ | [removed: 2.16] [added: 2.58] | | | $ | [removed: 1.90] [added: 2.16] | | |

| Balance Sheet Data: | [removed: 2017(1)] [added: 2018(1)] | | | | [removed: 2016(1)] [added: 2017(1)] | | | | [removed: 2015] [added: 2016(1)] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | |

| Total assets | $ | [removed: 67,977] [added: 69,225] | | | $ | [removed: 64,035] [added: 67,977] | | | $ | [removed: 39,367] [added: 64,035] | | | $ | [removed: 37,543] [added: 39,367] | | | $ | [removed: 35,495] [added: 37,543] | | |

| Accrued litigation | $ | [removed: 982] [added: 1,434] | | [added: (6)] | $ | [removed: 981] [added: 982] | | | $ | [removed: 1,024] [added: 981] | | | $ | [removed: 1,456] [added: 1,024] | | [removed: (5)] | $ | [removed: 5] [added: 1,456] | | [removed: (5)] [added: (6)] |

| Long-term debt | $ | [removed: 16,618] [added: 16,630] | | [removed: (6)] | $ | [removed: 15,882] [added: 16,618] | | [removed: (6)] [added: (7)] | $ | [removed: —] [added: 15,882] | | [added: (7)] | $ | — | | | $ | — | | |

| Total equity | $ | [removed: 32,760] [added: 34,006] | | | $ | [removed: 32,912] [added: 32,760] | | | $ | [removed: 29,842] [added: 32,912] | | | $ | [removed: 27,413] [added: 29,842] | | | $ | [removed: 26,870] [added: 27,413] | | |

| Dividend declared and paid per common [removed: share(4)] [added: share(5)] | $ | [removed: 0.66] [added: 0.825] | | | $ | [removed: 0.56] [added: 0.660] | | | $ | [removed: 0.48] [added: 0.560] | | | $ | [removed: 0.40] [added: 0.480] | | | $ | [removed: 0.33] [added: 0.400] | | |

| (1) | Our results of operations [removed: for fiscal 2017] and the [added: financial position beginning with the] last quarter of fiscal [removed: 2016, and the financial position as of September 30, 2017 and 2016,] [added: 2016] include Visa [removed: Europe's] [added: Europe’s] financial results. |

| [removed: (2)] [added: (4)] | During fiscal 2017, in connection with our legal entity reorganization, we eliminated deferred tax balances originally recognized upon the acquisition of Visa Europe, resulting in the recognition of a non-recurring, non-cash income tax provision of $1.5 billion. |

| [removed: (3)] [added: (2)] | During [added: fiscal] 2016, upon consummation of the Visa Europe acquisition, we recorded a non-recurring loss of $1.9 billion, before tax, in operating expense resulting from the effective settlement of the Framework Agreement between us and Visa Europe. [removed: Net of related tax benefit of $693 million, determined by applying applicable federal and state tax rates, the adjustment to net income was an increase of $1.2 billion.] |

| [removed: (4)] [added: (5)] | The per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the second quarter of fiscal 2015. |

| [removed: (5)] [added: (6)] | During fiscal [removed: 2013, we made payments from the U.S. litigation escrow account totaling $4.4 billion in connection with the U.S. covered litigation. During fiscal] 2014, the court entered the final judgment order approving the settlement with the class plaintiffs in the interchange multidistrict litigation proceedings. Certain merchants in the settlement classes objected to the settlement and filed opt-out claims. Takedown payments of approximately $1.1 billion related to the opt-out merchants were received and deposited into the U.S. litigation escrow account, and a related increase in accrued litigation to address the opt-out claims were recorded in the second quarter of fiscal 2014. [added: During fiscal 2018, pursuant to an amended settlement agreement that superseded the 2012 Settlement Agreement, we recorded an additional accrual of $600 million.] See Note [removed: 3—U.S.] [added: 2—U.S.] and Europe Retrospective Responsibility Plans and Note [removed: 19—Legal] [added: 17—Legal] Matters to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report. |

| [removed: (6)] [added: (7)] | During fiscal 2017 and fiscal 2016, we issued fixed-rate senior notes in an aggregate principal amount of $2.5 billion and $16.0 billion, respectively. See Note [removed: 8—Debt] [added: 6—Debt] to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report. |

| (3) | During fiscal 2018, as a result of the U.S. tax reform legislation, our net income reflected a lower statutory tax rate, a non-recurring, non-cash income tax benefit of approximately $1.1 billion from the remeasurement of our deferred tax liabilities, and a one-time transition tax of approximately $1.1 billion. |

| | |

| --- | --- |

| As of September 30, [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] and for the years ended September 30, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] | |

| [Report of Independent Registered Public Accounting [removed: Firm](#s7934BAB348E15124A05F83607DB4758E)] [added: Firm](#sC969957B5AC65A98AD62F5FB751BABAC)] | [removed: [53](#s7934BAB348E15124A05F83607DB4758E)] [added: [54](#sC969957B5AC65A98AD62F5FB751BABAC)] |

| [Consolidated Balance [removed: Sheets](#s737A439606945733B08E6248CDC4A3A5)] [added: Sheets](#s058FC6593A325A59898B9BECFEC2CFE5)] | [removed: [54](#s737A439606945733B08E6248CDC4A3A5)] [added: [56](#s058FC6593A325A59898B9BECFEC2CFE5)] |

| [Consolidated Statements of [removed: Operations](#s3BAD584958A559C785B28BA5495E915A)] [added: Operations](#s7F147CDA296952799D3809BD0D93129F)] | [removed: [55](#s3BAD584958A559C785B28BA5495E915A)] [added: [57](#s7F147CDA296952799D3809BD0D93129F)] |

| [Consolidated Statements of Comprehensive [removed: Income](#sB5E8DBCB06C751CBB77EFB9FDDBE7607)] [added: Income](#sBAC605E7AAE15F70B8E74FD47FE37BF3)] | [removed: [56](#sB5E8DBCB06C751CBB77EFB9FDDBE7607)] [added: [58](#sBAC605E7AAE15F70B8E74FD47FE37BF3)] |

| [Consolidated Statements of Changes in [removed: Equity](#sA32FDA63CC125A13B4092A0269DC8531)] [added: Equity](#s065965984B995CD6842C01BD659321B7)] | [removed: [57](#sA32FDA63CC125A13B4092A0269DC8531)] [added: [59](#s065965984B995CD6842C01BD659321B7)] |

| [Consolidated Statements of Cash [removed: Flows](#sD418CF9D4BFF5B39BC005D81B5427D92)] [added: Flows](#s7A64A1BB201C574BBEE32FA4B9BC0A7F)] | [removed: [60](#sD418CF9D4BFF5B39BC005D81B5427D92)] [added: [62](#s7A64A1BB201C574BBEE32FA4B9BC0A7F)] |

| [Notes to the Consolidated Financial [removed: Statements](#s7963BEA06D395A338CBFD212AAE629D3)] [added: Statements](#sEEE665D2F92557D1BDE78B552CAAC2FB)] | [removed: [61](#s7963BEA06D395A338CBFD212AAE629D3)] [added: [63](#sEEE665D2F92557D1BDE78B552CAAC2FB)] |

[removed: The] [added: To the Stockholders and] Board of Directors [removed: and Stockholders]

We have audited the accompanying consolidated balance sheets of Visa Inc. and subsidiaries [added: (Visa Inc. or the Company)] as of September 30, [removed: 2017 and 2016,] [added: 2018] and [added: 2017,] the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended September 30, [removed: 2017.][added: 2018 and the related notes.]

We also have audited Visa Inc.’s internal control over financial reporting as of September 30, [removed: 2017,] [added: 2018,] based on Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Visa Inc.’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for [removed: its] [added: their] assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on [removed: these] [added: the Company’s] consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the [added: consolidated] financial statements are free of material [removed: misstatement] [added: misstatement, whether due to error or fraud,] and whether effective internal control over financial reporting was maintained in all material respects.

Our audits [removed: of the consolidated financial statements] [added: also] included [removed: examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing] [added: evaluating] the accounting principles used and significant estimates made by management, [removed: and] [added: as well as] evaluating the overall [added: presentation of the consolidated] financial [removed: statement presentation.][added: statements.]

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Visa Inc. and subsidiaries as of September 30, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the results of their operations and their cash flows for each of the years in the three-year period ended September 30, [removed: 2017,] [added: 2018,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, Visa Inc. maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2017,] [added: 2018,] based on Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission (COSO).][added: Commission.]

[removed: November 16,] [added: |] 2017 [added: | 9 | | | | 5 | | |]

| | September 30, [removed: 2017] [added: 2018] | | | | September 30, [removed: 2016] [added: 2017] | | |

| Cash and cash equivalents | $ | [removed: 9,874] [added: 8,162] | | | $ | [removed: 5,619] [added: 9,874] | |

| Restricted cash—U.S. litigation escrow (Note [removed: 3)] [added: 2)] | [removed: 1,031] [added: 1,491] | | | | [removed: 1,027] [added: 1,031] | | |

| Investment securities (Note [removed: 4):] [added: 3):] | | | | | | | |

| Trading | [removed: 82] [added: 98] | | | | [removed: 71] [added: 82] | | |

| Available-for-sale | [removed: 3,482] [added: 3,449] | | | | [removed: 3,248] [added: 3,482] | | |

| Settlement receivable | [removed: 1,422] [added: 1,582] | | | | [removed: 1,467] [added: 1,422] | | |

| Accounts receivable | [removed: 1,132] [added: 1,208] | | | | [removed: 1,041] [added: 1,132] | | |

| Customer collateral (Note [removed: 10)] [added: 8)] | [removed: 1,106] [added: 1,324] | | | | [removed: 1,001] [added: 1,106] | | |

| Current portion of client incentives | [removed: 344] [added: 340] | | | | [removed: 284] [added: 344] | | |

| Prepaid expenses and other current assets | [removed: 550] [added: 562] | | | | [removed: 555] [added: 550] | | |

| Total current assets | [removed: 19,023] [added: 18,216] | | | | [removed: 14,313] [added: 19,023] | | |

| Investment securities, available-for-sale (Note [removed: 4)] [added: 3)] | [removed: 1,926] [added: 4,082] | | | | [removed: 3,931] [added: 1,926] | | |

| Client incentives | [removed: 591] [added: 538] | | | | [removed: 448] [added: 591] | | |

| Property, equipment and technology, net (Note [removed: 5)] [added: 4)] | [removed: 2,253] [added: 2,472] | | | | [removed: 2,150] [added: 2,253] | | |

| Other assets | [removed: 1,226] [added: 1,165] | | | | [removed: 893] [added: 1,226] | | |

| Intangible assets, net (Note [removed: 2 and Note 6)] [added: 5)] | [removed: 27,848] [added: 27,558] | | | | [removed: 27,234] [added: 27,848] | | |

| Goodwill (Note [removed: 2 and Note 6)] [added: 5)] | [removed: 15,110] [added: 15,194] | | | | [removed: 15,066] [added: 15,110] | | |

| Total assets | $ | [removed: 67,977] [added: 69,225] | | | $ | [removed: 64,035] [added: 67,977] | |

| Accounts payable | $ | [removed: 179] [added: 183] | | | $ | [removed: 203] [added: 179] | |

| Settlement payable | [removed: 2,003] [added: 2,168] | | | | [removed: 2,084] [added: 2,003] | | |

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

Basis for Opinions

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Report of Independent Registered Public Accounting Firm—(Continued)

Definition and Limitations of Internal Control Over Financial Reporting

We have served as the Company’s auditor since 2007.

| Customer collateral (Note 8) | 1,325 | | | | 1,106 | | |

| Deferred purchase consideration | 1,300 | | | | — | | |

| Net income | $ | 10,301 | | | $ | 6,699 | | | $ | 5,991 | |

| Reclassification adjustment for net loss realized in net income | 5 | | | | 32 | | | | 10 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance as of September 30, 2017 | 2 | | | 3 | | | 1,818 | | | 245 | | | 13 | | | $ | 5,526 | | | $ | (52 | ) | | $ | 16,900 | | | $ | 9,508 | | | $ | 878 | | | $ | 32,760 | |

| VE territory covered losses incurred (Note 2) | | | | | | | | | | | | | | | | | | | | (11 | | ) | | | | | | | | | | | | | | (11 | | ) |

| Recovery through conversion rate adjustment (Note 2 and Note 11) | | | | | | | | | | | | | | | | (56 | | ) | | 56 | | | | | | | | | | | | | | | | — | | |

| Repurchase of class A common stock (Note 11) | | | | | | | (58 | ) | | | | | | | | | | | | | | | | (619 | | ) | | (6,573 | | ) | | | | | | (7,192 | | ) |

| Balance as of September 30, 2018 | 2 | | | 3 | | | 1,768 | | | 245 | | | 12 | | | 5,470 | | | | (7 | | ) | | 16,678 | | | | 11,318 | | | | 547 | | | | $ | 34,006 | |

| (1) | Series B and C preferred stock are alternatively referred to as UK&I and Europe preferred stock, respectively. |

| Net income | $ | 10,301 | | | $ | 6,699 | | | $ | 5,991 | |

| Repayments of long-term debt (Note 6) | (1,750 | | ) | | — | | | | — | | |

| Deposit into U.S. litigation escrow account—U.S. retrospective responsibility plan (Note 2 and Note 17) | (600 | | ) | | — | | | | — | | |

| Charitable contribution of available-for-sale investment securities to Visa Foundation | $ | 195 | | | $ | — | | | $ | — | |

The Company’s Level 3 assets include non-marketable equity investments and investments accounted for under the equity method.

See Note 3—Fair Value Measurements and Investments.

September 30, 2018

Pledged securities are held by a custodian in an account under the Company’s name and ownership; however, the Company does not have the right to repledge these securities, but may sell these securities in the event of default by the client on its settlement obligations.

September 30, 2018

September 30, 2018

September 30, 2018

See Note 9—Derivative and Non-derivative Financial Instruments.

September 30, 2018

The Company has completed an assessment of its existing customer contracts through September 30, 2018.

Based on this assessment, application of the new standard to the consolidated financial statements for fiscal 2018 would not have resulted in a material impact.

The impact of the new standard to future financial results is unknowable as it is not possible to estimate the impact of the standard to new customer contracts which may be executed in future periods.

However, the new standard is not expected to have a material impact to the fiscal 2019 consolidated financial statements.

In July 2018, the FASB issued ASU 2018-11, which provides entities with an additional transition method to adopt the new leases standard.

Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

VISA INC.

| | |

| --- | --- |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Amortization of actuarial loss (gain) and prior service credit realized in net income | 32 | | | | 10 | | | | (1 | | ) |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance as of September 30, 2014 | 1,978 | | | 245 | | | 22 | | | $ | 18,299 | | | $ | 9,131 | | | $ | (17 | ) | | $ | 27,413 | |

| Balance as of September 30, 2015 | 1,950 | | | 245 | | | 20 | | | $ | 18,073 | | | $ | 11,843 | | | $ | (74 | ) | | $ | 29,842 | |

| Excess tax benefit for share-based compensation | — | | | | 63 | | | | 84 | | |

On June 21, 2016, Visa acquired 100% of the share capital of Visa Europe.

See Note 2—Visa Europe.

In February 2017, the Company completed a reorganization of Visa Europe and certain other legal entities to align the Company's corporate structure to the geographic jurisdictions in which it conducts business operations.

Associated with this reorganization, the newly-formed Visa Foundation received all Visa Inc. shares held by Visa Europe that were previously recorded as treasury stock.

On March 18, 2015, the Company completed a four\-for-one split of its class A common stock effected in the form of a stock dividend.

All per share amounts and number of shares outstanding in the consolidated financial statements and accompanying notes are presented on a post-split basis.

The Company revised certain fiscal 2016 amounts on the consolidated statements of cash flows to correct a presentation error in gross investing activity.

Purchases and proceeds from maturities and sales of investment securities were each reduced by $17.6 billion, from $28.0 billion and $26.7 billion, respectively, to $10.4 billion and $9.1 billion, respectively.

The previously reported amounts included purchases and sales of securities, using the proceeds of the Company's December 2015 debt offering, that had a maturity of 90 days or less.

These securities are therefore considered cash and cash equivalents for financial reporting purposes and should not have been included in the gross investing activity.

The correction did not affect the Company's total cash flows from investing activities, and there was no impact on the Company's financial position, total operating revenues, net income, or comprehensive income as of and for the periods presented.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company did not have any Level 3 assets or liabilities at September 30, 2017 and 2016.

Non-cash collateral assets are held on behalf of the Company by a third party and are not recorded on the consolidated balance sheets.

Client incentives.

retirement age, mortality, attrition and the rate of compensation increases.

In June 2014, the FASB issued ASU No. 2014-12, which requires a performance target in stock compensation awards that affects vesting, and is achievable after the requisite service period, be treated as a performance condition.

In April 2015, the FASB issued ASU No. 2015-05, which provides guidance about a customer's accounting for fees paid in a cloud computing arrangement.

The amendment will help entities evaluate whether such an arrangement includes a software license, which should be accounted for consistent with the acquisition of other software licenses; otherwise, it should be accounted for as a service contract.

In March 2016, the FASB issued ASU 2016-09, which simplifies several aspects of the accounting for share-based payments, including the accounting for excess tax benefits and deficiencies, forfeitures, and statutory tax withholding requirements, as well as classification on the statement of cash flows related to excess tax benefits and employee taxes paid when an employer withholds shares for tax-withholding purposes.

The adoption had the following impact on the consolidated financial statements:

| • | The Company recorded excess tax benefits of $70 million in its provision for income taxes rather than as an increase to additional paid-in capital for the year ended September 30, 2017 on a prospective basis. Therefore, the prior period presented has not been adjusted. |

| • | The Company excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share, which did not have a material impact on the Company's diluted earnings per share for the year ended September 30, 2017. |

| • | The Company elected to apply the presentation requirement for cash flows related to excess tax benefits prospectively, and thus, the prior period presented has not been adjusted. This adoption resulted in an increase to both net cash provided by operating activities and net cash used in financing of $70 million for the year ended September 30, 2017. |

In January 2017, the FASB issued ASU 2017-04, which simplifies the test for goodwill impairment by eliminating a previously required step.

In August 2017, the FASB issued ASU 2017-12, which improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements.

The amendments in this update also make certain targeted improvements to simplify the application of the hedge accounting guidance.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of September 30, [removed: 2017,] [added: 2018,] our disclosure controls and procedures were effective at the reasonable assurance level.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2017.][added: 2018.]

Based on management’s assessment, management has concluded that the Company’s internal control over financial reporting was effective as of September 30, [removed: 2017] [added: 2018] using the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

The effectiveness of our internal control over financial reporting as of September 30, [removed: 2017,] [added: 2018,] has been audited by KPMG LLP, an independent registered public accounting firm and is included in Item 8 of this report.

During fiscal [removed: 2017,] [added: 2018,] there were no significant changes in our internal controls over financial reporting that occurred during the year ended September 30, [removed: 2017,] [added: 2018,] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Certain information required by Part III is omitted from this Report and the Company will file a definitive proxy statement pursuant to Regulation 14A under the Exchange Act (the “Proxy Statement”) not later than 120 days after the end of the fiscal year ended September 30, [removed: 2017,] [added: 2018,] and certain information included therein is incorporated herein by reference.

Our Code of Business Conduct and [removed: Ethics, Code of] Ethics [removed: for Senior Financial Officers] [added: that is applicable to our directors, executive officers, senior financial officers, as well as our employees] and [added: contractors and] our Corporate Governance Guidelines are available on the Investor Relations page of our website at http://investor.visa.com, under “Corporate Governance.” Printed copies of these documents are also available to stockholders without charge upon written request directed to Corporate Secretary, Visa Inc., P.O. Box 193243, San Francisco, California 94119.

| Date: | | November 16, [removed: 2017] [added: 2018] |

| /s/ Alfred F. Kelly, Jr. | | Chief Executive Officer and Director | | November 16, [removed: 2017] [added: 2018] |

| /s/ Vasant M. Prabhu | | Chief Financial Officer | | November 16, [removed: 2017] [added: 2018] |

| /s/ James H. Hoffmeister | | Global Corporate Controller and | | November 16, [removed: 2017] [added: 2018] |

| /s/ Robert W. Matschullat | | Independent Chair | | November 16, [removed: 2017] [added: 2018] |

| /s/ Lloyd A. Carney | | Director | | November 16, [removed: 2017] [added: 2018] |

| /s/ Mary B. Cranston | | Director | | November 16, [removed: 2017] [added: 2018] |

| /s/ Francisco Javier Fernández-Carbajal | | Director | | November 16, [removed: 2017] [added: 2018] |

| /s/ John F. Lundgren | | Director | | November 16, [removed: 2017] [added: 2018] |

| /s/ Suzanne Nora Johnson | | Director | | November 16, [removed: 2017] [added: 2018] |

| /s/ John A. C. Swainson | | Director | | November 16, [removed: 2017] [added: 2018] |

| /s/ Maynard G. Webb, Jr. | | Director | | November 16, [removed: 2017] [added: 2018] |

| [removed: 10.17] [added: 10.18] | | Loss Sharing Agreement, dated as of November 2, 2015, among the UK Members listed on Schedule 1 thereto, Visa Inc. and Visa Europe Limited | | 8-K | | 001-33977 | | [10.1](http://www.sec.gov/Archives/edgar/data/1403161/000119312515361228/d44556dex101.htm) | | 11/2/2015 |

| [removed: 10.18] [added: 10.19] | | Litigation Management Deed, dated as of June 21, 2016, by and among the VE Member Representative, Visa Inc., the LMC Appointing Members, the UK&I DCC Appointing Members, the Europe DCC Appointing Members and the UK&I DCC Interested Members | | 8-K | | 001-33977 | | [10.1](http://www.sec.gov/Archives/edgar/data/1403161/000119312516627003/d212927dex101.htm) | | 6/21/2016 |

| [removed: 10.19*] [added: 10.20*] | | Visa 2005 Deferred Compensation Plan, effective as of August 12, 2015 | | 10-K | | 001-33977 | | [10.21](http://www.sec.gov/Archives/edgar/data/1403161/000140316115000013/vex1021093015.htm) | | 11/20/2015 |

| [removed: 10.20*] [added: 10.21*] | | Visa Directors Deferred Compensation Plan, as amended and restated as of July 22, 2014 | | 10-K | | 001-33977 | | [10.17](http://www.sec.gov/Archives/edgar/data/1403161/000140316114000017/vex1017093014.htm) | | 11/21/2014 |

| [removed: 10.21*] [added: 10.22*] | | Visa Inc. 2007 Equity Incentive Compensation Plan, as amended and restated as of February 3, 2016 | | DEFA 14A | | 001-33977 | | [Annex A](http://www.sec.gov/Archives/edgar/data/1403161/000119312516426980/d119459ddefa14a.htm) | | 1/12/2016 |

| [removed: 10.22*] [added: 10.23*] | | Visa Inc. Incentive Plan, as amended and restated as of February 3, 2016 | | DEF 14A | | 001-33977 | | [Annex B](http://www.sec.gov/Archives/edgar/data/1403161/000119312515400736/d10447ddef14a.htm) | | 12/11/2015 |

| [removed: 10.23*] [added: 10.24*] | | Visa Excess Thrift Plan, as amended and restated as of January 1, 2008 | | 10-K | | 001-33977 | | [10.31](http://www.sec.gov/Archives/edgar/data/1403161/000119312508240384/dex1031.htm) | | 11/21/2008 |

| [removed: 10.24*] [added: 10.25*] | | Visa Excess Retirement Benefit Plan, as amended and restated as of January 1, 2008 | | 10-K | | 001-33977 | | [10.32](http://www.sec.gov/Archives/edgar/data/1403161/000119312508240384/dex1032.htm) | | 11/21/2008 |

| [removed: 10.25*] [added: 10.26*] | | First Amendment, effective January 1, 2011, of the Visa Excess Retirement Benefit Plan, as amended and restated as of January 1, 2008 | | 10-K | | 001-33977 | | [10.34](http://www.sec.gov/Archives/edgar/data/1403161/000119312511315956/d218694dex1034.htm) | | 11/18/2011 |

| [removed: 10.26*] [added: 10.27*] | | Visa Inc. Executive Severance Plan, effective as of November 3, 2010 | | 8-K | | 001-33977 | | [10.1](http://www.sec.gov/Archives/edgar/data/1403161/000119312510254164/dex101.htm) | | 11/9/2010 |

| [removed: 10.27*] [added: 10.28*] | | Visa Inc. 2015 Employee Stock Purchase Plan | | DEF 14A | | 001-33977 | | [Appendix B](http://www.sec.gov/Archives/edgar/data/1403161/000119312514441290/d783905ddef14a.htm) | | 12/12/2014 |

| [removed: 10.28*] [added: 10.29*] | | Form of Visa Inc. 2007 Equity Incentive Compensation Plan Stock Option Award Agreement for awards granted after November 18, 2013 | | 10-Q | | 001-33977 | | [10.1](http://www.sec.gov/Archives/edgar/data/1403161/000140316114000005/vex101123113.htm) | | 1/30/2014 |

| [removed: 10.29*] [added: 10.30*] | | Form of [added: Alternate] Visa Inc. 2007 Equity Incentive Compensation Plan [removed: Restricted] Stock [added: Option] Award Agreement for awards granted after November 18, 2013 | | 10-Q | | 001-33977 | | [removed: [10.2](http://www.sec.gov/Archives/edgar/data/1403161/000140316114000005/vex102123113.htm)] [added: [10.5](http://www.sec.gov/Archives/edgar/data/1403161/000140316114000005/vex105123113.htm)] | | 1/30/2014 |

| 10.30* | | Form of Visa Inc. 2007 Equity Incentive Compensation Plan [added: Director] Restricted Stock Unit Award Agreement for awards granted after November [removed: 18, 2013] [added: 1, 2014] | | [removed: 10-Q] [added: 10-K] | | 001-33977 | | [removed: [10.3](http://www.sec.gov/Archives/edgar/data/1403161/000140316114000005/vex103123113.htm)] [added: [10.40](http://www.sec.gov/Archives/edgar/data/1403161/000140316114000017/vex1040093014.htm)] | | [removed: 1/30/2014] [added: 11/21/2014] |