EX-99.1 2 dex991.htm PRESS RELEASE OF VISA INC. Press release of Visa Inc.

Exhibit 99.1

Visa Inc. Reports Fiscal Second Quarter 2008 Earnings Results

 

 

GAAP net income of $314 million for the quarter

 

 

Adjusted net income of $401 million for the quarter

 

 

GAAP diluted class A common earnings per share of $0.39 for the quarter

 

 

Adjusted diluted class A common earnings per share of $0.52 for the quarter

 

 

Payment volume grew 19% over the prior year to $681 billion

San Francisco, CA, April 28, 2008 – Visa Inc. (NYSE: V) today announced financial results for our fiscal second quarter ended March 31, 2008. GAAP net income for the quarter was $314 million, or $0.39 per diluted class A common share. GAAP diluted class A common shares outstanding were 778 million. On an adjusted basis (reflective of a normalized tax rate and excluding litigation, restructuring and purchase amortization), net income for the quarter was $401 million, or $0.52 per diluted class A common share. Adjusted diluted class A common shares outstanding were 779 million.

Net operating revenue in the fiscal second quarter 2008 was $1.5 billion. Strong contributions were made by service fees, data processing fees, and international transaction fees as payment volumes and processed transactions rose across all regions worldwide.

“We are very pleased with our financial results for our first quarter as a public company. Despite a challenging economic environment, Visa recorded strong growth in payments volume and transactions globally and across our diverse suite of products – a trend which is continuing into the fiscal third quarter,” said Joseph Saunders, Visa’s chairman and chief executive officer. “Our performance is a testament to Visa’s business model and economic resiliency, as we continue to lead the migration from cash and checks to electronic payments.”

“Visa is focused on growing our business globally by extending our industry-leading processing services, expanding our products to new geographies, and further strengthening our valuable relationships with financial institutions and merchants who are critical to our success,” said Mr. Saunders.

Fiscal Second Quarter 2008 Financial Highlights:

Visa Inc. reports operational performance data on a trailing one quarter basis, based on information provided to the company from client financial institutions. This operational performance data, which includes payments volume for our clients, total volume, total payments transactions, and total cards carrying Visa brands, are in part the basis for financial results in the following quarter. For the period ending December 31, 2007, which impacts the March 2008 fiscal quarter, Visa’s operational performance highlights include:

 

   

Payments volume grew 19% over the prior year to $681 billion;

 

   

Total volume, inclusive of cash volume was $1.1 trillion, an increase of 21% over the prior year;

 

   

Total cards carrying the Visa brands rose 16% worldwide to 1.6 billion over the prior year; and

 

   

Total payment transactions increased by 16% over the prior year to 11 billion.

Total processed transactions, which are based on current fiscal second quarter results on Visa’s processing system, were 8.8 billion, a 15% increase over the prior year.

For the fiscal second quarter 2008, service fees were $792 million, up 29% over the prior year on a pro forma basis, and were recognized based on payment volume in the prior quarter. All other fee categories are recognized based on current quarter activity and are also compared on a pro forma basis. Data processing fees rose 34% over the prior year to $494 million. International transaction fees, which are driven by cross-border payments volume, grew 35% over the prior year to $379 million, as we continued to benefit from higher multi-currency payments volumes across all regions during the fiscal second quarter. Other revenue, which includes the Visa Europe licensing fee, was $126 million for the fiscal second quarter. Volume and incentive payments, which are contra revenue, were $338 million for the fiscal second quarter.

Total operating expenses were $1.1 billion for the fiscal second quarter, up 39% over the prior year on a pro forma basis. The increase in total operating expenses over the prior year was primarily driven by a

 

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$285 million provision for covered litigation. This amount is expected to be fully covered for Visa Inc. under the terms of the retrospective responsibility plan. Excluding this provision, operating expenses grew only 3% over the prior year on a pro forma basis.

Cash, cash equivalents, restricted cash, and available-for-sale investment securities were $8 billion at March 31, 2008, and includes $2.7 billion that we intend to use to redeem all of the series II and a portion of the series III class C shares in October 2008.

Other items for the second fiscal quarter ended March 31, 2008, included:

 

   

The Company funded the U.S. litigation escrow account with $3 billion of net proceeds from the initial public offering; and

 

   

A $945 million payment was made to American Express which was funded through the litigation escrow account as part of our legal settlement.

The Company’s net income and earnings per share, excluding special items, are non-GAAP financial measures that are reconciled to their most directly comparable GAAP measure in the accompanying financial tables.

Management believes the presentation of adjusted operating income and adjusted net income provides a clearer understanding of the one-time items related to the Company’s reorganization and initial public offering. These measures also adjust for expenses related to covered litigation that will be funded by the litigation escrow account through the retrospective responsibility plan. These items have a significant impact on our financial results but are either non-recurring or have no operating cash impact. Recognizing that we have a very complex equity structure incorporating multiple classes and series of common stock, the Company has also presented adjusted diluted class A earnings per share calculated based on adjusted net income and the adjusted weighted average number of shares outstanding in the periods presented. This non-GAAP financial measure has been presented to illustrate our per share results reflecting our capital structure after the redemption of all class C (series II) common stock and a portion of class C (series III) common stock, which the Company intends to redeem in October 2008. The class C (series II) common stock is classified as temporary equity and the class C (series III) common stock is classified as a liability on the Company’s consolidated balance sheet at March 31, 2008. Management believes this non-GAAP presentation provides the reader with a clearer understanding of our per share results by excluding those shares to be redeemed and allocating adjusted net income only to classes and series of common stock classified as permanent equity.

Fiscal Year-to-Date 2008 Results:

For the six months ended March 31, 2008, Visa Inc. reported GAAP net income of $738 million, or $0.93 per diluted class A common share. GAAP diluted class A common shares outstanding were 762 million.

On an adjusted basis, (reflective of a normalized tax rate and excluding litigation, restructuring, and purchase amortization) net income for the six months ended March 31, 2008, was $844 million, or $1.08 per diluted class A common share. Adjusted diluted class A common shares outstanding were 779 million.

Net operating revenue for the six months ended March 31, 2008, was $2.9 billion, up 24% over the prior year on a pro forma basis.

Total operating expenses were $1.9 billion for the six months ended March 31, 2008, up 21% over the prior year on a pro forma basis. The increase in total operating expenses over the prior year was primarily driven by a $285 million provision for covered litigation. This amount is expected to be fully covered for Visa Inc. under the terms of the retrospective responsibility plan. Excluding this provision, operating expenses grew only 3% over the prior year on a pro forma basis.

Financial Outlook:

Visa Inc.’s financial outlook over the next three years includes the following metrics:

 

   

Annual net revenue growth of 11% to 15%;

 

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Annual adjusted operating margin (adjusted earnings before interest and taxes) in the low 40% range;

 

   

Annual adjusted diluted class A common earnings per share growth of 20% or greater; and

 

   

Annual free cash flow (cash flow from operations plus cash reimbursements from litigation escrow less capital spending) in excess of $1 billion.

This outlook reflects an assumed 41% percent GAAP tax rate for fiscal year 2008. Our intent is to reduce this rate to a level around 35-36% over the next five years.

Second Quarter Results Webcast Information

Visa’s executive management team will host a live audio webcast beginning at 5:00 p.m. EDT (2:00 p.m. PDT) today to discuss the financial results and business highlights.

All interested parties are invited to listen to the live webcast at http://investor.visa.com. A replay of the webcast will be available on the Visa Investor Relations website for 30 days.

Investor information, including supplemental financial information, is available on Visa Inc’s Investor Relations website at http://investor.visa.com

About Visa Inc.

Visa Inc. operates the world’s largest retail electronic payments network providing processing services and payment product platforms. This includes consumer credit, debit, prepaid and commercial payments, which are offered under the Visa, Visa Electron, Interlink and PLUS brands. Visa enjoys acceptance around the world and Visa/PLUS is one of the world’s largest global ATM networks, offering cash access in local currency in more than 170 countries.

Forward Looking Statements

Certain statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. These statements can be identified by the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will” and similar expressions which are intended to identify forward-looking statements. In addition, any underlying assumptions are forward-looking statements. Such forward-looking statements include but are not limited to: (i) statements regarding certain of Visa’s goals and expectations with respect to earnings per share, revenue, operating margin, and free cash flow, and the growth rate in those item, as well as other measures of economic performance, and (ii) statements relating to the benefits of the 2007 reorganization and the 2008 initial public offering.

By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are not guarantees of future performance or results and (iii) are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements as a result of a variety of factors, including all the risks discussed under the heading “Risk Factors” in our Prospectus dated March 18, 2008, filed with the U.S. Securities and Exchange Commission pursuant to Rule 424(b)(4) on March 19, 2008. You are cautioned not to place undue reliance on such statements, which speak only as of the date of this press release. Unless required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.

Contacts:

 

 

Investor Relations: Jack Carsky or Victoria Hyde-Dunn, 415-932-2213, ir@visa.com

 

 

Media Relations: Paul Cohen or Sandra Chu, 415-932-2564, globalmedia@visa.com

 

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VISA INC.

Consolidated Statements of Operations

(unaudited)

 

     For the three months
ended March 31,
    For the six months
ended March 31,
 
     2008
Actual
    2007
Pro forma
    2008
Actual
    2007
Pro forma
 
     (in millions)     (in millions)  

Operating Revenues

        

Service fees

   $ 792     $ 614     $ 1,524     $ 1,191  

Data processing fees

     494       370       986       747  

Volume and support incentives

     (338 )     (187 )     (588 )     (323 )

International transaction fees

     379       281       760       529  

Other revenues

     126       113       259       221  
                                

Total operating revenues

     1,453       1,191       2,941       2,365  
                                

Operating Expenses

        

Personnel

     289       269       572       542  

Network, EDP, and communications

     78       69       161       137  

Advertising, marketing, and promotion

     215       182       425       387  

Professional and consulting fees

     96       136       194       237  

Depreciation and amortization

     59       54       121       109  

Administrative and other

     75       74       149       150  

Litigation provision

     292       13       292       15  
                                

Total operating expenses

     1,104       797       1,914       1,577  
                                

Operating income

     349       394       1,027       788  
                                

Other Income (Expense)

        

Equity in earnings of unconsolidated affiliates

     —         —         1       —    

Interest expense

     (41 )     (24 )     (86 )     (48 )

Investment income, net

     34       36       75       76  

Other

     28       —         36       —    
                                

Total other income (expense)

     21       12       26       28  
                                

Income before income taxes and minority interest

     370       406       1,053       816  

Income tax expense

     56       160       315       321  
                                

Net income

   $ 314     $ 246     $ 738     $ 495  
                                

Basic net income per share (1)

        

Class A common stock

   $ 0.39       $ 0.93    
                    

Class B common stock

   $ 0.37       $ 0.92    
                    

Class C (series I) common stock

   $ 0.39       $ 0.93    
                    

Class C (series II) common stock

   $ 0.30       $ 0.81    
                    

Class C (series III and IV) common stock

   $ 0.39       $ 0.93    
                    

Basic weighted average shares outstanding (1)

       (in thousands)      

Class A common stock

     63,800         31,726    
                    

Class B common stock

     415,280         420,866    
                    

Class C (series I) common stock

     255,313         256,675    
                    

Class C (series II) common stock

     35,311         31,587    
                    

Class C (series III and IV) common stock

     57,725         60,258    
                    

Diluted net income per share (1)

        

Class A common stock

   $ 0.39       $ 0.93    
                    

Class B common stock

   $ 0.37       $ 0.92    
                    

Class C (series I) common stock

   $ 0.39       $ 0.93    
                    

Class C (series II) common stock

   $ 0.30       $ 0.81    
                    

Class C (series III and IV) common stock

   $ 0.39       $ 0.93    
                    

Diluted weighted average shares outstanding (1)

       (in thousands)      

Class A common stock

     777,738         762,374    
                    

Class B common stock

     415,280         420,866    
                    

Class C (series I) common stock

     255,313         256,675    
                    

Class C (series II) common stock

     35,311         31,587    
                    

Class C (series III and IV) common stock

     57,725         60,258    
                    

 

(1) Note: There is no comparable earnings per share measure for 2007 as we were a non-stock company.

 

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VISA INC.

Consolidated Balance Sheets

(unaudited)

 

     March 31, 2008     October 1, 2007  
     (in millions)  

Assets

    

Cash and cash equivalents

   $ 5,041     $ 1,278  

Restricted cash - litigation escrow

     1,285       —    

Restricted cash - tax escrow

     116       —    

Investment securities, available-for-sale

     598       842  

Settlement receivable

     1,157       587  

Accounts receivable

     321       318  

Customer collateral

     500       389  

Current portion of volume and support incentives

     227       135  

Current portion of deferred tax assets

     541       771  

Prepaid and other current assets

     300       381  
                

Total current assets

     10,086       4,701  
                

Restricted cash - litigation escrow

     770       —    

Investment securities, available-for-sale

     194       743  

Volume and support incentives

     79       72  

Property, equipment, and technology, net

     1,018       906  

Other assets

     623       625  

Intangible assets

     10,883       10,883  

Goodwill

     10,216       9,139  
                

Total assets

   $ 33,869     $ 27,069  
                

Liabilities

    

Accounts payable

   $ 111     $ 164  

Settlement payable

     916       644  

Customer collateral

     500       389  

Accrued compensation and benefits

     317       479  

Volume and support incentives

     305       294  

Accrued liabilities

     540       496  

Current portion of long-term debt

     72       84  

Current portion of accrued litigation

     1,572       2,236  

Redeemable class C (series III) common stock, 35,263,585 shares outstanding

     1,508       —    
                

Total current liabilities

     5,841       4,786  
                

Long-term debt

     40       40  

Accrued litigation

     1,349       1,446  

Deferred tax liabilities

     3,563       3,758  

Other liabilities

     761       754  
                

Total liabilities

     11,554       10,784  
                

Temporary Equity

    

Class C (series II) common stock, 79,748,857 shares issued and outstanding

     1,127       —    
                

Total temporary equity

     1,127       —    
                

Commitments and contingencies

     —      

Stockholders’ Equity

    

Preferred stock none issued

     —         —    

Class A common stock, 447,889,803 issued and outstanding

     —         —    

Class B common stock, 245,513,385 issued and outstanding

     —         —    

Class C (series I) common stock, 124,503,084 issued and outstanding

     —         —    

Class C (series III) common stock, 26,949,616 issued and outstanding

     —         —    

Class C (series IV) common stock, 549,587 issued and outstanding

     —         —    

Additional paid-in capital

     20,970       16,785  

Accumulated income (deficit)

     223       (500 )

Accumulated other comprehensive loss

     (5 )     —    
                

Total equity

     21,188       16,285  
                

Total liabilities, temporary equity and stockholders’ equity

   $ 33,869     $ 27,069  
                

 

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VISA INC.

Consolidated Statements of Cash Flows

 

     For the Six Months Ended March 31,  
     2008     2007(1)  
     (in millions)  

Operating Activities

    

Net income

   $ 738     $ 385  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization of facilities, equipment, and software

     121       57  

Amortization of intangibles, investments, debt issuance cost, accretion of member deposits, and asset retirement obligation

     —         6  

Share-based compensation

     19    

Fair value adjustment for liability under the framework agreement

     (36 )     —    

Net recognized loss (gain) on investment securities, including other-than-temporary impairment

     8       (2 )

(Gain) loss on sale of assets

     —         1  

Minority interest

     —         1  

Amortization of volume and support incentives

     588       225  

Accrued litigation and accretion

     370       51  

Equity in earnings of unconsolidated affiliates

     (1 )     (25 )

Deferred income taxes

     124       —    

Change in operating assets and liabilities:

    

Accounts receivable

     (3 )     (1 )

Settlement receivable

     (569 )     5  

Volume and support incentives

     (676 )     (234 )

Other assets

     (61 )     21  

Accounts payable

     (54 )     (55 )

Settlement payable

     273       (4 )

Accrued compensation and benefits

     (154 )     (34 )

Accrued and other liabilities

     195       61  

Accrued litigation

     (1,131 )     (1 )

Member deposits

     (3 )     (71 )
                

Net cash provided by (used in) operating activities

     (252 )     386  
                

Investing Activities

    

Investment securities, available-for-sale:

    

Purchases

     (1,500 )     (1,427 )

Proceeds from sales and maturities

     2,279       1,222  

Cash acquired through reorganization

     1,002       —    

Contributions to joint ventures

     —         (1 )

Distribution from partnership investment

     1       —    

Purchases of property, equipment, and technology

     (237 )     (45 )

Proceeds from sale of property, equipment, and technology

     4       —    
                

Net cash provided by (used in) investing activities

     1,549       (251 )
                

Financing Activities

    

Proceeds from short-term borrowing

     2       —    

Payments on short-term borrowing

     (2 )     —    

Proceeds from sale of common stock, net of issuance costs of $550

     19,100       —    

Payment to litigation escrow account - Retrospective Responsibility Plan

     (3,000 )     —    

Funding from litigation escrow account - Retrospective Responsibility Plan

     945       —    

Payment to tax escrow account - Income tax withheld on proceeds

     (116 )     —    

Payment for redemption of common stock

     (13,446 )     —    

Principal payments on debt

     (12 )     (17 )

Principal payments on capital lease obligations

     (2 )     (2 )
                

Net cash used in financing activities

     3,469       (19 )
                

Increase in cash and cash equivalents

     4,766       116  

Cash and cash equivalents at beginning of year

     275       270  
                

Cash and cash equivalents at end of year

   $ 5,041     $ 386  
                

Supplemental Disclosure of Cash Flow Information

    

Income taxes paid, net of refunds

   $ 250     $ 177  

(Decrease) increase in accounts payable and accrued and other liabilities related to purchases of property, equipment, and technology, net

   $ (10 )   $ (15 )

Interest payments on debt

   $ 4     $ 2  

Common stock issued in acquisition

   $ 17,935     $ —    
                

 

(1) Historical amounts represent the balances of Visa U.S.A. Inc., deemed the accounting acquirer in the reorganization.

 

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Pro Forma Fiscal 2007 Results of Operations (1)

(in millions)

 

     For the Three
Months Ended
March 31, 2007
    For the Six
Months Ended
March 31, 2007
 

Operating Revenues

    

Service fees

   $ 614     $ 1,191  

Data processing fees

     370       747  

Volume and support incentives

     (187 )     (323 )

International transaction fees

     281       529  

Other revenues

     113       221  
                

Total operating revenues

     1,191       2,365  
                

Operating Expenses

    

Personnel

     269       542  

Network, EDP, and communications

     69       137  

Advertising, marketing, and promotion

     182       387  

Professional and consulting fees

     136       237  

Depreciation and amortization

     54       109  

Administrative and other

     74       150  

Litigation provision

     13       15  
                

Total operating expenses

     797       1,577  
                

Operating income

     394       788  

Other Income (Expense)

    

Interest expense

     (24 )     (48 )

Investment income, net

     36       76  
                

Total other income

     12       28  
                

Income before income taxes and minority interest

     406       816  

Income tax expense

     160       321  
                

Net income

   $ 246     $ 495  
                

 

(1) Visa Inc. had no operations prior to the reorganization on October 1, 2007. In order to provide insight into our operating results, the pro forma results of operations for the prior periods have been prepared for comparative purposes assuming that the reorganization had occurred on October 1, 2006. These pro forma statements of operations data have been prepared in accordance with Statement of Financial Accounting Standards, or SFAS, No. 141, “Business Combinations.

 

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Pro Forma Fiscal 2007 Quarterly Results of Operations

(in millions)

Unaudited Pro Forma Combined Income Statements - With California Mutual Trading Status

The quarterly pro forma statements of operations data set forth below for fiscal 2007 give effect to the reorganization as if it had occurred on October 1, 2006. These pro forma statements of operations data have been prepared in accordance with Statement of Financial Accounting Standards, or SFAS, No. 141, “Business Combinations.

 

     Pro Forma Fiscal 2007 Quarter Ended     Actual Fiscal
2008
Quarter Ended
 
(in millions)    December 31, 2006     March 31, 2007     June 30, 2007     September 30, 2007     December 31, 2007  

Operating Revenues

          

Card Service Fees

   $ 577     $ 614     $ 661     $ 730     $ 732  

Data Processing Fees

   $ 377     $ 370     $ 449     $ 463     $ 492  

Volume and Support Incentives

   $ (136 )   $ (187 )   $ (175 )   $ (216 )   $ (250 )

International Transaction Fees

   $ 247     $ 281     $ 311     $ 353     $ 381  

Other Revenues

   $ 108     $ 113     $ 119     $ 133     $ 133  
                                        

Total Operating Revenues

   $ 1,173     $ 1,191     $ 1,365     $ 1,463     $ 1,488  
                                        

Operating Expenses

          

Personnel

   $ 273     $ 269     $ 293     $ 324     $ 283  

Network, EDP, and Communications

   $ 68     $ 69     $ 77     $ 80     $ 83  

Advertising, Marketing, and Promotion

   $ 205     $ 182     $ 245     $ 443     $ 210  

Professional and Consulting Fees

   $ 101     $ 136     $ 159     $ 157     $ 98  

Depreciation and amortization

   $ 55     $ 54     $ 55     $ 63     $ 62  

Administrative and Other

   $ 76     $ 74     $ 94     $ 105     $ 74  

Litigation Obligation Provision

   $ 2     $ 13     $ (1 )   $ 2,638     $ —    
                                        

Total Operating Expenses

   $ 780     $ 797     $ 921     $ 3,810     $ 810  
                                        

Operating Income

   $ 393     $ 394     $ 444     $ (2,347 )   $ 678  
                                        

Other Income (Expenses)

          

Interest Income(Expense)

   $ (23 )   $ (24 )   $ (25 )   $ (24 )   $ (45 )

Investment Income, net

   $ 40     $ 36     $ 56     $ 65     $ 42  

Other

   $ —       $ —       $ 8     $ 0     $ 8  
                                        

Total Other Income (Expense)

   $ 17     $ 12     $ 39     $ 41     $ 5  
                                        

Income Before Income Taxes

   $ 410     $ 406     $ 483     $ (2,306 )   $ 683  

Income Tax Expense/(Benefit)

   $ 161     $ 160     $ 184     $ (652 )   $ 259  
                                        

Net Income

   $ 249     $ 246     $ 299     $ (1,654 )   $ 424  
                                        

 

8


Reconciliation of Non-GAAP Adjusted Operating Income and Net Income

(in millions)

 

     For the three Months
Ended

March 31, 2008
    For the six Months
Ended

March 31, 2008
    Pro forma for the
Three Months
Ended

March 31, 2007
    Pro forma for the
Six Months
Ended

March 31, 2007
 

Net income (as reported)

   $ 314     $ 738     $ 246     $ 1,191  

Addback: Income tax expense (as reported)

     56       315       160       321  
                                

Net income before taxes and minority interest (as reported)

   $ 370     $ 1,053     $ 406     $ 1,512  
                                

Adjustments:

        

Covered litigation reserve(1)

     285       285       —         —    

Restructuring(2)

     19       55       36       47  

Asset step-up amortization(3)

     17       34       17       34  
                                

Adjustments to operating income

     321       374       53       81  

Interest accretion on American Express settlement(4)

     23       46       —         —    

Investment income on IPO proceeds(5)

     (7 )     (7 )     —         —    

Underwater contract (LIBOR Adjustment)(6)

     (28 )     (36 )     —         —    
                                

Adjustments to non-operating income

     (12 )     3       —         —    

Total adjustments

     309       377       53       81  

Adjusted net income before tax

     679       1,430       459       1,593  

Adjusted income tax expense(7)

     (278 )     (586 )     (188 )     (653 )
                                

Adjusted net income

   $ 401     $ 844     $ 271     $ 940  
                                

Operating income (as reported)

   $ 349     $ 1,027     $ 394       788  

Addback: Adjustments to operating income

     321       374       53       81  
                                

Adjusted operating income

   $ 670     $ 1,401     $ 447     $ 869  
                                

Operating revenues (as reported)

   $ 1,453     $ 2,941     $ 1,191       2,365  

Adjusted operating margin

     46 %     48 %     38 %     37 %

Total operating expenses (as reported)

   $ 1,104     $ 1,914     $ 797     $ 1,577  

Less: Adjustments to operating expenses

     (321 )     (374 )     (53 )     (81 )
                                

Adjusted operating expenses

   $ 783     $ 1,540     $ 744     $ 1,496  
                                

 

(1)

Litigation expense recorded in the period related to the covered litigation. Settlements of, or judgments in, covered litigation will be paid from the litigation escrow account.

(2)

Restructuring costs, primarily severance in fiscal 2008, associated with workforce consolidation and elimination of overlapping functions.

(3)

Non-cash amortization and depreciation of the incremential basis in technology and building assets acquired in the reorganization.

(4)

Interest expense recorded on future payments to be made under the settlement agreement with American Express. These payments will be paid from the litigation escrow account.

(5)

Investment income earned during the period on all IPO proceeds held, including amounts the Company intends to use in October 2008 to redeem all class C (series II) common stock and a portion of the class C (series III) common stock held by Visa Europe.

(6)

Other income recorded in the period as a result of a reduction in the Company’s estimated liability under the Framework Agreement, which governs its relationship with Visa Europe. This reduction was a result of lower LIBOR rates in the period. This liability will not continue after the October 2008 redemptions described above.

(7)

Reflects a normalized tax rate of 41%.

 

9


Reconciliation of Non-GAAP Weighted Average Class A Common Stock Outstanding Used in the Calculation of Adjusted Diluted Class A Earnings Per Share

 

     For the Three
Months Ended
March 31, 2008
    For the Six
Months Ended
March 31, 2008
 
     (in millions)  

Weighted Average Shares Outstanding - GAAP

   778     762  

Class A Shares (1)

   383     415  

Class B Shares(2)

   (226 )   (238 )

Class C Shares (3)

   (161 )   (165 )

Class A Share Equivalents (4)

   5     5  
            

Share Adjustments

   1     17  

Adjusted Weighted Average Shares Outstanding - Non GAAP

   779     779  

 

(1) For GAAP purposes, the number of class A common shares outstanding is weighted to reflect the issuance of 446,600,000 shares at the IPO date of March 19, 2008. In the calculation of the adjusted weighted average shares outstanding, these shares are assumed to have been issued at the beginning of each period presented.
(2) For GAAP purposes, the number of class B common shares outstanding is weighted to reflect the redemption of 154,738,487 shares on March 28, 2008 and the reduction of the conversion ratio applicable to remaining shares outstanding to 0.71 to 1. In the calculation of the adjusted weighted average shares outstanding, these shares are weighted to assume that the redemption and reduction in conversion ratio had occurred at the beginning of each period presented.
(3) For GAAP purposes, the number of class C (series I, II, III & IV) common shares is weighted to reflect the redemption of 159,657,751 shares of class C (series I) common stock on March 28, 2008, and the reclassification of all shares of class C (series II) common stock to temporary equity and 35,263,585 shares of class C (series III) common stock to liabilities on the IPO date of March 19, 2008. Upon reclassification of the class C (series II) and class C (series III) common stock these shares are no longer convertible into shares of class A common stock. In the calculation of adjusted weighted average shares outstanding, these shares are weighted to assume that the redemption and reclassifications occurred at the beginning of each period presented.
(4) For GAAP purposes, the number of class A common shares outstanding is weighted to reflect the assumed issuance of class A common stock underlying stock options, restricted stock and restricted stock units to employees and directors at the IPO date of March 19, 2008, applying the treasury method. In the calculation of the adjusted weighted average shares outstanding, these shares are weighted to assume the issuance of these awards at the beginning of each period presented. The assumed number of shares underlying stock options assumed issued for adjusted non-GAAP purposes assumes the repurchase of shares at the share price on March 31, 2008 of $62.36.

 

10


Class A Common Stock Adjusted Diluted Earnings Per Share

Management believes the presentation of adjusted operating income and adjusted net income provides a clearer understanding of the one-time items related to the Company’s reorganization and initial public offering. These measures also adjust for expenses related to covered litigation that will be funded by the litigation escrow account. These items have a significant impact on our financial results but are either non-recurring or have no operating cash impact.

Recognizing that we have a very complex equity structure incorporating multiple classes and series of common stock, the Company has also presented adjusted diluted class A earnings per share calculated below based on adjusted net income and the adjusted weighted average number of shares outstanding in the periods presented. This non-GAAP financial measure has been presented to illustrate our per share results reflecting our capital structure after the redemption of all class C (series II) common stock and a portion of class C (series III) common stock, which the Company intends to redeem in October 2008. The class C (series II) common stock is classified as temporary equity and the class C (series III) common stock is classified as a liability on the Company’s consolidated balance sheet at March 31, 2008. Management believes this non-GAAP presentation provides the reader with a clearer understanding of our per share results by excluding these shares to be redeemed and allocating adjusted net income only to permanent equity.

 

     For the Three
Months Ended
March 31, 2008
   For the Six
Months Ended
March 31, 2008
     (in millions, except per share data)

Adjusted net income

   $ 401    $ 844

Adjusted weighted average number of diluted shares outstanding

     779      779
             

Adjusted diluted earnings per share

   $ 0.52    $ 1.08
             

 

11


LOGO

Operational Performance Data

The tables below provide information regarding the operational results for the 3 months ended December 31, 2007, as well as the prior eight quarterly reporting periods and the years ended December 31, 2005, 2006 and 2007, for cards carrying the Visa, Visa Electron and Interlink brands.

1. Branded Volume and Transactions

The tables present Payments Volume, Cash Volume, Total Volume, the number of payments transactions, cash transactions, accounts and cards for cards carrying the Visa, Visa Electron and Interlink brands. Card counts include PLUS proprietary cards. Nominal and constant dollar growth rates over prior periods are provided for volume-based data.

 

     For the 3 Months Ended December 31, 2007
     Total
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   241    28.4 %   23.0 %   158    24.3 %   19.6 %   1,931    83    36.9 %   29.9 %   452    368    446

Canada

   51    29.3 %   13.6 %   45    28.5 %   12.8 %   382    6    36.5 %   19.9 %   9    23    31

CEMEA

   115    43.8 %   38.9 %   18    44.1 %   40.1 %   235    97    43.8 %   38.7 %   590    139    147

LAC

   145    33.3 %   21.3 %   47    44.1 %   30.5 %   1,132    99    28.8 %   17.4 %   757    284    307

US

   514    11.3 %   11.3 %   413    12.4 %   12.4 %   7,416    101    7.1 %   7.1 %   730    476    686
                                              

Visa Inc.

   1,067    21.5 %   17.8 %   681    18.5 %   15.8 %   11,097    386    27.1 %   21.6 %   2,539    1,290    1,616

Visa Credit Programs

                                

US

   253    8.8 %   8.8 %   218    9.7 %   9.7 %   2,462    35    3.9 %   3.9 %   33    259    365

Rest of World

   272    26.7 %   19.5 %   232    27.3 %   19.7 %   2,863    40    23.2 %   18.5 %   136    372    431
                                              

Visa Inc.

   524    17.4 %   14.1 %   450    18.1 %   14.6 %   5,325    75    13.3 %   11.2 %   169    631    796

Visa Debit Programs

                                

US

   261    13.9 %   13.9 %   195    15.6 %   15.6 %   4,955    66    8.9 %   8.9 %   698    217    321

Rest of World

   281    39.1 %   29.8 %   36    43.5 %   32.9 %   817    245    38.5 %   29.4 %   1,672    442    500
                                              

Visa Inc.

   542    25.7 %   21.6 %   231    19.2 %   18.0 %   5,772    311    30.9 %   24.4 %   2,369    659    820
     For the 3 Months Ended September 30, 2007
     Total
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume ($
billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   215    25.6 %   19.6 %   140    22.1 %   16.8 %   1,796    74    32.8 %   25.1 %   417    348    422

Canada

   47    22.7 %   12.9 %   42    21.4 %   11.8 %   362    6    33.0 %   22.5 %   9    23    31

CEMEA

   101    43.0 %   38.4 %   15    39.0 %   35.1 %   211    85    43.8 %   39.0 %   545    125    136

LAC

   121    26.7 %   19.0 %   38    38.5 %   29.6 %   1,004    83    21.9 %   14.6 %   691    267    289

US

   489    9.6 %   9.6 %   388    10.7 %   10.7 %   7,033    101    5.6 %   5.6 %   730    442    643
                                              

Visa Inc.

   972    18.4 %   15.5 %   623    15.8 %   13.6 %   10,405    349    23.3 %   19.0 %   2,392    1,205    1,522

Visa Credit Programs

                                

US

   240    6.7 %   6.7 %   206    8.5 %   8.5 %   2,314    35    -2.9 %   -2.9 %   34    254    358

Rest of World

   243    22.5 %   16.4 %   206    23.6 %   17.2 %   2,654    37    16.4 %   12.0 %   128    353    410
                                              

Visa Inc.

   483    14.1 %   11.4 %   412    15.6 %   12.7 %   4,968    71    6.2 %   4.2 %   162    607    769

Visa Debit Programs

                                

US

   249    12.6 %   12.6 %   182    13.3 %   13.3 %   4,719    67    10.7 %   10.7 %   696    188    285

Rest of World

   241    36.0 %   28.5 %   29    39.6 %   31.1 %   718    211    35.5 %   28.2 %   1,534    409    468
                                              

Visa Inc.

   489    23.0 %   19.9 %   212    16.4 %   15.5 %   5,437    278    28.6 %   23.5 %   2,230    597    753

 

12


Operational Performance Data

 

     For the 3 Months Ended June 30, 2007
     Total
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   201    20.6 %   16.3 %   132    19.9 %   16.7 %   1,708    69    21.9 %   15.5 %   373    336    412

Canada

   45    18.2 %   12.0 %   40    17.4 %   11.3 %   352    5    24.5 %   18.0 %   9    22    30

CEMEA

   90    38.7 %   37.0 %   14    32.4 %   32.8 %   197    76    39.9 %   37.8 %   508    121    124

LAC

   114    32.5 %   19.1 %   35    42.2 %   28.2 %   945    79    28.6 %   15.4 %   669    257    281

US

   484    9.5 %   9.5 %   385    10.4 %   10.4 %   6,903    98    6.5 %   6.5 %   720    419    617
                                              

Visa Inc.

   934    17.1 %   14.4 %   606    14.7 %   13.1 %   10,104    327    21.8 %   17.0 %   2,279    1,155    1,465

Visa Credit Programs

                                

US

   235    6.4 %   6.4 %   203    8.3 %   8.3 %   2,251    33    -4.3 %   -4.3 %   32    246    345

Rest of World

   228    19.8 %   15.8 %   194    21.2 %   16.8 %   2,519    35    12.6 %   10.2 %   120    339    394
                                              

Visa Inc.

   464    12.6 %   10.8 %   396    14.3 %   12.3 %   4,770    67    3.7 %   2.6 %   152    584    739

Visa Debit Programs

                                

US

   248    12.7 %   12.7 %   183    12.7 %   12.7 %   4,652    66    12.8 %   12.8 %   688    174    272

Rest of World

   222    34.2 %   25.1 %   27    39.7 %   29.9 %   682    195    33.5 %   24.5 %   1,439    397    454
                                              

Visa Inc.

   470    21.9 %   18.3 %   210    15.6 %   14.6 %   5,334    260    27.6 %   21.3 %   2,127    571    726
     For the 3 Months Ended March 31, 2007
     Total
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   189    23.1 %   18.7 %   126    20.8 %   17.1 %   1,599    63    28.1 %   22.2 %   382    321    397

Canada

   36    10.3 %   11.8 %   31    9.2 %   10.7 %   309    4    19.1 %   20.7 %   9    22    30

CEMEA

   81    44.8 %   45.2 %   12    35.3 %   41.7 %   183    68    46.6 %   45.9 %   477    117    122

LAC

   104    19.4 %   19.9 %   31    25.9 %   25.8 %   904    72    16.8 %   17.6 %   658    251    271

US

   440    9.1 %   9.1 %   347    8.9 %   8.9 %   6,260    94    9.8 %   9.8 %   698    412    607
                                              

Visa Inc.

   850    16.1 %   15.3 %   548    12.9 %   12.3 %   9,255    302    22.3 %   21.2 %   2,224    1,124    1,426

Visa Credit Programs

                                

US

   214    7.8 %   7.8 %   181    8.0 %   8.0 %   2,021    33    7.0 %   7.0 %   30    243    341

Rest of World

   208    17.1 %   15.4 %   177    18.5 %   16.7 %   2,343    32    9.8 %   8.6 %   105    322    375
                                              

Visa Inc.

   423    12.2 %   11.4 %   357    13.0 %   12.1 %   4,364    65    8.3 %   7.8 %   135    565    716

Visa Debit Programs

                                

US

   226    10.4 %   10.4 %   166    10.0 %   10.0 %   4,239    60    11.4 %   11.4 %   668    170    266

Rest of World

   201    33.4 %   31.5 %   24    35.3 %   33.8 %   652    176    33.1 %   31.2 %   1,421    389    444
                                              

Visa Inc.

   427    20.1 %   19.4 %   190    12.7 %   12.6 %   4,890    237    26.8 %   25.6 %   2,089    559    710
     For the 3 Months Ended December 31, 2006
     Total
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   188    21.9 %   15.9 %   127    21.1 %   15.8 %   1,600    61    23.7 %   16.0 %   381    308    381

Canada

   40    11.1 %   11.3 %   35    10.1 %   10.3 %   344    4    19.8 %   20.0 %   9    22    30

CEMEA

   80    43.0 %   40.7 %   12    32.2 %   34.2 %   175    68    45.1 %   41.9 %   470    104    112

LAC

   109    22.2 %   17.5 %   33    30.4 %   25.3 %   911    77    19.0 %   14.5 %   687    241    262

US

   462    8.3 %   8.3 %   367    8.1 %   8.1 %   6,544    95    9.2 %   9.2 %   698    406    604
                                              

Visa Inc.

   878    15.4 %   13.6 %   574    12.4 %   11.3 %   9,573    304    21.4 %   18.2 %   2,245    1,081    1,388

Visa Credit Programs

                                

US

   232    7.7 %   7.7 %   199    7.7 %   7.7 %   2,270    34    7.7 %   7.7 %   32    240    345

Rest of World

   214    17.9 %   14.1 %   182    19.2 %   15.4 %   2,371    32    11.4 %   7.2 %   107    314    363
                                              

Visa Inc.

   447    12.4 %   10.8 %   381    12.9 %   11.4 %   4,640    66    9.5 %   7.5 %   140    554    709

Visa Debit Programs

                                

US

   230    8.9 %   8.9 %   169    8.5 %   8.5 %   4,275    61    10.0 %   10.0 %   666    166    259

Rest of World

   202    32.0 %   26.3 %   25    36.0 %   30.6 %   658    177    31.4 %   25.7 %   1,440    361    421
                                              

Visa Inc.

   431    18.6 %   16.7 %   194    11.4 %   11.1 %   4,933    238    25.2 %   21.5 %   2,105    527    680

 

13


Operational Performance Data

 

     For the 3 Months Ended September 30, 2006
     Total
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   171    16.8 %   15.0 %   115    17.5 %   16.3 %   1,508    56    15.4 %   12.3 %   360    298    367

Canada

   38    17.1 %   11.0 %   34    16.4 %   10.4 %   330    4    23.4 %   17.0 %   9    22    29

CEMEA

   70    38.9 %   40.1 %   11    29.6 %   35.2 %   157    59    40.8 %   41.1 %   424    94    104

LAC

   95    20.7 %   18.1 %   27    27.9 %   25.0 %   810    68    18.0 %   15.5 %   643    228    248

US

   446    11.6 %   11.6 %   350    11.1 %   11.1 %   6,230    96    13.6 %   13.6 %   733    398    599
                                              

Visa Inc.

   821    15.9 %   15.1 %   538    13.9 %   13.3 %   9,036    283    20.0 %   18.7 %   2,169    1,041    1,347

Visa Credit Programs

                                

US

   225    9.6 %   9.6 %   190    9.0 %   9.0 %   2,149    36    13.1 %   13.1 %   34    242    351

Rest of World

   198    16.6 %   14.4 %   167    17.9 %   15.8 %   2,243    31    10.0 %   7.5 %   102    297    346
                                              

Visa Inc.

   423    12.8 %   11.9 %   356    13.0 %   12.2 %   4,392    67    11.6 %   10.3 %   136    539    696

Visa Debit Programs

                                

US

   221    13.8 %   13.8 %   161    13.7 %   13.7 %   4,081    60    14.0 %   14.0 %   699    156    249

Rest of World

   177    27.4 %   25.2 %   21    32.2 %   30.7 %   563    156    26.8 %   24.5 %   1,334    346    402
                                              

Visa Inc.

   398    19.5 %   18.7 %   182    15.6 %   15.6 %   4,644    216    22.9 %   21.5 %   2,033    502    651
     For the 3 Months Ended June 30, 2006
     Total
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   167    17.9 %   18.1 %   110    15.9 %   16.6 %   1,416    56    22.0 %   20.9 %   353    287    354

Canada

   38    23.5 %   12.3 %   34    23.0 %   11.8 %   322    4    27.4 %   15.8 %   9    21    28

CEMEA

   65    43.5 %   42.2 %   10    35.5 %   35.9 %   147    55    45.2 %   43.4 %   407    86    95

LAC

   86    21.4 %   20.9 %   25    29.3 %   27.9 %   769    61    18.5 %   18.3 %   620    219    236

US

   441    14.8 %   14.8 %   349    15.7 %   15.7 %   6,158    92    11.4 %   11.4 %   710    390    611
                                              

Visa Inc.

   797    18.5 %   17.9 %   528    17.1 %   16.5 %   8,812    269    21.2 %   20.5 %   2,098    1,003    1,324

Visa Credit Programs

                                

US

   221    11.5 %   11.5 %   187    12.1 %   12.1 %   2,091    34    8.3 %   8.3 %   32    236    344

Rest of World

   191    16.7 %   14.9 %   160    18.4 %   16.5 %   2,126    31    8.5 %   6.8 %   97    283    329
                                              

Visa Inc.

   412    13.8 %   13.0 %   347    14.9 %   14.1 %   4,216    65    8.4 %   7.6 %   129    519    672

Visa Debit Programs

                                

US

   220    18.3 %   18.3 %   162    20.2 %   20.2 %   4,068    58    13.3 %   13.3 %   677    153    268

Rest of World

   165    32.1 %   30.5 %   19    33.9 %   32.7 %   528    146    31.9 %   30.2 %   1,291    330    384
                                              

Visa Inc.

   386    23.8 %   23.4 %   182    21.5 %   21.5 %   4,596    204    26.0 %   25.1 %   1,969    484    652
     For the 3 Months Ended March 31, 2006
     Total
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   154    12.2 %   16.0 %   104    11.9 %   16.3 %   1,302    49    12.7 %   15.2 %   327    276    341

Canada

   32    18.0 %   13.5 %   29    18.4 %   13.8 %   282    4    15.4 %   10.9 %   9    21    27

CEMEA

   56    38.8 %   41.7 %   9    28.8 %   31.7 %   126    47    41.0 %   43.7 %   357    82    89

LAC

   87    37.6 %   21.3 %   25    45.7 %   28.6 %   742    62    34.5 %   18.6 %   600    204    225

US

   403    16.1 %   16.1 %   318    17.6 %   17.6 %   5,687    85    11.0 %   11.0 %   662    383    606
                                              

Visa Inc.

   732    19.0 %   18.2 %   485    17.7 %   17.8 %   8,140    247    21.7 %   18.9 %   1,955    966    1,288

Visa Credit Programs

                                

US

   199    11.7 %   11.7 %   167    12.7 %   12.7 %   1,884    31    6.7 %   6.7 %   30    232    338

Rest of World

   178    14.1 %   15.0 %   149    16.0 %   16.9 %   1,962    29    5.3 %   6.1 %   88    273    315
                                              

Visa Inc.

   376    12.8 %   13.2 %   316    14.2 %   14.6 %   3,847    60    6.1 %   6.4 %   118    505    653

Visa Debit Programs

                                

US

   205    20.8 %   20.8 %   151    23.6 %   23.6 %   3,802    54    13.6 %   13.6 %   632    151    268

Rest of World

   151    34.8 %   28.3 %   18    37.2 %   31.0 %   491    133    34.5 %   28.0 %   1,205    311    367
                                              

Visa Inc.

   356    26.4 %   23.9 %   169    24.9 %   24.3 %   4,293    187    27.7 %   23.5 %   1,837    462    635

 

14


Operational Performance Data

 

     For the 3 Months Ended December 31, 2005
     Total
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   154    12.9 %   15.3 %   105    12.0 %   14.4 %   1,290    49    14.8 %   17.3 %   329    266    328

Canada

   36    17.9 %   10.7 %   32    17.8 %   10.6 %   316    4    19.1 %   11.8 %   9    21    27

CEMEA

   56    37.7 %   43.5 %   9    31.2 %   38.6 %   127    47    39.1 %   44.4 %   358    75    83

LAC

   89    31.1 %   20.1 %   25    38.9 %   28.3 %   758    64    28.3 %   17.2 %   632    194    214

US

   426    16.1 %   16.1 %   340    17.4 %   17.4 %   5,983    87    11.3 %   11.3 %   674    373    584
                                            

Visa Inc.

   761    18.4 %   17.8 %   511    17.3 %   17.1 %   8,475    250    20.7 %   19.2 %   2,002    929    1,236

Visa Credit Programs

                                

US

   215    10.5 %   10.5 %   184    11.2 %   11.2 %   2,128    31    6.7 %   6.7 %   32    228    327

Rest of World

   182    13.1 %   12.7 %   153    15.1 %   14.6 %   1,991    29    3.5 %   3.2 %   90    264    304
                                            

Visa Inc.

   397    11.7 %   11.5 %   337    12.9 %   12.8 %   4,119    60    5.1 %   4.9 %   121    492    631

Visa Debit Programs

                                

US

   211    22.3 %   22.3 %   155    25.6 %   25.6 %   3,855    55    14.0 %   14.0 %   642    144    257

Rest of World

   153    33.6 %   29.4 %   18    39.7 %   35.1 %   500    135    32.8 %   28.7 %   1,239    293    348
                                            

Visa Inc.

   364    26.8 %   25.4 %   174    27.0 %   26.6 %   4,356    190    26.7 %   24.4 %   1,881    437    605
     For the 12 Months Ended December 31, 2007
     Total
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   846    24.6 %   19.5 %   556    21.9 %   17.6 %   7,034    289    30.1 %   23.3 %   1,624    368    446

Canada

   179    20.6 %   12.7 %   158    19.6 %   11.7 %   1,404    21    28.6 %   20.2 %   37    23    31

CEMEA

   386    42.6 %   39.6 %   59    38.1 %   37.4 %   827    327    43.4 %   40.0 %   2,120    139    147

LAC

   485    28.3 %   19.9 %   152    38.1 %   28.7 %   3,984    333    24.2 %   16.3 %   2,775    284    307

US

   1,927    9.9 %   9.9 %   1,533    10.7 %   10.7 %   27,612    394    7.2 %   7.2 %   2,877    476    686
                                              

Visa Inc.

   3,822    18.4 %   15.8 %   2,458    15.6 %   13.8 %   40,860    1,364    23.8 %   19.7 %   9,433    1,290    1,616

Visa Credit Programs

                                

US

   942    7.5 %   7.5 %   807    8.7 %   8.7 %   9,048    136    0.7 %   0.7 %   129    259    365

Rest of World

   951    21.8 %   16.9 %   808    22.9 %   17.7 %   10,379    143    15.7 %   12.5 %   490    372    431
                                        

Visa Inc.

   1,894    14.2 %   12.0 %   1,615    15.4 %   13.0 %   19,427    278    7.9 %   6.4 %   618    631    796

Visa Debit Programs

                                

US

   985    12.4 %   12.4 %   726    13.0 %   13.0 %   18,564    259    10.9 %   10.9 %   2,749    217    321

Rest of World

   944    35.9 %   28.7 %   117    39.9 %   31.9 %   2,869    827    35.4 %   28.3 %   6,066    442    500
                                              

Visa Inc.

   1,929    22.8 %   19.9 %   843    16.1 %   15.3 %   21,433    1,086    28.6 %   23.7 %   8,815    659    820
     For the 12 Months Ended December 31, 2006
     Total
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   679    17.3 %   16.2 %   457    16.7 %   16.3 %   5,827    222    18.6 %   16.0 %   1,421    308    381

Canada

   148    17.1 %   11.9 %   132    16.6 %   11.4 %   1,278    16    21.5 %   16.2 %   36    22    30

CEMEA

   271    41.2 %   41.1 %   43    31.5 %   34.4 %   605    228    43.1 %   42.4 %   1,657    104    112

LAC

   378    24.8 %   19.2 %   110    32.7 %   26.5 %   3,233    268    21.9 %   16.5 %   2,550    241    262

US

   1,753    12.5 %   12.5 %   1,385    12.8 %   12.8 %   24,619    368    11.3 %   11.3 %   2,803    406    604
                                              

Visa Inc.

   3,228    17.1 %   16.0 %   2,126    15.1 %   14.5 %   35,561    1,102    21.1 %   19.0 %   8,468    1,081    1,388

Visa Credit Programs

                                

US

   877    10.0 %   10.0 %   742    10.2 %   10.2 %   8,394    135    9.0 %   9.0 %   129    240    345

Rest of World

   781    16.4 %   14.6 %   658    17.9 %   16.1 %   8,702    123    8.9 %   6.9 %   394    314    363
                                              

Visa Inc.

   1,658    12.9 %   12.2 %   1,400    13.7 %   13.0 %   17,096    258    8.9 %   8.0 %   523    554    709

Visa Debit Programs

                                

US

   876    15.1 %   15.1 %   642    16.0 %   16.0 %   16,225    233    12.7 %   12.7 %   2,674    166    259

Rest of World

   695    31.4 %   27.4 %   84    34.8 %   31.2 %   2,240    611    31.0 %   26.9 %   5,270    361    421
                                              

Visa Inc.

   1,570    21.8 %   20.4 %   726    17.9 %   17.7 %   18,466    844    25.3 %   22.8 %   7,945    527    680

 

15


Operational Performance Data

 

     For the 12 Months Ended December 31, 2005
     Total
Volume

($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
   Cash
Volume
($ billions)
   Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
   Accounts
(millions)
   Cards
(millions)

All Visa Credit & Debit

                                

Asia Pacific

   579    21.3 %   16.0 %   391    19.8 %   14.4 %   4,713    188    24.7 %   19.2 %   1,190    266    328

Canada

   126    21.3 %   10.9 %   113    21.2 %   10.9 %   1,176    13    21.7 %   11.2 %   36    21    27

CEMEA

   192    17.3 %   13.7 %   33    15.7 %   11.9 %   432    159    17.6 %   14.1 %   1,234    75    83

LAC

   303    34.4 %   21.4 %   83    42.6 %   29.3 %   2,625    220    31.5 %   18.7 %   2,343    194    214

US

   1,558    16.1 %   16.1 %   1,227    17.5 %   17.5 %   21,750    331    11.0 %   11.0 %   2,588    373    584
                                              

Visa Inc.

   2,757    19.3 %   16.2 %   1,847    19.1 %   16.8 %   30,696    911    19.5 %   15.1 %   7,392    929    1,236

Visa Credit Programs

                                

US

   797    10.6 %   10.6 %   674    10.5 %   10.5 %   7,757    123    10.8 %   10.8 %   126    228    327

Rest of World

   671    18.4 %   11.5 %   558    21.0 %   14.2 %   7,254    113    7.3 %   0.0 %   339    264    304
                                              

Visa Inc.

   1,468    14.0 %   11.0 %   1,231    15.0 %   12.2 %   15,011    237    9.1 %   5.2 %   465    492    631

Visa Debit Programs

                                

US

   761    22.5 %   22.5 %   554    27.3 %   27.3 %   13,993    207    11.2 %   11.2 %   2,462    144    257

Rest of World

   529    31.0 %   23.0 %   62    37.5 %   28.3 %   1,692    467    30.2 %   22.4 %   4,465    293    348
                                              

Visa Inc.

   1,289    25.8 %   22.7 %   616    28.3 %   27.4 %   15,685    674    23.7 %   18.9 %   6,927    437    605

Footnote

The preceding tables present Payments Volume, Cash Volume, Total Volume, the number of payments transactions, cash transactions, accounts and cards for cards carrying the Visa, Visa Electron and Interlink brands. Card counts include PLUS proprietary cards. Nominal and constant dollar growth rates over prior periods are provided for volume-based data.

Payments Volume represents the aggregate dollar amount of purchases made with cards carrying the Visa, Visa Electron and Interlink brands for the relevant period; and Cash Volume represents the aggregate dollar amount of cash disbursements obtained with these cards for the relevant period and includes the impact of balance transfers and convenience checks; but excludes proprietary PLUS volume. Total Volume represents Payments Volume plus Cash Volume.

Visa payment products are comprised of credit and debit programs, and data relating to each program is included in the tables. Debit programs include Visa’s signature based and Interlink (PIN) debit programs.

The data presented is reported quarterly by Visa’s members on their operating certificates and is subject to verification by Visa. On occasion, members may update previously submitted information.

Visa’s CEMEA region is comprised of countries in Central Europe, the Middle East and Africa. Several European Union countries in Central Europe, Israel and Turkey are not included in CEMEA. LAC is comprised of countries in Central and South America and the Caribbean. Rest of World includes Asia Pacific, Canada, CEMEA and LAC.

Information denominated in U.S. dollars is calculated by applying an established U.S. dollar/local currency exchange rate for each local currency in which Visa Inc. volumes are reported (“Nominal USD”). These exchange rates are calculated on a quarterly basis using the established exchange rate for each quarter. To eliminate the impact of foreign currency fluctuations against the U.S. dollar in measuring performance, Visa Inc. also reports period-over-period growth in Total Volume, Payments Volume and Cash Volume on the basis of local currency information (“Constant USD”). This presentation represents Visa’s historical methodology which may be subject to review and refinement.

 

16


Operational Performance Data

2. Processed Transactions

The table below represents transactions involving Visa, Visa Electron, Interlink and PLUS cards processed on Visa’s networks.

 

Period

   Processed
Transactions
(millions)
   Year-over-Year
Growth
 

3 Months Ended

     

Mar 31, 2008

   8,800    15 %

Dec 31, 2007

   9,094    13 %

Sep 30, 2007

   8,645    12 %

Jun 30, 2007

   8,411    13 %

Mar 31, 2007

   7,645    12 %

Dec 31, 2006

   8,018    11 %

Sep 30, 2006

   7,722    NA  

Jun 30, 2006

   7,441    NA  

Mar 31, 2006

   6,828    NA  

Dec 31, 2005

   7,212    NA  

12 Months Ended

     

Sep 30, 2007

   32,720    12 %

Sep 30, 2006

   29,202    NA  

 

17