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Analysis of Income Taxes

Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Income Tax Expense (Benefit)

Visa Inc., income tax expense (benefit), continuing operations

US$ in millions

	12 months ended:	Sep 30, 2020		Sep 30, 2019		Sep 30, 2018		Sep 30, 2017		Sep 30, 2016
	U.S. federal
	State and local
	Non-U.S.
	Current taxes
	U.S. federal
	State and local
	Non-U.S.
	Deferred taxes
	Income tax provision

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-14), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-15).

Item	Description	The company
Current taxes	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Visa Inc.’s current taxes decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.
Deferred taxes	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Visa Inc.’s deferred taxes increased from 2018 to 2019 and from 2019 to 2020.
Income tax provision	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Visa Inc.’s income tax provision increased from 2018 to 2019 and from 2019 to 2020.

Effective Income Tax Rate (EITR)

Visa Inc., effective income tax rate (EITR) reconciliation

		Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
	U.S. federal income tax at statutory rate
	State income taxes, net of federal benefit
	Non-U.S. tax effect, net of federal benefit
	Transition tax on foreign earnings
	Remeasurement of deferred tax balances
	Revaluation of Visa Europe put option
	Reorganization of Visa Europe and other legal entities
	Other, net
	Effective income tax rate

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-14), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-15).

Item	Description	The company
Effective income tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Visa Inc.’s effective income tax rate decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Components of Deferred Tax Assets and Liabilities

Visa Inc., components of deferred tax assets and liabilities

US$ in millions

		Sep 30, 2020		Sep 30, 2019		Sep 30, 2018		Sep 30, 2017		Sep 30, 2016
	Accrued compensation and benefits
	Accrued litigation obligation
	Client incentives
	Net operating loss carryforwards
	Comprehensive loss
	Federal benefit of state taxes
	Federal benefit of foreign taxes
	Other
	Deferred tax assets, before valuation allowance
	Valuation allowance
	Deferred tax assets
	Property, equipment and technology, net
	Intangible assets
	Foreign taxes
	Other
	Deferred tax liabilities
	Net deferred tax assets (liabilities)

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-14), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-15).

Item	Description	The company
Deferred tax assets, before valuation allowance	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Visa Inc.’s deferred tax assets, before valuation allowance decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Visa Inc.’s deferred tax assets decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Visa Inc.’s net deferred tax assets (liabilities) decreased from 2018 to 2019 and from 2019 to 2020.

Deferred Tax Assets and Liabilities, Classification

Visa Inc., deferred tax assets and liabilities, classification

US$ in millions

		Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
	Net deferred tax assets (reflected in Other assets)
	Deferred tax liabilities

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-14), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-15).

Item	Description	The company
Net deferred tax assets (reflected in Other assets)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Visa Inc.’s net deferred tax assets (reflected in Other assets) increased from 2018 to 2019 and from 2019 to 2020.
Deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Visa Inc.’s deferred tax liabilities increased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Deferred Taxes

Visa Inc., adjustments to financial statements

US$ in millions

		Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Equity
	Equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Equity (adjusted)
	Adjustment to Net Income
	Net income (as reported)
	Add: Deferred income tax expense (benefit)
	Net income (adjusted)

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-14), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-15).

Visa Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Visa Inc., adjusted financial ratios

		Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-14), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-15).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Visa Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Visa Inc.’s adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Visa Inc.’s adjusted financial leverage ratio increased from 2018 to 2019 and from 2019 to 2020.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Visa Inc.’s adjusted ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Visa Inc.’s adjusted ROA improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level.

Visa Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

		Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
	As Reported
	Selected Financial Data (US$ in millions)
	Net income
	Net revenues
	Profitability Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income
	Net revenues
	Profitability Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-14), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-15).

2020 Calculations

¹ Net profit margin = 100 × Net income ÷ Net revenues
= 100 × ÷ =

² Adjusted net profit margin = 100 × Adjusted net income ÷ Net revenues
= 100 × ÷ =

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Visa Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Adjusted Total Asset Turnover

		Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
	As Reported
	Selected Financial Data (US$ in millions)
	Net revenues
	Total assets
	Activity Ratio
	Total asset turnover¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Net revenues
	Adjusted total assets
	Activity Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-14), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-15).

2020 Calculations

¹ Total asset turnover = Net revenues ÷ Total assets
= ÷ =

² Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= ÷ =

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Visa Inc.’s adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Adjusted Financial Leverage

		Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
	As Reported
	Selected Financial Data (US$ in millions)
	Total assets
	Equity
	Solvency Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted total assets
	Adjusted equity
	Solvency Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-14), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-15).

2020 Calculations

¹ Financial leverage = Total assets ÷ Equity
= ÷ =

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity
= ÷ =

Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Visa Inc.’s adjusted financial leverage ratio increased from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Equity (ROE)

		Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
	As Reported
	Selected Financial Data (US$ in millions)
	Net income
	Equity
	Profitability Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income
	Adjusted equity
	Profitability Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-14), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-15).

2020 Calculations

¹ ROE = 100 × Net income ÷ Equity
= 100 × ÷ =

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted equity
= 100 × ÷ =

Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Visa Inc.’s adjusted ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level.

Adjusted Return on Assets (ROA)

		Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
	As Reported
	Selected Financial Data (US$ in millions)
	Net income
	Total assets
	Profitability Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income
	Adjusted total assets
	Profitability Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-14), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-15).

2020 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Visa Inc.’s adjusted ROA improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level.

	Visa Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Analysis of Financial Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis of Components of Financial Statements
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Analysis of Financial Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis of Components of Financial Statements
Financial Reporting Quality

Visa Inc. (NYSE:V)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Visa Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Visa Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)