Welcome to Visa Inc.’s Fiscal Third Quarter 2014 Earnings Conference Call. All participants are in a listen-only mode, until the question-and-answer session of today's call. Today’s conference is also being recorded, if you have any objections you may disconnect at this time. I would now like to turn the conference over to your host, Mr. Jack Carsky, Head of Global Investor Relations. Mr. Carsky, you may begin.

Thanks, Charles. Good afternoon everybody and welcome to Visa's earnings conference call today. With us today are Charlie Scharf, Visa’s Chief Executive Officer, and Byron Pollitt, Visa’s Chief Financial Officer. This call is currently being webcast over the Internet. It can be accessed on the Investor Relations section of our website at www.investor.visa.com. A replay of the webcast will also be archived on our site for 30 days. A PowerPoint deck containing financial and statistical highlights of today’s commentary was posted to our website prior to this call. Let me also remind you that this presentation may include forward-looking statements. These statements aren’t guarantees of future performance and our actual results could materially differ as the result of a variety of factors. Additional information concerning those factors is available in our most recent reports on Forms 10-K and Q, which you can find on the SEC’s website in the Investor Relations section of our website. For historical non-GAAP or pro forma related financial information disclosed in this call, the related GAAP measures and other information required by Reg G of the SEC are available in the financial and statistical summary accompanying today’s press release. This release can also be accessed through the IR section of our website. With that, I'll now turn the call over to Byron.

Thanks, Jack. Let me begin with my usual callouts and observations. First, we continue to experience solid constant dollar payment volume payment volume growth in the low double-digit range both in the US and in internationally. That said, we see no signs yet of any acceleration in economic recovery and cross-border volume growth remained soft in the mid-single-digits. Turning to revenue, as expected and previewed on our call last quarter, revenue growth further moderated growing 7% year-over-year on a constant dollar basis or 5% nominally which reflects the two percentage points of FX headwind we have experienced since the beginning of the fiscal year. As a reminder, the current Q3 is lapping 17% nominal revenue growth in the prior year quarter which benefited from a number of favorable one-time adjustments. It is worth noting that the international revenue grew it only 1% this quarter despite cross-border constant dollar volume growth of 7%. While unfavorable FX is a partial explanation, the bigger impact is the significant reduction in currency volatility which has a direct impact on our international revenues. We expect both of these factors to reverse overtime. Looking ahead to Q4, we expect a rebound in nominal revenue growth on the order of 2 to 3 percentage points compared to Q3. This rebound is about 2 percentage points than we anticipated at the time of our last earnings call primarily due to a 1 percentage point drop in cross-border transaction growth and unusually low levels of volatility across a broad range of currencies. So, that means for the full fiscal year 2014, we now expect revenue growth in the 9% to 10% range on a constant dollar basis with guarded optimism that the moderation in cross-border volume growth has dropped. After FX impacts that translates into nominal revenue growth of…

Thank you very much, Byron. Byron did cover the financial results in a fair amount of detail but I just thought I'd just pass on a few quick thoughts. First of all, the quarterly results did come in where we expect. The revenue growth being impacted by the year-over-year comps with the strong U.S. dollar and the tepid growth from cross-border payment volume in these specific geographies was what we expected. And we reiterate that we are confident that these headwinds we do not feel are permanent. More importantly for the long-term, global payments volume and processed transactions remained healthy and strong. Also our issuer contract pipeline is very strong. So, all in all we are gratified to be able to deliver 50% earnings per share growth given the environment and what we've discussed. Let me turn out for a second and talk about Russia. As you all know by reading the newspapers and watching the news, the situation continues to evolve. The recent additional sanctions have not forced us to curtail business with additional clients and as of today, our domestic and international business continues. This concludes completing term sheets and contracts regarding our brand relationships during this quarter with significant Russian clients which we're gratified about but we continue to focus on developing a domestic processing solution and we're actively engaged with the Russian government and the Russian banks to develop a commercial solution which will allow us to continue serve our Russian clients. Most limiting provisions of the new law going to effect in October and we are working to have a solution implemented by that time. Having said that and as Byron mentioned, we do expect to lose a portion of our domestic processing revenues over the next year which will reset our base from which…

Yes, sir. (Operator Instructions). Our first question comes from Jason Kupferberg from Jefferies. Your line is now open. Jason Kupferberg - Jefferies & Co.: Thanks guys. Just wanted to ask about the cross-border little bit more since obviously that remains a high priority focus area for folks. Can you give us any commentary whether some of the slowdown has been more on the consumer side relative to the commercial side? And then just any thoughts on the gap between your growth in this metric and that of your biggest competitor? At least through the March quarter we don’t know what they’ve done for the June quarter. But it just looks like that gap has gotten little bit bigger. I’m curious if you guys have done any market intelligence to get a better understanding of that, and is there anything structural there we should be thinking about?

So let me start off with the first part of the question. It’s very corridor specific. So let me just highlight a few of the corridors that we saw the deceleration in cross-border from Q2 to Q3. And many of these will come as no surprise. Generally from Russia to the European countries, from Argentina, Venezuela to the European countries. The European countries to Ukraine, Russia to Ukraine, Ukraine to the European countries. So from that standpoint those are the key quarters that moved the needle. We know that it is pretty broad based and in this case many of these are just situationally specific. With regards to second part of your question, recognizing that Visa, Inc. does not have Europe. We are comfortable that at least half the difference in cross-border growth rates is attributable to Europe and the remainder we have under study. We also know given the ebb and flow of certain portfolio movements that some of that is country-specific and we are very focused on reversing those trends in the coming quarters.

Next question.

Thank you sir. Our next question comes from Sanjay from KBW. Your line is now open. Sanjay Sakhrani – KBW: Thank you. I guess I had a question on the hedges and the volatility observation or point. Could you talk about what would happen if volatility doesn’t come back into the FX market? I mean, does that serve as a headwind for period of time then?

So let me separate hedges and volatility. Because the two are completely independent to each other. When we speak of hedges this is simply basically a 12 month program where we try and dampen the fluctuations in FX when we translate net revenue or earnings positions earned in foreign currencies back in to our financial statements. Cross-border is impacted but to a modest degree and these are hedges in the traditional sense, simply in put in place to dampen the volatility of naturally occurring changes and currencies relative to the dollar overtime. The volatility is a different animal. Every year, if we look back over the past year, we will have performed currency translations services for over a $150 billion in value in order to facilitate the settlement of transactions where Visa Card is -- whose account is denominated in one currency is used in a country where the currency is different and so over the course of the year as I indicated we do over $150 billion of those kinds of currency translation services. The way we earn a very small spread on those transaction. The way the spread is calculated, it's an algorithm that is based on the actual volatility of our currency in a given day. Those that volatility is something we have studied over a long period of time. There is during the course of a year often quite a bit of volatility but the amount tends to revert back to a mean overtime. So we would expect what we're seeing and as example if we were to look at the month of June, June had the lowest volatility that we have seen in 15 years. So from that standpoint we view this much more as of the moment that it should resume back to sort of normalized volatility levels which has been our experience since we've gone public. And that's how we're anticipating this trend for the future.

Our next question Charles.

And our next question comes from Jim, Jim from Goldman Sachs. Your line is now open. Jim Schneider – Goldman Sachs: Good afternoon. Thanks for taking my question. I was wondering if you could elaborate a little bit on your commentary regarding incentives for the fiscal '15. Specifically how many of your top 10 issuing clients are expected to come up for renewal next year?

So, what we would typical do on the Q4 call is give you a sense of the full year expectations for incentives so you can expect that on the Q4 call in October. It is our practice to give incentive projections or guidance on a yearly basis not by quarter and we would characterize our pipeline of deals as it was healthy this year. It's a healthy pipeline of renewals next year as well and the impact -- the expected impact will characterize that in a range and share with you all on the fourth quarter earnings call.

Next question, Charles?

Our next question comes from Darrin from Barclays. Your line is now open. Darrin Peller – Barclays Capital: Thanks. Charlie just first a higher level question. I mean you mentioned in your remarks, I think in the press release that longer, you believe Visa should be able to grow the revenue in the double-digit range, can you just highlight and perhaps rank for us what the key drivers you think would be that would enable the growth to improve given the higher base which we're growing now? And then maybe just near term, on the near term side Byron is a follow up to that question I mean I guess what people are trying to figure out is if there is higher level of incentives in fourth quarter is actually new business that could drive that part of that acceleration next year? Thanks guys.

Yeah. So, let me start with -- start this which is -- again the way we look at our numbers, as we look at what our revenue growth is excluding the items that we talk about here as headwinds. And again I said this in my remarks, we do believe that these headwinds are not permanent and so if you just look at the headwinds that we've had far in the foreign currency translation and the currency volatility, the impact on the comps year-over-year and this growth in cross-border payments which we should point out can move either way very, very rapidly and we've got amazing data to back that up. When you just back out these headwinds which we do believe are temporary, our growth underlying all that is still very, very strong which you can see in the transaction processing growth and the overall payments growth. So, as we -- so we talk about generating reasonable returns over a period of time, there is the long term which is affected by the things we're doing in the digital world we think which is certainly helpful but then there is this other defined period once we get through these headwinds and the issue that we have is we don't know exactly when they are going to reverse but we're very confident that they will.

With regards to the second part of your question recognizing that a typical contract with last five years some longer. We entered into contracts with the expectation that they will drive growth over that five year period. How we structure the incentives makes a big difference with regards to what kind of growth we may or not see in the first quarter as we've talked about over the years, some of the deal renewal entail more meaningful upfront payments that from a gap standpoint we might have to record more fully in the income statement versus amortize over the term of the contract. And so there is a lot that goes into how you structure deal and then how it’s translated onto the books. But since Charlie’s comment was based over the -- and we see our self in the longer-term returning to double-digit revenue growth, the answer is we would expect these deals to build on a foundation that would drive growth over the term of the period that what enabled us to achieve that objective.

Next question Charles.

Yes, sir. And next question comes from Moshe from Credit Suisse. Your line is now open.

Great, thanks. Charlie when you talked about tokenization, could you talk about whether that is something that is going to kind of bring revenues into the system and will those be revenues that go to the networks did they share I mean could you talk a little bit whether those are they just going to be something that’s going to an additional form of security?

Yeah, I don’t think the answer which is yes it’s an additional form of security for sure. We think of it as driving more network volume that we otherwise wouldn’t be able to get because other people can now participate and embed payments in different applications and experiences out there because it’s safe and secure because of the tokens. This isn't a question of getting paid specifically for tokenization. It really is about driving more volume through our issuers or merchants and ultimately to us as well as part of that.

Next question please.

Our next question comes from Smitti from Morgan Stanley. Your line is now open.

Great, thank you. Charlie I just wanted to follow-up on a statement that you made earlier about your new strategy on the digital front, I’d thought I heard that you say you allowed new ways for parties to access your network directly so, does that mean eventually merchants and other technology partners will no longer need to connect your network through in wire? And if that’s the case well settle the transaction?

No, I didn’t say that, what I said was that that we are exposing the capabilities so that different parties including merchants can embed Visa payments into their experiences but very importantly it preserves the role that issuers, acquirers play in the system today. So, what we're trying to do is again historically we've had great relationships with issuers and acquirers still do, but anyone who is trying to build an experience for an application would have to then go through multiple issuers and multiple acquirers to get that experience to market in a meaningful way and by exposing our capabilities directly to them, it allows more people to be creative relative to helping drive digital commerce in a way that uses our payments as a platform for them but it keeps the flows of information, the flow of data and the flow of economics the same as it is today in the fourth party system.

Thanks for the clarification.

Next question Charles.

Our next question comes from Bryan from Deutsche Bank. Your line is now open.

Yeah, I just want to follow-up Byron your comments on ’15. I didn’t hear any comments on the operating margin do you still expect to get leverage in ’15 on the operating margin? And then secondly, just an update on the Chase migration volume that is expected are we a quarter way through just trying to get a sense of how much we're through in that migrating of that volume? Thanks so much.

The only thing before Byron answer the question, let me answer that operating margin it’s -- we really have to think about incentives as a meaningful cost of doing business here as well.

And the two should be viewed in combination and with the exception of -- what happen to our incentive line after the great recession that has gradually moved up and the activity and a few comments on H1 performance highlighting the most significant points.

But even beyond the three months because I think -- the way we think about where we are is we are not in an environment where it’s very easy to predict the next quarter or the quarter after that just given what’s going on in the world and these trends that we’ve seen which affect our revenue numbers materially. Again as I said before, we feel very confident that the headwinds will dissipate. We know that at some point the economy will be more helpful across the globe, what we don’t know is the timing. And we certainly can’t sit here today and tell you what it will be a year from now. And that is still only half way through next year. So as the world evolves and as these issues evolved and we get closer to the time period, it’s obviously by definition easier for us to talk about it.

Just a quick word on Chase. The current quarter’s result to the extent that they include any of the conversions it’s not material. And remembering this will hit the service fee line and we report the service fee line on a one quarter lag. Before we see much impact from the conversion it will really be for us that December ending quarter which will be the first quarter of the next fiscal year. But at the present no material impact on the quarter’s results and frankly not a material impact on the Q4 results either.

Next question, Charles?

Our next question comes from Tien-Tsin from JP Morgan Chase. Your line is now open.

Great. Thanks. Just wanted to I guess clarify what’s driving the software revenue outlook for the fourth quarter? Just wanted to make sure I caught it correct. It sounds like it's lower cross border plus lack of volume acceleration I don’t think it’s incentive driven. Just wanted to clarify that. And then my -- the question I wanted to ask was actually on Visa Checkout and the strategy there to get consumer signed up and to use Visa Checkout versus whatever PayPal or any other digital payment method you can think of. Because if we get questions all day today about Apple and other initiatives I’m just trying to understand how that’s going to play out versus something else? Thanks.

Okay. So let me take the first part. With regards very specifically to the Q4, which is really how we're then going to finish out the year, it compared to where we were on the third quarter call, what’s different primarily is a downtick in the cross-border, so if you have that right and continued depressed, historically depressed volatility levels from a currency standpoint. And for those were -- our position has moved a bit more conservative from where we were on the prior quarter call. It doesn’t have anything to do with incentives because what didn’t get booked this quarter. Our assumption is that it'll get booked in the current quarter. And we're already signing deals to validate that. And remember our incentive guidance was 16.5% to 17.5% and we narrated to about 17%. So we're right down the middle of the fair way.

But as we sit here and just think about from this quarter to next quarter we are not assuming any kind of meaningful change in these headwinds that we’ve talked about which again are possible and will happen, we just don’t know the timing and just given the math that Byron said next quarter’s incentives will be higher than this quarter's incentives and he talked about that during his remarks. And the Visa Checkout question. I don’t remember what the exact question was? The question Tien-Tsin are you still there?

Yeah, I am here just wanted to clarify Charlie just in the strategy to get consumers signed up for Visa Checkout versus some all the other stuff that's out there PayPal and I guess Amazon is talking about, just trying to understand how you'll solve the consumer side of equation? And then I guess if I can get a chance here if you can address Apple and iBall or whatever all the press has been talked about with your partnership there I think that would great and how that would fit with, with your digital strategy? Thanks.

Sure, so, listen I think on the answer to the first question about my words is why Visa Checkout for an consumer and how we're going to activate the consumers around the world to use this product as opposed to something else. From our perspective what’s different about this versus the other things that you mentioned are the relationships that we have with banks, right. Again we've got two point 2 billion cards around the world and we think about the people who were willing to support this with their names in the press release, a bunch of them come to a launch event that we had here, these are amazing names. These banks talk to their clients regularly and over the next six months you'll start to see banks do different things to enable their customers in a very proactive way to use Visa Checkout. So, it's one thing for us to sit here and say we're going to try and do it, that would be very, very difficult, the reason why we're confident that will be successful because we do it in partnership with the banks because it's their clients. We provide support. Our marketing and advertising is going to do that again, we've got some really need stuff in the digital and social channels. As Byron mentioned in his remarks we are going to -- we intend to spend a significant amount in marketing including TV as we go into the back-to-school season and then again for the leading up to the Christmas. So, it’s going to be hard not to know what Visa Checkout and why you should have it and so, we are pretty about that. And Apple I am not going to address anything specifically out there but again we have we have said this before we talked to a whole range of people who historically work doing significant things and payment and those that are and we're very excited about some of the things that we talking to potential partners about and over the next three months, six months, nine months, we hope some of those things will actually be in the market place you will be as excited about as we are.

Next question Charles.

Next question comes from Bob from William Blair. Your line is now open. Robert Napoli - William Blair & Company: Good afternoon. Just wanted to follow-up a few of the 2015 comments. We talk a lot -- you talk a lot about currency volatility, can you maybe put some numbers around is that 1% of revenue effect versus your guidance and then in talking about 2015 your tax rate it was little, the full year tax rate for this year you are expecting it flat and then you are still getting double-digit payment volume growth as people think about revenue and higher as the double-digit payment volume growth do you still expect to be able to attain that next year?

Let me start off on the currency volatility we don’t we are not record with talking about specific amounts that this is as you can imagine a part of, it's pretty fundamental to the Visa global acceptance composition that we be in a position to perform currency translation services so, this is something that we have done for ever and we do it in a way that actually delivers a pretty attractive cardholder proposition as a part of the disclosures for someone that receives the Visa Card they are told that they are guaranteed a wholesale rate and I am hard for us personally to think of any other situation where a consumer, a cardholder would have available to them a wholesale currency translation rate. That’s what we do we take a very small spread on that to cover our operations and it's related how much the spread is related to currency volatility and I have talked about that from time-to-time on currency I mean on earnings calls. It rarely has this level of impact but as we said earlier we are at levels of currency volatility that we haven't seen in 15 years tax rate. So, with the guidance of this call we have given very specific guidance of 30 to 31 and have indicated that next year not to expect any step function rate. We did have an important tax adjustment last quarter that represented both a catch up and a permanent ongoing reduction in our tax rate because there was a catch up one might naturally wonder whether that impact is something that would be onetime and then the rate might naturally gravitate back up in the following year. Hence in my remarks I mentioned that we are hard at work and fully realizing foreign tax credit opportunities. And so we expect that to help inform the rate for next year and underpin the comment that we don't at this point expect any step function change in the rate. With regards to double-digit payment volume growth, we certainly on a constant dollar basis this is the level of payment volume growth that is being produced with pretty anemic growth in economies. And so, as we look at the payment volume growth this is one of those factors that we think looking forward have certainly more upside than downside when never knows for shore but one I think would agree that the economic growth we've been experiencing over the past several years has been pretty anemic and hopefully nowhere to but up. Robert Napoli - William Blair & Company: Great. Thank you.

Next question, Charles?

Our next question comes from Craig from CLSA. Your line is now open.

Yeah. Good evening. Charlie, I wanted to ask you theoretically about the future with technology and the changes you're bringing to the online world that are absolutely focused on better securities you said, what are your thoughts about the sustainability of card not present interchange rates for banks when clearly those rates were predicated on higher fraud levels?

Listen, I am not going to talk about what we would be thinking about anything specific on interchange on a going forward basis. What I will remind and I know Craig we talked about this but it's always a good reminder to everyone. I don't know a lot of industries out there that price their services for anything other than the value received and the value received from products like ours in the card not present world is extraordinary. And we know the number of businesses that wouldn't that exist if it wasn't for our products. And if people want to go back to a COD world, we can certainly try that. So, as we sit here and continue to improve security and continue to build payments into people applications all with the point of view of helping them grow, we're going to be making sure that we think about looking at both sides of equation looking at what goes to the issuing side and to the acquiring side what is fair in terms of value received. And that could possibly evolve overtime. But again it's the value equation on both sides.

Next question, Charles.

Our next question comes from Chris from Sandler O'Neill. Your line is now open. Christopher Donat - Sandler O'Neill & Partners: Hi. Thanks for taking my question. Byron I just want to explore one thing on your comment about the Chase business not appearing in the numbers in a material way, just looking at the volume from credit that was 12% year on year U.S. credit. 12% year on year growth in the June quarter and you said I think 14% through July 21st does that reflect any Chase business or is there some other dynamic going on there?

It does but as it relates to conversion it's really not a material driver of those numbers. As the conversion picks up speed later in the year, we would expect to see more of an impact but currently it's not material.

At this point Charles, we have time for one last question.

And our final question comes from Ken from Merrill Lynch. Your line is now open.

Thanks. Good evening. Thank you for all the color you’ve given us on the issue around cross-border I am hoping you might entertain one more question. You has pointed out last quarter that some of these quarter headwind is slowing volume obviously there is quarter is going to pick up and it’s going to work out as it works out on the actual foreign exchange volatility side. Has this been something that has been, the volatility is dampening over time and it just became much more acute in the more recent quarter? And if you look back what would be kind of the right reference point just think about in terms of what volatility would look like, if you would?

Honestly, we don’t have a very good explanation. When you look at the patterns, volatility they are often event specific. During the period where Greece was rumored to be potentially exiting the Euro there was quite a bit of volatility in the Euro and that cross referenced against quite a few currencies. We thought that we would see some volatility return during the week where a Malaysian airliner was shot down. We have an event in Gaza and Portugal was in the news with regards to the stability of its participation in the Euro And yet those type of events which would have historically created volatility didn’t. The one common denominator that we’ve seen over the past several quarters is just an exceptionally strong dollar and our hypothesis is that that may have something to do with it. But honestly we’ve done a lot of analysis and look for a lot of correlations and just haven’t been able to find one that offers much in a way of the respectable (inaudible)

But as Bryon said, what we saw recently are the lowest levels that we’ve ever...

In 15 years.

15 years.

So you can gravity for a while but not forever. And so in looking at 15 years’ worth of data there are periods of comp that occur regularly during the course of the year. And then again looking at that timeline of data these can reverse very, very quickly often without notice. And so if past this prolong then it’s just a matter of time before we hit an inflection point and it will go back to something more closer to lead way.

And with that we'd like to thank everybody for joining us today. And if you have any other follow up questions feel free to call myself or Victoria. Thank you.

And that concludes today’s conference. Thank you all for participating. You may disconnect at this time. Thank you.