Welcome to Visa's Fiscal Q1 2016 Earnings Conference Call. All participants are in a listen-only mode until the question-and-answer session. Today's conference is 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 Nib. Good afternoon, everyone, and welcome to Visa Inc.'s fiscal first quarter earnings conference call. With us today are Charlie Scharf, Visa's Chief Executive Officer; and Vasant Prabhu, Visa Inc.'s Chief Financial Officer. This call is currently being webcast over the Internet and is accessible on the Investor Relations section of our website at www.investor.visa.com. A replay of the webcast will be archived on our site for the 90 days. A PowerPoint deck containing the financial and statistical highlights of today's call have been posted to our IR website as well. Let me also remind you that these presentations may include forward-looking statements. These statements aren't guarantees of future performance and our actual results could materially differ as a 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. And with that, I'll now turn the call over to Charlie.

Thank you, Jack. I am going to start with a series of comments both about the quarter and a little bit about what we're seeing in the world and then I'll pass it over to Vasant before we take questions. First a few comments about the overall results. We continue to be pleased with the performance of the company given the ongoing macroeconomic headwinds that we have discussed before. Operating revenue grew 5% nominally or 8% on a constant currency basis, reflecting a negative three percentage point impact from FX. Adjusted diluted earnings per share grew 10%, volume growth continued at a healthy pace, growing 11.5% in constant dollars only down slightly from September's 12% growth. U.S. payments volume growth was essentially flat at about 10%, again healthy growth. International payment's volumes growth was 14% down one point from last quarter, but we continue to see weakness in cross border volume. U.S. outbound spend is strong, but it was offset by continued weakness from Canada, Brazil and Russia and more recently we're seeing increasing weakness in the Middle East and China. We do see some areas of strength such as Mexico, Japan and New Zealand, but they're obviously smaller markets for us. Now a couple of words about the U.S. holiday season; overall consumer spending by our Visa Cardholders during the season was similar to last year, but spending patterns are changing. Ecommerce continue to grow at a much higher rate than the spending at physical stores. We saw mid teens eCommerce growth during the holiday period versus mid single digits growth in the physical world. More than 25% of all spending on Visa Cards during November and December was online up from less than 20% just three years ago. Also the pattern of spending during the holidays has changed,…

Thanks Charlie. In a turbulent and uncertain global environment we're pleased to report that our business performed well in the first quarter as a result modestly ahead of our expectations. A few highlights; net operating revenue was increased 8% in constant dollars, the exchange rate drag was three percentage points both in line with expectations. Weaker than anticipated cross-border revenue was offset by lower than expected client incentive. Client incentives were lower due to software volumes in international markets and some deal delays. Expenses only grew 2% well below the high single digit rate we had indicted. We have focused hard on prioritizing and phasing our spending program given the uncertain macroeconomic environment. As the year progresses we will continue to look at opportunities to moderate expense growth while ensuring critical initiatives are adequately funded. We mark down the value of the Visa Europe put from $255 million to zero since the VE Board, Visa Europe Board amended the put in connection with our proposed acquisition. We are required to revalue the put each quarter. We are still awaiting regulatory clearance but expect to close the transaction in line with the transaction agreement leading us to load the value of the put, this non-cash non-operating gain added $0.10 to our reported earnings. As a reminder should the deal not close, the put will be reinstated in its un-amended form and we will need to value this liability based on all available information at that point. In December we issued $16 billion in debt with maturities ranging from 2 to 30 years. The weighted average interest rate was 3.08% with the weighted average maturity of 13.1 years. This is the low end of the 3% to 3.5% interest rate range we indicted last year. We're pleased with this outcome. We will…

Thanks, Vasant. Sam, at this time, we're ready to start the Q&A. And I'd remind everybody if they could please keep their questions to a single question and then queue back up so that more folks are able to get on the call.

[Operator Instructions] And the first question is from Bob Napoli with William Blair. Your line is now open.

Thank you and good afternoon. A question just on the competitive intensity of the industry and any changes you may be seeing. Certainly the credit card industry broadly at the margin continues to seem to get somewhat more competitive and you also have some regulatory challenges around the world. And historically, this hasn't really been able to penetrate its way through to Visa and Master Card revenue yields or I just -- wondering if you could you any update given the competitive changes on the issuer side and the regulatory changes if there is anything for us to be concerned about on the revenue yield for the business?

Well, I think the business is competitive and I always remind everyone that our business has been competitive since the day we went public. We and Master Card evolved our structures roughly the same period of time. We compete in the marketplace every single day. And that has been a very consistent way of doing business. Domestically, across the world there are local networks that we compete with. And there are emerging global competitors such as Chinese Union Pay in the traditional space as well as a series of people in the eCom whose names you know that we continue to compete with. I think when we think about what we have at Visa in the quality of the network, the safety, the security, the global acceptance and now the capabilities that we built in the world of digital commerce and the value-added services, we feel terrific about our ability to continue to compete. And we're very, very clear that we know that we have to continue to add value to transactions that run over our network in order to sustain the kind of margins that make this such an attractive business. And we think that there are couple of us with us leading the pack who are uniquely qualified to do that. And so those views I think are very consistent with where they were last quarter, last year and a couple of years ago.

Next question.

Thank you. Next question is from Dan Perlin with RBC Capital Markets. Your line is now open.

So the question I have is as you think about serving all these incremental constituencies, you're much more merchant direct and centric and then also much more consumer direct and centric. I'm wondering how you're prioritizing your expenses when you think about throttling back on projects and what we should be mindful of, because I look back on your expense lines may be back in, we were coming out of the last recession, your marketing dollars as an absolute dollar were almost kind of absolute levels. So I don't know if you pulled that back to norm. I'm wondering where do you throttle back. Thanks.

Yes. So let me take a stab at it and then Vasant you can add anything you want to add. I think so first of all, it's us who want to want to be really just clear for a second is we are not building a business which is consumer direct and we're not building a business which is merchant direct. There are occasional times when we will do something directly with the consumer or directly with the merchant, but it's in a way that's of course a four-party model in a way that we believe is ultimately good for issuers and acquires. We're just acting as a facilitator. So we still very, very much believe that the model that we have is an amazing model and we continue to most of what we do to work through those people. But the fact is we are consumer brand and we have a role that we've got to play there. When it comes to the comments on expenses, I think -- I guess what you should take away is that nothing that we have done when it comes to re-phasing, delaying or reducing any of the expense dollars that we contemplated in our minds relate to anything, which is going to help build the business for the future. If you ask us, are we as efficient as we should be? Are we spending every last dollar wisely across the place? The answer is no and the answer is still no today. And so what this environment does is it gives us the ability to take a harder look at where we're not as efficient as we should be and attack those dollars. So we've not cut back on anything that relates to building or digital business. The APIs and SDKs that are part of the developer center, the things that we're doing on behalf of merchants, the things that we're doing on behalf of issuers to build our consulting services. We're still very, very committed to building that and as we think about what this environment does is, it's just creating extra focus for us. We certainly don't think that the slowdown that we're seeing that's affecting the business is something that changes the business model for the long term. So we're not going to change the things that we think build the business for a long term as we said here.

And the only other thing I would add is we've said that the expense growth rate will be back in the mid single digits in the second quarters. And as Charlie said, there is nothing we've done to date that does anything in terms of either the funding or the pacing of critical initiative whether that's Visa Checkout, Visa Direct is token service, all the critical initiative. Times like these are a good opportunity to take a hard look at -- is every dollar well spend and prioritized once again. And we took some time to do that in the first quarter and in the second quarter, the expense growth rate will be back in the mid single digits. And we'll keep monitoring the external situation.

Next question, Sam.

Yes. Thank you. Next question is from Chris Brendler with Stifel. Please go ahead with your question.

Hi. Thanks. Good afternoon. I wanted to ask another question on competitive environments and get your updated thoughts on PayPal in particular. It seems like they've been a good supporter of our online volumes and a lot of transactions are funded by cards. But the opportunity seems a little bit different from the remediation threat. I just wanted to get your thoughts on that particularly threat? And also when it comes to Briantree venture of the in-app development and the potential for remediation risk there, is there competitive response from Visa to some of the technology that they've enabled to or that kind of stuff. Is that area that you could potentially expand and soon become a competitor when it comes to online in that purchases. Thanks.

Yeah, let me -- let me do the first one first. I’m not going to talk about any specific company. What I will say is that we love partnering with people that we think are good for the payment system and preserve our client's roles and our role in the ecosystem and there are many examples around the world of people that we partner with in ordered to do that. There are also some examples of people that don’t do that and people that generate business for us in the short term whose business model is built around dis-intermediating us eventually and our clients is not something that we like, not something that we support and not something that we're just going to sit ideally by and watch. Our first preference is to figure out how to work differently with those people. Those are the active conversations that we're engaged in. If we can't get to a predicted conclusion there are a lot of things at our disposal that we can do which we have not done, which will enable us we believe to compete in a very clear and very direct way in a way that’s a level playing field for everyone. And so our first preference is to figure out how to partner with people, but if that doesn’t work out then we will compete directly with them and that will evolve in the near future and so more to come on that and the second question was around… I guess the question was there are people like Braintree out there whose services help enable mobile commerce and what’s our response to that and on this one, our response is multiple on multiple fronts. First of all we have a great business in cyber source where we also own a business called authorize.net that deals with smaller merchants and helps enable smaller merchants to accept online payment. That business is focused both in the browser space, but also in the mobile space and we've just made a series of changes internally with some leadership changes that we're very excited about to help reenergize the business there and to be in a position to compete. We also made an investment in Strip and work very closely with them and we think they’re just extremely talented people who are almost solely focused on the mobile space and enabling mobile commerce in a way that’s very friendly to us and we're excited to continue to help them build their business globally.

Next question Sam.

Yes, thank you. Our next question is from Moshe Orenbuch with Credit Suisse. Your line is now open.

Great, could you talk a little bit about -- you mentioned a couple of very large merchants that are going to be deploying Visa Checkout this year. Can you talk a little bit about what the sales and implementation cycle might be and how to think about the progression perhaps over the next couple of years in that does it seems like it's pretty important from a competitive standpoint?

Yeah, so the sales cycle -- honestly the sales cycle varies dramatically with the priorities that the individual merchants have and obviously the more continuing success that we have changes that sales cycle as well. When we're able to quote the kind of numbers that we're able to quote on comScore for what it actually does to merchant sites and the merchants themselves and actually share those experiences, nothing changes the sales discussion more than that. And so I think it's fair to say when we first started these discussions. It could be six to nine months in terms of a calling process if not longer. I'll tell you I saw a note today on the way down here that we got an incoming call from a sizable merchant, which was very surprising to me saying that they would like to implement Visa Checkout. So it really is -- the game is changing, but we also in our minds we know, this is merchant by merchants, it’s a long term build and we just have to continue to show the kinds of progress that we're seeing with these -- about the numbers of merchants and the size of merchants. The implementation piece -- I hear what it was, but its dramatically quicker and easier for merchants to implement. If they can fit us into their queue it's literally weeks at this point as opposed to when we had the first incarnation it was multiple months. So the real issue is just making sure they understand why it's good for them and just having a merchant decide that its priority for them and that’s what we're starting to see.

Next question.

Thank you. Our next question is from Jason Kupferberg with Jefferies. Please go ahead with your question.

Thanks guys, so this quarter clearly seems to support that Visa can really protect the bottom line with cost controls and more or less any macro climate, but obviously the tone is getting understandably more cautious regarding the global volume outlook. So, I understand you're not changing your fiscal '16 revenue growth guidance, but just curious whether or not the lower end now feels more likely than it did at the time of the last earnings call. And then just very quickly any metrics on Visa Checkout volume you can share.

I’ll just jumping on your first question. The thing to point out is if you look at international payment volumes as we said in our comments, in constant dollars they were actually up 14%. So it's still incredibly healthy growth and then in nominal terms, it comes down to zero. If you can see what an huge impact exchange rates have had and U.S. payment volumes both credit and debit if you adjust for conversion and GAAP have been remarkably stable. So that’s what makes us optimistic about the long term. In the short run as Charlie said there is two issues, it's the strong dollar is hurting commerce into the U.S. which is a very sizable business for us and has been a big drag now for multiple years. The dollar also affects translation. You saw that from 14% constant dollar growth to zero it's huge. And the cross-border trends, clearly are being hurt by both the strong dollar as well as what’s happening in commodity markets China etcetera. So, we feel these as not really reflecting the long-term trends in our business and so we really don’t want to change anything in terms of our long-term profile of investment, but we are also mindful of the fact that the new few quarters we will face the same pressures. So all we're really doing is being prudent and prioritizing, they are not fundamentally changing anything in our investment posture and I guess the next question was on Visa Checkout numbers. I think you provided some in your comments.

Yeah but we actually don’t provide the volumes.

Next question please.

Thank you. Next question is from Eric Wasserstrom with Guggenheim Securities. Your line is now open.

Thanks very much. Charlie my question is also on an element of the competitive environment, which is we’ve seen Visa now maybe partnership in new ways with some of the banks in order to win portfolios that were and co brand relationships that were up for [RFP] and of course there is the evolving relationship with JPMorgan and what they're doing now on Chase Pay. And so I wonder is there something occurring now between Visa and the banks in terms of that the kind of relationship that banks are seeking to have with you in the United States that's different than in the past because it seems like the stance is a little more aggressive in response to some of the dynamics that are making growth to hard to come by in the States.

I think it’s a good question. I think and I think there are couple of different things going on. I think first of all part of what you're seeing in the evolving relationships that banks have with the networks not just in the U.S. but around the world is as the years past, since we have transitioned from association to public company, networks are kind of sorting out their point -- I am sorry, banks are sorting out their point of views on networks and what they want those relationships to look like. And so what you start to see now is at the same time payments evolving very, very rapidly driven mostly by digital, but by -- but I think also as importantly, the payments businesses broadly including the debit card business and the credit card businesses are now very much a part of what a bank does and why they think about their entire relationships as opposed to five, six , seven, eight years ago we were transitioning from the majority of the business being done on the credit side by standalone companies. So all a sudden being integrated into a bank, but still being run separately. So as they combined these businesses and really run them as an integrated business they're now thinking about how they need to have a partnership with a payment network, which is much more strategic as opposed to just a third party provider services. So what you're seeing is you're seeing longer term contracts whether its people used to do one and two year contracts and now you've seen us do three, five, seven and 10 in some cases and that’s because it’s a -- it is a different kind of relationship. I think the other thing that’s going on in the…

Next question please.

Thank you. Our next question is from Jim Schneider with Goldman Sachs. Please go ahead with your question.

Good afternoon, thanks for taking my question. I was wondering if I could ask a question about the U.S. consumer trends that you're seeing. Clearly it sounds like from the data you’ve seen so far, I was seeing any material downtick in the U.S. consumer although you’re watching it very closely. But can you maybe talk about any other kind of underlying stats you're looking at. I think almost a year ago you talked about the speculation about lower gas prices driving increased saving and banking of that savings. I am wondering if you’re seeing any evidence of increasing discretionary spend and then just as a clarification relative to the one point of acceleration you mentioned so far, year-to-date if I strip out the effect of lower gas prices, would you still be seeing the same consistent underlying trends or the one point of acceleration. Thank you.

I think what we're seeing is a very stable U.S. consumer environment. If you look at multiple quarters all the way through last year and into this year and you adjust for as we said conversions and gas prices it's in very stable for any question marks about whether the benefits from gas prices floating into. We've seen a little bit of that on the debit side as we said that earlier. Yes, there is a small benefit as you look at January from the impact of gas prices declining, but gas prices are still below where they were last year. So we had a two percentage point impact on debit one on credit that will moderate, but won’t go away completely. So most of it we would ascribe to that. Wouldn’t read too much into three weeks of January, we then had some awful weather in the last few weeks, last few days and that definitely will affect some of the commerce. But overall I don’t think there is a whole lot more we have to add than what Charlie gave you in terms of holiday spend shift to commerce channels. I don't know if there is anything else you could add.

No I think that’s it.

Okay. Next question.

Thank you. Next question is from Darrin Peller with Barclays. Your line is now open.

Thanks guys, look I just want to follow up on guidance, since your guidance was provided last quarter, we had further deterioration on some macro areas like you mentioned gas prices and definitely some of the emerging oil based economies, but again you maintained your guidance for now and did pretty well in the quarter. So I guess as of now do you include similar trends on the slower areas like Brazil, Russia, Middle East as persisting at these similar rates throughout the year and then what if anything would you say has been a surprise to the opposite since last quarter on revenue that might offset the slower macro, maybe it was cross-border versus the 3% right, if you can just give you us more color on that. Thanks guys.

Yeah, listen this whole concept of guidance is it’s a very strange thing right because you're asking us what we think our volumes will be next quarter, the quarter after that and the quarter after that? And we know a little more than you know, not a whole lot more. So asking people to give procession in terms of what’s going to happen effectively to the dollar, consumer conference, things like that. We really don’t know. So, what we try and to do is be as transparent as we can about what do know. And we recognize that it's hard sometimes to figure out what a trend is and it's hard to know what the triggers will be to either seen an uptick or downtick. So we try to be very clear in our remarks that we’re not changing guidance, but if we don’t see improvement then the guidance will come under pressure.

Yeah and I think if you want to know what could offset, we told you that we saw some additional factors that were causing deceleration in cross-border trends and that was really two main things that was travel out of China and it was travel out of oil linked economies. What could cause -- what is the most significant variable that could cause trends to change in a positive way do we know what's going to happen? We don’t, but it’s the dollar. If the dollar begins to show some signs of weakness clearly it has a big impact on our business not immediately, but over time on two fronts. One the translation impact, which you can all estimate, but then there is the other impact, which will play out over time which is, commerce into the U.S., which is a big part of our business. And then in the second half certainly Europe will be part of Visa and the travel into Europe has been better than travel into other geographies. So hopefully, that will help us and some of that we knew going into the other end and giving some of our perspectives we incorporate some of that.

Just to give you a little sense. We were looking earlier in detail at the cross-board spend and if you look at -- look over a much longer period of time when you go back to when our cross-border growth was in the low double-digits versus where it is today and say where is -- what’s the biggest effect? Almost something like 75% or 80% of that effect is -- the reduction is from sales wired in the U.S. So it’s the drop in spending of non-U.S. cardholders in the United States. Just -- it’s a very, very dramatic, very clear, very specific item predominately driven by the dollar, not totally, but predominately driven by the dollar and it moves quickly on the way down and at some point it could quickly change the other way as well we just don't know when.

Next question Sam?

Thank you. Next question is from Ken Bruce with Bank of America. Your line is now open.

Thanks, good afternoon. My questions really relate to some earlier comments, I’ve recognized that you have some expenses that you can manage. I was wondering if you might be able to provide some sense as to what you would -- how we should be thinking about what would be core spending or core investments in the expenses versus may be some of those areas that you talked about in terms of gaining more efficiency. So, just so we kind of have an understanding as to how much leverage you have from that standpoint. And then second question are you --and this is granular, but are you seeing any changes in activity within the U.S. in those areas that are particularly known for high energy or high exposure to gas and oil in particular? Thank you.

Yeah I think you can see some of this from things that we might put out through our economics, but there is clearly this, you can see the subdued activity in oil, oil related states and the West is doing better in aggregate then other parts of the country. But other than that I don’t think there is anything we would tell you that is not available from other sources of data that you see. The other question was on the cost side. What we said earlier was cost related to technology initiatives that are critical to product development for the future, cyber security, those have a long-term -- we have a long-term perspective on that and there really is no change in our posture on those things. It's on the margin where we can tighten the belt on things that maybe somewhat more discretionary and you could do them later or you could do them now and there comes a point where you criminally don't want to cut below a certain level. So we're being very prudent. We see many of these as transient and cyclical kinds of things with some strong underlying trend. So we see no reason to change our posture on our long-term investment outlook.

And the only thing I would add is that we're going through the initial discussions with our colleagues at Visa Europe and so obviously after we close the transaction, we'll go with full fledged integration. And that just is an opportunity to help us focus on efficiency in general and just to repeat what we said is that we still are believers that the underlying trends in the business are extraordinarily strong that there are places that commerce is moving to and we're building the appropriate solutions that will enable us to be as successful in the digital world and the physical world and we're very committed to continue to invest in that space. But remember we are a very young for-profit company. It wasn’t that long that we were an association and so opportunities to focus internally and to get smart about where you're spending your dollars to ensure that they're going towards the future and towards client-driven things is a good thing and that's our focus as we talk about the allocation of our resources.

Next question Sam.

Thank you. Next question is from Sanjay Sakhrani with KBW. Your line is now open.

Thank you. I guess I have a question on the share buyback and the dilution offset to the preferred issuance. Understanding the markets are volatile, but is there anything that precludes you from maybe having a little bit of a shorter time horizon in repurchasing those shares? And then just one data point question. Do we have -- and I am sorry if you guys have disclosed this before, but do we have a specific number on how much of your volume is travel that's coming out of China into other countries? Thank you.

I believe on the second question no, we don't -- we don't provide that. In terms of buyback if you calibrate the buybacks, as you know our buybacks have always been more problematic than opportunistic, but within the programmatic buyback, you've seen us calibrate up or down depending on market conditions and assessment of valuations and so on. So yes, there are opportunities to speed it up if we want to, but I think our best expectation remains what we told you earlier, which is that our goal is to buyback or offset the dilution caused by the issuance of the preferred stock by the end of fiscal year 2017? The pace in which we do that whether it's more in some quarters, less in others, I am sure will calibrate as each quarter comes by.

The only thing I'll say is to add on that is we have and well, I guess I will say this way, if you look at our actions on the debt offer, we issued the debt in December well ahead of what we expect to be the closing day because we looked at what we thought the right long-term economic decision was as opposed to what the negative effect would be this quarter and next quarter. And so when it comes to buybacks, it's the same economic discussion and obviously depending on the size, depending on how you want to accelerate there are different cost to do those things and we think about that in terms of what the right thing for us to do is.

Next question please.

Thank you. Next question is from Craig Maurer with Autonomous. Your line is now open.

Hi thanks. Two questions. First just on -- should we expect the incentives that were pushed out due to the delays on show up in the fiscal second quarter or will they be spread out more through the year. And secondly, Charlie Visa Checkout, we've been noticing a lot of incentives being pushed through the channel for consumers to sign up and use the offering and I was just wondering if you could comment at all regarding potential share gains against competitors in the digital wild space if there is any anecdotal evident there yet, thanks.

Our planned incentive as I mentioned in my comments, some of the reason they were lower than we expected, they were in the middle of the range rather than the high end of the range. So it was a small difference. Partially it was volumes because our international volumes were lower and so you get a reduction in incentive payments as a result of lower volume and it was only partially because of delays and some of those yes, they will move into the second quarter and so you should expect that the second quarter time incentive range will not look a whole lot different than the first quarter, but these are small shifts. These are not big shifts. And I tuned at after the first quarter. What was the second question.

Visa Checkout. Visa Checkouts anecdotally do we now for gaining share of other Checkout IT solutions.

I don't know the answer to that to be honest.

And we will go to the next question.

Thank you. Our next question is from Bryan Keane with Deutsche Bank. Your line is now open.

Thanks. I just wanted to ask again about the revenue sensitivity. So if cross-border doesn’t accelerate in the U.S., doesn’t accelerate in the second half '16 as is in the guidance and let's just say the cross-border stays at this depressed level along with the U.S. staying more the same, are we talking about potentially then the revenue guidance for the full fiscal year '16 has to come in and you would protect kind of the bottom lines or other cost cuts. Just want to make sure I know the sensitivity of what happens if it stays more the same environment, thanks.

Yes, I think you can probably run those numbers as well as we can. Cross-border the international revenues are roughly 20% of our revenue base and they're about 6% now and maybe there was an expectation that it would be somewhat better in the second half as we lap easier comparison. You can sort of look at it if it stays at these levels what -- we wouldn't do anything that would be wrong for the long term in our business. As we said, we will continue to look at phasing and prioritizing expenses while investing in things that matter. So I think we're suggesting that we can offset all revenue shortfalls that might emerge and it is too early really to tell you how the second half might shape. As you know, when we get to the second half, the comparisons do get somewhat easier. So we'll have to see how that plays out. We'll have to see what the dollar is doing at that point. Lots of unknown. We've given you our best sense of the next quarter. It looks to be very similar to what we saw in the first quarter and that's about as good as…

The only thing I would add, let me, to your point Vasant is we tried -- we feel like we've got a much better line of sight obviously to the next quarter. So we try to be as clear as we can there and as we get to the end of the next quarter, at that point we should -- we should have a much more definitive point of view on what the year looks like as well as the impact of what the year will be at that point in time.

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

Thank you. Our next question is from Tien-Tsin Huang with JPMorgan. Your line is now open.

Great. Thanks for fitting me in. Just and good job on the expenses here, I just wanted to ask about some of the tailwinds and if there is any update on the timing and I am curious if your outlook already contemplates USA and I guess Cosco and some of those things coming on, thanks?

Yes, there is no update on those things. They're all proceeding on plan and they were in our guidance.

And with that, we would like to thank everybody for joining us today. If you have any additional questions, please feel free to give either myself or Victoria a call. Take care.

Thank you, speakers. And this does conclude today's conference. Thank you for joining. All parties may disconnect at this time.