Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE OF VISA INC. - VISA INC. | d343939dex991.htm |
| 8-K - FORM 8-K - VISA INC. | d343939d8k.htm |
 Visa
Inc. Fiscal Second Quarter
Financial Results
May 2, 2012
Exhibit 99.2 |
 Second Quarter Fiscal 2012 Financial Results
2
Forward-Looking Statements
This presentation contains forward–looking statements within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995. These statements
can
be
identified
by
the
terms
“expect,”
“will,”
“continue”
and
similar
references
to
the
future.
Examples
of
such
forward–looking
statements
include,
but
are
not
limited
to,
statements
we
make
about
our
revenue,
incentive
payments,
expenses,
operating
margin,
tax
rate,
earnings
per
share,
capital
expenditures, free cash flow and and the growth of those items.
By their nature, forward-looking statements: (i)
speak only as of the date they are made, (ii)
are neither statements of historical fact nor guarantees of
future performance and (iii)
are subject to risks, uncertainties, assumptions and changes in circumstances that
are difficult to predict or quantify. Therefore, actual results could differ
materially and adversely from those forward-looking statements because of a variety of factors, including the following:
•
the impact of new laws, regulations and marketplace barriers, including:
•
rules capping debit interchange reimbursement fees promulgated under the Reform
Act; •
rules under the Reform Act expanding issuers' and merchants' choice among debit
payment networks; •
U.S. government and other parties' reactions to the changes we have made to our
business in response to the Reform Act;
•
increased regulation outside the United States and in other product categories;
and •
rules about consumer privacy and data use and security;
•
developments in current or future litigation or government enforcement, including
interchange, antitrust and tax disputes; •
economic factors, such as:
•
an increase or spread of the current European crisis involving sovereign debt and
the euro; •
other global economic, political and health conditions;
•
cross-border activity and currency exchange rates; and
•
material changes in our clients' performance compared to our estimates;
•
industry developments, such as competitive pressure, rapid technological
developments and disintermediation from the payments value stream;
•
system developments, such as:
•
disruption of our transaction processing systems or the inability to process
transactions efficiently; •
account data breaches or increased fraudulent or other illegal activities
involving our cards; and •
issues arising at Visa Europe, including failure to maintain interoperability
between our systems; •
costs arising if Visa Europe were to exercise its right to require us to acquire
all of its outstanding stock; •
loss of organizational effectiveness or key employees;
•
failure to integrate recent acquisitions successfully or to effectively launch new
products and businesses; •
changes in accounting principles or treatments; and
the other factors discussed in our most recent Annual Report on Form 10-K filed
with the U.S. Securities and Exchange Commission. You should not place undue
reliance on such statements. Unless required to do so by law, we do not intend to update or revise any forward–looking statement, because of
new information or future developments or otherwise. |
 Second Quarter Fiscal 2012 Financial Results
3
Solid Fiscal Second Quarter Results
•
Strong operating revenues of $2.6 billion, up 15% over prior year
•
Adjusted quarterly net income of $1.1 billion, up 23%, and adjusted diluted
earnings per share of $1.60, up 30% over prior year
•
Continued positive secular trends and spending momentum contributed to
growth in key underlying business drivers
Note: See appendix for reconciliation of adjusted non-GAAP measures to the
closest comparable GAAP measures. |
 Second Quarter Fiscal 2012 Financial Results
4
Payments Volume
US$ in billions, nominal, except percentages
YOY Change
(nominal)
12%
9%
11%
YOY Change
(constant)
11%
12%
9%
Note: Figures may not sum due to rounding. Growth rates calculated based on whole
numbers, not rounded numbers. From time to time, previously submitted volume
information may be updated. Prior period updates are not material. Constant dollar growth rates exclude the impact of foreign
currency fluctuations against the U.S. dollar in measuring performance.
ROW = Rest of World
Quarter ended December |
 Second Quarter Fiscal 2012 Financial Results
5
Payments Volume
US$ in billions, nominal, except percentages
YOY Change
(nominal)
14%
7%
11%
YOY Change
(constant)
11%
14%
7%
Note: Current quarter payments volume and other select metrics are provided in the
operational performance data supplement to provide more recent operating
data. Service revenues continue to be recognized based on payments volume in the prior quarter. From time to time, reported
payments volume information may be updated to reflect revised client submissions or
other adjustments. Prior period updates are not material. Figures may not
sum due to rounding. ROW
=
Rest
of
World
Quarter ended March |
 Second Quarter Fiscal 2012 Financial Results
6
Payments Volume
US$ in billions, nominal, except percentages
YOY Change
(nominal)
15%
5%
7%
15%
29%
YOY Change
(constant)
7%
12%
6%
21%
37%
Note: Growth rates calculated based on whole numbers, not rounded numbers. From
time to time, previously submitted volume information may be updated.
Prior
period
updates
are
not
material.
Constant
dollar
growth
rates
exclude
the
impact
of
foreign
currency
fluctuations
against
the
U.S.
dollar in measuring performance.
Quarter ended December |
 Second Quarter Fiscal 2012 Financial Results
7
Payments Volume
US$ in billions, nominal, except percentages
Note: Current quarter payments volume and other select metrics are provided in the
operational performance data supplement to provide more recent operating
data. Service revenues continue to be recognized based on payments volume in the prior quarter. From time to time, reported
payments volume information may be updated to reflect revised client submissions or
other adjustments. Prior period updates are not material. Figures may not
sum due to rounding. YOY Change
(nominal)
16%
7%
6%
19%
36%
YOY Change
(constant)
13%
9%
6%
25%
42%
Quarter ended March |
 Second Quarter Fiscal 2012 Financial Results
8
Transactions
in millions, except percentages
Quarter ended December
Quarter ended March
Note: Processed transactions represent transactions involving Visa, Visa Electron,
Interlink and Plus cards processed on Visa’s networks. Total transactions
represent payments and cash transactions as reported by Visa clients on their
operating certificates. From time to time, previously submitted transaction
information may be updated. Prior period updates are not material.
YOY
Change
8%
8%
8%
8% |
 Second Quarter Fiscal 2012 Financial Results
9
Total Cards
in millions, except percentages
YOY
Change
9%
6%
1%
Note: From time to time, previously submitted card information may be
updated. Prior period updates are not material. Quarter ended
December |
 Second Quarter Fiscal 2012 Financial Results
10
Revenue –
Q2 2012
US$ in millions, except percentages
YOY
Change
10%
15%
14%
Note: Growth rates and percentage of gross revenues calculated based on whole
numbers, not rounded numbers. FY12 % of Gross
Revenues
16%
84% |
 Second Quarter Fiscal 2012 Financial Results
11
Revenue Detail –
Q2 2012
US$ in millions, except percentages
Note: Growth rates calculated based on whole numbers, not rounded numbers.
YOY
Change
12%
17%
13%
14% |
 Second Quarter Fiscal 2012 Financial Results
12
Operating Margin –
Q2 2012
US$ in millions, except percentages
Note: Growth rates calculated based on whole numbers, not rounded numbers.
YOY
Change
13%
16%
15%
NM |
 Second Quarter Fiscal 2012 Financial Results
13
Operating Expenses –
Q2 2012
US$ in millions, except percentages
Note: Growth rates calculated based on whole numbers, not rounded numbers.
YOY
Change
6%
16%
28%
NM
12%
(7%)
23% |
 Second Quarter Fiscal 2012 Financial Results
14
Other Financial Results
•
Cash, cash equivalents, restricted cash, and available-for-sale
investment securities of $8.9 billion at the end of the fiscal second
quarter, which includes $4.3 billion of restricted cash in the litigation
escrow account
•
Free cash flow of $1.1 billion for the fiscal second quarter
•
Capital expenditures of $61 million during the fiscal second quarter
|
 Second Quarter Fiscal 2012 Financial Results
15
Financial Metrics for Fiscal Year 2012 |
 Second Quarter Fiscal 2012 Financial Results
16
Financial Metrics for Fiscal Year 2012
*
Excludes the impact of one-time non-cash remeasurement of our existing net
deferred tax liabilities, which would
decrease the GAAP tax rate to 29% to 30%. These deferred tax liabilities are
primarily associated with indefinite-lived intangible assets recorded as
part of Visa’s October 2007 reorganization. |
 Appendix
Reconciliation of
Non-GAAP Measures |
   Second Quarter Fiscal 2012 Financial Results
Reconciliation of Non-GAAP
Financial Results
US$ in millions, except per share data
During the three months ended March 31, 2012, the state of California approved
certain changes to its state tax apportionment
rules,
effective
retroactively
to
the
beginning
of
fiscal
2012,
which
lowered
our
overall
state
tax
rate.
As a result, in our income tax provision for the three months ended March 31, 2012,
we recorded a one-time, non- cash
benefit
of
$208
million
resulting
from
the
remeasurement
of
our
existing
net deferred
tax
liabilities
primarily
associated with $11 billion of indefinite-lived intangible assets previously
recorded to reflect our reorganization in 2007. This adjustment has no cash
impact to us. Management therefore believes that the resulting net income
recorded is not indicative of Visa’s financial performance in the current or
future periods. Management believes the presentation of adjusted net income
and adjusted diluted earnings per share provides a clearer understanding of our
operating performance for the periods.
A1
Net income
attributable to
Visa Inc.
Fully-diluted
earnings per
share
(1)
Net income
attributable to
Visa Inc.
Fully-diluted
earnings per
share
(1)
As reported
$1,292
$1.91
$2,321
$3.40
Impact of deferred tax adjustment
(208)
(0.31)
(208)
(0.30)
Adjusted
$1,084
$1.60
$2,113
$3.09
Weighted-average number of diluted shares (as reported)
676
683
(1)
Earnings per share figures calculated based on whole numbers, not rounded numbers.
Six Months Ended
March 31, 2012
Three Months Ended
March 31, 2012
Note: There were no comparable adjustments in the three months ended March
31, 2011. As such, we do not present adjusted results for that period. |
   Second Quarter Fiscal 2012 Financial Results
Reconciliation of Non-GAAP
Financial Results
A2
As discussed in the previous slide, during the three months ended March 31, 2012,
we recorded a one-time, non-cash benefit resulting from the
remeasurement of our existing net deferred tax liabilities. This adjustment
has
no
cash
impact
to
us.
Management
therefore
believes
that
the
resulting
benefit
recorded
in
our
effective
income tax rates is not indicative of our financial performance in the current or
future periods. Management believes the presentation of our adjusted
effective income tax rates provides a clearer understanding of our operating
performance for these periods. Three Months
Ended
March 31,
2012
(1)
Six Months
Ended
March 31,
2012
(1)
Effective income tax rate (as reported)
19.7%
28.1%
Remeasurement of deferred tax liabilities
12.9%
6.4%
Adjusted effective income tax rate
32.6%
34.6%
(1)
Effective income tax rate calculated based on whole numbers, not rounded numbers.
Note: There were no comparable adjustments in the three months ended March
31, 2011. As such, we do not present adjusted results for that period. |
     Second Quarter Fiscal 2012 Financial Results
Calculation of Free Cash Flow
US$ in millions
A3
(1) Includes changes in client incentives, trade receivable/payable, settlement
receivable/payable, and personnel incentives. Additions (+) /
Reductions (-) to
Net income
attributable to
Visa Inc.
Net income attributable to Visa Inc. (as reported)
1,292
2,321
Capital Assets
+
Depreciation and amortization
80
160
-
Capital expenditures
(61)
(127)
19
33
Litigation
+
Litigation provision
-
-
+
Accretion expense
-
1
-
Settlement payments
(70)
(140)
+
Settlement payments funded by litigation escrow
70
140
-
1
Share-based Compensation
+
Share-based compensation
38
76
Pension
+
Pension expense
11
22
-
Pension contribution
-
-
11
22
Taxes
+
Income tax expense
317
907
-
Income taxes paid
(1,014)
(1,071)
(697)
(164)
Changes in Working Capital
(1)
+/-
Changes in other working capital accounts
413
151
Total Free Cash Flow
1,076
2,440
Three Months Ended
March 31, 2012
Six Months Ended
March 31, 2012 |