Attached files
| file | filename |
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| EX-99.1 - EX-99.1 - VISA INC. | d620084dex991.htm |
| 8-K - FORM 8-K - VISA INC. | d620084d8k.htm |
 Visa
Inc. Fiscal Fourth Quarter
Financial Results
October 30, 2013
Exhibit 99.2 |
 Fiscal Fourth Quarter 2013 Financial Results
2
Forward-Looking Statements
various other factors discussed in “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Result of Operations” in our Annual Report on Form
10-K for the year ended September 30, 2012 and our most recent Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, on file with
the U.S. Securities and Exchange Commission. Additional information will also be available in our
Annual Report on Form 10-K for the year ended September 30, 2013. You should not place
undue reliance on such statements. Except as required by law, we do not intend to update or revise any forward–looking statements as
a result of new information, future developments or otherwise.
natural disasters, terrorist attacks, military or political conflicts, and
public health emergencies; and the failure to integrate acquisitions
successfully or to effectively develop new products and businesses; the loss
of organizational effectiveness or key employees; costs arising if Visa
Europe were to exercise its right to require us to acquire all of its outstanding stock;
failure to maintain systems interoperability with Visa Europe;
account data breaches or increased fraudulent or other illegal activities
involving Visa-branded cards or payment products; and disruption of our
transaction processing systems or the inability to process transactions efficiently;
system developments, such as:
industry developments, such as competitive pressure, rapid technological
developments and disintermediation from our payments network; material
changes in our financial institution clients' performance compared to our estimates;
material changes in cross-border activity, foreign exchange controls and
fluctuations in currency exchange rates; and general economic, political
and social conditions in mature and emerging markets globally; economic
fragility in the Eurozone and in the United States; economic factors, such
as: new lawsuits, investigations or proceedings, or changes to our potential
exposure in connection with pending lawsuits, investigations or proceedings;
developments
in
litigation
and
government
enforcement,
including
those
affecting
interchange
reimbursement
fees,
antitrust
and
tax;
increased regulation of consumer privacy, data use and security;
increased government support of national payment networks outside the United
States; and increased regulation in jurisdictions outside of the United
States and in other product categories; rules capping debit interchange reimbursement
rates and expanding financial institutions’ and merchants’ choices among debit payment networks promulgated,
under the Dodd-Frank Wall Street Reform and Consumer Protection Act;
the impact of laws, regulations and marketplace barriers, including:
By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are
not statements of historical fact or guarantees of future performance, and (iii) in
jurisdiction are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Therefore,
actual results could differ materially and adversely from our forward-looking statements due to a
variety of factors, including the following: This presentation contains forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking statements generally are
identified by words such as “outlook,” “will,” “believes,” “continues,” and other similar expressions. Examples of forward-looking
statements include, but are not limited to, statements we make about our revenue, client incentives,
operating margin, earnings per share, free cash flow, and the growth of those items.
|
 Fiscal Fourth Quarter 2013 Financial Results
3
Solid Fiscal Fourth Quarter Results
•
Strong operating revenues of $3.0 billion, up 9% over prior year
•
Quarterly net income of $1.2 billion and diluted earnings per share
of $1.85, up 15% and 20%, respectively, over prior year adjusted
results
•
Continued positive secular trends and spending momentum
contributed to growth in key underlying business drivers
•
Repurchased 7 million shares of class A common stock in the open
market at an average price of $177.47 per share, using $1.3 billion
of cash on hand
Note: See appendix for reconciliation of adjusted non-GAAP measures to the
closest comparable GAAP measures. |
 Fiscal Fourth Quarter 2013 Financial Results
4
Payments Volume
US$ in billions, nominal, except percentages
YOY Change
(nominal)
9%
15%
11%
YOY Change
(constant)
13%
12%
16%
Note: Figures may not recalculate exactly due to rounding. Percentage changes are
calculated based on whole numbers, not the rounded numbers presented. 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 June |
 Fiscal Fourth Quarter 2013 Financial Results
5
Payments Volume
US$ in billions, nominal, except percentages
YOY Change
(nominal)
8%
12%
10%
YOY Change
(constant)
13%
13%
13%
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
recalculate exactly due to rounding. Percentage changes are calculated based on whole numbers, not the rounded numbers
presented.
ROW =
Rest of World
Quarter ended September |
 Fiscal Fourth Quarter 2013 Financial Results
6
Transactions
in millions, except percentages
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. Figures may not
recalculate exactly due to rounding. Percentage changes are calculated based
on whole numbers, not the rounded numbers presented. YOY
Change
11%
14%
Quarter ended September
2012
2013
20,568
13,573
22,907
15,491
Total
Transactions
Processed
Transactions
Credit
38%
Debit
62%
Credit
38%
Debit
62% |
 Fiscal Fourth Quarter 2013 Financial Results
7
Total Cards
in millions, except percentages
YOY
Change
9%
7%
4%
Note: From time to time, previously submitted card information may be updated.
Prior period updates are not material. Figures may not recalculate exactly
due to rounding. Percentage changes are calculated based on whole numbers,
not the rounded numbers presented. Quarter ended June
|
 Fiscal Fourth Quarter 2013 Financial Results
8
Revenue –
Q4 2013
US$ in millions, except percentages
YOY
Change
21%
9%
11%
Note: Figures may not recalculate exactly due to rounding. Percentage changes are
calculated based on whole numbers, not the rounded numbers presented.
FY13 % of
Gross Revenues
19%
81% |
 Fiscal Fourth Quarter 2013 Financial Results
9
Revenue Detail –
Q4 2013
US$ in millions, except percentages
Note: Figures may not recalculate exactly due to rounding. Percentage changes are
calculated based on whole numbers, not the rounded numbers presented.
YOY
Change
12%
13%
10%
6%
Fiscal 2012
Fiscal 2013 |
 Fiscal Fourth Quarter 2013 Financial Results
10
Operating Margin –
Q4 2013
US$ in millions, except percentages
Note:
Operating
margin
is
calculated
as
operating
income
divided
by
net
operating
revenues.
Figures
may
not
recalculate
exactly
due
to
rounding. Percentage changes are calculated based on whole numbers, not the rounded
numbers presented. YOY
Change
1%
15%
9%
3 ppts
Fiscal 2012
Fiscal 2013 |
 Fiscal Fourth Quarter 2013 Financial Results
11
Operating Expenses –
Q4 2013
US$ in millions, except percentages
Note: Figures may not recalculate exactly due to rounding. Percentage changes are
calculated based on whole numbers, not the rounded numbers presented.
YOY
Change
10%
(3%)
6%
(2%)
17%
(13%)
(81%)
Fiscal 2012
Fiscal 2013
471
271
111
134
89
131
2
499
236
122
130
106
129
0
Personnel
Marketing
Network &
Processing
Professional
Fees
Depreciation &
Amortization
General &
Administrative
Litigation
provision |
 Fiscal Fourth Quarter 2013 Financial Results
12
Other Financial Results
•
Cash, cash equivalents and available-for-sale investment securities
of $6.9 billion at the end of the fiscal fourth quarter
•
Free cash flow of $1.9 billion for the fiscal fourth quarter
•
Capital expenditures of $138 million during the fiscal fourth quarter
|
 Fiscal Fourth Quarter 2013 Financial Results
13
Financial Metrics for Fiscal Year 2014
Annual net revenue growth
Client incentives as % of gross revenues
Operating margin
Annual diluted class A common stock
earnings per share growth
Annual free cash flow
Low double-digits on a
constant dollar basis
Negative 2 ppts foreign
currency impact
Low 60s
16.5% to 17.5% range
Mid to high teens
About $5 billion |
 Appendix |
  Fiscal Fourth Quarter 2013 Financial Results
Reconciliation of Non-GAAP
Financial Results –
Fourth Quarter
US$ in millions, except per share data
During the fourth quarter of fiscal 2012, the IRS issued a revised Revenue Agent
Report effectively withdrawing its proposed adjustment, which would have
disallowed the deduction of payments made in fiscal 2008 to settle the
American Express litigation. As a result, during that quarter, we reevaluated and
reversed all previously recorded tax reserves and accrued interest
associated with the deductibility of covered litigation expense (“reversal of tax
reserves”), which increased our net income by $627M for that quarter. These
adjustments were non-recurring in nature and not indicative of our
financial performance in that or future periods. As such, we believe the
presentation of adjusted financial results excluding these amounts provides a
clearer understanding of our operating performance for that period.
A1
(1)
Figures may not recalculate exactly due to rounding. Diluted earnings per share
figures are calculated based on whole numbers, not the rounded numbers
presented. 2013
2012
2013
2012
As reported
1,192
$
1,662
$
1.85
$
2.47
$
Reversal of tax reserves
-
(627)
-
(0.93)
Adjusted
1,192
$
1,035
$
1.85
$
1.54
$
Diluted weighted-average shares
outstanding
644
672
Three Months Ended September 30,
Net income attributable
to Visa Inc.
Diluted earnings per
share
(1) |
  Fiscal Fourth Quarter 2013 Financial Results
Reconciliation of Non-GAAP
Financial
Results
–
Full
Year
A2
Our financial results for fiscal 2012 were impacted by the following special items:
We believe inclusion of these items was not indicative of our financial
performance in that or future periods, as amounts were either non-
recurring,
had
no
cash
impact
or
are
covered
by
the
plan.
As
such,
we
believe
the
presentation
of
our
adjusted
financial
results
provides
a
clearer understanding of our operating performance for that period.
(1)
Operating margin is calculated as operating income divided by net operating
revenues. (2)
Figures in the table may not recalculate exactly due to rounding. Diluted earnings
per share figures are calculated based on whole numbers, not the rounded
numbers presented. US$ in millions, except percentages and per share
data 2013
2012
2013
2012
2013
2012
2013
2012
As reported
$ 4,539
$ 8,282
61%
21%
4,980
$
2,144
$
$ 7.59
3.16
$
Reversal of tax reserves
-
-
-
-
-
(326)
-
(0.48)
Litigation provision
-
(4,098)
-
39%
-
2,593
-
3.82
Impact of deferred tax adjustment
-
-
-
-
-
(208)
-
(0.31)
Adjusted
$ 4,539
$ 4,184
61%
60%
4,980
$
4,203
$
$ 7.59
6.20
$
Diluted weighted-average shares
outstanding
656
678
Twelve Months Ended September 30,
Operating
expenses
Operating margin
(1)
Net income
attributable to
Visa Inc.
Diluted earnings per
share
(2)
•
Reversal of tax reserves:
During the fourth quarter of fiscal 2012, we reversed all previously recorded tax
reserves and accrued interest associated
with
the
deductibility
of
covered
litigation
expense,
which
increased
our
net
income
by
$627
million
for
the
fourth
quarter
of
fiscal
2012.
The
reversed
tax
reserves
included
$301
million
originally
recorded
in
the
third
quarter
of
fiscal
2012;
therefore,
the
full-year
impact of this adjustment was only $326 million.
•
Litigation provision:
During the third quarter of fiscal 2012, we recorded a provision of $4.1 billion
and related tax benefits associated with
litigation
covered
by
the
retrospective
responsibility
plan
(the
“plan”).
•
Deferred tax adjustment:
During the second quarter of fiscal 2012, we recorded a one-time, non-cash
benefit of $208 million resulting from the remeasurement of our net
deferred tax liabilities due to changes in the California state apportionment rules. |
 Fiscal Fourth Quarter 2013 Financial Results
Calculation of Free Cash Flow
US$ in millions
A3
(1)
Includes changes in client incentives, trade receivable/payable, settlement receivable/payable and
personnel incentives. |