Attached files
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| EX-99.1 - EX-99.1 - VISA INC. | d663032dex991.htm |
| 8-K - FORM 8-K - VISA INC. | d663032d8k.htm |
 Visa Inc.
Fiscal First Quarter 2014
Financial Results
January 30, 2014
Exhibit 99.2 |
 Fiscal
First Quarter 2014 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. Forward-looking statements generally are
identified by words such as "believes," "estimates," "expects," "intends," "may," "projects," "could,"
"should," "will," "will continue" 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.
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) 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:
•
the impact of laws, regulations and marketplace barriers, including: •
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;
•
increased regulation in jurisdictions outside of the United States and in other product
categories; •
increased government support of national payment networks outside the United States; and •
increased regulation on consumer privacy, data use and security; •
developments in litigation and government enforcement, including those affecting interchange
reimbursement fees, antitrust and tax;
•
new lawsuits, investigations or proceedings, or changes to our potential exposure in connection with
pending lawsuits, investigations or proceedings; •
economic factors, such as:
•
economic fragility in the Eurozone and in the United States; •
general economic, political and social conditions in mature and emerging markets globally; •
material changes in cross-border activity, foreign exchange controls and fluctuations in currency
exchange rates; and
•
material changes in our financial institution clients' performance compared to our estimates; •
industry developments, such as competitive pressure, rapid technological developments and
disintermediation from our payments network;
•
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
Visa-branded cards or payment products; and
•
failure to maintain systems interoperability with Visa Europe; •
costs arising if Visa Europe were to exercise its right to require us to acquire all of its
outstanding stock;
•
the loss of organizational effectiveness or key employees; •
the failure to integrate acquisitions successfully or to effectively develop new products and
businesses; •
natural disasters, terrorist attacks, military or political conflicts, and public health
emergencies; and various other factors, including those contained in our Annual Report on Form 10-K for the year
ended September 30, 2013, and our other filings with the U.S. Securities and Exchange
Commission. 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. |
 Solid
Fiscal First Quarter Results Strong operating revenues of $3.2 billion, up 11%
over prior year
Repurchased 5.5 million shares of class A common stock in
the open market at an average price of $199.56 per share,
using $1.1 billion of cash on hand
Continued positive secular trends and spending momentum
contributed to growth in key underlying business drivers
Quarterly net income of $1.4 billion and diluted earnings per
share of $2.20, up 9% and 14%, respectively, over prior year
Fiscal First Quarter 2014 Financial Results
3 |
 Fiscal First Quarter 2014 Financial Results
4
Quarter ended September
Payments Volume
US$ in billions, nominal, except percentages
YOY Change
(constant)
13%
13%
13%
YOY Change
(nominal)
8%
12%
10%
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.
INTL
393
INTL
420
INTL 93
INTL 109
U.S.
522
U.S.
575
U.S.
250
U.S.
277
U.S.
272
U.S.
298
1,007
643
365
1,104
697
407
Total Visa Inc.
Credit
Debit
2012
2013
INTL
486
INTL
529
INTL
=
International |
 Fiscal First Quarter 2014 Financial Results
5
Quarter ended December
Payments Volume
US$ in billions, nominal, except percentages
YOY Change
(constant)
11%
11%
12%
YOY Change
(nominal)
7%
10%
8%
Note:
Current
quarter
payments
volume
and
other
select
metrics
are
provided
in
the
operational
performance
data
supplement
in
the
Press
Release 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.
INTL
425
INTL
449
INTL 105
INTL 124
U.S.
545
U.S.
590
U.S.
262
U.S.
287
U.S.
282
U.S.
303
1,075
688
387
1,163
736
427
Total Visa Inc.
Credit
Debit
2012
2013
INTL
530
INTL
573
INTL =
International |
 Fiscal First Quarter 2014 Financial Results
6
Quarter ended December
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. Credit
38%
YOY
Change
9%
13%
Debit
62%
Credit
38%
21,557
14,159
23,597
15,985
Total Transactions
Processed Transactions
2012
2013
Debit
62% |
 Quarter ended September
Total Cards
in millions, except percentages
Note: The data presented is based on results reported quarterly by Visa clients on
their operating certificates. Estimates may be utilized if data is
unavailable. 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.
YOY
Change
3%
8%
6%
2,067
789
1,278
2,188
811
1,377
Visa Inc.
Credit
Debit
2012
2013
Fiscal First Quarter 2014 Financial Results
7 |
 Fiscal First Quarter 2014 Financial Results
8
Revenue –
Q1 2014
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
8%
11%
10%
Fiscal 2014 % of
Gross Revenues
16%
84%
3,399
(553)
2,846
3,754
(599)
3,155
Gross Revenues
Incentives
Net Operating
Revenues
Fiscal 2013
Fiscal 2014 |
 Fiscal First Quarter 2014 Financial Results
9
Revenue
Detail
–
Q1
2014
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
13%
11%
9%
0%
1,300
1,115
805
179
1,419
1,264
891
180
Service Revenues
Data Processing
Revenues
International
Transaction Revenues
Other Revenues
Fiscal 2013
Fiscal 2014 |
 Fiscal First Quarter 2014 Financial Results
10
Operating
Margin
–
Q1
2014
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
3%
15%
11%
3 ppts
2,846
1,046
1,800
63%
3,155
1,078
2,077
66%
Net Operating
Revenues
Total Operating
Expenses
Operating
Income
Operating
Margin
Fiscal 2013
Fiscal 2014 |
 Note: Figures may not recalculate exactly due to rounding. Percentage changes are
calculated based on whole numbers, not the rounded numbers presented.
YOY
Change
20%
(15%)
4%
2%
16%
(4%)
NM
Operating Expense –
Q1 2014
US$ in millions, except percentages
Fiscal First Quarter 2014 Financial Results
11
454
193
110
88
92
106
3
470
186
132
75
107
108
0
Personnel
Marketing
Network &
Processing
Professional
Fees
Depreciation &
Amortization
General &
Administrative
Litigation
Provision
Fiscal 2013
Fiscal 2014 |
 Fiscal First Quarter 2014 Financial Results
12
Other Financial Results
•
Cash, cash equivalents and available-for-sale investment securities of
$7.0 billion at the end of the fiscal first quarter
•
Free cash flow of $1.6 billion for the fiscal first quarter
•
Capital expenditures of $120 million during the fiscal first quarter
|
 Fiscal First Quarter 2014 Financial Results
13
Financial Metrics for Fiscal Year 2014
Annual net revenue
growth
Client incentives as % of
gross revenues
Annual 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
•
16.5% to 17.5% range
•
Low 60s
•
Mid to high teens
•
About $5 billion |
 Appendix |
 Fiscal First Quarter 2014 Financial Results
Calculation of Free Cash Flow
US$ in millions
A-1
Additions (+) /
Reductions (-) to
Net income
Net income (as reported)
1,407
Capital Assets
+
Depreciation and amortization
107
-
Capital expenditures
(120)
(13)
Litigation
+
Litigation provision
-
-
Settlement payments
(1)
+
Settlement payments funded by litigation escrow
-
(1)
Share-based Compensation
+
Share-based compensation
45
Pension
+
Pension expense
2
-
Pension contribution
-
2
Taxes
+
Income tax provision
676
-
Income taxes paid
(96)
580
Changes in Working Capital
(1)
+/-
Changes in other working capital accounts
(443)
Total Free Cash Flow
1,577
Three Months Ended
December 31, 2013
Includes changes in client incentives, trade receivable/payable, settlement receivable/payable and
personnel incentives.
(1) |