Attached files
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| EX-99.1 - EX-99.1 - VISA INC. | d764163dex991.htm |
| 8-K - FORM 8-K - VISA INC. | d764163d8k.htm |
 July 24, 2014
Exhibit 99.2
Visa Inc.
Fiscal Third Quarter 2014
Financial Results
|
 Fiscal
Third Quarter 2014 Financial Results 2
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, tax rate 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.
Forward-Looking Statements |
 Fiscal Third Quarter 2014 Financial Results
3
Solid operating revenues of $3.2 billion, up 5% over prior year
Repurchased 5.6 million shares of class A common stock in
the open market at an average price of $207.13 per share,
using $1.2 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 $2.17, up 11% and 15%, respectively, over prior year
Solid
Fiscal
Third
Quarter
Results |
 Fiscal Third Quarter 2014 Financial Results
4
Quarter ended March
YOY Change
(constant)
12%
12%
11%
YOY Change
(nominal)
8%
8%
8%
Note: Figures may not recalculate exactly due to rounding. Percentage changes are
calculated based on whole numbers, not the rounded numbers presented. From
time to time, previously submitted volume information may be updated to reflect revised client submissions or other adjustments.
Prior period updates are not material. Constant dollar growth rates exclude the
impact of foreign currency fluctuations against the U.S. dollar in measuring
performance. INTL
394
INTL
417
INTL 102
INTL 115
U.S.
530
U.S.
575
U.S.
244
U.S.
269
U.S.
286
U.S.
305
1,026
638
388
1,108
687
421
Total Visa Inc.
Credit
Debit
2013
2014
INTL
496
INTL
533
INTL
=
International
Payments Volume
US$ in billions, nominal, except
percentages |
 Payments Volume
US$ in billions, nominal, except
percentages
YOY Change
(constant)
11%
11%
12%
YOY Change
(nominal)
9%
10%
9%
INTL
412
INTL
440
INTL 107
INTL 123
U.S.
571
U.S.
627
U.S.
270
U.S.
303
U.S.
300
U.S.
323
INTL
563
INTL
519
1,190
1,089
682
407
743
447
Total Visa Inc.
Credit
Debit
2013
2014
INTL =
International
Fiscal Third Quarter 2014 Financial Results
5
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.
Quarter ended June |
 Quarter ended June
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 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.
Credit
37%
YOY
Change
10%
11%
Debit
63%
Credit
37%
2013
2014
22,348
24,543
14,972
16,662
Total Transactions
Processed Transactions
Debit
63%
Fiscal Third Quarter 2014 Financial Results
6 |
 Fiscal Third Quarter 2014 Financial Results
7
Quarter ended March
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
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.
YOY
Change
3%
8%
6%
2,128
801
1,327
2,261
822
1,438
Visa Inc.
Credit
Debit
2013
2014 |
 Revenue –
Q3 2014
US$ in millions, except percentages
Note: Figures may not recalculate exactly due to rounding. Percentages are
calculated based on whole numbers, not the rounded numbers
presented.
17%
83%
3,522
(521)
3,001
3,793
(638)
3,155
Fiscal 2013
Fiscal 2014
Gross Revenues
Client
Incentives
Net Operating
Revenues
Gross Revenues
Fiscal 2014 % of
Fiscal Third Quarter 2014 Financial
Results 8
22%
5%
YOY
Change
8% |
 Revenue Detail –
Q3 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
11%
1%
9%
9%
Fiscal 2013
Fiscal 2014
1,298
1,417
1,191
1,321
854
860
179
195
Service Revenues
Data Processing
Revenues
International
Transaction Revenues
Other Revenues
Fiscal Third Quarter 2014 Financial Results
9 |
 Operating Margin –
Q3 2014
US$ in millions, except percentages
Fiscal 2013
Fiscal 2014
3,001
3,155
1,173
1,135
1,828
2,020
61%
64%
Net Operating
Revenues
Total Operating
Expenses
Operating
Income
Operating
Margin
Fiscal Third Quarter 2014 Financial Results
10
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%)
11%
5%
3 ppts |
 Fiscal Third Quarter 2014 Financial Results
11
Operating Expense Q3 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
9%
(20%)
(6%)
17%
7%
(9%)
NM
Personnel
Marketing
Network &
Processing
Professional
Fees
Depreciation &
Amortization
General &
Administrative
Litigation
Provision
Fiscal 2013
Fiscal 2014
493
252
117
103
101
108
(1)
463
228
127
82
109
126
0 |
 Fiscal Third Quarter 2014 Financial Results
12
Other Financial Results
•
Cash,
cash
equivalents
and
available-for-sale
investment
securities
of
$6.8
billion
at
the
end
of
the
fiscal
third
quarter
•
Free cash flow of $1.9 billion for the fiscal third quarter
•
Capital expenditures of $109 million during the fiscal third quarter
|
 Fiscal Third Quarter 2014 Financial Results
13
Financial Metrics for Fiscal Year 2014
•
Constant revenue growth in the 9-10% range
•
Negative 2 ppts foreign currency impact
Annual net revenue growth
•
Around 17%
Client incentives as % of
gross revenues
•
Low to mid 60s
Annual operating margin
•
30 -
31% range
Tax Rate
•
17.5-
18.5% range
Annual diluted class A
common stock earnings per
share growth
•
About $5 billion
Annual free cash flow |
 Appendix |
 Calculation of Free Cash Flow
US$ in millions
(1)
Reflects the return of takedown payments into the litigation escrow account in
connection with the interchange multidistrict litigation. (2)
Includes
changes
in
client
incentives,
trade
receivable/payable,
settlement
receivable/payable
and
personnel
incentives.
A-1
Fiscal Third Quarter 2014 Financial Results
Additions (+) /
Reductions (-) to Net
income
Net income (as reported)
1,360
4,365
Capital Assets
+
Depreciation and amortization
109
323
-
Capital expenditures
(109)
(326)
-
(3)
Litigation
+
-
1,056
-
-
(1,056)
-
Settlement payments
-
(1)
-
(1)
Share-based Compensation
+
Share-based compensation
41
130
Pension
+
Pension expense
4
6
Taxes
+
Income tax provision
670
1,809
-
Income taxes paid
(551)
(1,943)
119
(134)
Changes in Working Capital
(2)
+/-
Changes in other working capital accounts
345
(93)
Total Free Cash Flow
1,869
4,270
Three Months Ended
June 30, 2014
Nine Months Ended
June 30, 2014
Return of settlement payments into the litigation
escrow
(1)
(1)
Return of settlement payments |