Visa Inc. Fiscal First Quarter Financial Results February 3, 2010 Exhibit 99.2 |
2 Fiscal Q1 2010 Earnings Results 2 Safe Harbor Reminder • Certain statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. These statements can be identified by the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will” and similar expressions which are intended to identify forward-looking statements. In addition, any underlying assumptions are forward-looking statements. Such forward-looking statements include but are not limited to statements regarding certain of Visa’s goals and expectations with respect to earnings per share, revenue, operating margin, free cash flow, and the growth rate in those items, as well as other measures of economic performance. • By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are not guarantees of future performance or results and (iii) are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements as a result of a variety of factors, including all the risks discussed under the heading “Risk Factors” in Part 1, Item 1A – “Risk Factors” in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q or Periodic Reports on Form 8-K, if any. You are cautioned not to place undue reliance on such statements, which speak only as of the date of this presentation. Unless required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements. |
3 Fiscal Q1 2010 Earnings Results Solid Fiscal First Quarter Results • Repurchased 5.5 million shares of class A common stock at an average price of $78.78 • Quarterly net income of $763 million, up 33%, and diluted earnings of $1.02 per share, up 38% over prior year • Strong operating revenues of $2.0 billion, up 13% over prior year • Continued positive secular trends and business model resilience despite economic slowdown |
4 Fiscal Q1 2010 Earnings Results 701 452 249 452 268 720 Total Visa Inc. Credit Debit 2008 2009 ROW 41 Quarter ended September US$ in billions, nominal, except percentages Payments Volume ROW 280 ROW 258 U.S. 421 U.S. 417 ROW 303 U.S. 213 239 ROW U.S. 195 U.S. 208 U.S. 223 ROW 45 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 year volume information presented has not been updated, as changes made are not material. Constant dollar growth rates exclude the impact of foreign currency fluctuations against the U.S. dollar in measuring performance. YOY Change (nominal) 0% 8% 3% YOY Change (constant) 3% (1)% 8% ROW = Rest of World |
5 Fiscal Q1 2010 Earnings Results 431 244 675 478 291 769 Total Visa Inc. Credit Debit 2008 2009 ROW 38 Quarter ended December US$ in billions, nominal, except percentages Payments Volume ROW 266 ROW 278 U.S. 409 U.S. 438 ROW 331 U.S. 203 228 ROW U.S. 201 U.S. 206 U.S. 238 ROW 53 Commencing this quarter, current payments volume and other select metrics are provided in the operational performance data supplement. Service revenues will 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. ROW = Rest of World YOY Change (nominal) 14% 11% 19% YOY Change (constant) 9% 4% 17% |
6 Fiscal Q1 2010 Earnings Results 421 21 163 51 44 183 55 44 21 417 United States Asia Pacific Latin America and Caribbean Canada Central and Eastern Europe, Middle East and Africa 2008 2009 Quarter ended September US$ in billions, nominal, except percentages Payments Volume Note: Growth rates calculated based on whole numbers, not rounded numbers. From time to time, previously submitted volume information may be updated. Prior year volume information presented has not been updated, as changes made are not material. Constant dollar growth rates exclude the impact of foreign currency fluctuations against the U.S. dollar in measuring performance. YOY Change (nominal) (1%) 12% 9% (1%) (2%) YOY Change (constant) (1%) 9% 15% (1%) 3% |
7 Fiscal Q1 2010 Earnings Results 409 20 161 47 38 196 64 47 23 438 United States Asia Pacific Latin America and Caribbean Canada Central and Eastern Europe, Middle East and Africa 2008 2009 Quarter ended December US$ in billions, nominal, except percentages Payments Volume Commencing this quarter, current payments volume and other select metrics are provided in the operational performance data supplement. Service revenues will 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. YOY Change (nominal) 7% 22% 38% 23% 16% YOY Change (constant) 7% 10% 16% 4% 9% |
8 Fiscal Q1 2010 Earnings Results 9,590 14,898 9,797 14,483 10,463 16,572 10,924 15,855 Total Transactions Processed Transactions Total Transactions Processed Transactions 2008 2009 Quarter ended September in millions, except percentages Transactions – Q1 2010 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 members on their operating certificates. From time to time, previously submitted volume information may be updated. Prior year volume information presented has not been updated, as changes made are not material. Quarter ended December Debit 63% Credit 37% Credit 39% Debit 61% Credit 39% Debit 61% Credit 37% Debit 63% YOY Change 9% 9% 11% 12% |
9 Fiscal Q1 2010 Earnings Results 864 1,676 812 979 1,766 787 Credit Debit Visa Inc. 2008 2009 Quarter ended September in millions, except percentages Total Cards YOY Change (3%) 13% 5% |
10 Fiscal Q1 2010 Earnings Results 2,008 1,739 (269) 1,960 2,334 (374) Fiscal 2009 Fiscal 2010 Revenue – Q1 2010 US$ in millions, except percentages Gross Revenues Incentives Net Operating Revenues YOY Change 16% 39% 13% Note: Growth rates calculated based on whole numbers, not rounded numbers. |
11 Fiscal Q1 2010 Earnings Results Revenue Detail – Q1 2010 US$ in millions, except percentages Service Revenues Data Processing Revenues International Transaction Revenues Other Revenues 793 505 554 156 765 827 552 190 Fiscal 2009 Fiscal 2010 YOY Change 4% 38% 9% 21% Note: Growth rates calculated based on whole numbers, not rounded numbers. |
12 Fiscal Q1 2010 Earnings Results Operating Margin – Q1 2010 US$ in millions, except percentages 1,739 966 773 743 1,960 1,217 Net Operating Revenues Total Operating Expenses Operating Income 56% 62% Operating Margin Fiscal 2009 Fiscal 2010 YOY Change 6 ppts 13% (4%) 26% Note: Growth rates calculated based on whole numbers, not rounded numbers. |
13 Fiscal Q1 2010 Earnings Results 299 773 0 63 52 56 210 93 743 (43) 105 216 51 62 78 274 Fiscal 2009 Fiscal 2010 Operating Expenses – Q1 2010 US$ in millions, except percentages Personnel Network, EDP and Communications Advertising, Marketing and Promotion Professional and Consulting Fees Depreciation and Amortization Administrative and Other Total Operating Expenses Litigation Provision YOY Change (8)% 13% 3% (9)% 18% 24% NM (4)% Note: Growth rates calculated based on whole numbers, not rounded numbers. |
14 Fiscal Q1 2010 Earnings Results Other Financial Results • Cash, cash equivalents, restricted cash and available-for-sale investment securities of $6.0 billion at the end of the fiscal first quarter which includes $1.6 billion of restricted cash for litigation escrow • Free cash flow of $788 million • Utilized $432 million of the overall $1.0 billion share repurchase plan to repurchase 5.5 million shares of class A common stock at an average price of $78.78 per share • Pre-tax gain of $41 million recognized related to the prepayment of remaining $800 million of obligations related to a class action lawsuit at a discounted amount of $682 million • Capital expenditures during fiscal Q1 2010 of $37 million |
15 Fiscal Q1 2010 Earnings Results Less than $1 billion Advertising, marketing and promotion expenses Less than $1 billion 11-15% range Annual net revenue growth Financial Metrics for Fiscal Year 2010 Annual operating margin Mid to high 50% range 16-17% of gross revenue Volume and support incentives |
16 Fiscal Q1 2010 Earnings Results Financial Metrics for Fiscal Year 2010 Capital Expenditures About $200 million Annual diluted class A common stock earnings per share growth 20% + GAAP tax rate 36.5 to 38.5% range Annual free cash flow $2 billion + |
Appendix Reconciliation of Non-GAAP Measures |
Fiscal Q1 2010 Earnings Results A-1 Adjusted Diluted Class A Common Stock Earnings Per Share US$ in millions, except per share data Three months ended December 31, 2009 Diluted EPS (1) Net Income (as reported) 763 $ 1.02 $ Adjustment for non-recurring item: Less: gain from retailers' litigation prepayment (2) (41) Addback: tax expense related to the gain (2) 15 Adjustment net of tax (26) Adjusted net income 737 $ 0.99 $ Impact to EPS 0.03 $ (2) Adjustment to remove effect of one time gain from Retailer's litigation prepayment (1) Calculated using 745 million of weighted average shares outstanding at December 31, 2009 |
Fiscal Q1 2010 Earnings Results A-2 Calculation of Free Cash Flow US$ in millions (1) (2) Includes changes in volume & support incentives, trade receivables, settlement receivable/payable, and personnel incentives. Excludes $202 million of estimated federal and a majority of the estimated state tax payments for Visa's fiscal Q1, which were not paid until they were due in January. Estimated tax payments for Visa's fiscal Q2 will be paid when due in March. Additions (+) / Reductions (-) to Net income attributable to Visa Inc. Q1 FY 2010 Net income attributable to Visa Inc. (as reported) 763 + Depreciation and amortization 62 - Capital expenditures (37) 25 + Litigation provision (43) + Accretion expense 10 - Settlement payments (73) + Settlement payments funded by litigation escrow 70 (36) Share-based Compensation + Share-based compensation 32 Pension + Pension expense 15 + Income tax expense 445 - Income taxes paid (25) 420 Changes in Working Capital (2) + Changes in other working capital accounts (431) Total Free Cash Flow 788 Less: Retailers' Litigation Prepayment - Settlement payment (682) Adjusted Free Cash Flow 106 Taxes (1) Capital Assets Litigation |