![]() Visa Inc. Fiscal First Quarter Financial Results February 2, 2011 Exhibit 99.2 |
![]() Fiscal First Quarter 2011 Financial Results 2 Forward-Looking Information 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 gross and net revenue, incentive payments, expenses, operating margin, tax rate, earnings per share, capital expenditures, 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 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, particularly the Wall Street Reform and Consumer Protection Act, including those affecting: – issuers’ and retailers’ choice among debit payment networks; – debit interchange rates; – the spread of regulation of debit payments to credit and other product categories; – the spread of U.S. regulations to other countries; – consumer privacy and data use and security; and – designation as a systemically important payment system; • developments in current or future disputes and our ability to absorb their impact, including: interchange; currency conversion; and tax; • macroeconomic factors such as: – global economic, political, health environmental and other conditions; – cross-border activity and currency exchange rates; and – material changes in our clients’ performance compared to our estimates; • industry and systemic developments, such as: – competitive pressure on client pricing and in the payments industry generally; – bank and merchant consolidation and their increased focus on payment card costs; – disintermediation from the payments value stream through government actions or bilateral agreements; – adverse changes in our relationships and reputation; – our clients’ failure to fund settlement obligations we have guaranteed; – disruption of our transaction processing systems or the inability to process transactions efficiently; – rapid technological developments; – account data breaches and increased fraudulent and other illegal activity 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 successfully CyberSource or other acquisitions; • changes in accounting principles or treatment; and the other factors discussed in our most recent Annual Report on Form 10-K and our most recent Quarterly Reports on Form 10-Q 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. |
![]() Fiscal First Quarter 2011 Financial Results 3 Solid Fiscal First Quarter Results • Strong operating revenues of $2.2 billion, up 14% over prior year • Quarterly net income of $884 million, up 16% and diluted earnings of $1.23 per share, up 20% over prior year • Continued positive secular trends and spending momentum contributed to double-digit growth in key underlying business drivers • Repurchased 15.3 million shares at an average price of $72.08 and total cost of $1.1 billion – of which $306 million was from open market purchases and $800 million was effectively repurchased via funding of the litigation escrow |
![]() Fiscal First Quarter 2011 Financial Results 4 Quarter ended September US$ in billions, nominal, except percentages Payments Volume 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. ROW = Rest of World 2009 2010 720 452 268 829 502 327 Total Visa Inc. Credit Debit ROW 45 ROW 303 ROW 295 U.S. 417 U.S. 473 ROW 356 U.S. 195 258 ROW U.S. 223 U.S. 266 ROW 61 YOY Change (nominal) 11% 22% 15% YOY Change (constant) 14% 9% 22% U.S. 207 |
![]() Fiscal First Quarter 2011 Financial Results 5 769 478 291 897 549 348 Total Visa Inc. Credit Debit ROW 53 Quarter ended December US$ in billions, nominal, except percentages Payments Volume ROW 331 ROW 334 U.S. 438 U.S. 493 ROW 404 U.S. 201 278 ROW U.S. 216 U.S. 238 U.S. 277 ROW 71 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 year volume information presented has not been updated, as changes made are not material. Figures may not sum due to rounding. YOY Change (nominal) 15% 20% 17% YOY Change (constant) 15% 12% 19% ROW = Rest of World 2009 2010 |
![]() Fiscal First Quarter 2011 Financial Results 6 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. 2009 2010 473 212 68 49 27 21 44 55 183 417 United States Asia Pacific Latin America and Caribbean Canada Central and Eastern Europe, Middle East and Africa YOY Change (nominal) 13% 16% 24% 10% 26% YOY Change (constant) 13% 12% 24% 7% 28% |
![]() Fiscal First Quarter 2011 Financial Results 7 Quarter ended December US$ in billions, nominal, except percentages Payments Volume YOY Change (nominal) 12% 22% 27% 11% 34% YOY Change (constant) 12% 15% 27% 7% 32% 2009 2010 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 year volume information presented has not been updated, as changes made are not material. Figures may not sum due to rounding. 493 239 82 53 30 23 47 64 197 438 United States Asia Pacific Latin America and Caribbean Canada Central and Eastern Europe, Middle East and Africa |
![]() Fiscal First Quarter 2011 Financial Results 8 15,855 10,463 16,619 10,924 18,149 12,119 12,580 Total Transactions Processed Transactions Total Transactions Processed Transactions Quarter ended September in millions, except percentages Transactions 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 year transaction information presented has not been updated, as changes made are not material. Quarter ended December Debit 65% Credit 35% Credit 37% Debit 63% Credit 37% Debit 63% Credit 36% Debit 64% YOY Change 14% 16% 14% 15% 2009 2010 18,911 |
![]() Fiscal First Quarter 2011 Financial Results 9 787 979 1,766 770 1,081 1,850 Credit Debit Visa Inc. Quarter ended September in millions, except percentages Total Cards YOY Change (2%) 10% 5% Note: From time to time, previously submitted cards information may be updated. Prior year cards information presented has not been updated, as changes made are not material. 2009 2010 |
![]() Fiscal First Quarter 2011 Financial Results 10 2,334 (374) 1,960 2,643 (405) 2,238 Revenue – Q1 2011 US$ in millions, except percentages Gross Revenues Incentives Net Operating Revenues YOY Change 13% 8% 14% Note: Growth rates calculated based on whole numbers, not rounded numbers. Fiscal 2010 Fiscal 2011 |
![]() Fiscal First Quarter 2011 Financial Results 11 Revenue Detail – Q1 2011 US$ in millions, except percentages Service Revenues Data Processing Revenues International Transaction Revenues Other Revenues 827 765 552 190 1,008 844 630 161 YOY Change 22% 10% 14% (15%) Note: Growth rates calculated based on whole numbers, not rounded numbers. Fiscal 2010 Fiscal 2011 |
![]() Fiscal First Quarter 2011 Financial Results 12 Operating Margin – Q1 2011 US$ in millions, except percentages 1,960 743 1,217 2,238 872 1,366 Net Operating Revenues Total Operating Expenses Operating Income 62% 61% Operating Margin YOY Change (1 ppt) 14% 17% 12% Note: Growth rates calculated based on whole numbers, not rounded numbers. Fiscal 2010 Fiscal 2011 |
![]() Fiscal First Quarter 2011 Financial Results 13 274 105 216 51 62 78 (43) 357 80 197 61 67 110 0 Operating Expenses – Q1 2011 US$ in millions, except percentages Personnel Network and Processing Marketing Professional Fees Depreciation and Amortization General and Administrative Litigation Provision YOY Change 30% (24%) (9%) 18% 10% 42% NM Note: Growth rates calculated based on whole numbers, not rounded numbers. Fiscal 2010 Fiscal 2011 |
![]() Fiscal First Quarter 2011 Financial Results 14 Other Financial Results • Cash, cash equivalents, restricted cash and available-for-sale investment securities of $6.5 billion at the end of the fiscal first quarter which includes $2.7 billion of restricted cash for litigation escrow • Total free cash flow of $1.2 billion at the end of the fiscal first quarter • Capital expenditures of $75 million during the fiscal first quarter |
![]() Fiscal First Quarter 2011 Financial Results 15 Less than $900 million Marketing expenses Financial Metrics for Fiscal Year 2011 Annual operating margin About 60% 16% to 16.5% range Client incentives as % of gross revenues Annual net revenue growth 11% to 15% range |
![]() Fiscal First Quarter 2011 Financial Results 16 Financial Metrics for Fiscal Year 2011 Capital expenditures Between $250- $275 million Annual diluted class A common stock earnings per share growth 20% + GAAP tax rate 36.5% to 37% range Annual free cash flow $3 billion + |
![]() Appendix Reconciliation of Non-GAAP Measures |
![]() Fiscal First Quarter 2011 Financial Results Calculation of Free Cash Flow US$ in millions A1 (1) Excludes $334 million of estimated federal and a majority of the estimated state tax payments related to Visa's fiscal Q1, which were not paid until January when due. Estimated tax payments for Visa's fiscal Q2 will be paid when due in March. (2) Includes changes in client incentives, trade receivables, settlement receivable/payable, and personnel incentives. Additions (+) / Reductions (-) to Net income attributable to Visa Inc. Net income attributable to Visa Inc. (as reported) 884 Capital Assets + Depreciation and amortization 67 - Capital expenditures (75) (8) Litigation + Litigation provision - + Accretion expense 4 - Settlement payments (71) + Settlement payments funded by litigation escrow 70 3 Share-based Compensation + Share-based compensation 48 Pension + Pension expense 7 - Pension contribution - 7 Taxes (1) + Income tax expense 498 - Income taxes paid (29) 469 Changes in Working Capital (2) +/- Changes in other working capital accounts (251) Total Free Cash Flow 1,152 Three Months Ended December 31, 2010 |