![]() Visa Inc. Fiscal Fourth Quarter and Full-Year 2011 Financial Results October 26, 2011 Exhibit 99.2 |
![]() Fiscal Fourth Quarter and Full-Year 2011 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. 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 our earnings per share, cash flow, revenue, incentive payments, expenses, operating margin, tax rate and capital expenditures 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 rules recently promulgated under the U.S. Wall Street Reform and Consumer Protection Act, including: • rules capping debit interchange rates; • rules expanding issuers’ and retailers’ choice among debit payment networks; • the spread of regulation of debit payments to credit and other product categories; • the spread of U.S. regulations to other countries; and • rules about consumer privacy and data use and security – developments in current or future disputes and our ability to absorb their impact, including interchange, tax and antitrust; – macroeconomic factors, such as: • global economic, political, health and other conditions; • cross-border activity and currency exchange rates; and • material changes in our clients’ performance compared to our estimates; – industry developments, such as: • competitive pressure, particularly on client pricing; • rapid technological developments; • bank and merchant consolidation and their increased focus on payment card costs; • disintermediation from the payments value stream through new entrants, government actions or bilateral agreements; and • adverse changes in our relationships and reputation; – system developments, such as: • disruption of our transaction processing systems or the inability to process transactions efficiently; • our clients’ failure to fund settlement obligations we have guaranteed; • disruption of our transaction processing systems or the inability to process transactions efficiently; • account data breaches or increased fraudulent or other illegal activities 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 recent acquisitions or new technologies; – changes in accounting principles or treatments; and the other factors discussed under the heading “Risk Factors” in our annual report on Form 10-K 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 Fourth Quarter and Full-Year 2011 Financial Results 3 Solid Fiscal Fourth Quarter and Full-Year Results • Strong operating revenues of $2.4 billion for the fourth quarter and $9.2 billion for the full-year, up 13% and 14% over prior year • Quarterly and adjusted annual net income of $880 million and $3.5 billion, and diluted earnings per share of $1.27 and $4.99, up 34% and 28% over prior period adjusted amounts • Continued positive secular trends and spending momentum contributed to double-digit growth year over year in key underlying business drivers for the past two years • Repurchased 5.2 million class A common shares during the fiscal fourth quarter at an average price of $80.87. For full-year 2011, effectively repurchased 43 million shares at an average price of $74.94 per share for a total cost of $3.2 billion |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 4 Payments Volume US$ in billions, nominal, except percentages YOY Change (nominal) 19% 15% 17% YOY Change (constant) 14% 13% 14% 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 Quarter ended June 802 481 321 941 572 369 Total Visa Inc. Credit Debit 2010 2011 U.S. 469 ROW 333 U.S. 204 ROW 277 U.S. 518 ROW 423 U.S. 224 ROW 348 U.S. 294 ROW 75 U.S. 266 ROW 55 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 5 Payments Volume US$ in billions, nominal, except percentages YOY Change (nominal) 19% 14% 17% YOY Change (constant) 13% 14% 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 year volume information presented has not been updated, as changes made are not material Figures may not sum due to rounding. Quarter ended September 2010 2011 829 970 502 327 597 373 473 ROW 356 U.S. 207 ROW 295 U.S. 266 ROW 61 U.S. 516 ROW 453 U.S. 228 ROW 369 ROW 85 U.S. 288 ROW = Rest of World Total Visa Inc. Credit Debit U.S. 473 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 6 Payments Volume US$ in billions, nominal, except percentages Twelve Months ended June YOY Change (nominal) 15% 18% 16% YOY Change (constant) 14% 12% 17% 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 3,037 1,861 1,176 3,530 2,141 1,390 Total Visa Inc. Credit Debit Fiscal 2010 Fiscal 2011 U.S. 1,752 ROW 1,285 U.S. 781 ROW 1,080 U.S. 1,961 ROW 1,569 U.S. 846 ROW 1,295 U.S. 1,115 ROW 275 U.S. 971 ROW 206 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 7 Payments Volume US$ in billions, nominal, except percentages YOY Change (nominal) 17% 16% 17% YOY Change (constant) 14% 13% 15% 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. Twelve Months ended September Total Visa Inc. Credit Debit ROW 220 U.S. 1,808 ROW 1,337 U.S. 794 ROW 1,116 U.S. 2,004 U.S. 867 U.S. 1,137 U.S. 1,014 ROW 1,666 ROW 1,368 ROW 299 3,145 1,910 1,235 3,670 2,235 1,435 ROW = Rest of World Fiscal 2010 Fiscal 2011 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 8 Payments Volume US$ in billions, nominal, except percentages YOY Change (nominal) 26% 14% 10% 37% 42% YOY Change (constant) 10% 15% 8% 28% 35% 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. 2010 2011 469 198 62 48 24 518 248 85 55 35 United States Asia Pacific Latin America and Caribbean Canada Central and Eastern Europe, Middle East and Africa Quarter ended June |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 9 Payments Volume US$ in billions, nominal, except percentages 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) 28% 14% 9% 31% 40% YOY Change (constant) 17% 7% 9% 25% 37% Quarter ended September 2010 2011 473 212 68 49 27 516 271 90 55 37 United States Asia Pacific Latin America and Caribbean Canada Central and Eastern Europe, Middle East and Africa |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 10 1,752 771 240 183 91 1,961 931 312 204 122 United States Asia Pacific Latin America and Caribbean Canada Central and Eastern Europe, Middle East and Africa Payments Volume US$ in billions, nominal, except percentages YOY Change (nominal) 21% 12% 12% 30% 34% YOY Change (constant) 12% 13% 7% 26% 32% 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. Twelve Months ended June 2010 2011 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 11 Payments Volume US$ in billions, nominal, except percentages YOY Change (nominal) 23% 13% 11% 32% 37% YOY Change (constant) 15% 7% 11% 26% 34% Twelve Months ended September 2010 2011 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. 1,808 800 253 187 97 2,004 990 333 211 133 United States Asia Pacific Latin America and Caribbean Canada Central and Eastern Europe, Middle East and Africa |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 12 Transactions in millions, except percentages Quarter ended June Quarter ended September 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. YOY Change 10% 11% 9% 9% 2010 2011 17,582 11,721 19,404 13,038 Total Transactions Processed Transactions Credit 35% Debit 65% Credit 35% Debit 65% 18,149 12,119 19,779 13,263 Total Transactions Processed Transactions Credit 35% Debit 65% Credit 36% Debit 64% |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 13 Transactions in millions, except percentages Twelve Months ended June Twelve Months ended September 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. YOY Change 13% 14% 11% 12% 2010 2011 Credit 36% Debit 64% Credit 35% Debit 65% Credit 36% Debit 64% Credit 35% Debit 65% Total Transactions Processed Transactions Total Transactions Processed Transactions Total 66,158 43,755 74,456 49,778 68,423 45,411 76,084 50,922 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 14 Total Cards in millions, except percentages YOY Change 7% 4% (1%) Note: From time to time, previously submitted card information may be updated. Prior year card information presented has not been updated, as changes made are not material 2010 2011 772 1,065 1,837 766 1,137 1,903 Credit Debit Visa Inc. Quarter ended June |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 15 Revenue – Q4 2011 US$ in millions, except percentages YOY Change 37% 13% 17% Note: Growth rates calculated based on whole numbers, not rounded numbers. Percentage of Gross Revenues 19% 81% 2,538 (421) 2,117 2,959 (576) 2,383 Gross Revenues Incentives Net Operating Revenues Fiscal 2010 Fiscal 2011 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 16 Revenue – Fiscal Year 2011 US$ in millions, except percentages Percentage of Gross Revenues 17% 83% Note: Growth rates calculated based on whole numbers, not rounded numbers. YOY Change 21% 14% 15% 9,625 (1,560) 8,065 11,068 (1,880) 9,188 Gross Revenues Incentives Net Operating Revenues Fiscal 2010 Fiscal 2011 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 17 Revenue Detail – Q4 2011 US$ in millions, except percentages Note: Growth rates calculated based on whole numbers, not rounded numbers. YOY Change 10% 23% 21% 3% Fiscal 2010 Fiscal 2011 912 840 619 167 1,105 925 758 171 Service Revenues Data Processing Revenues International Transaction Revenues Other Revenues |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 18 Revenue Detail – Fiscal Year 2011 US$ in millions, except percentages Note: Growth rates calculated based on whole numbers, not rounded numbers. YOY Change 11% 17% 22% (8%) Fiscal 2010 Fiscal 2011 3,497 3,125 2,290 713 4,261 3,478 2,674 655 Service Revenues Data Processing Revenues International Transaction Revenues Other Revenues |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 19 Operating Margin – Q4 2011 US$ in millions, except percentages Note: Growth rates calculated based on whole numbers, not rounded numbers. YOY Change 13% 2% 4 ppts 22% Fiscal 2010 Fiscal 2011 53% 2,117 1,004 1,113 57% 2,383 1,021 1,362 Operating Margin Net Operating Revenues Total Operating Expenses Operating Income |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 20 Operating Margin – Fiscal Year 2011 US$ in millions, except percentages Note: Growth rates calculated based on whole numbers, not rounded numbers. YOY Change 14% 7% 2 ppts 19% Fiscal 2010 Fiscal 2011 57% 8,065 3,476 4,589 59% 9,188 3,732 5,456 Operating Margin Net Operating Revenues Total Operating Expenses Operating Income |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 21 Operating Expenses – Q4 2011 US$ in millions, except percentages Note: Growth rates calculated based on whole numbers, not rounded numbers. YOY Change 2% 7% 10% (19%) (1)% (11%) NM 353 119 233 108 78 117 (4) 388 106 239 115 77 95 1 Personnel Network and Processing Marketing Professional Fees Depreciation and Amortization General and Administrative Litigation Provision Fiscal 2010 Fiscal 2011 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 22 Operating Expenses – Fiscal Year 2011 US$ in millions, except percentages Note: Growth rates calculated based on whole numbers, not rounded numbers. YOY Change 18% 19% 15% 9% (10%) (16%) NM 1,222 425 964 286 265 359 (45) 1,459 357 870 337 288 414 7 Personnel Network and Processing Marketing Professional Fees Depreciation and Amortization General and Administrative Litigation Provision Fiscal 2010 Fiscal 2011 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 23 Other Income (Expense) Fiscal Year 2011 US$ in millions The following table presents components of our other income (expense). Gain on sale of investment in CBSS 85 $ Revaluation of Visa Europe put option 122 Other (1) (7) Total other income 200 $ (1) Amount primarily represents interest expense, other investment income and the accretion associated with litigation settlements to be paid over periods longer than one year. |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 24 Other Financial Results • Cash, cash equivalents, restricted cash, and available-for-sale investment securities of $6.9 billion at the end of the fiscal year, which includes $2.9 billion of restricted cash in the litigation escrow account • Free cash flow of $3.9 billion was fully deployed to effectively repurchase 43 million shares at $3.2 billion, pay $423 million in dividends, and finance PlaySpan and Fundamo acquisitions of $268 million • Capital expenditures of $117 million and $353 million during the fiscal fourth quarter and the full-year 2011, respectively Note: See appendix for reconciliation of adjusted non-GAAP measures to the closest comparable GAAP measures. |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 25 Financial Metrics for Fiscal Year 2012 Under $1 billion Marketing expenses Annual operating margin About 60% 17% to 18% range Client incentives as % of gross revenues Annual net revenue growth High single to low double digit range |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results 26 Financial Metrics for Fiscal Year 2012 *Excludes impact of possible non-cash revaluation of deferred tax liabilities, which could decrease the GAAP tax rate to 30% to 31%. These deferred tax liabilities are primarily associated with indefinite-lived intangible assets recorded as part of Visa’s October 2007 reorganization. Capital expenditures Adjusted annual diluted class A common stock earnings per share growth Mid to high teens range Adjusted tax rate* 33% to 34% range Annual free cash flow Above $4 billion $350 million to $400 million range |
![]() Appendix Reconciliation of Non-GAAP Measures |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results Adjusted Net Income and Earnings US$ in millions, except per share data Management believes the presentation of adjusted net income and diluted earnings per share provides a clearer understanding of our operating performance for the periods. The revaluation of the Visa Europe put option during the third fiscal quarter resulted in non-cash, non-operating income during fiscal 2011. The reduction in the fair value of the put option was primarily the result of declines in our estimated long-term price-to-earnings ratio and does not reflect any change in the likelihood that Visa Europe will exercise its option. Management therefore believes that the resulting non-operating income is not indicative of Visa’s performance in the current or future periods. (1) Non-cash, non-operating income resulting from the revaluation of this financial instrument is not subject to tax. September 30, 2011 September 30, 2011 Net income attributable to Visa Inc. (as reported) 880 774 3,650 2,966 Revaluation of Visa Europe Put option (1) - (79) (122) (79) Adjusted net income attributable to Visa Inc. 880 695 3,528 2,887 692 731 707 739 Adjusted diluted earnings per share 1.27 0.95 4.99 3.91 Diluted earnings per share (as reported) 1.27 1.06 5.16 4.01 Impact of the revaluation of Visa Europe put option - 0.17 0.10 Three months ended Twelve months ended Weighted average number of diluted shares outstanding (as reported) September 30, 2010 September 30, 2010 0.11 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ A1 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results Calculation of Free Cash Flow US$ in millions (1) Includes changes in client incentives, trade receivables/payable, settlement receivable/payable, and personnel incentives. Additions (+) / Reductions (-) to Net income attributable to Visa Inc. Net income attributable to Visa Inc. (as reported) 880 3,650 Capital Assets + Depreciation and amortization 77 288 - Capital expenditures (117) (40) (353) (65) Litigation + Litigation provision 1 7 + Accretion expense 2 11 - Settlement payments (90) (302) + Settlement payments funded by litigation escrow 70 (17) 280 (4) Share-based Compensation + Share-based compensation 32 154 Pension + Pension expense 10 34 - Pension contribution (74) (64) (74) (40) Taxes + Income tax expense 476 2,010 - Income taxes paid (480) (4) (1,731) 279 Visa Europe Put Option - Fair Value Adjustment - (122) Changes in Working Capital (1) +/- Changes in other working capital accounts (45) 6 Total Free Cash Flow 742 3,858 Less: PlaySpan and Fundamo Acquisitions - Purchase consideration, net of cash received - (268) Adjusted Free Cash Flow 742 3,590 Three Months Ended September 30, 2011 Twelve Months Ended September 30, 2011 A2 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results Impact of PlaySpan Acquisition US$ in millions, except per share data The following table presents the impact of the PlaySpan acquisition on Visa’s fiscal fourth quarter and full-year adjusted diluted earnings per share. (1) (2) (3) Represents tax rate applicable to PlaySpan. (4) (5) Operating revenues recognized by Visa related to PlaySpan transactions. Amount primarily represents data processing revenues. Operating expenses incurred by Visa related to PlaySpan. Amounts incurred subsequent to the acquisition primarily represent personnel, amortization of intangibles and normal operating expenses. Amount primarily represents professional fees related to closing the transaction and some minor compensation expense, which are non-deductible for tax purposes. See slide A1 for a reconciliation of adjusted diluted earnings per share to GAAP diluted earnings per share. Net income attributable to Visa Inc. (as reported) 880 $ 3,650 $ Revaluation of Visa Europe Put option - (122) Adjusted net income attributable to Visa Inc. 880 $ 3,528 $ Taxable PlaySpan adjustments: Less: Operating revenue (1) (10) (18) Addback: Deductible operating expenses (2) 22 43 Subtotal of taxable adjustments 12 25 Tax rate (3) 39% 39% Tax impact of adjustments (4) (10) Impact of taxable PlaySpan adjustments 8 15 Addback: Non-deductible adjustments (4) - 8 Impact of PlaySpan 8 23 Adjusted net income attributable to Visa Inc. 888 $ 3,551 $ Weighted average number of diluted shares outstanding (as reported) 692 707 Adjusted diluted earnings per share, excluding impact of PlaySpan acquisition 1.28 $ 5.02 $ Adjusted diluted earnings per share (5) 1.27 $ 4.99 $ Impact of PlaySpan acquisition (0.01) $ (0.03) $ A3 Three Months Ended Twelve Months Ended September 30, 2011 September 30, 2011 |
![]() Fiscal Fourth Quarter and Full-Year 2011 Financial Results Impact of Fundamo Acquisition US$ in millions, except per share data The following table presents the impact of the Fundamo acquisition on Visa’s fiscal fourth quarter and full-year adjusted diluted earnings per share. A4 (1) (2) See slide A1 for a reconciliation of adjusted diluted earnings per share to GAAP diluted earnings per share. Represents the net operating results of Fundamo recognized by Visa since the acquisition in June 2011. Three Months Ended September 30, 2011 Twelve Months Ended September 30, 2011 Net income attributable to Visa Inc. (as reported) 880 $ 3,650 $ Revaluation of Visa Europe Put option - (122) Adjusted net income attributable to Visa Inc. 880 $ 3,528 $ After tax impact of Fundamo (1) 10 $ 14 $ Adjusted net income attributable to Visa Inc. 890 $ 3,542 $ Weighted average number of diluted shares outstanding (as reported) 692 707 Adjusted diluted earnings per share, excluding impact of Fundamo acquisition 1.28 $ 5.01 $ Adjusted diluted earnings per share (2) 1.27 $ 4.99 $ Impact of Fundamo acquisition (0.01) $ (0.02) $ |