Visa Inc. Fiscal Second Quarter Financial Results May 1, 2013 Exhibit 99.2 |
Fiscal Second Quarter 2013 Financial Results 2 Forward-Looking Statements • the impact of laws, regulations and marketplace barriers, including: • rules capping debit interchange reimbursement fees promulgated under the U.S. Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act; • rules under the Dodd-Frank Act expanding issuers' and merchants' choice among debit payment networks; • increased regulation outside the United States and in other product categories; • increased government support of national payment networks outside the United States; and • rules about consumer privacy and data use and security; • developments in litigation and government enforcement, including • those affecting interchange reimbursement fees, antitrust and tax and • our failure to make our multidistrict interchange litigation settlement effective; • economic factors, such as: • an increase or spread of the current European crisis involving sovereign debt and the euro; • a failure to raise the “debt ceiling” or to resolve the current sequestration in the United States; • cross-border activity and currency exchange rates; • material changes in our clients' performance compared to our estimates; and • other global economic, political and health conditions; • industry developments, such as competitive pressure, rapid technological developments and disintermediation from the payments value stream; • system developments, such as: • disruption of our transaction processing systems or the inability to process transactions efficiently; • account data compromises 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; • the other factors discussed in our most recent 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. 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 "believe," "continue," “expect," and similar references to the future. Examples of such forward-looking statements include, but are not limited to, statements we make about revenues, client incentives, expenses, operating margin, tax rate, earnings per share, capital expenditures, free cash flow, consumer credit and debit volume 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: failure to integrate acquisitions successfully or to effectively launch new products and businesses; and |
Fiscal Second Quarter 2013 Financial Results 3 Solid Fiscal Second Quarter Results • Strong operating revenues of $3.0 billion, up 15% over prior year • Quarterly net income of $1.3 billion and diluted earnings per share of $1.92, up 17% and 20%, respectively, over prior year adjusted results • Continued positive secular trends and spending momentum contributed to growth in key underlying business drivers • Repurchased 12 million shares of class A common stock in the open market at an average price of $157.24 per share, using $1.8 billion of cash on hand Note: See appendix for reconciliation of adjusted non-GAAP measures to the closest comparable GAAP measures. |
Payments Volume US$ in billions, nominal, except percentages 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. Quarter ended December YOY Change (nominal) 12% 3% 8% YOY Change (constant) 9% 12% 3% U.S. 529 ROW 464 U.S. 545 ROW 529 U.S. 237 ROW 379 U.S. 262 ROW 424 U.S. 282 ROW 105 U.S. 292 ROW 85 993 616 377 1,074 687 387 2011 2012 Total Visa Inc. Credit Debit Fiscal Second Quarter 2013 Financial Results 4 Rest of World ROW = |
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 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 March YOY Change (constant) 9% 11% 6% YOY Change (nominal) 9% 5% 7% 958 588 370 1,025 638 387 Total Visa Inc. Credit Debit 2012 2013 U.S. 508 ROW 450 U.S. 223 ROW 365 U.S. 284 U.S. 529 ROW 497 U.S. 244 ROW 395 ROW 102 U.S. 285 Fiscal Second Quarter 2013 Financial Results 5 ROW 85 Rest of World ROW = |
Payments Volume US$ in billions, nominal, except percentages 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. Quarter ended December 2011 2012 YOY Change (nominal) 13% 11% 3% 11% 30% YOY Change (constant) 3% 13% 7% 21% 32% Fiscal Second Quarter 2013 Financial Results 6 529 276 93 56 39 545 313 103 62 51 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 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 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 March 2012 2013 YOY Change (nominal) 10% 2% 4% 9% 25% YOY Change (constant) 13% 2% 4% 19% 28% Fiscal Second Quarter 2013 Financial Results 7 508 269 90 51 40 529 296 98 52 50 United States Asia Pacific Latin America and Caribbean Canada Central and Eastern Europe, Middle East and Africa |
Fiscal Second Quarter 2013 Financial Results 8 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. YOY Change 5% 6% 2012 2013 Quarter ended March 19,633 13,038 20,620 13,850 Credit 36% Debit 64% Credit 37% Debit 63% Processed Transactions Total Transactions |
Fiscal Second Quarter 2013 Financial Results 9 Total Cards in millions, except percentages YOY Change 12% 8% 2% Note: 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. Quarter ended December 2011 2012 779 1,195 1,974 795 1,333 2,128 Credit Debit Visa Inc. |
Fiscal Second Quarter 2013 Financial Results 10 Revenue – Q2 2013 US$ in millions, except percentages YOY Change 14% 15% 15% Note: Figures may not recalculate exactly due to rounding. Percentage changes are calculated based on whole numbers, not the rounded numbers presented. FY13 % of Gross Revenues 16% 84% 3,075 (497) 2,578 3,525 (567) 2,958 Gross Revenues Incentives Net Operating Revenues Fiscal 2012 Fiscal 2013 |
Fiscal Second Quarter 2013 Financial Results 11 Revenue Detail – Q2 2013 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 25% 13% 10% (2)% Fiscal 2012 Fiscal 2013 1,241 922 733 179 1,369 1,150 831 175 Service Revenues Data Processing Revenues International Transaction Revenues Other Revenues |
Fiscal Second Quarter 2013 Financial Results 12 Operating Margin – Q2 2013 US$ in millions, except percentages Note: Operating margin is calculated as operating income divided by total 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 13% 16% 15% 1 ppt Fiscal 2012 Fiscal 2013 2,578 972 1,606 62% 2,958 1,098 1,860 63% Net Operating Revenues Total Operating Expenses Operating Income Operating Margin |
Fiscal Second Quarter 2013 Financial Results 13 Operating Expenses – Q2 2013 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 16% 11% 13% 2% 21% 15% NM Fiscal 2012 Fiscal 2013 431 170 103 82 80 106 0 486 195 119 91 98 108 1 Personnel Marketing Network & Processing Professional Fees Depreciation & Amortization General & Administrative Litigation Provision |
Fiscal Second Quarter 2013 Financial Results 14 Other Financial Results • Cash, cash equivalents and available-for-sale investment securities of $5.6 billion at the end of the fiscal second quarter • Free cash flow of $1.5 billion for the fiscal second quarter • Capital expenditures of $111 million during the fiscal second quarter |
Fiscal Second Quarter 2013 Financial Results 15 Under $1 billion Marketing expenses Financial Metrics for Fiscal Year 2013 Annual operating margin About 60% 16% to 17% range Client incentives as % of gross revenues Low double digits Annual net revenue growth |
Fiscal Second Quarter 2013 Financial Results 16 $425 million to $475 million range Capital expenditures Financial Metrics for Fiscal Year 2013 Annual free cash flow About $6 billion Around 20% Adjusted annual diluted class A common stock earnings per share growth Tax rate 30% to 32% range |
Appendix |
Fiscal Second Quarter 2013 Financial Results Reconciliation of Non-GAAP Financial Results US$ in millions, except percentages and per share data Our reported financial results for the three months ended March 31, 2012 benefited from a one-time non-cash adjustment of $208 million related to the remeasurement of our net deferred tax liabilities (“deferred tax adjustment”), which was recorded in our income tax provision during that period. We believe the presentation of adjusted net income and adjusted diluted earnings per share for the three months ended March 31, 2012, excluding the $208 million benefit, provides a clearer understanding of our operating performance in that period. The following table presents our financial results for the three months ended March 31, 2013, as compared to our adjusted financial results for the three months ended March 31, 2012. (1) Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on whole numbers, not the rounded numbers presented. c 2013 2012 % Change 2013 2012 % Change As reported 1,270 $ 1,292 $ (2)% 1.92 $ 1.91 $ 1% Impact of deferred tax adjustment — (208) — (0.31) Adjusted 1,270 $ 1,084 $ 17% 1.92 $ 1.60 $ 20% Weighted-average number of diluted shares outstanding (as reported) 660 676 Net income attributable to Visa Inc. Fully-diluted earnings per share Three Months Ended March 31, Three Months Ended March 31, A1 (1) |
Fiscal Second Quarter 2013 Financial Results Calculation of Free Cash Flow US$ in millions Additions (+) / Reductions (-) to Net income attributable to Visa Inc. Net income attributable to Visa Inc. (as reported) 1,270 2,563 Capital Assets + Depreciation and amortization 98 190 - Capital expenditures (111) (211) (13) (21) Litigation + Litigation provision 1 4 - Settlement payments - (4,384) + Settlement payments funded by litigation escrow - 4,383 1 3 Share-based Compensation + Share-based compensation 50 98 Pension + Pension expense 10 17 - Pension contribution - - 10 17 Taxes + Income tax provision 587 1,095 - Income taxes paid (376) (421) 211 674 Changes in Working Capital (1) +/- Changes in other working capital accounts 8 (247) Total Free Cash Flow 1,537 3,087 Three Months Ended March 31, 2013 Six Months Ended March 31, 2013 A2 (1) Includes changes in client incentives, trade receivable/payable, settlement receivable/payable and personnel incentives. |
Chase Merchant Services (CMS) • 10 year renewable partnership • Creating a distinct custom platform within VisaNet for the processing of Chase Merchant Services (CMS) transactions; This image of Visa’s authorization clearing and settlement system will be licensed to Chase and exclusively for their use • Chase transactions will be processed in one of two ways: • Just as they are today • If Chase has a direct agreement with a merchant for CMS, Chase issued Visa branded transactions will be processed over the platform provided for CMS • Visa branding on cards and at the point of sale remains the same • The CMS platform is customizable, but the transactions will continue to meet Visa’s safety, security and soundness standards • Visa retains ownership and control of its technology and intellectual property associated with VisaNet • Other important facts: • Chase, like any issuer today, can negotiate interchange directly with merchants, whether the transaction is processed through CMS or VisaNet • Pricing levels and mechanics consistent with what would be available to clients of Chase’s size and scope who are making a 10 year commitment • Visa will gain additional consumer credit and debit volume Fiscal Second Quarter 2013 Financial Results A3 |