Attached files
| file | filename |
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| EX-99.1 - EX-99.1 - VISA INC. | d572461dex991.htm |
| 8-K - FORM 8-K - VISA INC. | d572461d8k.htm |
 Visa
Inc. Fiscal Third Quarter
Financial Results
July 24, 2013
Exhibit 99.2 |
 Fiscal Third 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; •
failure 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 revenue, client incentives, 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:
failure
to
integrate
acquisitions
successfully
or
to
effectively
launch
new
products
and
businesses;
and |
 Fiscal Third Quarter 2013 Financial Results
3
Solid Fiscal Third Quarter Results
•
Strong operating revenues of $3.0 billion, up 17% over prior year
•
Quarterly net income of $1.2 billion and diluted earnings per share of
$1.88, up 16% and 20%, respectively, over prior year adjusted results
•
Continued positive secular trends and spending momentum contributed
to growth in key underlying business drivers
•
Repurchased 6 million shares of class A common stock in the open
market at an average price of $176.75 per share, using $981 million of
cash on hand
Note: See appendix for reconciliation of adjusted non-GAAP measures to the
closest comparable GAAP measures. |
 Payments Volume
US$ 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 March
YOY Change
(nominal)
8%
5%
7%
YOY Change
(constant)
9%
11%
6%
U.S.
508
ROW
450
U.S.
530
ROW
495
U.S.
223
ROW
365
U.S.
244
ROW
393
U.S.
286
ROW 102
U.S.
284
ROW 85
958
588
370
1,025
637
388
2012
2013
Total Visa Inc.
Credit
Debit
Fiscal Third 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 June
YOY Change
(constant)
13%
12%
15%
YOY Change
(nominal)
9%
15%
11%
978
623
355
1,090
682
408
Total Visa Inc.
Credit
Debit
2012
2013
U.S.
513
ROW
466
U.S.
246
ROW
378
U.S.
267
U.S.
570
ROW
519
U.S.
270
ROW
412
ROW 108
U.S.
300
Fiscal Third Quarter 2013 Financial Results
5
ROW 88
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 March
2012
2013
508
269
90
51
40
530
295
98
51
50
YOY Change
(nominal)
10%
1%
4%
9%
25%
YOY Change
(constant)
4%
13%
1%
18%
28%
United States
Asia Pacific
Latin America and
Caribbean
Canada
Central and Eastern
Europe, Middle
East and Africa
Fiscal Third Quarter 2013 Financial Results
6 |
 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.
YOY Change
(nominal)
10%
6%
11%
14%
25%
YOY Change
(constant)
14%
6%
11%
19%
28%
Quarter ended June
2012
2013
United States
Asia Pacific
Latin America and
Caribbean
Canada
Central and
Eastern Europe,
Middle East and
Africa
513
570
277
88
56
45
304
101
59
56
Fiscal Third Quarter 2013 Financial Results
7 |
 Fiscal Third 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. 2012
2013
Quarter ended June
19,918
22,299
13,113
14,972
Credit
38%
Credit
37%
Debit
63%
Debit
62%
Total
Transactions
Processed
Transactions
Fiscal Third Quarter 2013 Financial Results
8
YOY
Change
12%
14% |
 9
Fiscal Third Quarter 2013 Financial Results
Total Cards
in millions, except percentages
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 March
778
1,225
2,003
801
1,333
2,134
Credit
Debit
Visa Inc.
YOY
Change
9%
7%
3%
2012
2013
9
Fiscal Third Quarter 2013 Financial Results |
 Revenue
–
Q3
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.
Gross Revenues
Incentives
Net Operating
Revenues
3,179
(614)
2,565
3,522
3,001
Fiscal 2012
Fiscal 2013
YOY
Change
(15%)
17%
11%
FY13 % of
Gross Revenues
15%
85%
(521)
Fiscal Third Quarter 2013 Financial Results
10 |
 Revenue Detail –
Q3 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
15%
14%
7%
1%
Fiscal 2012
Fiscal 2013
1,216
1,298
1,040
1,191
748
854
175
179
Service
Revenues
Data Processing
Revenues
International
Transaction
Revenues
Other Revenues
Fiscal Third Quarter 2013 Financial Results
11 |
 Adjusted
Operating
Margin
–
Q3
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. See appendix for reconciliation of adjusted non-GAAP
measures to the closest comparable GAAP measures. Fiscal 2012
Fiscal 2013
Fiscal Third Quarter 2013 Financial Results
12
2,565
1,074
1,491
58%
3,001
1,173
1,828
61%
9%
22%
17%
YOY
Change
3 ppt
Net Operating
Revenues
Total Operating
Expenses
Operating
Income
Operating
Margin |
 Adjusted
Operating
Expenses
–
Q3
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. See
appendix for reconciliation of adjusted non-GAAP measures to the closest comparable GAAP measures.
Fiscal 2012
Fiscal 2013
YOY
Change
14%
5%
13%
(3%)
22%
4%
NM
Personnel
Marketing
Network &
Processing
Professional
Fees
Depreciation &
Amortization
General &
Administrative
Litigation
provision
0
435
242
102
99
84
112
493
252
117
103
101
108
Fiscal Third Quarter 2013 Financial Results
13
(1) |
 Fiscal Third Quarter 2013 Financial Results
14
Other Financial Results
•
Cash, cash equivalents and available-for-sale investment securities
of $6.5 billion at the end of the fiscal third quarter
•
Free cash flow of $2.0 billion for the fiscal third quarter
•
Capital expenditures of $122 million during the fiscal third quarter
|
 Financial Metrics for
Fiscal Year 2013 Fiscal Third Quarter 2013 Financial Results
15
Around 13%
16% to 17%
range
Under $1
billion
About 60%
Annual net revenue growth
Client incentives as % of gross revenues
Marketing
expenses
Annual operating
margin |
 Financial Metrics for Fiscal Year 2013
Note: See appendix for reconciliation of adjusted non-GAAP measures to the
closest comparable GAAP measures. Fiscal Third Quarter 2013 Financial
Results 30% to 32%
range
Low twenties
$425 million to
$475 million
range
About $6
billion
Annual free cash flow
Capital expenditures
Adjusted annual diluted class A common stock
earnings per share growth
Tax rate
16 |
 Financial Metrics for
Fiscal Year 2014 Annual free cash flow
About $5
billion
Mid to high
teens
Adjusted annual diluted class A common stock
earnings per share
growth Annual net revenue
growth Low double
digits
Fiscal Third Quarter 2013 Financial Results
17 |
 Appendix |
 Fiscal Third Quarter 2013 Financial Results
Reconciliation of Non-GAAP
Financial Results
US$ in millions, except percentages and per share data
Our reported financial results for the three months ended June 30, 2012 included a
litigation provision of $4.1 billion and related tax benefits associated
with the interchange MDL, which is covered by the retrospective responsibility plan. We believe
the presentation of adjusted financial results excluding the litigation provision
adjustment provides a clearer understanding of our operating performance in
that period. The following table presents our financial results for the three months ended June
30, 2013, as compared to our adjusted financial results for the three months ended
June 30, 2012. A1
2013
2012
2013
2012
2013
2012
2013
2012
As reported
$1,173
$ 5,172
61%
(102)%
1,225
$
(1,839)
$
1.88
$
(2.74)
$
Litigation provision
—
(4,098)
—
NM
—
2,894
(3)
—
4.30
Adjusted
$1,173
$ 1,074
61%
58%
1,225
$
1,055
$
1.88
$
1.56
$
Weighted-average number of
diluted shares outstanding
(4)
651
675
Three Months Ended June 30,
Operating
expenses
Operating
margin
(1)
Net income (loss)
attributable to Visa Inc.
Diluted earnings (loss)
per share
(2)
(4,098)
(1)
Operating margin is calculated as operating income (loss) divided by total operating revenues. (2)
Figures in the table may not recalculate exactly due to rounding. Diluted earnings (loss) per share
is calculated based on whole numbers, not the rounded numbers presented.
(3)
The litigation provision adjustment to net income (loss) attributable to Visa Inc. is shown net of
tax. The tax impact is determined by applying applicable federal and state tax rates to the
litigation provision and applying any reserves for uncertain tax positions.
(4)
For the three months ended June 30, 2012, the computation of adjusted diluted earnings per share
included the effect of 3 million incremental dilutive shares, which were excluded from the
computation of reported diluted loss per share as they are considered anti-dilutive when applied to a net loss. |
     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)
1,225
3,788
Capital Assets
+
Depreciation and amortization
101
291
-
Capital expenditures
(122)
(333)
(21)
(42)
Litigation
+
Litigation provision
(1)
3
-
Settlement payments
-
(4,384)
+
Settlement payments funded by litigation escrow
-
4,383
(1)
2
Share-based Compensation
+
Share-based compensation
41
139
Pension
+
Pension expense
8
25
-
Pension contribution
-
-
8
25
Taxes
+
Income tax provision
608
1,703
-
Income taxes paid
(57)
(478)
551
1,225
Changes in Working Capital
(1)
+/-
Changes in other working capital accounts
168
(79)
Total Free Cash Flow
1,971
5,058
Three Months Ended
June 30, 2013
Nine Months Ended
June 30, 2013
Fiscal Third Quarter 2013 Financial Results
(1)
Includes changes in client incentives, trade receivable/payable, settlement receivable/payable and
personnel incentives. A2 |