Visa Inc. · NYSE:V
Visa — Q3 2012 Earnings Presentation
20 slides from Visa's earnings presentation, Jul 25, 2012
Slide 1: Visa Inc. Fiscal Third Quarter Financial Results
Visa Inc. Fiscal Third Quarter Financial Results July 25, 2012
Slide 2: Forward-Looking Statements
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 "believe," "continue," "potential," "project," “subject to," and similar references to the
Slide 3: Solid Fiscal Third Quarter Results
Solid Fiscal Third Quarter Results • Strong operating revenues of $2.6 billion, up 10% over prior year • Adjusted quarterly net income of $1.1 billion, up 20%, and adjusted diluted earnings per share of $1.56, up 25% over prior year • Repurchased 4 million shares at an average price of $115.51 for a
Slide 4: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended March 2011 2012 ROW = Rest of World 958 862 U.S. U.S. 588 477 508 517 U.S. U.S. 345 370 199 223 U.S. U.S. ROW ROW 278 284 385 450 ROW ROW 318 365 ROW 68 ROW 85 Total Visa Inc. Credit Debit YOY Change (nominal) 11% 14% 7% YOY
Slide 5: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended June 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 paymen
Slide 6: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended March 2011 2012 508 477 269 230 77 90 48 51 30 40 United States Asia Pacific Latin America and Canada Central and Eastern Caribbean Europe, Middle East and Africa YOY Change (nominal) 6% 17% 17% 7% 33% YOY Change (constant) 6
Slide 7: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended June 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 paymen
Slide 8: Transactions
Transactions in millions, except percentages Quarter ended June 2011 2012 19,404 19,919 Credit Credit 35% 38% 13,038 13,113 Debit Debit 65% 62% Total Processed Transactions Transactions YOY Change 3% 1% Note: Processed transactions represent transactions involving Visa, Visa Electron, Interlink and
Slide 9: Total Cards
Total Cards in millions, except percentages Quarter ended March 2011 2012 2,025 1,870 1,246 1,110 760 778 Credit Debit Visa Inc. YOY Change 2% 12% 8% Note: Figures may not sum due to rounding. From time to time, previously submitted card information may be updated. Prior period updates are not mater
Slide 10: Revenue – Q3 2012
Revenue – Q3 2012 US$ in millions, except percentages Fiscal 2011 Fiscal 2012 3,179 2,770 2,565 2,322 (448) (614) Gross Revenues Incentives Net Operating Revenues YOY Change 15% 37% 10% FY12 % of Gross Revenues 19% 81% Note: Growth rates and percentage of gross revenues calculated based on whole num
Slide 11: Revenue Detail – Q3 2012
Revenue Detail – Q3 2012 US$ in millions, except percentages Fiscal 2011 Fiscal 2012 1,216 1,055 1,040 886 748 662 167 175 Service Data Processing International Other Revenues Revenues Transaction Revenues Revenues YOY Change 15% 17% 13% 7% Note: Growth rates calculated based on whole numbers, not r
Slide 12: Adjusted Operating Margin – Q3 2012
Adjusted Operating Margin – Q3 2012 US$ in millions, except percentages Fiscal 2011 Fiscal 2012 2,565 2,322 58% 58% 1,491 1,345 1,074 977 Net Operating Total Operating Operating Operating Revenues Expenses Income Margin YOY Change 10% 10% 11% - Note: Growth rates calculated based on whole numbers, n
Slide 13: Adjusted Operating Expenses – Q3 2012
Adjusted Operating Expenses – Q3 2012 US$ in millions, except percentages Fiscal 2011 Fiscal 2012 435 363 251 242 102 99 114 112 91 84 84 74 Personnel Network Marketing Professional Fees Depreciation General and Processing and Amortization and Administrative YOY Change 20% 13% (3%) 17% 14% (3%) Note
Slide 14: Other Financial Results
Other Financial Results • Cash, cash equivalents, restricted cash, and available-for-sale investment securities of $9.4 billion at the end of the fiscal third quarter, which includes $4.3 billion of restricted cash in the litigation escrow account • Free cash flow of $1.1 billion for the fiscal thir
Slide 15: Financial Metrics for Fiscal Year 2012
Financial Metrics for Fiscal Year 2012 Annual net revenue growth Low double digits 17% to 18% Client incentives as % of gross revenues range Marketing expenses Under $1 billion Adjusted annual operating margin About 60%* *Financial Outlook excludes the impact of the litigation provision of $4.1 bill
Slide 16: Financial Metrics for Fiscal Year 2012
Financial Metrics for Fiscal Year 2012 33% to 34% Adjusted tax rate range* Adjusted annual diluted class A common stock Low twenties* earnings per share growth $350 million to Capital expenditures $400 million range Greater than Annual free cash flow $4 billion *Financial Outlook excludes the impact
Slide 17: Appendix
Appendix Reconciliation of Non-GAAP Measures
Slide 18: Reconciliation of Non-GAAP Financial Results
Reconciliation of Non-GAAP Financial Results US$ in millions, except margin ratio and per share data During the third quarter of fiscal 2012, we recorded a provision related to litigation subject to the retrospective responsibility plan of $4.1 billion and related tax benefits ("litigation provision
Slide 19: Reconciliation of Non-GAAP Financial Results
Reconciliation of Non-GAAP Financial Results US$ in millions, except tax rate During the third quarter of fiscal 2012, we recorded a provision related to litigation subject to the retrospective responsibility plan of $4.1 billion and related tax benefits. We believe the covered litigation provision
Slide 20: Calculation of Free Cash Flow
Calculation of Free Cash Flow US$ in millions Additions (+) / Reductions (-) to Net (loss) income Three Months Nine Months attributable to Ended June 30, Ended June 30, Visa Inc. 2012 2012 Net (loss) income attributable to Visa Inc. (as reported) (1,839) 482 Capital Assets + Depreciation and amortiz