Visa Inc. · NYSE:V
Visa — Q2 2011 Earnings Presentation
19 slides from Visa's earnings presentation, May 5, 2011
Slide 1: Visa Inc. Fiscal Second Quarter Financial Results
Visa Inc. Fiscal Second Quarter Financial Results May 5, 2011
Slide 2: Forward-Looking Information
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 forwa
Slide 3: Solid Fiscal Second Quarter Results
Solid Fiscal Second Quarter Results • Strong operating revenues of $2.2 billion, up 15% over prior year • Quarterly net income of $881 million, up 23% and diluted earnings per share of $1.23, up 28% over prior year • Effectively repurchased 8.7 million shares at an average price of $72.58 for a tota
Slide 4: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended December 2009 ROW = Rest of World 2010 897 769 U.S. U.S. 550 438 493 478 U.S. U.S. 348 201 216 291 U.S. U.S. ROW ROW ROW ROW 238 277 331 405 278 334 ROW 53 ROW 71 Total Visa Inc. Credit Debit YOY Change (nominal) 17% 15% 20%
Slide 5: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended March 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 payme
Slide 6: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended December 2009 2010 493 438 240 197 81 64 53 47 23 30 United States Asia Pacific Latin America and Canada Central and Eastern Caribbean Europe, Middle East and Africa YOY Change (nominal) 12% 22% 26% 13% 33% YOY Change (consta
Slide 7: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended March 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 payme
Slide 8: Transactions
Transactions in millions, except percentages Quarter ended December Quarter ended March 2009 2010 2010 18,845 2011 17,997 16,619 16,118 Credit Credit Credit Credit 37% 36% 36% 35% 12,580 12,040 10,924 10,648 Debit Debit Debit Debit 63% 64% 64% 65% Total Transactions Processed Total Transactions Proc
Slide 9: Total Cards
Total Cards in millions, except percentages Quarter ended December 2009 1,808 1,897 2010 1,127 1,024 784 770 Credit Debit Visa Inc. YOY (2%) 10% 5% Change Note: From time to time, previously submitted cards information may be updated. Prior year cards information presented has not been updated, as c
Slide 10: Revenue – Q2 2011
Revenue – Q2 2011 US$ in millions, except percentages Fiscal 2010 Fiscal 2011 2,696 2,331 2,245 1,959 (372) (451) Gross Net Operating Revenues Incentives Revenues YOY 16% 21% 15% Change Note: Growth rates calculated based on whole numbers, not rounded numbers. Fiscal Second Quarter 2011 Financial Re
Slide 11: Revenue Detail – Q2 2011
Revenue Detail – Q2 2011 US$ in millions, except percentages Fiscal 2010 Fiscal 2011 1,093 885 823 728 624 545 173 156 Service Data International Other Revenues Processing Transaction Revenues Revenues Revenues YOY 24% 13% 14% (10%) Change Note: Growth rates calculated based on whole numbers, not ro
Slide 12: Operating Margin – Q2 2011
Operating Margin – Q2 2011 US$ in millions, except percentages Fiscal 2010 Fiscal 2011 2,245 62% 57% 1,959 1,383 1,122 837 862 Operating Margin Net Operating Total Operating Operating Income Revenues Expenses YOY 5 ppt 15% 3% 23% Change Note: Growth rates calculated based on whole numbers, not round
Slide 13: Operating Expenses – Q2 2011
Operating Expenses – Q2 2011 US$ in millions, except percentages Fiscal 2010 Fiscal 2011 351 310 238 183 98 95 80 77 70 77 62 50 2 6 Network Depreciation General Personnel Marketing Professional and Litigation and and Fees Amortization Provision Processing Administrative YOY Change 14% (18%) (23%) 5
Slide 14: Other Financial Results
Other Financial Results • Cash, cash equivalents, restricted cash and available-for-sale investment securities of $6.6 billion at the end of the fiscal second quarter which includes $3.0 billion of restricted cash in the litigation escrow account • Total free cash flow of $545 million for the fiscal
Slide 15: Financial Metrics for Fiscal Year 2011
Financial Metrics for Fiscal Year 2011 11% to 15% Annual net revenue growth range Client incentives as % of gross revenues 16% to 16.5% range* Less than Marketing expenses $900 million Annual operating margin About 60% *Note - This range may change based on future developments regarding pending fede
Slide 16: Financial Metrics for Fiscal Year 2011
Financial Metrics for Fiscal Year 2011 36.5% to 37% GAAP tax rate range Annual diluted class A common stock earnings 20% + per share growth Capital expenditures $250-$275 million Annual free cash flow $3 billion + Fiscal Second Quarter 2011 Financial Results 16
Slide 17: Appendix: Reconciliation of Non-GAAP Measures
Appendix Reconciliation of Non-GAAP Measures
Slide 18: Calculation of Free Cash Flow
Calculation of Free Cash Flow US$ in millions Additions (+) / Reductions (-) to Net income attributable to Three Months Ended Six Months Ended Visa Inc. March 31, 2011 March 31, 2011 Net income attributable to Visa Inc. (as reported) 881 1,765 Capital Assets + Depreciation and amortization 70 137 -
Slide 19: Impact of PlaySpan Acquisition
Impact of PlaySpan Acquisition US$ in millions, except per share data The following table presents the impact of the PlaySpan acquisition on Visa’s diluted earnings per share. Three Months Ended March 31, 2011 Net income attributable to Visa Inc. (as reported) $ 881 Taxable PlaySpan adjustments: Les