 Visa
Inc. Fiscal Fourth Quarter and Full-Year 2009 Financial Results October 27, 2009 Exhibit 99.2 |
| Visa
Inc. Fiscal Fourth Quarter and Full-Year 2009 Financial Results October 27, 2009 Exhibit 99.2 |
 2 Fiscal Q4 2009 Earnings Results 2 Safe Harbor Reminder • Certain statements contained in this press release are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended, which
are subject to the “safe harbor” created by those sections. These statements can be identified by the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will” and similar expressions which are intended to identify forward-looking statements. In addition, any underlying assumptions are
forward-looking statements. Such forward-looking statements include
but are not limited to statements regarding certain of Visa’s goals and
expectations with respect to adjusted earnings per share, revenue, adjusted operating margin, and free cash flow, and the growth rate in those items, as well as other measures of economic performance.
• By their nature, forward-looking statements: (i) speak only as of the date they are
made, (ii) are not guarantees of future performance or results and (iii) are
subject to risks, uncertainties and assumptions that are difficult to
predict or quantify. Therefore, actual results could differ materially and
adversely from those forward-looking statements as a result of a variety of factors, including all the risks discussed in Part 1, Item 1A – “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30,
2008. You are cautioned not to place undue reliance on such statements, which
speak only as of the date of this presentation. Unless required to do so
under U.S. federal securities laws or other applicable laws, we do not
intend to update or revise any forward-looking statements.
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 3 Fiscal Q4 2009 Earnings Results 3 Solid Fiscal Fourth Quarter and Full-Year Results • Adjusted annual net income, excluding gain on sale of equity stake in VisaNet do Brasil, of $2.2 billion or adjusted diluted earnings of $2.92 per share Note: See appendix for reconciliation of adjusted non-GAAP measures to the closest
comparable GAAP measures. • Continued positive secular trends and business model resilience despite economic slowdown • Adjusted quarterly and annual net income of $552 million and $2.4 billion or adjusted diluted earnings of $0.74 and $3.23 per share • Strong operating revenues of $1.9 billion for the fourth quarter and $6.9 billion for the full-year both up, 10% over the prior periods
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 4 Fiscal Q4 2009 Earnings Results $699 $450 $248 $687 $261 $426 Total Visa Inc. Credit Debit 2008 2009 Quarter ended June US$ in billions, nominal Payments Volume – Q4 2009 2% 7% ROW ROW $276 $234 U.S. $423 U.S. $412 U.S. ROW U.S. U.S. $275 $213 $238 ROW U.S. $192 $210 ROW $38 $220 ROW $41 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 have not been updated, as changes made are not material. 1 Constant dollar growth rates exclude the impact of foreign currency fluctuations against
the U.S. dollar in measuring performance. (2%) 5% YOY Change (nominal) YOY Change (constant) 1 (2%) (5%) |
 5 Fiscal Q4 2009 Earnings Results $2,654 $1,736 $918 $2,680 $990 $1,689 Total Visa Inc. Credit Debit 2008 2009 Twelve Months ended June US$ in billions, nominal Payments Volume – Fiscal Year 2009 ROW ROW $1,043 $905 U.S. $1,611 U.S. $1,621 U.S. ROW U.S. U.S. $1,058 $832 $904 ROW U.S. $785 $780 ROW $138 $837 ROW $153 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 have not been updated, as changes made are not material. 1 Constant dollar growth rates exclude the impact of foreign currency fluctuations against
the U.S. dollar in measuring performance. 5% 10% 1%
8% YOY Change (nominal) YOY Change (constant) 3% (3%) 1 |
 6 Fiscal Q4 2009 Earnings Results $423 $162 $50 $45 $19 $165 $49 $41 $20 $412 United States Asia Pacific (AP) Latin America and Caribbean (LAC) Canada Central and Eastern Europe, Middle East and Africa (CEMEA) 2008 2009 Quarter ended June US$ in billions, nominal Payments Volume – Q4 2009 YOY Change (constant) 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 have not been updated, as changes made are not material. 1 Constant dollar growth rates exclude the impact of foreign currency fluctuations against
the U.S. dollar in measuring performance. YOY Change (nominal) (3%) 2% 0% (10%)
3% (3%) 8% 16% (2%)
12% 1 |
 7 Fiscal Q4 2009 Earnings Results 1 $1,611 $620 $181 $173 $69 $636 $189 $155 $78 $1,621 United States Asia Pacific (AP) Latin America and Caribbean (LAC) Canada Central and Eastern Europe, Middle East and Africa (CEMEA) 2008 2009 Twelve Months ended June US$ in billions, nominal Payments Volume – Fiscal Year 2009 YOY Change (constant) 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 have not been updated, as changes made are not material. 1 Constant dollar growth rates exclude the impact of foreign currency fluctuations against
the U.S. dollar in measuring performance. YOY Change (nominal) 1% 3% 4% (10%)
12% 1% 13% 20% 3% 26% |
 8 Fiscal Q4 2009 Earnings Results 14,124 9,473 9,590 10,266 10,463 15,491 Total Transactions Processed Transactions Processed Transactions 2008 2009 Quarter ended June in millions Transactions – Q4 2009 10%
8% 9% 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 members on their operating certificates. Quarter ended September Debit Credit 63% 37% YOY Change Credit 39% Debit 61% |
 9 Fiscal Q4 2009 Earnings Results 53,684 36,012 36,957 39,013 39,885 59,205 Total Transactions Processed Transactions Processed Transactions 2008 2009 Twelve Months Ended June in millions Transactions – Fiscal Year 2009 10% 8% 8% 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 members on their operating certificates. Twelve Months ended September Debit Credit 62% 38% Credit 40% Debit 60% YOY Change |
 10 Fiscal Q4 2009 Earnings Results 798 847 1,645 941 1,732 791 Credit Debit Visa Inc. 2008 2009 Quarter ended June in millions Total Cards (1%) 11% 5% YOY Change Note: Percentage change calculated based on whole numbers, not rounded numbers.
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 11 Fiscal Q4 2009 Earnings Results $2,008 ($299) $1,709 $1,879 $2,205 ($326) Q4 FY 2008 Q4 FY 2009 Revenue Detail – Q4 2009 US$ in millions Gross Revenues Incentives Net Operating Revenues 10% 9% 10% YOY Change |
 12 Fiscal Q4 2009 Earnings Results Revenue Detail – Fiscal Year 2009 US$ in millions Gross Revenues Incentives Net Operating Revenues 10% 6% 10% YOY Change $7,424 ($1,161) $6,263 $6,911 $8,145 ($1,234) 2008 2009 |
 13 Fiscal Q4 2009 Earnings Results $788 $548 $512 $160 $727 $808 $507 $163 Q4 FY 2008 Q4 FY 2009 Revenue Detail – Q4 2009 US$ in millions Service Revenues Data Processing Revenues International Transaction Revenues Other Revenues 3% 33%
(1%) 2% YOY Change |
 14 Fiscal Q4 2009 Earnings Results $3,061 $2,073 $1,721 $569 $2,430 $3,174 $1,916 $625 2008 2009 Revenue Detail – Fiscal Year 2009 US$ in millions Service Revenues Data Processing Revenues International Transaction Revenues Other Revenues 4% 17%
11% 10% YOY Change |
 15 Fiscal Q4 2009 Earnings Results $1,709 $943 $766 $919 $1,879 $960 Net Operating Revenues Total Operating Expenses Operating Income Adjusted Operating Margin – Q4 2009 US$ in millions 4 ppts 10%
2% 20% 45% 49% Operating Margin Q4 FY 2008 Q4 FY 2009 YOY Change |
 16 Fiscal Q4 2009 Earnings Results $6,263 $3,366 $2,897 $3,673 $6,911 $3,238 Net Operating Revenues Total Operating Expenses Operating Income Adjusted Operating Margin – Fiscal Year 2009 US$ in millions 7 ppts 10%
(4%) 27% 46% 53% Operating Margin 2008 2009 YOY Change |
 17 Fiscal Q4 2009 Earnings Results $253 $93 $320 $943 $960 $94 $135 $6 $42 $113 $111 $301 $283 $107 $44 $1 Q4 FY 2008 Q4 FY 2009 Adjusted Operating Expenses – Q4 2009 US$ in millions Personnel Network, EDP and Communications Advertising, Marketing and Promotion Professional and Consulting Fees Depreciation and Amortization Administrative and Other Total Operating Expenses 19%
19% (12%) (21%) 5%
20% (83%) 2% Note: Restructuring contains Personnel, Professional fees and Administrative and Other
expenses associated with organizational changes. See appendix for
reconciliation of adjusted non-GAAP measures to the closest comparable GAAP measures. Litigation Provision YOY Change |
 18 Fiscal Q4 2009 Earnings Results $1,078 $338 $1,016 $3,366 $3,238 $169 $13 $424 $328 $2 $158 $352 $918 $1,077 $393 $338 2008 2009 Adjusted Operating Expenses – Fiscal Year 2009 US$ in millions Personnel Network, EDP and Communications Advertising, Marketing and Promotion Professional and Consulting Fees Depreciation and Amortization Administrative and Other Total Operating Expenses 0%
16% (10%) (17%) (7%)
3% (85%) (4%) Note: Restructuring contains Personnel, Professional fees and Administrative and Other
expenses associated with organizational changes. See appendix for
reconciliation of adjusted non-GAAP measures to the closest comparable GAAP measures. Litigation Provision YOY Change |
 19 Fiscal Q4 2009 Earnings Results Other Financial Results • Capital expenditures during the fiscal fourth quarter and full-year 2009 were $101 million and $306 million, respectively • Cash, cash equivalents, restricted cash and investment securities available-for-sale of $6.6 billion at the end of the
fiscal year which includes $1.7 billion of restricted cash for litigation escrow • Prepayment of remaining $800 million of obligations at a discounted amount of $682 million made on October 5, 2009 related to a class action lawsuit • Total free cash flow of $3.3 billion for FY09 and adjusted free cash flow of $2.8 billion excluding the VisaNet do Brasil gain
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 20 Fiscal Q4 2009 Earnings Results Annual net revenue growth Financial Metrics for Fiscal Year 2010 Annual free cash flow Annual diluted class A common stock earnings per share growth Annual operating margin 20% + $2 billion + Lower end 11-15% range Mid 50% range |
 21 Fiscal Q4 2009 Earnings Results Capital Expenditures Financial Metrics for Fiscal Year 2010 GAAP tax rate Volume and support incentives Advertising, marketing and promotion expenses Less than $1 billion 16-17% of gross revenue 38 to 39% range $200-250 M |
 Appendix – Reconciliation of Non-GAAP Measures |
 23 Fiscal Q4 2009 Earnings Results Adjusted Operating Income and Net Income US$ in millions Three Months Ended September 30, 2009 Three Months Ended September 30, 2008 Twelve Months Ended September 30, 2009 Twelve Months Ended September 30, 2008 Net (loss) income (as reported) 514 $
(356) $
2,353 $
804 $
Addback: Income tax (benefit) expense (as reported) 349 (75) 1,648 532 Less: Minority interest (as reported) - - (1) - Net (loss) income before taxes and minority interest (as reported) 863 $
(431) $
4,000 $
1,336 $
Adjustments: Litigation reserve (1) - 1,122 - 1,457 Restructuring (2) 33 70 67 140 Asset step-up amortization (3) 17 17 68 68 Adjustments to operating income 50 1,209 135 1,665 Interest accretion on American Express settlement (4) 8 11 36 68 Interest expense on Discover settlement (5) - - 5 - Investment income on Litigation Escrow and EU proceeds (6) (1) (30) (22) (70) Underwater contract (LIBOR adjustment) (7) - - - (35) Adjustments to non-operating income 7 (19) 19 (37) Total adjustments 57 1,190 154 1,628 Adjusted income before taxes and minority interest 920 759 4,154 2,964 Tax rate (8) 40% 41% 41% 41% Adjusted income tax expense (368) (311) (1,707) (1,215) Addback: Minority interest (as reported) - - 1 - Adjusted net income 552 $
448 $
2,448 $
1,749 $
Operating (loss) income (as reported) 869 $
(443) $
3,538 $
1,232 $
Addback: Adjustments to operating income 50 1,209 135 1,665 Adjusted operating income 919 $
766 $
3,673 $
2,897 $
Operating revenues (as reported) 1,879 $
1,709 $
6,911 $
6,263 $
Adjusted operating margin 49% 45% 53% 46% Total operating expenses (as reported) 1,010 $
2,152 $
3,373 $
5,031 $
Less: Adjustments to operating expenses (50) (1,209) (135) (1,665) Adjusted operating expenses 960 $
943 $
3,238 $
3,366 $
(1) Litigation reserve related to the covered litigation. Settlements of, or judgments in, covered litigation will be paid from the litigation escrow account. (2) Restructuring costs associated with workforce consolidation and elimination of
overlapping functions. (3) Non-cash amortization and depreciation of the incremental basis in technology and
building assets acquired in the reorganization. (4) Non-cash interest expense recorded on future payments to be made under the settlement
agreement with American Express. These payments will be paid from the
litigation escrow account. (5) Interest expense recorded on payments made under the settlement agreement with Discover.
These payments have been paid from the litigation escrow account. (6) Investment income earned during the period on all IPO proceeds and amounts held in the
litigation escrow, including amounts the Company used in October 2008 to
redeem all class C (series II) common stock and a portion of the class C (series III) common stock held by Visa Europe. (7) Other expense recorded in the periods presented as a result of changes in the Company's
estimated liability under the Framework Agreement, which governs its
relationship with Visa Europe. The changes were primarily due to movement in the LIBOR rates in the periods presented. This liability was satisfied as part of the October 2008 redemptions described above. (8) Rates applied to Fiscal 2009 periods
represent the GAAP effective tax rate adjusted for immaterial one-time charges associated with the establishment of our Singapore subsidiary's tax incentive agreement. Rates applied to Fiscal 2008 periods represent a normalized rate of
41%. |
 24 Fiscal Q4 2009 Earnings Results Reconciliation of Non-GAAP Adjusted Operating Expenses US$ in millions Actual Adjustments As Adjusted Actual Adjustments As Adjusted Personnel $ 334 $ (33) (1) $ 301 $ 317 (64) (1) 253 Network, EDP and communications 111 111 94 (1) (1) 93 Advertising, marketing and promotion 283 283 320 - 320 Professional and consulting fees 107 107 136 (1) (1) 135 Depreciation and amortization 61 (17) (2) 44 59 (17) (2) 42 Administrative and other 113 113 98 (4) (1) 94 Litigation provision 1 1 1,128 (1,122) (3) 6 Total operating expenses $ 1,010 $ (50) $ 960 $ 2,152 $ (1,209) $ 943 Actual Adjustments As Adjusted Actual Adjustments As Adjusted Personnel $ 1,143 (66) (1) 1,077 $ 1,199 (121) (1) 1,078 Network, EDP and communications 393 393 339 (1) (1) 338 Advertising, marketing and promotion 918 918 1,016 - 1,016 Professional and consulting fees 353 (1) (1) 352 438 (14) (1) 424 Depreciation and amortization 226 (68) (2) 158 237 (68) (2) 169 Administrative and other 338 338 332 (4) (1) 328 Litigation provision 2 2 1,470 (1,457) (3) 13 Total operating expenses $ 3,373 $ (135) $ 3,238 $ 5,031 $ (1,665) $ 3,366 (1) Restructuring (2) Asset Step-up amortization (3) Litigation Reserve For the Three Months Ended September 30, 2009 For the Three Months Ended September 30, 2008 For the Twelve Months Ended September 30, 2009 For the Twelve Months Ended September 30, 2008 - - - - - - - - - $ $ $ $ $ $ |
 25 Fiscal Q4 2009 Earnings Results Reconciliation of Non-GAAP Adjusted Non-operating Income US$ in millions Actual Adjustments As Adjusted Actual Adjustments As Adjusted Equity in earnings of unconsolidated affiliates - $ - $ - $ - - $ Interest expense (25) 8 (1) (17) (27) 11 (1) (16) Investment income, net 18 (1) (2) 17 39 (30) (2) 9 Other 1 - 1 - - - Total other income (expenses) (6) $ 7 1 $
12 $ (19) (7) $
Actual Adjustments As Adjusted Actual Adjustments As Adjusted Equity in earnings of unconsolidated affiliates - $ - $ 1 $ - 1 $
Interest expense (115) 41 (1) (74) (143) 68 (1) (75) Investment income, net 575 (22) (2) 553 211 (70) (2) 141 Other 2 - 2 35 (35) (3) - Total other income (expenses) 462 $ 19 481 $ 104 $ (37) 67 $ (1) Interest accretion on American Express Settlement and interest expense
on Discover Settlement (2) Investment income on Litigation Escrow
funds and funds used in October 2008 for the repurchase of shares from Visa Europe. (3) Underwater contract (LIBOR adjustment) For the Three Months Ended September 30, 2009 For the Three Months Ended September 30, 2008 For the Twelve Months Ended September 30, 2009 For the Twelve Months Ended September 30, 2008 $ $ $ $ $ - $ $ - $ |
 26 Fiscal Q4 2009 Earnings Results Adjusted Diluted Earnings per Share Class A Common Stock Adjusted net income $ 552 $ 448 $ 2,448 $ 1,749 Weighted average number of diluted shares outstanding 747 776 758 776 Adjusted diluted earnings per share $ 0.74 $ 0.58 $ 3.23 $ 2.25 (in millions, except per share data) For the Twelve Months Ended September 30, 2009 September 30, 2008 For the Three Months Ended September 30, 2009 For the Three Months Ended September 30, 2008 For the Twelve Months Ended Management believes the presentation of adjusted operating income and adjusted net income
provides a clearer understanding of the one-time items related to the
Company’s reorganization, initial public offering and other non-recurring events. These measures also adjust for expenses related to covered litigation that will be funded by the litigation escrow account.
These items have an impact on our financial results but are either non-recurring or have no operating cash impact. Reorganizing that we have a very complex equity structure incorporating multiple classes and series of common stock, the Company has also presented adjusted diluted class A earnings per share calculated below based on adjusted net income and the weighted average number of diluted class A shares outstanding in the periods presented (adjusted in the prior
periods presented). This non-GAAP financial measure has been presented
to illustrate our per share results reflecting our capital structure after the redemption of all class C (series II) common stock and a portion of class C (series III) common stock, which the Company redeemed in October
2008. Management believes this non-GAAP presentation provides the reader
with a clearer understanding of our per share results by excluding these redeemed shares and allocating adjusted net income only to permanent equity. |
 27 Fiscal Q4 2009 Earnings Results Calculation of Free Cash Flow US$ in millions Additions (+) / Reductions (-) to Net income Net income (as reported) 2,353 + Depreciation and amortization 226 - Capital expenditures (306) (80) + Litigation provision 2 + Accretion expense 93 - Settlement payments (2,201) + Settlement payments funded by litigation escrow 2,028 + Settlement payments funded by Morgan Stanley 65 (13) Share-based Compensation + Share-based compensation 115 + Pension expense 60 - Pension contribution (170) (110) - Gain on sale of investment (473) + Proceeds from sale 1,008 535 + Income tax expense 1,648 - Income taxes paid (1,172) 476 Changes in Working Capital* + Changes in other working capital accounts 12 Total Free Cash Flow 3,288 - Proceeds from sale (1,008) + Income taxes paid 489 (519) Adjusted Free Cash Flow 2,769 * Includes changes in volume & support incentives, trade receivables, settlement receivable/payable,
and personnel incentives. Taxes Less: VisaNet Brazil VisaNet Brazil FY 2009 Capital Assets Litigation Pension |