EX-99.2 3 dex992.htm PRESENTATION OF VISA INC. Presentation of Visa Inc.
Visa Inc.
Fiscal Second Quarter 2008
Financial Results
April 28, 2008
Exhibit 99.2

2
Q2 FY 2008 Earnings Release
Safe Harbor Reminder
•
The following materials and management’s discussion of them may contain “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.
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:  (i) statements regarding certain of
Visa’s goals and expectations with respect to earnings per share, revenue, operating
margin
and
free
cash
flow
and
the
growth
rate
in
those
items,
as
well
as
other
measures
of economic performance, and (ii) statements relating to the benefits of the 2007
reorganization and the 2008 initial public offering.
•
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 under the heading “Risk
Factors”
in
our
Prospectus
dated
March
18,
2008,
filed
with
the
U.S.
Securities
and
Exchange Commission pursuant to Rule 424(b)(4) on March 19, 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.

3
Q2 FY 2008 Earnings Release
Strong Opening Quarter
•
On an adjusted basis
–
Quarterly net income of $401 million
–
48% increase in net income over 2007 period
–
Earnings per share of $0.52 on a diluted basis
•
Achieved significant year-over-year growth
–
Payments volume of 19% to $681 billion
–
Total volume of 21% to $1.1 trillion
•
Operating revenues of $1.5 billion increased 22% over 2007
period
Note: Please see appendix for reconciliation of adjusted non-GAAP measures to the closest comparable GAAP measures.

4
Q2 FY 2008 Earnings Release
Legal Matters
•
FAS 5 reserve for litigation provision of $285 million recorded for
covered litigation
•
Litigation escrow account established through the deposit of $3
billion in IPO proceeds, as directed by the litigation committee
•
American Express settlement payment of $1.13 billion made in
March 2008, of which $185 million was provided by five co-
defendant banks and $945 million was funded by the litigation
escrow

5
Q2 FY 2008 Earnings Release
Payments Volume & Processed Transactions
12.8%
28.5%
45
Canada
30.5%
44.1%
47
Latin America and Caribbean (LAC)
15.1%
8,800
Visa Inc.
YOY
Growth
Processed
Transactions
Quarter ended March 2008
40.1%
44.1%
18
Central Europe, Middle East &     
Africa (CEMEA)
YOY Growth
18.5%
24.3%
12.4%
Nominal
USD
15.8%
$681
Visa Inc.
19.6%
158
Asia Pacific
12.4%
$413
United States
Constant
USD
Payments
Volume            
Quarter ended December 2007
US$ in billions, transactions in millions

6
Q2 FY 2008 Earnings Release
Q2 FY 2008
Q1 FY 2008
Q2 FY 2007
Adj. Actual
Adj. Actual
Adj. Pro forma
Net Revenues
1,453
$            
1,488
$            
1,191
$            
Total Operating Expenses
783
                  
757
                  
744
                  
Operating Income
670
                  
731
                  
447
                  
   Operating Margin
46.1%
49.1%
37.5%
Net Income
401
$                
443
$                
271
$                
Adjusted EPS
0.52
$              
0.56
$              
NA
Fiscal Second Quarter 2008 -
Financial Performance
Adjusted Basis
US$ in millions, excluding percentages and EPS data
Note: Please see appendix for reconciliation of adjusted non-GAAP measures to the closest comparable GAAP measures.

7
Q2 FY 2008 Earnings Release
Revenue Detail
US$ in millions
Q2 FY 2008
Q2 FY 2007
Percent
Actual
Pro forma
Change
   Service fees
792
$                
614
$                
29%
   Data processing fees
494
                  
370
                  
34%
   International transaction fees
379
                  
281
                  
35%
   Other revenue
126
                  
113
                  
12%
Gross revenues
1,791
              
1,378
              
30%
   Incentives
(338)
                 
(187)
                 
81%
Net revenues
1,453
$            
1,191
$            
22%

8
Q2 FY 2008 Earnings Release
Expense Detail
Adjusted Basis
US$ in millions
Q2 FY 2008
Q2 FY 2007
Percent
Actual
Pro forma
Change
   Personnel
272
$                  
269
$                  
1%
   Network, EDP & communications
78
                      
69
                      
13%
   Advertising, marketing, and promotion
215
                    
182
                    
18%
   Professional and consulting fees
94
                      
102
                    
(8%)
   Depreciation and amortization
42
                      
37
                      
14%
   Administrative and other
75
                      
72
                      
4%
   Litigation provision
7
                        
13
                      
(46%)
Total adjusted operating expenses
783
                    
744
                    
5%
   Litigation provision
285
                    
-
                    
NM
   Restructuring
19
                      
36
                      
(47%)
   Purchase Amortization
17
                      
17
                      
-
Sub Total
321
                    
53
                      
Total operating expenses (as reported)
1,104
$            
797
$                
39%
Note: Restructuring contains both Personnel and Professional fees expenses associated with organizational changes.
Please see appendix for reconciliation of adjusted non-GAAP measures to the closest comparable GAAP measures.

9
Q2 FY 2008 Earnings Release
Balance Sheet
•
Cash, cash equivalents, restricted cash and investment
securities available-for-sale of $8.0 billion during the fiscal
second quarter
•
Restricted cash for litigation escrow of $2.1 billion reflects the
$945 million March payment to American Express
•
Capital expenditures during the fiscal second quarter were $166
million
•
Goodwill increased by $1.1
billion during the fiscal second
quarter
US$ in millions

10
Q2 FY 2008 Earnings Release
Financial metrics over the next three years
•
Annual net revenue growth:
11-15 %
•
Annual adjusted operating margin
(adjusted earnings before interest and taxes):
low 40 % range
•
Annual adjusted diluted class A common
earnings per share growth:
20%+
•
Annual free cash flow (cash flow from
operations plus cash reimbursements from
litigation escrow less capital spending):
$1 billion +

Appendix –
Reconciliation of Non-GAAP
Measures

12
Q2 FY 2008 Earnings Release
Quarterly Results of Operations
Fiscal 2008
Quarter Ended
December 31,
2006
March 31, 2007
June 30, 2007
September 30,
2007
December 31,
2007
Actual
Operating Revenues
Service fees
577
$                 
614
$                 
661
$                 
730
$                 
732
$                 
Data processing fees
377
                    
370
                    
449
                    
463
                    
492
                    
Volume and support incentives
(136)
                   
(187)
                   
(175)
                   
(216)
                   
(250)
                 
International transaction fees
247
                    
281
                    
311
                    
353
                    
381
                    
Other revenues
108
                    
113
                    
119
                    
133
                    
133
                    
           Total operating revenues
1,173
                
1,191
                
1,365
                
1,463
                
1,488
                
Operating Expenses
Personnel
273
                    
269
                    
293
                    
324
                    
283
                    
Network, EDP, and communications
68
                      
69
                      
77
                      
80
                      
83
                     
Advertising, marketing, and promotion
205
                    
182
                    
245
                    
443
                    
210
                    
Professional and consulting fees
101
                    
136
                    
159
                    
157
                    
98
                     
Depreciation and amortization
55
                      
54
                      
55
                      
63
                      
62
                     
Administrative and other
76
                      
73
                      
94
                      
105
                    
74
                     
Litigation provision
2
                        
13
                      
(1)
                       
2,638
                
-
                    
          Total operating expenses
780
                    
797
                    
921
                    
3,810
                
810
                    
Operating income (loss)
393
                    
394
                    
444
                    
(2,347)
               
678
                    
Other Income (Expense)
Equity in earnings of unconsolidated affiliates
-
                     
-
                     
-
                     
-
                     
1
                       
Interest expense
(23)
                     
(24)
                     
(25)
                     
(24)
                     
(45)
                    
Investment income, net
40
                      
36
                      
56
                      
65
                      
41
                     
Other
8
                        
-
                     
8
                       
         Total other income
17
                      
12
                      
39
                      
41
                      
5
                       
Income (loss) before income taxes
410
                    
406
                    
483
                    
(2,306)
               
683
                    
Income tax expense (benefit)
161
                    
160
                    
184
                    
(652)
                   
259
                    
Net income (loss)
249
$                 
246
$                 
299
$                 
(1,654)
$             
424
$                 
Pro forma
(1)
Fiscal 2007 Quarter Ended
(1)  Visa Inc. had no operations prior to the reorganization on October 1, 2007. In order to provide insight into our operating results, the pro forma
results of operations for the prior periods have been prepared for comparative purposes assuming that the reorganization had occurred on
October 1, 2006.
US$ in millions

13
Q2 FY 2008 Earnings Release
For theThree
Months Ended 
For the Six
Months Ended 
March 31, 2007
March 31, 2007
Operating Revenues
Service fees
614
$                         
1,191
$                   
Data processing fees
370
                           
747
                        
Volume and support incentives
(187)
                          
(323)
                       
International transaction fees
281
                           
529
                        
Other revenues
113
                           
221
                        
           Total operating revenues
1,191
                        
2,365
                     
Operating Expenses
Personnel
269
                           
542
                        
Network, EDP, and communications
69
                             
137
                        
Advertising, marketing, and promotion
182
                           
387
                        
Professional and consulting fees
136
                           
237
                        
Depreciation and amortization
54
                             
109
                        
Administrative and other
74
                             
150
                        
Litigation provision
13
                             
15
                          
          Total operating expenses
797
                           
1,577
                     
Operating income
394
                           
788
                        
Other Income (Expense)
Interest expense
(24)
                            
(48)
                         
Investment income, net
36
                             
76
                          
         Total other income
12
                             
28
                          
Income before income taxes and minority interest
406
                           
816
                        
Income tax expense
160
                           
321
                        
Net income
246
$                         
495
$                      
(1)  Visa Inc. had no operations prior to the reorganization on October 1, 2007. In order to provide insight into our operating results, the pro forma
results of operations for the prior periods have been prepared for comparative purposes assuming that the reorganization had occurred on
October 1, 2006. These pro forma statements of operations have been prepared in accordance with Statement of Financial
Accounting Standards No. 141, "Business Combinations."
Pro Forma Results of Operations
(1)
US$ in millions

14
Q2 FY 2008 Earnings Release
Adjusted Operating Income and Net Income
US$ in millions
For the Three Months
Ended 
For the Six Months
Ended 
Pro Forma For the
Three Months
Ended
March 31, 2008
March 31, 2008
March 31, 2007
Net income (as reported)
314
$                                
738
$                         
246
$                     
Addback: Income tax expense
56
315
160
Net income before taxes and minority interest (as reported)
370
$                                
1,053
$                      
406
$                     
Adjustments:
Covered litigation reserve
(1)
285
285
-
Restructuring
(2)
19
55
36
Asset step-up amortization
(3)
17
34
17
Adjustments to operating income
321
374
53
Interest accretion on American Express settlement
(4)
23
46
-
Investment income on IPO proceeds
(5)
(7)
(7)
-
Underwater contract (LIBOR Adjustment)
(6)
(28)
(36)
-
Adjustments to non-operating income
(12)
3
-
Total Adjustments
309
377
53
Adjusted net income before tax
679
1,430
459
Adjusted income tax expense
(7)
(278)
(586)
(188)
Adjusted net income
401
$                                
844
$                         
271
$                     
Operating income (as reported)
349
$                                
1,027
$                      
394
$                     
Addback: Adjustments to operating income
321
374
53
Adjusted operting
income
670
$                                
1,401
$                      
447
$                     
Operating revenues (as reported)
1,453
$                             
2,940
$                      
1,191
$                  
Adjusted operating margin
46%
48%
38%
(1)
Litigation
expense
recorded
in
the
period
related
to
the
covered
litigation.
Settlements
of,
or
judgments
in,
the
covered
litigation
will be paid from the litigation escrow account.
(2)
Restructuring costs, primarily severance in fiscal 2008, 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)
Investment income earned during the period on all IPO proceeds held, including amounts the Company intends to use 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.
(6)
Other income recorded in the period as a result of a reduction in the Company's estimated liability under the Framework Agreement, which governs its relationship with
Visa
Europe.
This
reduction
was
a
result
of
lower
LIBOR
rates
in
the
period.
This
liability
will
not
continue
after
the
October
2008
redemptions
described
above.
(7)
Reflects a normalized tax rate of 41%.
Pro Forma For the
Six Months
Ended
March 31, 2007
1,191
$                     
321
1,512
$                     
-
47
34
81
-
-
-
-
81
1,593
(563)
940
$                     
788
$                     
81
869
$                     
2,365
$                  
37%
Total operating expenses (as reported)
$                      1,577
Less: Adjustments to operating expenses
(81)
Adjusted operating expenses
$                      1,496
$                     
1,104
(321)
$                     
783
$                      1,914
(374)
$                      1,540
$                      797
(53)
$                      744

15
Q2 FY 2008 Earnings Release
Weighted Avg. Class A Common Stock Outstanding
Used in the Calculation of Adjusted Diluted EPS
(1) For
GAAP
purposes,
the
number
of
class
A
common
shares
outstanding
is
weighted
to
reflect
the
issuance
of
446,600,000
shares
at 
the
IPO
date
of
March
19,
2008.
In
the
calculation
of
the
adjusted
weighted
average
shares
outstanding,
these
shares
are
assumed
to have been issued at the beginning of each period presented.
(2) For GAAP purposes, the number of class B common shares outstanding is weighted to reflect the redemption of 154,738,487 shares
on
March
28,
2008
and
the
reduction
of
the
conversion
ratio
applicable
to
remaining
shares
outstanding
to
0.71
to
1.
In
the
calculation
of the adjusted weighted average shares outstanding, these shares are weighted to assume that the redemption and reduction in
conversion ratio had occurred at the beginning of each period presented.
(3) For GAAP purposes, the number of class C (series I, II, III & IV) common shares is weighted to reflect the redemption of 159,657,751
shares
of
class
C
(series
I)
common
stock
on
March
28,
2008,
and
the
reclassification
of
all
shares
of
class
C
(series
II)
common
stock
to
temporary
equity
and
35,263,585
shares
of
class
C
(series
III)
common
stock
to
liabilities
on
the
IPO
date
of
March
19,
2008. 
Upon
reclassification
of
the
class
C
(series
II)
and
class
C
(series
III)
common
stock
these
shares
are
no
longer
convertible
into
shares of class A common stock.  In the calculation of adjusted weighted average shares outstanding, these shares are weighted to
assume that the redemption and reclassifications occurred at the beginning of each period presented.
(4)  For GAAP purposes, the number of class A common shares outstanding is weighted to reflect the assumed issuance of 
class
A
common
stock
underlying
stock
options,
restricted
stock
and
restricted
stock
units
to
employees
and
directors
at
the
IPO 
date
of
March
19,
2008,
applying
the
treasury
method.
In
the
calculation
of
the
adjusted
weighted
average
shares
outstanding,
these
shares are weighted to assume the issuance of these awards at the beginning of each period presented. The assumed number of
shares underlying stock options assumed issued for adjusted non-GAAP purposes assumes the repurchase of shares at the share
price on March 31, 2008 of $62.36.
For the Three
Months Ended 
For the Six
Months Ended 
March 31, 2008
March 31, 2008
Weighted
Average
Shares
Outstanding
-
GAAP
778
762
Class A Shares
(1)
383
415
Class B Shares
(2)
(226)
(238)
Class C Shares
(3)
(161)
(165)
Class A Share Equivalents
(4)
5
5
1
17
Adjusted
Weighted
Average
Shares
Outstanding
-
Non
GAAP
779
779
Share Adjustments
(in millions)

16
Q2 FY 2008 Earnings Release
For theThree
Months Ended 
For the Six
Months Ended 
March 31, 2008
March 31, 2008
Adjusted net income
401
$                     
844
$                   
Adjusted weighted average number of diluted shares outstanding
779
                       
779
                     
Adjusted diluted earnings per share
0.52
$                    
1.08
$                  
(in millions, except per share data)
•
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 and initial public
offering.
These measures also adjust for
expenses related to covered litigation
that will be funded
by the
litigation escrow
account.
These
items
have
a
significant
impact
on
our
financial
results
but
are
either
non-recurring or have no operating cash impact.
•
Recognizing 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 adjusted weighted average number of shares outstanding in
the 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
intends
to
redeem
in
October
2008.
The
class C (series II) common stock is classified as temporary equity and the class C (series III) common
stock is classified as a liability on the Company's consolidated
balance sheet at March 31,
2008.
Management believes this non-GAAP presentation provides the reader with a clearer
understanding of our per share results
by excluding these shares to be redeemed and
allocating adjusted
net income only
to permanent equity.
Class A Common Stock
Adjusted Diluted Earnings per Share