EX-99.2 3 dex992.htm PRESENTATION OF VISA INC., DATED JULY 29, 2009. Presentation of Visa Inc., dated July 29, 2009.
Visa Inc.
Fiscal Third Quarter 2009
Financial Results
July 29, 2009
Exhibit 99.2

Fiscal Q3 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.

Fiscal Q3 2009 Earnings Results
3
Solid Fiscal Third Quarter Results
Note: See appendix for reconciliation of adjusted non-GAAP measures to the closest comparable GAAP measures.
•
Adjusted quarterly net income of $744 million or adjusted diluted
earnings of $0.98 per share
•
Sale
of
equity
interest
in
VisaNet
do
Brasil
resulting
in
a
$237
million,
after tax, gain contributing $0.31 to adjusted diluted earnings per share
•
Continued positive secular trends
•
Business model resilience despite economic slowdown with operating
revenues of $1.6 billion
•
Adjusted
quarterly
net
income,
excluding
VisaNet
do
Brasil
gain,
of
$507
million or adjusted diluted earnings of $0.67 per share

Fiscal Q3 2009 Earnings Results
4
$652
$228
$424
$380
$236
$617
Total Visa Inc.
Credit
Debit
2008
2009
Quarter ended March
US$ in billions, nominal
Payments
Volume
–
Q3
2009
YOY Change
(nominal)
-5%
-10%
4%
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.
ROW
ROW
$264
$204
U.S.
$388
U.S.
$379
U.S.
ROW
U.S.
U.S.
$238
$195
$229
ROW
U.S.
$176
$193
ROW  $35
$202
ROW  $34
2%
-1%
7%
YOY Change
(constant)
1

Fiscal Q3 2009 Earnings Results
5
$388
$159
$46
$41
$17
$147
$42
$32
$17
$379
United States
Asia Pacific (AP)
Latin America and
Caribbean (LAC)
Canada
Central and Eastern
Europe, Middle East
and Africa (CEMEA)
2008
2009
Quarter ended March
US$ in billions, nominal
Payments Volume
–
Q3
2009 Regional
Note: 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.
-3%
10%
15%
1%
20%
YOY Change
(nominal)
YOY Change
(constant)
-3%
-8%
-9%
-22%
-
%
1

Fiscal Q3 2009 Earnings Results
6
YOY
Change
13,149
14,305
Total Transactions
2008
2009
Quarter ended March
in millions
Transactions –
Q3 2009
9%
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.
Quarter ended June
Debit
Credit
63%
37%
9,473
10,266
Processed Transactions
2008
2009

Fiscal Q3 2009 Earnings Results
7
814
806
1,620
925
1,723
798
Credit
Debit
Visa Inc.
2008
2009
Quarter ended March
in millions
YOY
Change
Total Cards
-2%
15%
6%

Fiscal Q3 2009 Earnings Results
8
$1,887
($274)
$1,613
($344)
$1,990
$1,646
2008
2009
Revenue Detail
–
Q3 2009
US$ in millions
Gross
Revenues
Incentives
Net Operating
Revenues
5%
25%
2%
YOY
Change
Note: Percentage change calculated based on whole numbers, not rounded numbers.

Fiscal Q3 2009 Earnings Results
9
3%
12%                         2%
6%
$749
$539
$449
$150
$158
$458
$769
$605
2008
2009
Revenue Detail
–
Q3 2009
US$ in millions
Service
Revenues
Data
Processing
Revenues
International
Transaction
Revenues
Other
Revenues
YOY
Change
Note: Percentage change calculated based on whole numbers, not rounded numbers.

Fiscal Q3 2009 Earnings Results
10
6 ppts
2%                     -9%
15%
$1,613
$883
$730
$842
$1,646
$804
Net Operating
Revenues
Total Operating
Expenses
Operating Income
Adjusted
Operating
Margin
–
Q3
2009
US$ in millions
YOY
Change
45%
51%
Operating Margin
2008
2009

Fiscal Q3 2009 Earnings Results
11
Adjusted Operating Expenses
–
Q3
2009
US$ in millions
-12%                15%             -15%              -24%                -
%               13%                  N/A
YOY
Change
$295
$84
$271
$85
$108
$0
$40
$96
$97
$259
$229
$82
$40
$1
2008
2009
Personnel
Network,
EDP and
Communications
Advertising,
Marketing and
Promotion
Professional
and
Consulting
Fees
Depreciation
and
Amortization
Administrative
and Other
Litigation
Provision

Fiscal Q3 2009 Earnings Results
12
Other Financial Results
•
Capital expenditures during the fiscal third quarter were $69
million
•
Cash, cash equivalents, restricted cash and investment
securities of $6.1 billion at the end of the third quarter
–
$1.6 billion of restricted cash for litigation escrow
–
$700 million additional funding to litigation escrow in July 2009
•
Free cash flow of $1.6 billion generated in the year-to-date

Fiscal Q3 2009 Earnings Results
13
Financial Metrics through Fiscal Year 2010
20% +
$1 billion +
FY 2009:
Around $300M  
FY 2010:
3 -
4% of gross 
revenue
FY 2009:
Low 50% range
FY 2010:
Low 50% range
Annual net revenue growth
Annual adjusted operating margin 
Annual adjusted diluted class A common
earnings per share growth
Annual free cash flow
Capital expenditures
FY 2009:
High single           
digits
FY 2010:
11-15%

Appendix –
Reconciliation of Non-GAAP
Measures

Fiscal Q3 2009 Earnings Results
15
Adjusted Operating Income and Net Income
US$ in millions
Three Months Ended
June 30, 2009
Three Months Ended
June 30, 2008
Net income (as reported)
729
$                               
422
$                               
Addback: Income tax expense (as reported)
568
292
Net Income before taxes and minority interest (as reported)
1,297
$                            
714
$                               
Adjustments:
Litigation reserve (1)
50
Restructuring (2)
3
15
Asset step-up amortization (3)
17
17
Adjustments to operating income
20
82
Interest accretion on American Express settlement
(4)
8
11
Interest expense on Discover settlement
(5)
1
—
Investment income on Litigation Escrow and EU proceeds (6)
(3)
(33)
Underwater contract (LIBOR adjustment)
(7)
—
1
Adjustments to non-operating income
6
(21)
Total adjustments
26
61
Adjusted income before taxes and minority interest
1,323
775
Adjusted income tax expense
(8)
(579)
(318)
Adjusted net income
744
$                               
457
$                               
Operating income (as reported)
822
$                               
648
$                               
Addback: Adjustments to operating income
20
82
Adjusted operating income
842
$                               
730
$                               
Operating revenues (as reported)
1,646
$                            
1,613
$                            
Adjusted operating margin
51%
45%
Total operating expenses (as reported)
824
$                               
965
$                               
Less: Adjustments to operating expenses
(20)
(82)
Adjusted operating expenses
804
$                               
883
$                               
(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 future payments to be made under the settlement agreement with Discover. These payments will be
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)
Adjusted income tax expense for the three months ended June 30, 2009 reflects the GAAP effective tax rate for the current quarter,
which is impacted by the sale of the equity interest in VisaNet do Brasil. Adjusted income tax expense for the three months ended
June 30, 2008 reflects the normalized tax rate for fiscal 2008.
—

Fiscal Q3 2009 Earnings Results
16
Reconciliation of Non-GAAP
Adjusted Operating Expenses
US$ in millions
(1)  Restructuring
(2)  Asset step-up amortization
(3)  Litigation reserve
Three Months Ended
June 30, 2009
Three Months Ended
June 30, 2008
Actual
Adjustments
As Adjusted
Actual
Adjustments
As Adjusted
Personnel
262
$     
(3)
$                  
(1)
259
$            
310
$     
(15)
$                
(1)
295
$            
Network, EDP and communications
97
97
84
84
Advertising, marketing and promotion
229
229
271
271
Professional and consulting fees
82
82
108
108
Depreciation and amortization
57
(17)
(2)
40
57
(17)
(2)
40
Administrative and other
96
96
85
85
Litigation provision
1
1
50
(50)
(3)
Total operating expenses
824
$     
(20)
$                
804
$            
965
$     
(82)
$                
883
$            
—
—
—
—
—
—
—
—
—
—

Fiscal Q3 2009 Earnings Results
17
Reconciliation of Non-GAAP
Adjusted Non-operating Income
US$ in millions
(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)
Three Months Ended
June 30, 2009
Three Months Ended
June 30, 2008
Actual
Adjustments
As Adjusted
Actual
Adjustments
As Adjusted
Equity in earnings of unconsolidated affiliates
—
$      
—
$             
—
$            
$    
$             
—
$            
Interest expense
(30)
9
(1)
(21)
(30)
11
(1)
(19)
Investment income, net
504
(3)
(2)
501
97
(33)
(2)
64
Other
1
—
1
(1)
1
(3)
Total other income
475
$     
6
$                  
481
$           
66
$     
(21)
$             
45
$             
—
—
—

Fiscal Q3 2009 Earnings Results
18
Adjusted Diluted Earnings per Share
Class A Common Stock
•
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.
•
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
weighted
average
number
of
diluted
class
A
shares
outstanding
in
the
periods
presented
(adjusted
in
the
prior
period
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.
Adjusted net income
$
744
$
457
Weighted average number of diluted
shares outstanding
756
779
Adjusted diluted earnings per share
$
0.98
$
0.59
June 30, 2009
June 30, 2008
(in millions, except per share data)
Three Months Ended 
Three Months Ended 

Fiscal Q3 2009 Earnings Results
19
Calculation of Free Cash Flow
US$ in millions
Additions (+) /
Reductions (-) to
Net income
Net income (as reported)
1,839
$              
Recurring Items:
+
Depreciation and amortization
165
-
Capital expenditures
(205)
Share-based Compensation
+
Share-based compensation
84
+
Litigation provision
1
+
Accretion expense
71
-
Settlement payments
(1,642)
+
Pension expense
43
-
Pension contribution
(8)
VisaNet
do Brasil
(1)
-
Gain on sale of investment, pre-tax
(473)
+
Income tax expense
1,299
-
Income taxes paid
(528)
Non-recurring Items
(2)
:
+
Settlement payments funded by litigation escrow
1,481
-
Tax benefit on settlement payments
(540)
+
Settlement payments funded by Morgan Stanley
49
Total Free Cash Flow
1,636
$              
Taxes
Covered Litigation
For the Nine
Months Ended
June 30, 2009
Capital Assets
Litigation
Pension
(1) In July 2009, Visa received total proceeds from the sale of its equity investment in VisaNet do Brasil of approximately $1 billion. Free cash flow
for the quarter ended September 30, 2009 will reflect receipt of these proceeds, as well as the payment of associated taxes estimated to be
approximately half this amount.
(2) Adjustments to eliminate the cash impact of non-recurring items.