EX-99.2 3 dex992.htm PRESENTATION OF VISA INC. Presentation of Visa Inc.
Visa Inc.
Fiscal Third Quarter 2008
Financial Results
July 30, 2008
Exhibit 99.2

2
Fiscal Q3 2008 Earnings Results
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 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 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
Fiscal Q3 2008 Earnings Results
3
Solid Fiscal Third Quarter Results
•
Adjusted quarterly net income of $457 million or adjusted diluted
earnings of $0.59 per share
•
Strong operating revenues of $1.6 billion, up 18% yearly on a  
pro forma basis
•
Continued positive secular trends
•
Business model resilience despite economic slowdown
Note: See appendix for reconciliation of adjusted non-GAAP measures to the closest comparable GAAP measures.

4
Fiscal Q3 2008 Earnings Results
$548
$357
$190
$652
$228
$424
Visa Inc.
Credit
Debit
2007
2008
Quarter ended March
US$ in billions, nominal
YOY Growth
Payments Volume
19%
19%
20%
Note: Figures may not sum due to rounding.
ROW
ROW
$201
$229
U.S.
$347
U.S.
$388
U.S.
ROW
U.S.
U.S.
$264
$181
$177
ROW
U.S.
$195
$166
ROW
ROW
$24
$193
$35
Total

5
Fiscal Q3 2008 Earnings Results
Quarter ended March
US$ in billions, nominal
12%
27%
48%
31%
40%
YOY Growth
Payments Volume
$347
$126
$31
$31
$12
$159
$46
$41
$17
$388
United States
Asia Pacific (AP)
Latin America and
Caribbean (LAC)
Canada
Central and
Eastern Europe,
Middle East and
Africa (CEMEA)
2007
2008

6
Fiscal Q3 2008 Earnings Results
11,478
7,645
8,411
8,800
9,473
13,146
Total Transactions
Processed Transactions
Processed Transactions
2007
2008
Quarter ended March
in millions
YOY Growth
Transactions
15%
15%
13%
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
61%
39%

7
Fiscal Q3 2008 Earnings Results
716
710
1,426
815
1,629
814
Credit
Debit
Visa Inc.
2007
2008
Quarter ended March
in millions
YOY Growth
Total Cards
14%
15%
14%

8
Fiscal Q3 2008 Earnings Results
$1,540
($175)
$1,365
($274)
$1,887
$1,613
Q3 FY 2007 Pro Forma
Q3 FY 2008 Actual
Revenue Detail
US$ in millions
Gross
Revenues
Incentives
Net Operating
Revenues
23%
57%
18%
YOY Growth

9
Fiscal Q3 2008 Earnings Results
$661
$449
$311
$119
$539
$749
$449
$150
Q3 FY 2007 Pro Forma
Q3 FY 2008 Actual
Revenue Detail
US$ in millions
Service Fees
Data
Processing
Fees
International
Transaction
Fees
Other
Revenue
YOY Growth
13%
20%                          44%
26%

10
Fiscal Q3 2008 Earnings Results
$1,365
$852
$513
$883
$1,613
$730
Net Operating
Revenues
Total Operating
Expenses
Operating Income
Adjusted Operating Margin
US$ in millions
YOY Growth
7 ppts
18%                      4%
42%
38%
45%
Operating Margin
Q3 FY 2007 Pro Forma
Q3 FY 2008 Actual

11
Fiscal Q3 2008 Earnings Results
$293
$87
$244
$82
$108
$852
$38
$85
$84
$296
$271
$107
$40
$883
Q3 FY 2007 Pro Forma
Q3 FY 2008  Actual
Adjusted Operating Expenses
US$ in millions
Personnel
Network,
EDP &
Communications
Advertising,
Marketing &
Promotion
Professional
and
Consulting
Fees
Depreciation
and
Amortization
Administrative
and Other
Total
Operating
Expenses
1%         (3%)           11%           (1%)           5%      
4%            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.
YOY
Growth

12
Fiscal Q3 2008 Earnings Results
Other Financial Results
•
Capital expenditures during the fiscal third quarter were $86
million and over half are attributable to the build-out of our new
data center
•
Cash, cash equivalents, restricted cash and investment
securities available-for-sale of $8.4 billion during the fiscal third
quarter
–
$2.0 billion of restricted cash for litigation escrow
–
$2.7 billion for October redemption of European Class         
C shares

13
Fiscal Q3 2008 Earnings Results
11-15%
13
Annual net revenue growth
Financial Metrics through Fiscal Year 2010
Annual adjusted operating margin
Annual free cash flow (cash flow from
operations plus cash reimbursements from
litigation escrow less capital spending)
Annual adjusted diluted class A common
earnings per share growth
Mid-to-High
40% Range
20% +
$1 billion
+

Appendix –
Reconciliation of Non-GAAP
Measures

15
Fiscal Q3 2008 Earnings Results
15
Pro Forma Quarterly Results of Operations
(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.”
(2)
Certain immaterial reclassifications were made to the quarter ended June 30 and September 30, 2007 pro forma financial statements to conform to the
current presentation.
US$ in millions
December 31,
2006
March 31,
2007
June 30,
2007
(2)
September 30,
2007
(2)
Operating Revenues
Service fees
577
$                 
614
$                 
661
$                 
730
$                 
Data processing fees
377
                    
370
                    
449
                    
463
                    
Volume and support incentives
(136)
                   
(187)
                   
(175)
                   
(216)
                   
International transaction fees
247
                    
281
                    
311
                    
354
                    
Other revenues
108
                    
113
                    
119
                    
133
                    
           Total operating revenues
1,173
                
1,191
                
1,365
                
1,464
                
Operating Expenses
Personnel
273
                    
269
                    
293
                    
324
                    
Network, EDP and communications
68
                      
69
                      
87
                      
84
                      
Advertising, marketing and promotion
205
                    
182
                    
244
                    
444
                    
Professional and consulting fees
101
                    
136
                    
159
                    
156
                    
Depreciation and amortization
55
                      
54
                      
55
                      
64
                      
Administrative and other
76
                      
74
                      
83
                      
101
                    
Litigation provision
2
                        
13
                      
-
2,638
                
          Total operating expenses
780
                    
797
                    
921
                    
3,811
                
Operating income (loss)
393
                    
394
                    
444
                    
(2,347)
               
Other Income (Expense)
Interest expense
(23)
                     
(24)
                     
(25)
                     
(24)
                     
Investment income, net
40
                      
36
                      
56
                      
65
                      
Other
-
-
8
                        
-
         Total other income
17
                      
12
                      
39
                      
41
                      
Income (loss) before income taxes
410
                    
406
                    
483
                    
(2,306)
               
Income tax expense/(benefit)
161
                    
160
                    
184
                    
(651)
                   
Net income (loss)
249
$                 
246
$                 
299
$                 
(1,655)
$             
Fiscal 2007 Quarter Ended
(1)

16
Fiscal Q3 2008 Earnings Results
16
(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.“
(2)
Certain immaterial reclassifications were made to the three and nine months ended June 30, 2007 pro forma financial statements to conform to the current
presentation.
Pro
Forma
Results
of
Operations
(1)(2)
US$ in millions
Operating Revenues
Service fees
661
$              
1,852
$        
Data processing fees
449
1,196
Volume and support incentives
(175)
(498)
International transaction fees
311
839
Other revenues
119
340
Total operating revenues
1,365
3,729
299
$              
794
$           
For the Nine
Months Ended
June 30, 2007
For the Three
Months Ended
June 30, 2007
Operating Expenses
Personnel
293
835
Network, EDP, and communications
87
224
Advertising, marketing, and promotion
244
631
Professional and consulting fees
159
396
Depreciation and amortization
55
164
Administrative and other
83
233
Litigation provision
-
15
Total operating expenses
921
2,498
Operating income
444
1,231
Other Income (Expense)
Interest expense
(25)
(72)
Investment income, net
56
132
Other
8
8
Total other income
39
68
Income before income taxes
483
1,299
Income tax expense
184
505
Net income

17

18
Fiscal Q3 2008 Earnings Results
18
Weighted Avg. Class A Common Stock Outstanding
Used in the Calculation of Adjusted Diluted EPS
(1)
For the three months ended March 31, 2008 and nine months ended June 30, 2008, 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 January 1, 2008 for the three months ended March 31, 2008 and October 1, 2007 for the nine
months ended June 30, 2008.
(2)      For
the
three
months
ended
March
31,
2008
and
nine
months
ended
June
30,
2008,
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 January 1, 2008 for the three months ended March 31, 2008 and October 1, 2007 for the nine months ended
June 30, 2008.
(3)      For
the
three
months
ended
March
31,
2008
and
nine
months
ended
June
30,
2008,
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 January 1, 2008 for the three months ended March 31, 2008 and October 1, 2007 for the nine months ended June 30, 2008.
(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
and
during
the
three
months
ended
June
30, 2008, by applying the treasury stock method. For the three months ended March 31, 2008 and nine months ended June 30, 2008, in the calculation of
adjusted weighted
shares
outstanding,
these
shares
are
assumed
to
have
been
issued
at
October
1,
2007
and
were
outstanding
for
the
entire
period.
The
share adjustments also reflect the estimated number of stock options, restricted stock and restricted stock units estimated to be outstanding in October 2008 after
the redemption of
the
class
C
(series
II
and
series
III)
common
shares
held
by
Visa
Europe.
For the Three
Months Ended 
For the Nine
Months Ended 
For the three
Months Ended 
June 30, 2008
June 30, 2008
March 31, 2008
Weighted Average Shares Outstanding -
GAAP
776
767
778
Class A Shares
(1)
-
277
383
Class B Shares
(2)
-
(159)
(226)
Class C Shares
(3)
-
(109)
(161)
Class A Share Equivalents
(4)
3
3
5
3
12
1
Adjusted Weighted Average Shares Outstanding -
Non GAAP
779
779
779
Share Adjustments
(in millions)

19
Fiscal Q3 2008 Earnings Results
19
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 and a $31
million after-tax charge taken in the third quarter related to non-recurring legacy litigation items that will not 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 redeemable class C (series III) common stock is classified as
a
liability on the
Company's
consolidated
balance
sheet
at
June
30,
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.
For the Three
Months Ended 
For the Nine
Months Ended 
For the Three
Months Ended 
June 30, 2008
June 30, 2008
March 31, 2008
Adjusted net income
457
$                     
1,301
$                   
401
$                   
Adjusted weighted average number of diluted shares outstanding
779
                       
779
                       
779
                    
Adjusted diluted earnings per share
0.59
$                    
1.67
$                    
0.52
$                  
(in millions, except per share data)