Summary
Visa Inc. filed this Form 8-K on March 13, 2012, to provide investors with updated operational metrics ahead of anticipated discussions at the Credit Suisse Annual Global Services Conference. The report highlights strong performance in February 2012, particularly in payments volume and processed transactions. Key financial updates include the impact of California state tax law changes, which are expected to lower Visa's effective tax rate starting in the second fiscal quarter and allow for a retroactive catch-up adjustment. Investors can expect Visa to report a lower effective tax rate for the fiscal six months ending in the second quarter, aligning more closely with their annual guidance of 33-34% (adjusted rate excluding non-cash deferred tax liability revaluation). The GAAP effective tax rate for the second fiscal quarter is anticipated to be in the high teens. This filing provides timely insights into Visa's operational momentum and the favorable impact of tax reform on its financial reporting.
Key Highlights
- 1Visa provided February 2012 operational data, including payments volume and processed transactions, for investor discussions.
- 2U.S. aggregate payments volume grew 10% year-over-year in February 2012 (6% adjusted for leap day).
- 3U.S. credit payments volume increased by 15% (11% adjusted), while debit payments volume rose 7% (4% adjusted).
- 4February 2012 cross-border volume on a constant dollar basis saw robust growth of 20% (16% adjusted).
- 5Global processed transactions increased 11% year-over-year (8% adjusted for leap day).
- 6Final approval of California state tax law changes will result in a lower state tax rate for Visa starting in Q2 FY12.
- 7A one-time, non-cash adjustment to revalue deferred tax liabilities will be recorded in Q2 FY12, impacting the GAAP effective tax rate.