EX-99.1 2 d247231dex991.htm PRESS RELEASE OF VISA INC. Press release of Visa Inc.

Exhibit 99.1

LOGO

 

 

Visa Inc. Posts Strong Fiscal Fourth Quarter and Full-Year 2011 Earnings Results and Increases Existing Share Repurchase Program by $1 Billion

 

 

 

 

GAAP quarterly net income of $880 million or $1.27 per diluted class A common share

 

 

Adjusted full-year 2011 net income of $3.5 billion or $4.99 per diluted class A common share excluding the revaluation of the Visa Europe put option

 

 

Full-year 2011 GAAP net income, inclusive of the revaluation of the Company’s Visa Europe put option, was $3.6 billion

 

 

The Company increases its share repurchase program by $1 billion and quarterly dividend payment by 47%

SAN FRANCISCO, CA, October 26, 2011 – Visa Inc. (NYSE: V) today announced financial results for the Company’s fiscal fourth quarter and full-year 2011. For the fourth quarter ending September 30, 2011, GAAP net income was $880 million, an increase of 14% over the prior year. GAAP diluted class A common stock earnings per share were $1.27 - an increase of 20% over the prior year on a GAAP basis, or an increase of 34% over the prior year on an adjusted basis (excluding the revaluation of the Company’s Visa Europe put option). The weighted-average number of diluted class A common shares outstanding was approximately 692 million.

GAAP net operating revenue in the fiscal fourth quarter of 2011 was $2.4 billion, an increase of 13% over the prior year and driven by strong contributions across all revenue categories. Currency fluctuations contributed 2 percentage points of growth towards quarterly net operating revenues.

On an adjusted basis (excluding the revaluation of the Company’s Visa Europe put option), net income for the full-year was $3.5 billion, an increase of 22% over the prior year. On an adjusted basis, diluted class A common stock earnings per share were $4.99, an increase of 28% over the prior year on an adjusted basis.

GAAP net income for the full-year was $3.6 billion, inclusive of the revaluation of the Company’s Visa Europe put option. Diluted class A common stock earnings per share were $5.16. The Company’s adjusted quarterly and full-year net income per class A common share outstanding are non-GAAP financial measures that are reconciled to their most directly comparable GAAP measures in the accompanying financial tables. The weighted-average number of diluted class A common shares outstanding was approximately 707 million.

 

1


GAAP net operating revenue for the full-year was $9.2 billion, an increase of 14% over the prior year and driven by double-digit revenue growth contributions from service, data processing and international transaction revenues. Currency fluctuations contributed 2 percentage points of growth towards full-year net operating revenues.

“Visa continues to deliver strong results, with fourth quarter and full year performance reflecting a business that is both resilient and flexible enough to adapt and flourish in a changing business environment,” said Joseph Saunders, Chairman and Chief Executive Officer of Visa Inc.

“Throughout the quarter and the year, we have been diligent in our efforts to grow our core business, while successfully unlocking new revenue opportunities through strategic investments, both in our core business and into innovations that will ensure our foundation for future growth remains strong. This foundation will allow us to effectively drive transactions, pursue global growth in new markets and provide our clients with innovative ways to provide safe electronic payments to their customers.”

Fiscal Fourth Quarter 2011 Financial Highlights:

Payments volume growth, on a constant dollar basis, for the three months ended June 30, 2011, on which fiscal fourth quarter service revenue is recognized, was a positive 14% over the prior year at $941 billion.

Payments volume growth, on a constant dollar basis, for the three months ended September 30, 2011, was a positive 13% over the prior year at $970 billion.

Cross border volume growth, on a constant dollar basis, was a positive 15% for the three months ended September 30, 2011.

Total processed transactions, which represent transactions processed by VisaNet, for the three months ended September 30, 2011, were 13 billion, a positive 9% increase over the prior year.

For the fiscal fourth quarter 2011, service revenues were $1.1 billion, an increase of 21% versus the prior year, and are recognized based on payments volume in the prior quarter. All other revenue categories are recognized based on current quarter activity. Data processing revenues rose 10% over the prior year to $925 million. International transaction revenues, which are driven by cross border payments volume, grew 23% over the prior year to $758 million. Other revenues, which include the Visa Europe licensing fee, were $171 million, a 3% increase over the prior year. Client incentives, which are a contra revenue item, were $576 million and represents 19.5% of gross revenues.

 

2


Total operating expenses on a GAAP basis were $1 billion for the quarter, a 2% increase over the prior year and included approximately $30 million in restructuring expenses.

Cash, cash equivalents, restricted cash, and available-for-sale investment securities were $6.9 billion at September 30, 2011.

Visa’s GAAP effective tax rate was 35% for the quarter ended September 30, 2011.

Fiscal Full-Year 2011 Financial Highlights:

For the fiscal full-year 2011, service revenues were $4.3 billion, an increase of 22% over the prior year. Data processing revenues rose 11% over the prior year to $3.5 billion. International transaction revenues, which are driven by cross border payments volume, grew 17% over the prior year to $2.7 billion. Other revenues, which include the Visa Europe licensing fee, were $655 million, an 8% decrease over the prior year. Client incentives, which are a contra revenue item, were $1.9 billion and represent 17% of gross revenues.

Total processed transactions, which represent transactions processed by VisaNet for the 12 months ended September 30, 2011, totaled 51 billion, a 12% increase over the prior year.

Total operating expenses on a GAAP basis were $3.7 billion for the full-year, a 7% increase over the prior year.

Visa’s GAAP effective tax rate was 36% for the twelve months ended September 30, 2011, excluding the revaluation of the Visa Europe put option.

Notable Events:

During the three months ended September 30, 2011, the Company repurchased approximately 5.2 million class A common shares, at an average price of $80.87 per share, for a total cost of $423 million.

As announced on October 19, 2011, the Board of Directors declared a quarterly dividend in the aggregate amount of $0.22 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis) payable on December 6, 2011, to all holders of record of the Company’s class A, class B and class C common stock as of November 18, 2011.

 

3


Today, the Company announces that its Board of Directors has authorized a $1 billion increase to its previously announced $1 billion share repurchase program. The authorization will be in place through July 20, 2012, and is subject to further change at the discretion of the Board.

Financial Outlook:

Visa Inc. affirms its financial outlook for the following metrics through 2012:

 

   

Annual net revenue growth: high single to low double digit range; and

 

   

Adjusted annual diluted class A common stock earnings per share growth: mid to high teens range.

Visa Inc. provides its financial outlook for the following metrics for 2012:

 

   

Client incentives as a percent of gross revenues: 17% to 18% range;

 

   

Marketing expenses: Under $1 billion;

 

   

Annual operating margin: About 60%;

 

   

Adjusted tax rate: 33% to 34% range*;

 

   

Capital expenditures $350 million to $400 million range; and

 

   

Annual free cash flow: Above $4 billion.

* Financial Outlook excludes impact of possible non-cash revaluation of deferred tax liabilities, which could decrease the GAAP tax rate to 30 to 31%. These deferred tax liabilities are primarily associated with indefinite-lived intangible assets recorded as part of Visa’s October 2007 reorganization.

Fiscal Fourth Quarter and Full-Year 2011 Earnings Results Conference Call Details:

Visa’s executive management team will host a live audio webcast beginning at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) today to discuss the financial results and business highlights.

All interested parties are invited to listen to the live webcast at http://investor.visa.com. A replay of the webcast will be available on the Visa Investor Relations website for 30 days.

Investor information, including supplemental financial information, is available on Visa Inc.’s Investor Relations website at http://investor.visa.com.

 

4


About Visa

Visa is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world’s most advanced processing networks—VisaNet—that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit www.corporate.visa.com.

Forward Looking Statements:

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by the terms “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “potential,” “project,” “should,” “will,” and similar references to the future. Examples of such forward-looking statements include, but are not limited to, statements we make about our earnings per share, cash flow, revenue, incentive payments, expenses, operating margin, tax rate and capital expenditures and the growth of those items.

By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are neither statements of historical fact nor guarantees of future performance and (iii) are subject to risks, uncertainties, assumptions and changes in circumstances that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements because of a variety of factors, including the following:

 

 

the impact of new laws, regulations and marketplace barriers, particularly the rules recently promulgated under the U.S. Wall Street Reform and Consumer Protection Act, including:

 

   

rules capping debit interchange rates;

 

   

rules expanding issuers’ and retailers’ choice among debit payment networks;

 

   

the spread of regulation of debit payments to credit and other product categories;

 

   

the spread of U.S. regulations to other countries; and

 

   

rules about consumer privacy and data use and security

 

 

developments in current or future disputes and our ability to absorb their impact, including interchange and tax;

 

 

macroeconomic factors, such as:

 

   

global economic, political, health and other conditions;

 

   

cross-border activity and currency exchange rates; and

 

   

material changes in our clients’ performance compared to our estimates;

 

 

industry developments, such as:

 

   

competitive pressure, particularly on client pricing;

 

   

rapid technological developments;

 

   

bank and merchant consolidation and their increased focus on payment card costs;

 

   

disintermediation from the payments value stream through new entrants, government actions or bilateral agreements; and

 

   

adverse changes in our relationships and reputation;

 

   

concentration of revenue;

 

 

system developments, such as:

 

   

disruption of our transaction processing systems or the inability to process transactions efficiently;

 

   

our clients’ failure to fund settlement obligations we have guaranteed;

 

   

disruption of our transaction processing systems or the inability to process transactions efficiently;

 

   

account data breaches or increased fraudulent or other illegal activities involving our cards;

 

   

issues arising at Visa Europe, including failure to maintain interoperability between our systems;

 

5


 

costs arising if Visa Europe were to exercise its right to require us to acquire all of its outstanding stock;

 

 

loss of organizational effectiveness or key employees;

 

 

failure to integrate successfully recent acquisitions or new technologies; and

 

 

changes in accounting principles or treatments; and

the other factors discussed under the heading “Risk Factors” herein. You should not place undue reliance on such statements. Unless required to do so by law, we do not intend to update or revise any forward-looking statement because of new information or future developments or otherwise.

Contacts:

Investor Relations: Jack Carsky or Victoria Hyde-Dunn, 415-932-2213, ir@visa.com

Media Relations: Will Valentine, 415-932-2564, globalmedia@visa.com

 

6


VISA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

     Three Months Ended
September  30,
    Twelve Months Ended
September  30,
 
     2011     2010     2011     2010  
     (in millions, except per share data)  

Operating Revenues

        

Service revenues

   $ 1,105      $ 912      $ 4,261      $ 3,497   

Data processing revenues

     925        840        3,478        3,125   

International transaction revenues

     758        619        2,674        2,290   

Other revenues

     171        167        655        713   

Client incentives

     (576     (421     (1,880     (1,560
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating revenues

     2,383        2,117        9,188        8,065   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Expenses

        

Personnel

     388        353        1,459        1,222   

Network and processing

     106        119        357        425   

Marketing

     239        233        870        964   

Professional fees

     115        108        337        286   

Depreciation and amortization

     77        78        288        265   

General and administrative

     95        117        414        359   

Litigation provision

     1        (4     7        (45
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     1,021        1,004        3,732        3,476   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     1,362        1,113        5,456        4,589   
  

 

 

   

 

 

   

 

 

   

 

 

 

Other Income (Expense)

        

Interest expense

     (13     (15     (32     (72

Investment income, net

     1        20        108        49   

Other

     4        77        124        72   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other (expense) income

     (8     82        200        49   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     1,354        1,195        5,656        4,638   

Income tax provision

     476        422        2,010        1,674   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income including non-controlling interest

     878        773        3,646        2,964   

Loss attributable to non-controlling interest

     2        1        4        2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Visa Inc.

   $ 880      $ 774      $ 3,650      $ 2,966   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

        

Class A common stock

   $ 1.28      $ 1.06      $ 5.18      $ 4.03   
  

 

 

   

 

 

   

 

 

   

 

 

 

Class B common stock

   $ 0.62      $ 0.59      $ 2.59      $ 2.31   
  

 

 

   

 

 

   

 

 

   

 

 

 

Class C common stock

   $ 1.28      $ 1.06      $ 5.18      $ 4.03   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic weighted-average shares outstanding

        

Class A common stock

     518        492        509        482   
  

 

 

   

 

 

   

 

 

   

 

 

 

Class B common stock

     245        245        245        245   
  

 

 

   

 

 

   

 

 

   

 

 

 

Class C common stock

     49        98        70        112   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

        

Class A common stock

   $ 1.27      $ 1.06      $ 5.16      $ 4.01   
  

 

 

   

 

 

   

 

 

   

 

 

 

Class B common stock

   $ 0.62      $ 0.59      $ 2.58      $ 2.30   
  

 

 

   

 

 

   

 

 

   

 

 

 

Class C common stock

   $ 1.27      $ 1.06      $ 5.16      $ 4.01   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted weighted-average shares outstanding

        

Class A common stock

     692        731        707        739   
  

 

 

   

 

 

   

 

 

   

 

 

 

Class B common stock

     245        245        245        245   
  

 

 

   

 

 

   

 

 

   

 

 

 

Class C common stock

     49        98        70        112   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

7


VISA INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

     September 30,
2011
    September 30,
2010
 
     (in millions, except par value data)  

Assets

    

Cash and cash equivalents

   $ 2,127      $ 3,867   

Restricted cash - litigation escrow

     2,857        1,866   

Investment securities

    

Trading

     57        60   

Available-for-sale

     1,214        124   

Settlement receivable

     412        402   

Accounts receivable

     560        476   

Customer collateral

     931        899   

Current portion of client incentives

     278        175   

Current portion of deferred tax assets

     489        623   

Prepaid expenses and other current assets

     265        242   
  

 

 

   

 

 

 

Total current assets

     9,190        8,734   

Restricted cash - litigation escrow

     —          70   

Investment securities, available-for-sale

     711        24   

Client incentives

     85        101   

Property, equipment and technology, net

     1,541        1,357   

Other assets

     129        197   

Intangible assets, net

     11,436        11,478   

Goodwill

     11,668        11,447   
  

 

 

   

 

 

 

Total assets

   $ 34,760      $ 33,408   
  

 

 

   

 

 

 

Liabilities

    

Accounts payable

   $ 169      $ 137   

Settlement payable

     449        406   

Customer collateral

     931        899   

Accrued compensation and benefits

     387        370   

Client incentives

     528        418   

Accrued liabilities

     562        625   

Current portion of long-term debt

     —          12   

Current portion of accrued litigation

     425        631   
  

 

 

   

 

 

 

Total current liabilities

     3,451        3,498   

Long-term debt

     —          32   

Accrued litigation

     —          66   

Deferred tax liabilities

     4,205        4,181   

Other liabilities

     667        617   
  

 

 

   

 

 

 

Total liabilities

     8,323        8,394   
  

 

 

   

 

 

 

Equity

    

Preferred stock, $0.0001 par value, 25 shares authorized and none issued

   $ —        $ —     

Class A common stock, $0.0001 par value, 2,001, 622 shares authorized, 520 and 493 shares issued and outstanding at September 30, 2011, and September 30, 2010, respectively

     —          —     

Class B common stock, $0.0001 par value, 622 shares authorized, 245 shares issued and outstanding at September 30, 2011 and September 30, 2010

     —          —     

Class C common stock, $0.0001 par value, 1,097 shares authorized, 47 and 97 shares issued and outstanding at September 30, 2011, and September 30, 2010, respectively

     —          —     

Additional paid-in capital

     19,907        20,794   

Accumulated income

     6,706        4,368   

Accumulated other comprehensive income (loss), net

    

Investment securities, available-for-sale

     —          3   

Defined benefit pension and other postretirement plans

     (186     (115

Derivative instruments classified as cash flow hedges

     18        (40

Foreign currency translation adjustments

     (8     1   
  

 

 

   

 

 

 

Total accumulated other comprehensive loss, net

     (176     (151
  

 

 

   

 

 

 

Total Visa Inc. stockholders’ equity

     26,437        25,011   

Non-controlling interest

     —          3   
  

 

 

   

 

 

 

Total equity

     26,437        25,014   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 34,760      $ 33,408   
  

 

 

   

 

 

 

 

8


VISA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

     For the Years Ended September 30,  
     2011     2010     2009  
     (in millions)  

Operating Activities

      

Net income including non-controlling interest

   $ 3,646      $ 2,964        2,352   

Adjustments to reconcile net income including non-controlling interest to net cash provided by (used in) operating activities:

      

Amortization of client incentives

     1,880        1,560        1,234   

Fair value adjustment for the Visa Europe put option

     (122     (79     —     

Share-based compensation

     154        131        115   

Excess tax benefit for share-based compensation

     (18     (14     (7

Depreciation and amortization of property, equipment and technology and intangible assets

     288        265        226   

Litigation provision and accretion

     18        (18     95   

Net recognized (gain) loss on investment securities, including other-than-temporary impairment

     (3     (21     5   

Net recognized gain on other investments, including other-than-temporary impairment

     (92     (3     (462

Deferred income taxes

     164        249        297   

Other

     (9     (8     (35

Change in operating assets and liabilities:

      

Trading securities

     3        (1     34   

Settlement receivable

     (4     203        526   

Accounts receivable

     (79     (7     (102

Client incentives

     (1,857     (1,386     (1,136

Other assets

     (1     (41     (109

Accounts payable

     29        (21     (3

Settlement payable

     36        (245     (461

Accrued compensation and benefits

     16        (26     (23

Accrued and other liabilities

     113        191        213   

Accrued litigation

     (290     (1,002     (2,201
  

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     3,872        2,691        558   
  

 

 

   

 

 

   

 

 

 

Investing Activities

      

Acquisitions, net of cash received of $22, $147 and $0, respectively

     (268     (1,805     —     

Purchases of property, equipment and technology

     (353     (241     (306

Proceeds from disposal of property, equipment and technology

     —          3        —     

Distributions from money market investment

     —          89        884   

Investment securities, available-for-sale:

      

Purchases

     (1,910     (11     (7

Proceeds from sales and maturities

     129        67        297   

Purchases of / contributions to other investments

     (13     (17     (48

Proceeds / distributions from other investments

     116        11        1,010   
  

 

 

   

 

 

   

 

 

 

Net cash (used in) provided by investing activities

     (2,299     (1,904     1,830   
  

 

 

   

 

 

   

 

 

 

Financing Activities

      

Repurchase of class A common stock

     (2,024     (1,000     —     

Dividends paid

     (423     (368     (318

Deposits into litigation escrow account - retrospective responsibility plan

     (1,200     (500     (1,800

Payment from litigation escrow account - retrospective responsibility plan

     280        280        2,028   

Cash proceeds from exercise of stock options

     99        56        32   

Excess tax benefit for share-based compensation

     18        14        7   

Principal payments on debt

     (44     (12     (50

Principal payments on capital lease obligations

     (10     (12     (4

Payment for redemption of stock

     —          —          (2,646
  

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (3,304     (1,542     (2,751
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (9     5        1   
  

 

 

   

 

 

   

 

 

 

Decrease in cash and cash equivalents

     (1,740     (750     (362

Cash and cash equivalents at beginning of year

     3,867        4,617        4,979   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of year

   $ 2,127      $ 3,867      $ 4,617   
  

 

 

   

 

 

   

 

 

 

Supplemental Disclosure of Cash Flow Information

      

Income taxes paid, net of refunds

   $ 1,731      $ 1,291      $ 1,172   

Amounts included in accounts payable and accrued and other liabilities related to purchases of property, equipment and technology

   $ 36      $ 31      $ 18   

Interest payments on debt

   $ 3      $ 4      $ 7   

Assets acquired in joint venture with note payable and equity interest issued

   $ —        $ —        $ 22   

 

9


VISA INC.

FISCAL 2010 AND 2011 QUARTERLY RESULTS OF OPERATIONS

US$ in millions

(UNAUDITED)

 

     Fiscal 2010
Quarter Ended
    Fiscal 2011 Quarter Ended  
     September 30,     December 31,     March 31,     June 30,     September 30,  
     2010     2010     2011     2011     2011  
     (in millions)  

Operating Revenues

          

Service revenues

   $ 912      $ 1,008      $ 1,093      $ 1,055      $ 1,105   

Data processing revenues (1)

     840        844        823        886        925   

International transaction revenues

     619        630        624        662        758   

Other revenues (2)

     167        161        156        167        171   

Client incentives

     (421     (405     (451     (448     (576
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating revenues

     2,117        2,238        2,245        2,322        2,383   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating Expenses

          

Personnel

     353        357        351        363        388   

Network and processing (1)

     119        80        80        91        106   

Marketing (2)

     233        197        183        251        239   

Professional fees

     108        61        77        84        115   

Depreciation and amortization

     78        67        70        74        77   

General and administrative

     117        110        95        114        95   

Litigation provision

     (4     —          6        —          1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     1,004        872        862        977        1,021   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (1) (2)

     1,113        1,366        1,383        1,345        1,362   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other Income (Expense)

          

Interest (expense) income

     (15     4        (12     (11     (13

Investment income, net

     20        10        9        88        1   

Other

     77        2        (3     121        4   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

     82        16        (6     198        (8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     1,195        1,382        1,377        1,543        1,354   

Income tax provision

     422        498        497        539        476   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income including non-controlling interest

     773        884        880        1004        878   

Loss attributable to non-controlling interest

     1        —          1        1        2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Visa Inc. (1)  (2)

   $ 774      $ 884      $ 881      $ 1,005      $ 880   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) 

As previously announced, beginning in the first quarter of fiscal 2011, the Company changed its presentation for non-Visa transactions pass-through revenues and expenses from a gross reporting to a net reporting basis. Previously, pass-through revenues were recorded in data processing and related expenses were recorded in network and processing. This change in presentation does not impact operating income or net income attributable to Visa Inc., as revenue and expense amounts completely offset. On a quarterly basis, related fiscal 2010 revenues and expenses were $38 million in Q4. This amount did not recur in fiscal 2011 as a result of this change in presentation.

 

(2) 

As previously announced, as a result of certain contractual changes relating to our Visa Extras rewards platform, certain fiscal 2010 revenues recorded in other revenues, and expenses recorded in marketing, did not recur in fiscal 2011. These changes do not impact operating income or net income attributable to Visa Inc., as revenue and expense amounts completely offset. On a quarterly basis, related fiscal 2010 revenues and expenses were $7 million in Q4.

 

10


Adjusted Net Income and Earnings Per Share

US$ in millions, except per share data

Management believes the presentation of adjusted net income and diluted earnings per share provides a clearer understanding of our operating performance for the periods. The revaluation of the Visa Europe put option during the third fiscal quarter resulted in non-cash, non-operating income during fiscal 2011. The reduction in the fair value of the put option was primarily the result of declines in our estimated long-term price-to-earnings ratio and does not reflect any change in the likelihood that Visa Europe will exercise its option. Management therefore believes that the resulting non-operating income is not indicative of Visa’s performance in the current or future periods.

 

     Fiscal Year 2011  

Net income attributable to Visa Inc. (as reported)

   $ 3,650   

Revaluation of Visa Europe Put option (1)

     (122
  

 

 

 

Adjusted net income attributable to Visa Inc.

   $ 3,528   

Weighted average number of diluted shares outstanding (as reported)

     707   

Adjusted diluted earnings per share

   $ 4.99   

Diluted earnings per share (as reported)

   $ 5.16   

Impact of revaluation of Visa Europe put option

   $ 0.17   

 

(1) 

Non-cash, non-operating income resulting from the revaluation of this financial instrument is not subject to tax.

 

11


LOGO

Operational Performance Data

The tables below provide information regarding the available operational results for the 3 months ended September 30, 2011, as well as the prior four quarterly reporting periods and the 12 months ended September 30, 2011 and 2010, for cards carrying the Visa, Visa Electron and Interlink brands. Also included is a table with information on the number of billable transactions processed on Visa Inc.’s CyberSource network.

1. Branded Volume and Transactions

The tables present total volume, payments volume, and cash volume, and the number of payments transactions, cash transactions, accounts and cards for cards carrying the Visa, Visa Electron and Interlink brands. Card counts include PLUS proprietary cards. Nominal and constant dollar growth rates over prior years are provided for volume-based data.

 

    For the 3 Months Ended September 30, 2011  
    Total
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
    Cash
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
 

All Visa Credit & Debit

                     

Asia Pacific

  $ 400        22.6     13.3   $ 271        27.6     16.8     2,866      $ 129        13.2     6.7     624   

Canada

    61        14.3     7.3     55        14.2     7.1     488        5        15.8     8.7     10   

CEMEA

    213        30.0     27.5     37        40.1     37.3     565        175        28.1     25.6     999   

LAC

    250        22.6     16.9     90        30.7     24.5     1,917        160        18.5     13.0     929   

US

    626        9.0     9.0     516        9.0     9.0     10,476        109        8.8     8.8     905   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

 

Visa Inc.

    1,549        17.3     13.6     970        16.9     13.2     16,313        579        17.9     14.1     3,467   

Visa Credit Programs

                     

US

  $ 241        11.0     11.0   $ 228        10.3     10.3     2,662      $ 13        26.4     26.4     18   

Rest of World

    420        24.1     15.3     369        24.8     15.7     4,210        51        19.6     13.0     181   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

 

Visa Inc.

    661        19.0     13.7     597        18.8     13.5     6,872        64        20.9     15.5     199   

Visa Debit Programs

                     

US

  $ 384        7.8     7.8   $ 288        8.1     8.1     7,814      $ 96        6.9     6.9     887   

Rest of World

    503        23.2     18.2     85        39.5     32.1     1,627        418        20.4     15.7     2,381   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

 

Visa Inc.

    888        16.0     13.4     373        13.9     12.7     9,441        515        17.6     13.9     3,268   

 

    For the 3 Months Ended June 30, 2011  
    Total
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
    Cash
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
    Accounts
(millions)
    Cards
(millions)
 

All Visa Credit & Debit

                         

Asia Pacific

  $ 379        22.7     13.2   $ 248        25.5     14.8     2,758      $ 131        17.6     10.4     599        495        588   

Canada

    60        13.6     7.7     55        14.0     8.0     473        5        9.9     4.2     10        25        34   

CEMEA

    204        32.3     27.0     35        41.6     35.5     532        170        30.5     25.4     992        230        232   

LAC

    244        31.8     22.9     85        37.1     27.7     1,817        159        29.1     20.5     912        365        398   

US

    623        9.9     9.9     518        10.3     10.3     10,410        106        8.1     8.1     902        498        651   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    1,511        19.1     14.7     941        17.3     13.5     15,990        570        22.2     16.8     3,415        1,614        1,903   

Visa Credit Programs

                         

US

  $ 234        9.4     9.4   $ 224        9.8     9.8     2,569      $ 11        2.0     2.0     17        199        258   

Rest of World

    400        25.0     15.7     348        25.3     15.8     4,042        52        22.6     15.3     179        448        509   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    634        18.8     13.3     572        18.8     13.4     6,610        62        18.5     12.8     196        647        766   

Visa Debit Programs

                         

US

  $ 389        10.3     10.3   $ 294        10.7     10.7     7,841      $ 95        8.9     8.9     885        300        393   

Rest of World

    488        27.8     20.5     75        36.6     27.3     1,538        413        26.3     19.4     2,334        667        744   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    877        19.4     15.8     369        15.2     13.7     9,379        508        22.6     17.3     3,219        967        1,137   

 

12


Operational Performance Data

 

 

    For the 3 Months Ended March 31, 2010  
    Total
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
    Cash
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
    Accounts
(millions)
    Cards
(millions)
 

All Visa Credit & Debit

                         

Asia Pacific

  $ 352        18.7     12.4   $ 230        18.5     11.8     2,629      $ 121        19.0     13.5     578        476        573   

Canada

    52        12.3     7.3     48        11.4     6.5     420        5        21.2     15.8     9        25        33   

CEMEA

    177        26.5     24.9     30        33.8     31.2     483        147        25.1     23.7     906        226        225   

LAC

    222        26.8     20.5     77        32.5     25.9     1,740        145        23.9     17.8     860        360        389   

US

    576        11.1     11.1     477        11.6     11.6     9,581        99        8.9     8.9     839        507        648   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    1,379        17.2     14.3     862        15.7     13.1     14,854        517        19.9     16.5     3,193        1,594        1,868   

Visa Credit Programs

                         

US

  $ 209        7.6     7.6   $ 199        9.1     9.1     2,284      $ 10        -16.4     -16.4     15        197        256   

Rest of World

    364        19.2     13.2     318        19.1     12.9     3,825        46        19.9     15.5     163        444        504   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    573        14.7     11.1     517        15.1     11.4     6,108        56        11.5     8.3     177        641        760   

Visa Debit Programs

                         

US

  $ 367        13.2     13.2   $ 278        13.4     13.4     7,298      $ 89        12.6     12.6     824        309        392   

Rest of World

    439        24.4     19.9     68        31.8     26.1     1,448        372        23.2     18.9     2,192        644        715   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    806        19.1     16.8     345        16.6     15.7     8,746        461        21.0     17.6     3,016        953        1,108   

 

    For the 3 Months Ended December 31, 2011  
    Total
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
    Cash
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
    Accounts
(millions)
    Cards
(millions)
 

All Visa Credit & Debit

                         

Asia Pacific

  $ 361        13.6     7.9   $ 240        21.9     15.3     2,767      $ 121        0.2     -4.1     591        473        571   

Canada

    58        12.1     7.6     53        11.3     6.8     467        5        22.8     17.9     9        25        33   

CEMEA

    184        25.6     26.6     30        32.8     31.5     478        154        24.3     25.7     955        219        222   

LAC

    233        21.4     19.0     81        26.0     25.8     1,822        151        19.1     15.6     914        358        387   

US

    592        11.5     11.5     493        12.5     12.5     9,999        99        7.0     7.0     852        529        685   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    1,428        15.3     13.3     898        16.6     14.5     15,533        530        13.2     11.3     3,321        1,604        1,898   

Visa Credit Programs

                         

US

  $ 226        5.4     5.4   $ 216        7.6     7.6     2,534      $ 10        -26.7     -26.7     16        205        267   

Rest of World

    381        20.1     15.2     334        19.8     14.7     4,008        48        22.6     18.7     167        442        503   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    608        14.2     11.3     550        14.7     11.8     6,542        58        9.5     6.9     183        647        770   

Visa Debit Programs

                         

US

  $ 365        15.7     15.7   $ 277        16.6     16.6     7,465      $ 88        13.1     13.1     835        324        419   

Rest of World

    454        16.5     14.1     71        33.3     30.0     1,526        384        13.8     11.6     2,302        633        709   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    820        16.1     14.8     348        19.6     19.1     8,991        472        13.7     11.9     3,138        957        1,127   

 

    For the 3 Months Ended September 30, 2010  
    Total
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
    Cash
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
    Accounts
(millions)
    Cards
(millions)
 

All Visa Credit & Debit

                         

Asia Pacific

  $ 326        16.2     11.6   $ 212        16.2     11.9     2,681      $ 114        16.2     10.9     595        467        556   

Canada

    53        10.4     7.4     49        10.2     7.2     450        5        12.0     8.9     9        24        32   

CEMEA

    164        22.1     23.2     27        26.4     27.6     418        137        21.3     22.4     860        208        212   

LAC

    204        22.4     20.1     69        24.0     23.8     1,634        135        21.6     18.4     873        356        385   

US

    574        12.3     12.3     474        13.5     13.5     9,760        100        7.0     7.0     876        501        668   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    1,321        15.8     14.3     830        15.1     13.8     14,943        491        16.9     15.1     3,213        1,557        1,852   

Visa Credit Programs

                         

US

  $ 217        3.3     3.3   $ 207        6.4     6.4     2,431      $ 10        -35.7     -35.7     17        208        269   

Rest of World

    338        14.6     11.4     295        14.5     11.3     3,835        43        15.3     11.7     157        439        501   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    555        9.9     8.2     503        11.0     9.3     6,266        53        0.1     -1.5     174        647        770   

Visa Debit Programs

                         

US

  $ 357        18.6     18.6   $ 266        19.7     19.7     7,329      $ 90        15.7     15.7     859        294        399   

Rest of World

    409        22.2     19.9     61        34.2     32.0     1,347        348        20.3     18.0     2,180        616        683   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    765        20.5     19.3     327        22.1     21.9     8,676        438        19.3     17.5     3,039        910        1,082   

 

13


Operational Performance Data

 

 

    For the 12 Months Ended September 30, 2011  
    Total
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
    Cash
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
 

All Visa Credit & Debit

                     

Asia Pacific

  $ 1,492        19.4     11.7   $ 990        23.5     14.7     11,021      $ 503        12.1     6.3     2,393   

Canada

    231        13.1     7.5     211        12.8     7.1     1,849        20        17.0     11.1     39   

CEMEA

    778        28.7     26.6     133        37.3     34.0     2,058        646        27.1     25.1     3,853   

LAC

    948        25.5     19.8     333        31.5     26.0     7,295        615        22.5     16.6     3,614   

US

    2,416        10.4     10.4     2,004        10.8     10.8     40,466        412        8.2     8.2     3,497   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

 

Visa Inc.

    5,866        17.2     14.0     3,670        16.6     13.6     62,689        2,196        18.3     14.6     13,395   

Visa Credit Programs

                     

US

  $ 911        8.4     8.4   $ 867        9.2     9.2     10,048      $ 43        -6.1     -6.1     65   

Rest of World

    1,565        22.2     14.9     1,368        22.3     14.8     16,084        197        21.2     15.5     690   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

 

Visa Inc.

    2,476        16.7     12.4     2,235        16.9     12.6     26,132        240        15.1     10.9     755   

Visa Debit Programs

                     

US

  $ 1,505        11.6     11.6   $ 1,137        12.0     12.0     30,418      $ 369        10.2     10.2     3,431   

Rest of World

    1,885        22.9     18.2     299        35.5     29.0     6,139        1,587        20.8     16.3     9,209   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

 

Visa Inc.

    3,391        17.6     15.1     1,435        16.2     15.2     36,557        1,956        18.7     15.1     12,640   

 

    For the 12 Months Ended September 30, 2010  
    Total
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Payments
Transactions
(millions)
    Cash
Volume
($ billions)
    Growth
(Nominal
USD)
    Growth
(Constant
USD)
    Cash
Transactions
(millions)
    Accounts
(millions)
    Cards
(millions)
 

All Visa Credit & Debit

                         

Asia Pacific

  $ 1,250        23.5     13.7   $ 801        22.2     12.0     10,262      $ 449        25.8     17.0     2,298        467        556   

Canada

    204        18.9     5.6     187        20.6     7.2     1,701        17        3.2     -8.9     36        24        32   

CEMEA

    605        21.5     19.2     97        28.4     23.3     1,522        508        20.3     18.4     3,277        208        212   

LAC

    755        28.2     16.4     253        31.0     20.7     6,106        502        26.9     14.4     3,414        356        385   

US

    2,189        10.0     10.0     1,809        11.8     11.8     36,601        381        2.3     2.3     3,250        501        668   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    5,004        17.4     12.8     3,147        16.7     12.6     56,191        1,857        18.8     13.1     12,273        1,557        1,852   

Visa Credit Programs

                         

US

  $ 840        -0.7     -0.7   $ 794        3.6     3.6     9,270      $ 46        -42.2     -42.2     69        208        269   

Rest of World

    1,281        20.1     10.2     1,118        21.0     10.9     14,584        162        14.3     5.2     590        439        501   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    2,121        10.9     5.8     1,912        13.1     7.9     23,854        209        -6.1     -10.5     659        647        770   

Visa Debit Programs

                         

US

  $ 1,349        18.0     18.0   $ 1,014        19.2     19.2     27,331      $ 335        14.5     14.5     3,180        294        399   

Rest of World

    1,534        27.3     19.3     220        41.4     29.4     5,007        1,314        25.2     17.7     8,433        616        683   
 

 

 

       

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

 

Visa Inc.

    2,883        22.8     18.7     1,235        22.6     21.0     32,337        1,648        22.9     17.1     11,614        910        1,082   

 

14


Operational Performance Data

 

 

Footnote

The preceding tables present regional total volume, payments volume and cash volume, and the number of payments transactions, cash transactions, accounts and cards for cards carrying the Visa, Visa Electron and Interlink brands. Card counts include PLUS proprietary cards. Nominal and constant dollar growth rates over prior years are provided for volume-based data.

Payments volume represents the aggregate dollar amount of purchases made with cards carrying the Visa, Visa Electron and Interlink brands for the relevant period; and cash volume represents the aggregate dollar amount of cash disbursements obtained with these cards for the relevant period and includes the impact of balance transfers and convenience checks; but excludes proprietary PLUS volume. Total volume represents payments volume plus cash volume.

Visa payment products are comprised of credit and debit programs, and data relating to each program is included in the tables. Debit programs include Visa’s signature based and Interlink (PIN) debit programs.

The data presented is reported quarterly by Visa’s members on their operating certificates and is subject to verification by Visa. On occasion, members may update previously submitted information.

Visa’s CEMEA region is comprised of countries in Central Europe, the Middle East and Africa. Effective with the 3 months ended September, 2009, Pakistan and Afghanistan were moved from the AP to CEMEA region. Several European Union countries in Central Europe, Israel and Turkey are not included in CEMEA. LAC is comprised of countries in Central and South America and the Caribbean. Rest of World includes Asia Pacific, Canada, CEMEA and LAC.

Information denominated in U.S. dollars is calculated by applying an established U.S. dollar/local currency exchange rate for each local currency in which Visa Inc. volumes are reported (“Nominal USD”). These exchange rates are calculated on a quarterly basis using the established exchange rate for each quarter. To eliminate the impact of foreign currency fluctuations against the U.S. dollar in measuring performance, Visa Inc. also reports year-over-year growth in total volume, payments volume and cash volume on the basis of local currency information (“Constant USD”). This presentation represents Visa’s historical methodology which may be subject to review and refinement.

 

15


Operational Performance Data

 

 

2. Cross Border Volume

The table below represents cross border volume growth for cards carrying the Visa, Visa Electron, Interlink and PLUS brands. Cross border volume refers to payments and cash volume where the issuing country is different from the merchant country.

 

Period

   Growth
(Nominal
USD)
    Growth
(Constant
USD)
 

3 Months Ended

    

Sep 30, 2011

     19     15

Jun 30, 2011

     20     14

Mar 31, 2011

     16     13

Dec 31, 2010

     16     15

Sep 30, 2010

     17     16

12 Months Ended

    

Sep 30, 2011

     18     14

Sep 30, 2010

     16     12

3. Visa Processed Transactions

The table below represents transactions involving Visa, Visa Electron, Interlink and PLUS cards processed on Visa’s networks. CyberSource transactions are not included in this table, and are reported in the next section.

 

Period

   Processed
Transactions
(millions)
     Growth  

3 Months Ended

     

Sep 30, 2011

     13,263         9

Jun 30, 2011

     13,038         11

Mar 31, 2011

     12,040         13

Dec 31, 2010

     12,580         15

Sep 30, 2010

     12,119         16

12 Months Ended

     

Sep 30, 2011

     50,922         12

Sep 30, 2010

     45,411         14

 

16


Operational Performance Data

 

 

4. CyberSource Transactions

The table below represents billable transactions processed on Visa Inc.’s CyberSource network.

 

Period

   Billable
Transactions
(millions)
     Growth  

3 Months Ended

     

Sep 30, 2011

     1,088         31

Jun 30, 2011

     1,045         38

Mar 31, 2011

     1,018         38

Dec 31, 2010

     987         40

Sep 30, 2010

     829         36

12 Months Ended

     

Sep 30, 2011

     4,137         36

Sep 30, 2010

     3,032         32

 

17