Visa posts strong fiscal fourth quarter and full-year 2011 earnings results

Visa 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.

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.

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.