Visa 2012 Annual Report Download - page 38

Table of Contents
Reduction in as-converted shares. During fiscal 2012 , total as-converted class A common stock was reduced by 22.8 million
shares, using $2.4 billion of operating cash on hand. Of the $2.4 billion, $710 million
was used to repurchase class A common stock
in the open market. In addition, we made deposits totaling $1.7 billion
of operating cash into the litigation escrow account previously
established under the retrospective responsibility plan. These deposits have the same economic effect on earnings per share as
repurchasing our class A common stock, because they reduce the class B conversion rate and consequently the as-converted
class A common stock share count.
In July 2012 , our board of directors authorized a $1 billion share repurchase program to be in effect through July 2013 . As of
September 30, 2012, the program had remaining authorized funds of $865 million . In October 2012 , our board of directors
authorized an additional $1.5 billion share repurchase program to be in effect through October 2013 . All share repurchase
programs authorized prior to July 2012 have been completed.
Nominal payments volume and transaction counts. Payments volume is the primary driver for our service revenues, and
processed transactions are the primary driver for our data processing revenues. Compared to the prior year, overall payments
volume increased as a result of continuing double-digit percentage growth in consumer credit and commercial payments volume
worldwide. These increases were moderated by an anticipated deceleration in consumer debit growth, primarily due to the impacts
of the Dodd-Frank Act. Excluding U.S. debit transactions, which reflect the impacts of the Dodd-
Frank Act, the number of processed
transactions continues to increase at a healthy rate, reflecting the continuing worldwide shift to electronic currency.
The following tables set forth nominal payments volume for the periods presented in nominal dollars
(1)
.
36
Fiscal 2012
Fiscal 2011
(in millions, except margin ratio and per share data)
Operating
Expenses
Operating
Margin
(1)
Net Income
Attributable
to Visa Inc.
Diluted
Earnings Per
Share
(2)
Operating
Expenses
Operating
Margin
(1)
Net Income
Attributable
to Visa Inc.
Diluted
Earnings Per
Share
(2)
As reported
$
8,282
21
%
$
2,144
$
3.16
$
3,732
59
%
$
3,650
$
5.16
Reversal of tax
reserves —
— (
326
)
(0.48
)
— — —
—
Litigation
provision
(4,098
)
39
%
2,593
3.82
— — —
—
Impact of
deferred tax
adjustment —
— (
208
)
(0.31
)
— — —
—
Revaluation of
Visa Europe put
option —
— —
—
— — (
122
)
(0.17
)
Adjusted
$
4,184
60
%
$
4,203
$
6.20
$
3,732
59
%
$
3,528
$
4.99
Diluted weighted-
average shares
outstanding (as
reported)
678
707
(1)
Operating margin is calculated as operating income divided by total operating revenues.
(2)
Figures in the table may not recalculate exactly due to rounding. Diluted earnings per share figures are calculated based on
whole numbers, not the rounded numbers presented.