In addition, some of the comments made on this call may refer to certain measures such as normalized and cash earnings for second quarter fiscal 2011 which are not in accordance with GAAP. Management believes these results more clearly reflect comparative operating performance.For a full reconciliation of normalized and cash earnings to GAAP results in accordance with Regulation G, please see our press release furnished as an exhibit to our Form 8-K dated January 6, 2011, which may be located under the Investor Relations area on our website at www.globalpaymentsinc.com. I’d like to introduce Paul Garcia. Paul? Paul Garcia Thank you, Jane, and Happy New Year, everyone. And thank you so much for joining us this afternoon. I am happy to report solid second quarter revenue and normalized earnings per share performance and as a result, we are modestly increasing our full year revenue and earnings estimates. In addition, we are pleased to announce the closing of our joint venture with la Caixa ahead of schedule. David will discuss our financial expectations with and without la Caixa and cash earnings in more detail in just a moment. Now for the highlights of the quarter and some recent events. I am delighted with our recent expansion into Spain with la Caixa. The largest retail bank in Spain and the largest merchant acquirer with over 20% market share and over 150,000 merchant outlets. While the Spanish economy has indeed been challenged of late, la Caixa’s financial stability has allowed the bank to successfully pursue its growth strategy during these turbulent times. On that note, both of our organizations are focused on expanding our market share and growing the merchant acquiring business through our new joint venture. This joint venture will be led by our own Darren Wilson, who leads our western European region which of course includes our U.K. business. As with our initial U.K. joint venture, we intend to leverage our sales strategies and add approximately 50 sales people over the next few quarters. When combined with la Caixa’s brand and 5000 plus branch footprint, we expect to drive significant market expansion and long-term growth.
Turning now to North America where we delivered solid revenue growth in the quarter with U.S. and Canadian transaction growth rates of 18% and 3%, respectively. During September we made a difficult decision to eliminate over 70 positions in Canada to match our investment levels to the near-term economic opportunity in that market. We continue to anticipate that our Canadian performance improves over the remainder of the year that we exit the fiscal year in a stable position.Our international segment produced another quarter of strong results with the U.K. and Russia both performing well in the quarter. Regarding the U.K., we continue to be on track to complete our backend migration by the end of February 2011. Our Asia-Pacific business delivered extraordinary results in the quarter with significant increases in revenue and operating income. These results were driven by good growth areas across the region and a very successful rollout of a new product by one of our major retailers. As we prepare for successful transition from the HSBC customer service facility in India that serves our U.K. business, we have begun to staff for customer service and operations in our Philippines Global Service Center or GSC. We are also transitioning other customer support services to the center from other regions over the remainder of the year. I will now turn the call over to David. David Mangum Thank you, Paul. I’ll review currency, operating performance and outlook, cash flow and cash earnings. During the second quarter on a year-over-year basis currency changes benefited revenue and normalized earnings by about $1 million and nearly $0.01 per share respectively. Our outlook for fiscal 2011 continues to assume that the U.S. dollar remains constant or slightly weakens against the Canadian dollar and remains constant or slightly strengthens against the British pound, Czech Koruna and the Russian Ruble. But we now believe the aggregate effect will likely be about neutral for us in 2011. Fluctuation in exchange rates of course may cause variances to our outlook.
North America merchant services revenue grew 9% for the quarter driven by U.S. merchant services revenue growth of 11%. U.S. results reflect continued strong growth from our ISO channel. Our expectation for low double-digit revenue growth from the U.S. in 2011 remains unchanged.Transactions in Canada grew 3% for the quarter. In local currency Canadian revenue was flat with the prior year. We continue to expect Canada’s local currency annual revenue to be about flat or to perhaps grow modestly when compared to prior year. Read the rest of this transcript for free on seekingalpha.com