Visa 2009 Annual Report Download - page 80

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Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2009
(in millions, except as noted)
To value the shares issued on June 15, 2007 (the "measurement date"), the Company primarily relied upon the analysis of comparable companies with
similar industry, business model and financial profiles. This analysis considered a range of metrics including the forward multiples of revenue; earnings
before interest, depreciation and amortization; and net income of these comparable companies. Ultimately, the Company determined that the forward net
income multiple was the most appropriate measure to value the acquired regions and reflect anticipated changes in the Company's financial profile
prospectively. This multiple was applied to the corresponding forward net income of the acquired regions to calculate their value. The most comparable
company identified was MasterCard Inc. Therefore, the most significant input into this analysis was MasterCard's forward net income multiple of 27 times net
income at the measurement date.
Visa Inc. Common Stock Issued to Visa Europe
As part of the reorganization, Visa Europe received 62,762,788 shares of class C (series III and IV) common stock valued at $3.1 billion based on the
value of the class C (series I) common stock issued to the acquired regions. Visa Europe also received 27,904,464 shares of class C (series II) common stock
valued at $1.104 billion determined by discounting the redemption price of these shares using a risk-free rate of 4.9% over the period to October 2008, when
these shares were redeemed by the Company. Prior to the IPO, the Company issued Visa Europe an additional 51,844,393 class C (series II) common stock at
a price of $44 per share in exchange for a subscription receivable. The issuance and subscription receivable were recorded as offsetting entries in temporary
equity at September 30, 2008. Completion of the Company's IPO triggered the redemption feature of this stock and in March 2008, the Company reclassified
all outstanding shares of the class C (series II) common stock at its then fair value of $1.125 billion to temporary equity on the consolidated balance sheet with
a corresponding reduction in additional paid-in-capital of $1.104 billion and accumulated income of $21 million. From March 2008 to October 10, 2008, the
date these shares were redeemed, the Company recorded accretion of this stock to its redemption price through accumulated income.
Fair Value of Assets Acquired and Liabilities Assumed
Total purchase consideration has been allocated to the tangible and identifiable intangible assets and liabilities assumed underlying the acquired
interests based on their fair value on the reorganization date. The excess of purchase consideration over net assets assumed was recorded as goodwill. The
following table summarizes this allocation.
in millions
Tangible assets and liabilities
Current assets $ 1,733
Non-current assets 1,122
Current liabilities (1,194)
Non-current liabilities (4,426)
Intangible Assets 10,883
Goodwill 10,295
Net assets acquired $ 18,413
79