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Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2009
(in millions, except as noted)
Condensed Pro Forma Results of Operations
The following condensed Visa Inc. pro forma results of operations for fiscal 2007 have been prepared to give effect to the reorganization described
above assuming it occurred on October 1, 2006. The condensed pro forma results below are presented for illustrative purposes only and have been prepared
by applying adjustments to the historical consolidated statements of operations of Visa U.S.A., Visa International and Visa Canada for fiscal 2007.
(in millions except share and per share data) Fiscal 2007
Total operating revenues $ 5,193
Total operating expenses (6,309)
Operating loss (1,116)
Total other income 109
Loss before income taxes (1,007)
Income tax benefit (146)
Net loss $ (861)
Basic and diluted net loss per share $ (1.11)
Shares used in basic and diluted net loss per share 775,080,512
The condensed pro forma results presented above reflect the Company's continuing eligibility to claim the special deduction afforded to companies that
operate on a cooperative or mutual basis under California Revenue and Taxation Code §24405. Had ineligibility for the special deduction been reflected at
October 1, 2006 in the condensed pro forma results, pro forma income tax benefit would decrease and pro forma net loss would increase by approximately
$31 million.
Note 3—Visa Europe
Under the terms of the reorganization, Visa Europe exchanged its ownership interest in Visa International and Inovant for Visa Inc. common stock as
described in Note 2—The Reorganization, a put-call option agreement and a Framework Agreement, as described below.
Visa Europe Put Option Agreement
The Company granted Visa Europe a perpetual put option, which if exercised, will require Visa Inc. to purchase all of the outstanding shares of capital
stock of Visa Europe from its members. The put option became exercisable during fiscal 2009. The Company is required to purchase the shares of Visa
Europe no later than 285 days after exercise of the put option. The purchase price of the Visa Europe shares under the put option is based upon a formula that,
subject to certain adjustments, applies Visa Inc.'s forward price-to-earnings multiple (the "P/E ratio") at the time the option is exercised (as defined in the
option agreement) to Visa Europe's projected sustainable adjusted net operating income for the forward 12-month period ("adjusted sustainable income").
Visa Europe's adjusted sustainable income is calculated under the terms of the put option agreement and includes potentially material adjustments for cost
synergies and other negotiated items.
80