Visa 2011 Annual Report Download - page 116

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2011
(in millions, except as noted)
The following table presents basic and diluted earnings per share for fiscal 2009.
Basic Earnings Per Share Diluted Earnings Per Share
(in millions, except per share data)
Income
Allocation
(A)
Weighted
Average
Shares
Outstanding (B)
Earnings per
Share =
(A)/(B)(1)
Income
Allocation
(A)
Weighted
Average
Shares
Outstanding (B)
Earnings per
Share =
(A)/(B)(1)
Common Stock Redeemed October 10, 2008:
Class C (series II) and class C (series III)(5) $ 4 Not presented Not presented $ 4 Not presented Not presented
Common Stock:
Class A 1,397 451 3.10 2,350 759(2) 3.10
Class B 485(3) 245 1.98 485(3) 245 1.98
Class C 460 148 3.10 459 148 3.10
Participating securities(4) 7 Not presented Not presented 7 Not presented Not presented
Net income attributable to Visa Inc. $ 2,353
(1) Earnings per share calculated based on whole numbers, not rounded numbers.
(2) The computation of weighted-average dilutive shares outstanding included the effect of 3 million dilutive shares of outstanding stock awards for fiscal
2011, and 2 million for fiscal 2010 and 2009, respectively. The computation excluded stock options to purchase approximately $2 million, 3 million and
less than 1 million shares of common stock for fiscal 2011, 2010 and 2009, respectively, because their effect would have been anti-dilutive.
(3) Net income attributable to Visa Inc. is allocated to each class of common stock on an as-converted basis. The weighted average numbers of shares of as-
converted class B common stock used in the income allocation were 123 million, 141 million and 157 million for fiscal 2011, 2010 and 2009,
respectively.
(4) Participating securities are unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, such as the
Company's restricted stock awards, restricted stock units and earned performance-based shares.
(5) Net income attributable to Visa Inc. was allocated to the shares of redeemed common stock for the period during which they were outstanding.
Note 17—Share-based Compensation
The Company's 2007 Equity Incentive Compensation Plan, or the EIP, authorizes the compensation committee of the board of directors to grant non-
qualified stock options, or options, restricted stock awards, or RSAs, restricted stock units, or RSUs, and performance-based shares to its employees and non-
employee directors, for up to 59 million shares of class A common stock. Shares available for award may be either authorized and unissued or previously
issued shares subsequently acquired by the Company. The EIP will continue in effect until all of the common stock available under the EIP is delivered and
all restrictions on those shares have lapsed, unless the EIP is terminated earlier by the Company's board of directors. No awards may be granted under the plan
on or after 10 years from its effective date.
Share-based compensation expense is recorded net of estimated forfeitures on a straight-line basis for awards with service conditions only, and on a
graded-vesting basis for awards with service, performance and market conditions. The Company's estimated forfeiture rate is based on an evaluation of
historical, actual and trended forfeiture data. For fiscal 2011, 2010, and 2009, the Company recorded share-based compensation expense of $154 million,
$135 million and $115 million,
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