Visa 2008 Annual Report Download - page 110

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2008
(in millions, except as noted)
Prior to the reorganization, at September 30, 2007, Visa U.S.A. held a 69% ownership interest in its consolidated subsidiary, Inovant, and an estimated
26% membership interest in Visa International. The remaining 31% ownership interest in Inovant was held by Visa International, Visa Canada and Visa
Europe. The remaining estimated 74% membership interest in Visa International was held by the financial institution members of the unincorporated regions
(consisting of Visa AP, Visa LAC, and Visa CEMEA), Visa Europe and Visa Canada. The reorganization was accounted for using the purchase method of
accounting under the guidelines of Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations, ("SFAS 141") with Visa U.S.A.
deemed to be the accounting acquirer of Visa Canada and the remaining ownership interest in Visa International and Inovant not previously held (the
"acquired interests"). The net assets underlying the acquired interests were recorded at fair value at the reorganization date with the excess purchase price over
this value attributed to goodwill.
The results of operations of Visa International and Visa Canada have been included in the consolidated statements of operations of the Company
beginning October 1, 2007.
Initial Public Offering
In March 2008, the Company completed its initial public offering (the "IPO"), issuing 446,600,000 shares of class A common stock at an IPO price of
$44 per share. The Company closed the transaction on March 25, 2008. The Company received $19.1 billion in net proceeds from the offering which reflects
underwriting discounts and commissions of $1.23 per share. On March 28, 2008, the Company used $13.4 billion of the net proceeds to redeem 154,738,487
shares of class B common stock and 159,657,751 shares of class C (series I) common stock. Subsequent to the fiscal year-end, in October 2008, the Company
used $1.5 billion of the proceeds for the required redemption of 35,263,585 shares of class C (series III) common stock and $1.1 billion of the proceeds to
redeem all shares of class C (series II) common stock outstanding. See further discussion at Note 4—Visa Europe and Note 16—Stockholders' Equity and
Redeemable Shares. On March 31, 2008, as determined by the litigation committee and under the Retrospective Responsibility Plan, the Company deposited
$3.0 billion of the net IPO proceeds into an escrow account from which settlements of, or judgments in, the covered litigation will be payable resulting in the
reduction of the conversion ratio applicable to the remaining Class B common stock outstanding to 0.71 shares of Class A common stock to one share of class
B common stock. See Note 5—Retrospective Responsibility Plan.
The Company has one operating and reportable segment, "Payment Services." The Company's activities are interrelated and each activity is dependent
upon and supportive of the other. Accordingly all significant operating decisions are based on analysis of Visa Inc. as a single global business.
Note 2—Summary of Significant Accounting Policies
Basis of presentation—The accompanying audited consolidated financial statements include the accounts of Visa Inc. and its consolidated entities and
are presented in accordance with accounting principles generally accepted in the United States of America.
Consolidated balance sheet information at September 30, 2007 and consolidated income statement information for the year ended September 30, 2007
and 2006 is that of Visa U.S.A., the accounting acquirer in the reorganization, as further described in Note 3—The Reorganization and are also presented in
accordance with accounting principles generally accepted in the United States of America.
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