Visa 2008 Annual Report Download - page 127

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2008
(in millions, except as noted)
The Company redeemed all outstanding shares of class C (series II) common stock in October 2008 at its redemption price of $1.136 billion, which
represents its stated redemption price of $1.146 billion reduced by the dividend declared in June 2008 and paid on these shares in August 2008 and the
extinguishment of the subscription receivable.
Fair Value and Accretion of Class C (Series II) Common Stock
At the time of the reorganization in October 2007, the Company determined the fair value of the class C (series II) common stock to be approximately
$1.104 billion. Prior to the IPO these shares were not redeemable. Completion of the Company's IPO triggered the redemption feature of this stock. As a
result, in accordance with Emerging Issues Task Force ("EITF") Topic D-98, "Classification and Measurement of Redeemable Securities," 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 or mezzanine level
equity on the Company's consolidated balance sheet with a corresponding reduction in additional paid-in-capital of $1.104 billion and accumulated income of
$21 million. Over the period 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.
The following table reflects activity related to the class C (series II) common stock from October 1, 2007 to September 30, 2008:
Fiscal 2008
(in millions)
Balance at October 1 recorded in stockholders' equity $ 1,104
Re-measure of fair value at IPO date 21
Accretion recorded from IPO date to September 30, 2008(1) 19
Dividend declared(2) (8)
Balance at September 30 in temporary equity $ 1,136
(1) Over the period from March 2008 to September 30, 2008, the Company recorded accretion of this stock to its redemption price through accumulated
income.
(2) In June 2008, the Company declared a dividend of $0.105 per share. The dividend paid to the class C (series II) common stock is treated as a reduction
in temporary equity as it reduces the redemption value of the class C (series II) common stock. See Note 16—Stockholders' Equity and Redeemable
Shares for further information regarding the dividend declaration.
October 2008 Redemptions of class C (series II) and class C (series III) common stock
As noted above, on October 10, 2008, the Company redeemed all of the outstanding shares of class C (series II) common stock at its redemption price
of $1.146 billion less dividends paid, or $1.136 billion.
Pursuant to the Company's fourth amended and restated certificate of incorporation, 35,263,585 shares of class C (series III) common stock were
required to be redeemed in October 2008 and therefore were classified as a current liability at September 30, 2008 on the Company's consolidated balance
sheet. On October 10, 2008, the Company used $1.508 billion of net proceeds from the IPO for the required redemption of 35,263,585 shares of class C
(series III) common stock at a redemption
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