Visa 2008 Annual Report Download - page 156

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2008
(in millions, except as noted)
require the Company to redeem all class C (series II) common stock at any time after December 4, 2008. Therefore, in March 2008, the Company reclassified
all class C (series II) common stock at its then fair value of $1.125 billion to temporary equity on the Company's consolidated balance sheet with a
corresponding reduction in additional paid-in-capital of $1.104 billion and accumulated income (deficit) of $21 million. The Company accreted this stock to
its redemption price of $1.146 billion, adjusted for dividends and certain other adjustments, on a straight-line basis, from March 2008 to October 2008 through
accumulated income. See Note 4—Visa Europe for a roll-forward of the balance of class C (series II) common stock.
The following table sets forth the number of shares of common stock issued and outstanding by class at September 30, 2008 and the impact of the
October 2008 redemptions and subsequent conversion of the remaining outstanding shares of class C (series III and series IV) to class C (series I) shares and
the number of shares of common stock issued and outstanding after the October 2008 redemptions in total and on as converted basis:
Shares issued and outstanding
At
September 30,
2008
October 2008
Redemptions
Conversion
to class C
(series I)
Following
Immediate
Conversion
to class C
(series I)
As
Converted
Post October
2008
Redemptions
Class A common stock 447,746,261 — — 447,746,261 447,746,261
Class B common stock(1) 245,513,385 — — 245,513,385 175,367,482
Class C (series I) common stock 124,097,105 — 27,499,203 151,596,308 151,596,308
Class C (series II) common stock 79,748,857 (79,748,857) — — —
Class C (series III) common stock 62,213,201 (35,263,585) (26,949,616) — —
Class C (series IV) common stock 549,587 — (549,587) — —
Total shares issued and outstanding 959,868,396 (115,012,442) — 844,855,954 774,710,051
(1) All voting and dividend payment rights are based on the number of shares held multiplied by the applicable conversion rate in effect on the record date, as discussed below. Subsequent to
the IPO and as a result of the initial funding of the litigation escrow account, the conversion rate applicable to class B common stock was approximately 0.71 shares of class A common
stock for each share of class B common stock.
Special IPO Cash and Stock Dividends Received from Cost Method Investees, Net of Tax
Several of the Company's cost method investees are also holders of class C (series I) common stock and therefore participated in the initial share
redemption in March 2008. Certain of these investees elected to declare a special cash dividend to return to their owners on a pro rata basis, the proceeds
received as a result of the redemption of a portion of their class C (series I) common stock. The dividends represent the return of redemption proceeds. As a
result of the Company's ownership interest in these cost method investees, the Company received approximately $21 million of special dividends from these
investees during the third fiscal quarter and recorded a receivable of $8 million in prepaid and other assets on its consolidated balance sheet at September 30,
2008 for a dividend declared by these investees during the fourth fiscal quarter.
In addition, another investee elected to distribute its entire ownership in the Company's class C (series I) common stock through the distribution of these
shares to its investors on a pro rata basis. As a result, the Company received 525,443 shares of its own class C (series I) common stock during the fourth fiscal
quarter and recorded $35 million in treasury stock. The value of the treasury stock was calculated based on sales prices of other recent class C (series I) stock
transactions by other class C
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