Visa 2008 Annual Report Download - page 159

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2008
(in millions, except as noted)
Calculation of Basic Earnings Per Share
Under the provisions of SFAS 128, basic net income per share is computed for each class and series of common stock outstanding during the period by
dividing net income available to each class and series by the weighted average number of common shares outstanding during the period.
Earnings Allocation to Each Class and Series of Common Stock
Prior to the IPO, each class and series of common stock was legally entitled to pro rata per share distributions whether through dividends or upon
liquidation. As a result, net income was allocated to each class and series of common stock for this period based on each class' proportionate ownership.
Following the Company's IPO, net income is ascribed to each class and series of common stock as follows:
• Class C (series II)—After the IPO, income attributable to this class of common stock is limited to accretion recorded on the carrying value of
these securities through redemption of these shares on October 10, 2008 at the contractual redemption value of $1.146 billion, adjusted for
dividends and certain other adjustments. See Note 4—Visa Europe for additional information regarding class C (series II) shares.
• Class C (series III) redemption shares—Upon the IPO, 35,263,585 class C (series III) redemption shares are classified as a liability on the
Company's consolidated balance sheet. While legally outstanding, these shares continue to participate on an as-converted basis in any
distributions of the Company. Under the guidelines of SFAS 128, net income, after the allocation of accretion to the class C (series II) common
stock, is attributed to the class C (series III) redemption shares based on its proportionate ownership until redemption in October 2008. This
allocation reduces the net income attributable to all other classes and series of common stock.
• All Remaining Classes and Series of Common Stock—As described above, net income is ascribed to the remaining classes and series of common
stock, including the class C (series III) redemption shares, after accretion has been allocated to the class C (series II) common stock. Net income
is allocated to these classes and series of common stock proportionately on an as-converted basis, which assumes the conversion of all classes
and series of common stock into class A common stock. Income available to each class and series of common stock is allocated based on the
proportionate ownership of each during the periods presented.
Weighted Average Number of Shares Outstanding
During the year ended September 30, 2008, the weighted average number of shares of each class and series of common stock outstanding reflects
changes in ownership over the period as follows:
• October 1, 2007 through March 16, 2008: Ownership reflects the regional classes and series of common stock issued in the reorganization
effective October 1, 2007. See Note 3—The Reorganization.
• March 17, 2008 through March 18, 2008: Ownership reflects the conversion of each regional class and series of common stock to various series
of class C common stock, except in the case of class USA regional common stock which was converted into class B common stock,
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