Visa 2010 Annual Report Download - page 110

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2010
(in millions, except as noted)
Revenue by geographic market is primarily based on the location of the issuing financial institution. Certain revenues, primarily international service
revenues, are shared by geographic locations based upon the location of the merchant involved in the transaction. Other than the U.S., Visa does not maintain
revenues by individual country. Revenues earned in the U.S. was approximately 58%, 58% and 59% of total operating revenues in fiscal 2010, 2009 and
2008, respectively.
A significant portion of Visa's operating revenues are concentrated among its largest clients. Loss of business from any of these clients could have an
adverse effect on the Company. Revenues from the Company's top five clients were approximately 30%, 32% and 26% of total operating revenues in fiscal
2010, 2009 and 2008, respectively. In fiscal 2009, one customer accounted for 10% of the Company's net operating revenues. The Company did not have any
customer that generated greater than 10% of its net operating revenues in fiscal 2010 or fiscal 2008. See Item 1A—Risk Factors.
Note 16—Stockholders' Equity
Reorganization, IPO and Redemptions. As part of the October 2007 reorganization and a subsequent true-up adjustment prior to the March 2008 IPO,
the Company issued different regional classes and series of common stock reflecting the different rights and obligations of the Visa financial institution
members and Visa Europe.
In the March 2008 IPO, the Company issued approximately 447 million shares of class A common stock at a net offering price of $42.77 (the IPO price
of $44.00 per share of class A common stock, less underwriting discounts and commissions of $1.23 per share). Of the net $19.1 billion IPO proceeds
received, $13.4 billion was used to partially redeem shares of class B and class C common stock and $3.0 billion was used to fund the litigation escrow
account as discussed below.
The IPO also triggered the redemption feature of certain series of class C common stock issued to Visa Europe. In March 2008, the Company
reclassified these shares and other redeemable shares, to temporary equity and liability, respectively. In October 2008, the Company redeemed these shares for
approximately $2.6 billion. Following the redemption and adoption of the Fifth Amended and Restated Certificate of Incorporation in December 2008, the
series designation related to the remaining shares of class C common stock was removed.
Class B Common Stock. The class B common stock is not convertible or transferable until the later of March 25, 2011 or the date on which all of the
covered litigation has been finally resolved, although the Company's board of directors may make exceptions to this transfer restriction after resolution of all
covered litigation. This transfer restriction is subject to limited exceptions, including transfers to other holders of class B common stock. After termination of
the restrictions, the class B common stock will be convertible into class A common stock if transferred to a person that was not a Visa member or similar
person or affiliate of a Visa member or similar person. Upon such transfer, each share of class B common stock will automatically convert into a number of
shares of class A common stock based upon the applicable conversion rate in effect at the time of such transfer.
Funding of the litigation escrow account. Immediately following the IPO in March 2008, the conversion rate applicable to class B common stock was
reduced to 0.7143 share of class A common stock for each share of class B common stock to reflect the initial deposit of $3.0 billion into the escrow
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