Visa 2010 Annual Report Download - page 112

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2010
(in millions, except as noted)
class C common stock (or in the case of stockholders with fewer than 5,000 shares of class C common stock, all of their shares). Stockholder application was
not required. Under this program, 56 million shares of class C common stock were released from transfer restrictions. The release of these shares did not
increase the number of outstanding shares on an as-converted basis, and there was no dilutive effect to the outstanding class A common stock share count on
an as-converted basis from these transactions.
Of the 96 million shares of class C common stock released from transfer restrictions, 55 million shares have been converted from class C common stock
to class A common stock upon the sale or transfer by the holders of class C common stock into the public market through September 30, 2010.
At September 30, 2010, 55 million shares of class C common stock remain subject to the general transfer restrictions that expire on March 25, 2011
under Visa's amended and restated certificate of incorporation and will not be transferable or convert into class A common stock until such date. This transfer
restriction is subject to limited exceptions, including transfers to other holders of class C common stock. The Company's board of directors may make
additional exceptions to this transfer restriction. After termination of the restrictions, the class C common stock will convert into class A common stock if
transferred to a person that was not, immediately after the reorganization, a Visa member. In connection with such a transfer, each share of class C common
stock will automatically convert into a number of shares of class A common stock on a one-to-one basis, subject to adjustments for stock splits,
recapitalizations and similar transactions.
Share repurchase plan. In October 2009, the Company's board of directors authorized a $1.0 billion share repurchase plan that was to be in place
through September 30, 2010. During fiscal 2010, the Company repurchased approximately 12.9 million shares of its class A common stock at an average
price of $77.48 per share, using the entire $1.0 billion of authorized funds. Repurchased shares have been retired and constitute authorized but unissued
shares. In October 2010, the Company's board of directors authorized a second $1.0 billion share repurchase plan to be in place through September 30, 2011,
subject to extension or expansion at the determination of the Company's board of directors.
Special IPO Cash and Stock Dividends Received from Cost Method Investees. Several of the Company's cost method investees are also holders of class
C common stock and 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 common stock. As a result of the Company's ownership interest in these cost method investees, the Company recorded
approximately $1 million, $2 million and $29 million of special cash dividends received from these investees during fiscal 2010, 2009 and 2008, respectively.
In addition, the Company received 24,449 and 525,443 shares of its own class C common stock during fiscal 2009 and 2008, respectively, from similar cost
method investees and recorded $1 million and $35 million, respectively, as treasury stock. This treasury stock was retired in fiscal 2010 and 2009 and the
Company has no class C common treasury stock outstanding at September 30, 2010.
These special cash and stock dividends are recorded as an increase in additional paid-in capital, net of tax, and are not recorded as income in the
consolidated statements of operations as they represent the same redemption proceeds and shares issued by the Company as part of the reorganization. Any
value recorded upon their return would be the result of appreciation in the
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