Visa 2010 Annual Report Download - page 89

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2010
(in millions, except as noted)
members pursuant to Visa U.S.A.'s certificate of incorporation and bylaws and in accordance with their membership agreements.
In accordance with the escrow agreement, following the Company's IPO in fiscal 2008, the Company deposited $3.0 billion of the proceeds of the
offering in an escrow account, from which settlements of, or judgments in, the covered litigation are being paid. Under the terms of the plan, when the
Company funds the escrow account, the shares of class B common stock are subject to dilution through an adjustment to the conversion rate of the shares of
class B common stock to shares of class A common stock. The initial deposit reduced this conversion rate to 0.7143. The escrow funds are held in money
market investments along with the income earned, less applicable taxes, and are classified as restricted cash on the consolidated balance sheet. The amount of
the escrow funds classified as a non-current asset is equivalent to the actual, undiscounted amount of covered litigation payments expected to be made beyond
one year from the balance sheet date for settled claims. The amount of the escrow was determined by the litigation committee. The litigation committee was
established pursuant to the litigation management agreement among Visa Inc., Visa U.S.A., Visa International and the members of the litigation committee,
all of whom are affiliated with, or act for, certain Visa U.S.A. members.
In December 2008, the Company filed a Fifth Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware. The
amendment enabled the Company to, under certain conditions, deposit operating cash directly into the escrow account resulting in a further reduction in the
conversion rate applicable to the Company's class B common stock.
Subsequent to the initial funding, the Company made additional deposits of operating cash into the escrow account, which had the effect of the
Company repurchasing its common stock as follows:
Fiscal 2011 Fiscal 2010 Fiscal 2009
October
2010(1)
May
2010
July
2009
December
2008
(in millions except per share data and conversion rate)
Funding under the plan $ 800 $ 500 $ 700 $ 1,100
Repurchase price per share(2) $ 72.74 $ 74.22 $ 60.45 $ 52.88
Equivalent shares of class A common stock repurchased 11 7 12 21
Conversion rate after funding of class B common stock to class A common stock 0.5102 0.5550 0.5824 0.6296
As-converted class B common stock after funding 125 136 143 155
(1) On September 21, 2010, the Company announced it will deposit $800 million into the litigation escrow account. The funds were deposited into the
escrow account on October 8, 2010.
(2) Price per share calculated using the volume-weighted average price of the Company's class A common stock over a pricing period in accordance with
the Company's amended and restated certificate of incorporation.
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