Stockholders' Equity

12 Months Ended

Sep. 30, 2011

Stockholders' Equity

Note 15—Stockholders’ Equity

The number of shares of each class and the number of shares of class A common stock outstanding on an as-converted basis at September 30, 2011, are as follows:

(in millions except conversion rate)	Shares Outstanding at September 30, 2011		Conversion Rate Into Class A Common Stock		Class A Common Stock As Converted(1)
Class A common stock		520		—		520
Class B common stock		245		0.4881		120
Class C common stock		47		1.0000		47
Total						687

⁽¹⁾  Figures may not sum due to rounding. As-converted class A common stock count is calculated based on whole numbers.

Share repurchases. The Company effectively repurchased 43.0 million shares, at an average price of $74.94 per share, for a total cost of $3.2 billion during fiscal 2011. Of the $3.2 billion, $2.0 billion was executed through the repurchase of class A common stock in the open market, and $1.2 billion was effectively executed through two separate deposits into the litigation escrow account previously established under the retrospective responsibility plan.

The following table presents share repurchases in the open market during the following fiscal years:

	2011		2010
	(in millions, except per share data)
Shares repurchased in the open market		26.6		12.9
Weighted-average repurchase price per share	$	76.08	$	77.48
Total cost	$	2,024	$	1,000

During fiscal 2011 and 2010, the Company completed three share repurchase programs previously authorized by the board of directors in April, 2011, October, 2010 and October, 2009, for an aggregate of $2.6 billion. All repurchased shares have been retired and constitute authorized but unissued shares. The Company made no share repurchases in the open market during fiscal 2009.

In July, 2011, the Company’s board of directors authorized a new $1 billion share repurchase program. The authorization will be in effect through July 20, 2012, and the terms of the program are subject to change at the discretion of the board of directors. At September 30, 2011, the July share repurchase program had remaining authorized funds of $577 million. In October, 2011, the Company announced that its board of directors authorized a $1 billion increase to the existing share repurchase program, subject to the same terms of the July authorization.

During fiscal 2011 and 2010, the Company made deposits of $400 million, $800 million and $500 million into the litigation escrow account on March 31, 2011, October 8, 2010 and May 28, 2010, respectively. Under the terms of the retrospective responsibility plan, when the Company makes deposits into 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. This has the same effect on earnings per share as repurchasing the Company’s class A common stock, by reducing the as-converted class B common stock share count as shown in the table below.

	Fiscal 2011				Fiscal 2010
	March 2011		October 2010		May 2010
	(in millions except per share data and conversion rate)
Deposits under the retrospective responsibility plan	$	400	$	800	$	500
Effective price per share(1)	$	73.81	$	72.74	$	74.22
Equivalent shares of class A common stock repurchased		5.4		11.0		6.7
Conversion rate of class B common stock to class A common stock after deposits		0.4881		0.5102		0.5550
As-converted class B common stock after deposits		120		125		136

⁽¹⁾  Effective 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.

Class B Common Stock. The class B common stock is not convertible or transferable until 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.

Adjustment of the conversion rate occurs upon: (i) the completion of any follow-on offering of class A common stock completed to increase the size of the escrow account (or any cash deposit by the Company in lieu thereof) resulting in a further corresponding decrease in the conversion rate; or (ii) the final resolution of the covered litigation and the release of funds remaining on deposit in the escrow account to the Company resulting in a corresponding increase in the conversion rate.

Accelerated Class C Share Release Programs. The Company’s board of directors approved three separate accelerated class C share release programs in fiscal 2011, 2010 and 2009, in which holders of class C common stock were permitted to liquidate their class C common stock, subject to certain terms and conditions. Under these programs, 55 million, 56 million and 40 million shares of class C common stock were released from transfer restrictions during fiscal 2011, 2010 and 2009, respectively. As of September 30, 2011, all of the shares of class C common stock have been released from transfer restrictions, and 104 million shares have been converted from class C to class A common stock upon their sale into the public market.

Preferred Stock. Preferred stock may be issued as redeemable or non-redeemable, and it has preference over any class of common stock with respect to the payment of dividends and distribution of the Company’s assets in the event of a liquidation or dissolution. The Company had no shares of preferred stock outstanding during and at the end of fiscal 2011, 2010 and 2009.

Voting Rights. The holders of class A common stock have the right to vote on all matters on which stockholders generally are entitled to vote. All holders of class B and class C common stock have no right to vote on any matters, except for certain defined matters, including any consolidation, merger, combination or any decision to exit the core payments business, in which case the holders of class B and class C common stock are entitled to cast a number of votes equal to the number of shares of class B or class C common stock held multiplied by the applicable conversion rate in effect on the record date.

Dividends Declared. On October 18, 2011, the Company’s board of directors declared a dividend in the aggregate amount of $0.22 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis), which will be paid on December 6, 2011 to all holders of record of the Company’s class A, class B and class C common stock as of November 18, 2011. The Company declared and paid $423 million in dividends in fiscal 2011 at a quarterly rate of $0.15 per share.