Summary
Visa Inc. (V) has filed an 8-K report on December 23, 2011, announcing a significant event related to its litigation escrow account. The company has decided to deposit $1.565 billion into this account, which was previously established under its retrospective responsibility plan. This action is expected to impact the value of Visa's Class B shares, which are held by U.S. financial institutions, by reducing their as-converted share count. This reduction in shares will have a similar effect on earnings per share as a stock repurchase of Class A common stock.
Key Highlights
- 1Visa Inc. is depositing $1.565 billion into its litigation escrow account.
- 2This deposit is made under the company's retrospective responsibility plan.
- 3The Class B shares, held by U.S. financial institutions, will have their as-converted share count adjusted downwards.
- 4This adjustment to Class B shares will effectively reduce the total share count, impacting earnings per share.
- 5The funds for this deposit will come from Visa's existing $2 billion Class A repurchase program.
- 6The use of these funds will exhaust the remaining amount allocated to the Class A repurchase program.
- 7This event has the same financial impact on EPS as a share buyback of Class A common stock.