Visa 2011 Annual Report Download - page 52

Table of Contents
• Other non-operating income primarily reflects non-cash adjustments to the fair market value of the Visa Europe put option of $122 million and
$79 million in fiscal 2011 and 2010, respectively. The changes in value are not subject to tax, and do not reflect any change in the likelihood that
Visa Europe will exercise its option. See Note 2—Visa Europe to our consolidated financial statements.
Effective Income Tax Rate
The effective tax rates were 36% in fiscal 2011 and 2010, compared with 41% in fiscal 2009.
The effective tax rates in fiscal 2011 and 2010 were lower than the rate in fiscal 2009 primarily due to the benefit of tax incentives in Singapore, our
largest operating hub outside the U.S., beneficial changes in the geographic mix of our global income, the nontaxable revaluations of the Visa Europe put
option in fiscal 2011 and 2010, and the absence of additional foreign tax related to the sale of our investment in VisaNet do Brasil in fiscal 2009.
As a result of anticipated beneficial changes to certain state tax laws beginning in fiscal 2012 and other factors, we expect our effective tax rate to
decrease in fiscal 2012 to 33% to 34%. This rate excludes any potential related non-cash impact from the remeasurement of deferred tax assets and liabilities.
Liquidity and Capital Resources
Management of Our Liquidity
We regularly evaluate cash requirements for current operations, commitments, development activities and capital expenditures, and we may elect to
raise additional funds for these purposes in the future through the issuance of either debt or equity. Our treasury policies provide management with the
guidelines and authority to manage liquidity risk in a manner consistent with corporate objectives.
The objectives of our treasury policies are to provide adequate liquidity to cover operating expenditures and liquidity contingency scenarios, to ensure
payments on required litigation settlements, to ensure timely completion of payments settlement activities, to make planned capital investments in our
business, to pay dividends and repurchase our shares at the discretion of our board of directors and to optimize income earned by investing excess cash in
securities that we believe are high-quality and marketable in the short term.
Based on our current cash flow budgets and forecasts of our short-term and long-term liquidity needs, we believe that our projected sources of liquidity
will be sufficient to meet our projected liquidity needs for more than the next 12 months. We will continue to assess our liquidity position and potential
sources of supplemental liquidity in view of our operating performance, current economic and capital market conditions, and other relevant circumstances.
Cash Flow Data
The following table summarizes our cash flow activity for the fiscal years presented:
2011 2010 2009
(in millions)
Total cash provided by (used in):
Operating activities $ 3,872 2,691 558
Investing activities (2,299) (1,904) 1,830
Financing activities (3,304) (1,542) (2,751)
Effect of exchange rate changes on cash and cash equivalents (9) 5 1
Decrease in cash and cash equivalents $ (1,740) $ (750) $ (362)
51