Visa 2008 Annual Report Download - page 87

Table of Contents
Effective October 1, 2007, we adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of
FASB Statement No. 109. At September 30, 2008, the liability for uncertain tax positions, net of offsetting tax benefits associated with the correlative effects
of state and foreign income taxes was $376 million. At September 30, 2008, we also accrued $5 million of interest and $1 million of penalties associated with
our uncertain tax positions. We cannot determine the range of cash payments that will be made within the next twelve months associated with our uncertain
tax positions.
Also see Note 11—Debt, Note 20—Commitments and Contingencies, and Note 23—Legal Matters to our consolidated financial statements included
elsewhere in this report.
Related Parties
During fiscal 2008, a significant portion of our operating revenues were generated from four customers with officers who also serve on our board of
directors. Operating revenues from these customers were approximately $538 million, or 9%, of our operating revenues for fiscal 2008. No customer
accounted for 10% or more of Visa Inc.'s total operating revenues during this period. The loss of any of these customers could adversely impact our operating
revenues and operating income going forward. See Note 21—Related Parties to our consolidated financial statements included elsewhere in this report.
One of the Company's directors, and the spouse of another of the Company's directors, are also officers of entities that participated in (or are affiliated
with an entity that participated in) our IPO as underwriters, and one of those entities is also one of our customers. As underwriters, each was offered and
purchased 113 million shares of class A common stock at a price of $42.77 per share, a discount of $1.23 per share based on the IPO price of $44.00 per
share. This price per share is the same as that paid by all underwriters in the IPO. Also as underwriters, each received total underwriter fees from us of $139
million in March 2008.
We are also a party to numerous agreements with Visa Europe, a holder of our class C common stock, which allow each entity to provide services to the
other at negotiated fees, including the allocation of costs for office premises which are shared by us and Visa Europe. For fiscal 2008, total operating revenues
and operating expenses related to Visa Europe totaled $221 million and $7 million, respectively. At September 30, 2008, Visa Europe owed us approximately
$3 million in net accounts receivable. See Note 4—Visa Europe to our consolidated financial statements included elsewhere in this report.
Also see Item 13 "Certain Relationships and Related Transactions, and Director Independence" included elsewhere in this report.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The
preparation of these consolidated financial statements requires us to make judgments, assumptions and estimates that affect the amounts reported. Note 2—
Summary of Significant Accounting Policies to our consolidated financial statements describes the significant accounting policies and methods used in the
preparation of our consolidated financial statements and is included elsewhere in this report. We have established policies and control procedures to seek to
ensure that estimates and assumptions are appropriately governed and applied consistently from period to period. On a regular basis, we review the accounting
policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with generally
accepted accounting principles. However, because future events and their effects cannot be determined with certainty, actual results could differ from our
assumptions and estimates, and such differences could be material. The following is a brief description of our current accounting policies involving significant
management judgments.
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