Visa 2009 Annual Report Download - page 44

Table of Contents
than-temporary-impairment of $68 million on investments and money market funds. See Note 6—Prepaid Expenses and Other Assets to our
consolidated financial statements.
• Other non-operating income in fiscal 2008 reflected the adjustments to the fair market value of our liability under the Framework Agreement
with Visa Europe. This liability was settled during the first fiscal quarter of 2009.
Effective Income Tax Rate
The effective tax rate increased to 41% in fiscal 2009, compared with 40% in fiscal 2008 and 23% for Visa U.S.A. in fiscal 2007. The increase in the
effective tax rate in fiscal 2009 compared to fiscal 2008 was primarily due to the additional foreign tax in fiscal 2009 on the sale of our investment in VisaNet
do Brasil, which increased the overall effective tax rate by approximately 1%. Our Singapore subsidiary began operating under a tax incentive agreement in
fiscal 2009, which had an insignificant impact on the fiscal 2009 effective tax rate. The increase in the effective income tax rate in fiscal 2008 compared to
fiscal 2007 was due primarily to tax reserves related to litigation, and the combined effect of the loss of certain special deductions in California for which we
were eligible prior to our IPO, the change in state tax apportionment, and a one-time benefit attributable to the remeasurement of deferred taxes. We expect
our effective tax rate in fiscal 2010 to decrease to below 40% due to changes in the geographic mix of our global income.
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
payment of required litigation settlement payments, to ensure timely completion of payments settlement activities, to make planned capital investments in our
business, to pay dividends, to repurchase our shares at the discretion of our board of directors, to service the payments of principal and interest on outstanding
debt 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, management believes that our projected sources
of liquidity will be sufficient to meet our projected liquidity needs for more than the next 12 months. Management 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
This table summarizes cash flow activity for the following fiscal years:
2009 2008 2007(1)
(in millions)
Total cash provided by (used in):
Operating activities $ 558 $ 531 $ 505
Investing activities 1,830 554 (463)
Financing activities (2,751) 3,624 (37)
Effect of exchange rate changes on cash and cash equivalents 1 (5) —
(Decrease) increase in cash and cash equivalents $ (362) $ 4,704 $ 5
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