Visa 2010 Annual Report Download - page 34

Table of Contents
In some instances, as in the case of CyberSource, Visa Europe may have the right to control the activities of newly acquired entities within Visa
Europe's territory. In any event, Visa Europe's exclusive license rights in Europe may hinder our ability to acquire new entities or to operate them effectively.
Any inconsistency in the payment processing services and products that we can provide could negatively affect cardholders from Visa Europe using
cards in the countries we serve or our cardholders using cards in Visa Europe's region.
If Visa Europe makes us acquire all of its outstanding stock, we will incur substantial costs and may suffer a material and adverse effect on our
operations and net income.
We have granted Visa Europe a put option requiring us to purchase all outstanding capital stock from its members if exercised. We will incur a
substantial financial obligation if Visa Europe exercises this option. Visa Europe may do so at any time. We may need to obtain third-party financing in order
to meet our obligation, by either borrowing funds or selling stock. An equity offering, or the payment of part of the exercise price in our stock, would dilute
the ownership interests of our stockholders. We would have only 285 days to pay the exercise price. Sufficient financing might not be available to us within
that time on reasonable terms. See Note 3—Visa Europe to our consolidated financial statements included in Item 8 of this report.
If Visa Europe exercises the put option, we may encounter difficulties in integrating Visa Europe's business and systems into our existing operations. If
we cannot do so quickly and cost-effectively, the integration could divert the time and attention of senior management, disrupt our current operations and
adversely affect our results of operations. In addition, we would become subject to the many regulations of the European Union that govern the operations of
Visa Europe, including any regulatory disputes.
We are required to record quarterly any change in the fair value of the put option. We record these adjustments through our consolidated statements of
operations. Consequently, the adjustments affect our reported net income and earnings per share. These quarterly adjustments and their resulting impact on
our reported statements of operations could be significant. The existence of these changes could adversely affect our ability to raise capital or the costs
involved in raising it.
If we cannot remain organizationally effective, we will be unable to address the opportunities and challenges presented by our strategy and by the
increasingly challenging competitive, economic and regulatory environment.
Since our reorganization in October 2007, we have increasingly centralized our management and operations. For us to succeed, we must effectively
integrate our operations, actively work to ensure consistency throughout our organization, and avoid U.S.-centric thinking. If we fail to do so, we may be
unable to expand as rapidly as we plan, and the results of our expansion may be unsatisfactory.
In addition, the current competitive, economic and regulatory environment will require our organization to adapt rapidly and nimbly to new
opportunities and challenges. We will be unable to do so if we do not make important decisions quickly enough, define our appetite for risk specifically
enough, implement new governance, managerial and organizational processes smoothly enough and communicate roles and responsibilities clearly enough.
We may be unable to attract and retain key management and other key employees.
Our employees, particularly our key management, are vital to our success and difficult to replace. We may be unable to retain them or to attract other
highly qualified employees, particularly if we do not offer employment terms competitive with the rest of the market. Failure to attract and retain highly
qualified employees, or failure to develop and implement a viable succession plan, could result in inadequate depth of institutional knowledge or skill sets,
adversely affecting our business.
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