Visa 2015 Annual Report Download - page 63

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provision in our financial results related to approximately $6.4 billion of undistributed earnings included
in these funds. The amount of income taxes that would have resulted had such earnings been
repatriated is not practicably determinable.
Available-for-sale investment securities. Our investment portfolio is designed to invest excess
cash in securities which enables us to meet our working capital and liquidity needs. Our investment
portfolio primarily consists of debt securities issued by the U.S. Treasury or U.S. government-
sponsored agencies. The majority of these investments, $3.4 billion, are classified as non-current as
they have stated maturities of more than one year from the balance sheet date. However, these
investments are generally available to meet short-term liquidity needs.
Factors that may impact the liquidity of our investment portfolio include, but are not limited to,
changes to credit ratings of the securities, uncertainty related to regulatory developments, actions by
central banks and other monetary authorities, and the ongoing strength and quality of credit markets.
We will continue to review our portfolio in light of evolving market and economic conditions. However, if
current market conditions deteriorate, the liquidity of our investment portfolio may be impacted and we
could determine that some of our investments are impaired, which could adversely impact our financial
results. We have policies that limit the amount of credit exposure to any one financial institution or type
of investment. See Item 1A—Risk Factors included elsewhere in this report.
Commercial paper program. We maintain a commercial paper program to support our working
capital requirements and for other general corporate purposes. Under the program, we are authorized
to issue up to $3.0 billion in outstanding notes, with maturities up to 397 days from the date of
issuance. We had no outstanding obligations under the program at September 30, 2015. See Note 9—
Debt to our consolidated financial statements.
Credit facility. On January 28, 2015, we entered into an unsecured $3.0 billion revolving credit
facility. The credit facility, which expires on January 27, 2016, replaced our previous $3.0 billion credit
facility, which terminated on January 28, 2015. The new credit facility contains covenants and events of
default customary for facilities of this type. There were no borrowings under either facility and we were
in compliance with all related covenants during the year ended September 30, 2015. See Note 9—
Debt to our consolidated financial statements.
Universal shelf registration statement. In July 2015, we filed a registration statement with the SEC
using a shelf registration process. As permitted by the registration statement, we may, from time to
time, sell shares of debt or equity securities in one or more transactions. This registration statement
expires in July 2018.
Expected debt issuance and change in capital structure. In conjunction with the potential Visa
Europe acquisition, we intend to evolve our long-term capital structure. We intend to issue senior
unsecured debt in an amount ranging between $15.0 billion and $16.0 billion in the first half of fiscal
year 2016, with maturities ranging between 2 and 30 years, depending on market conditions. The
proceeds from the debt issuance will be used to fund the upfront cash consideration of the acquisition,
and increase the repurchase of class A common stock outstanding in 2016 and 2017 to offset the
effect of the expected issuance of preferred stock upon the closing of the acquisition. Our initial
leverage is expected to be between 1.4 and 1.5 times gross debt to earnings before interest, taxes,
depreciation and amortization, or EBITDA. We expect our long-term leverage to be between 1.1 and
1.5 times gross debt to EBITDA, maintaining flexibility to pursue future growth opportunities. We expect
to maintain our current investment credit ratings disclosed below.
Litigation escrow account. Pursuant to the terms of the U.S. retrospective responsibility plan, we
maintain a litigation escrow account from which monetary liabilities from settlements of, or judgments
in, the U.S. covered litigation will be payable. When we fund the litigation escrow account, the shares
50