MasterCard 2013 Annual Report Download - page 49

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45
Liquidity and Capital Resources
We need liquidity and access to capital to fund our global operations, credit and settlement exposure, capital expenditures,
investments in our business and current and potential obligations. The Company generates the cash required to meet
these needs through operations. The following table summarizes the cash, cash equivalents and investment securities
balances and credit available to the Company at December 31:
Years Ended December 31,
2013 2012 2011
(in billions)
Cash, cash equivalents and available-for-sale investment securities1. . . . . . . $ 6.3 $ 5.0 $ 4.9
Unused line of credit2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 3.0 2.8
1 Excludes restricted cash related to the U.S. merchant class litigation settlement of $723 million and $726 million at December 31, 2013
and 2012, respectively.
2 The Company did not use any funds from the line of credit during the periods presented, except for business continuity planning and related
purposes.
The increase in net cash provided by operations is primarily due to increases in net income in 2013 and 2012. Cash,
cash equivalents and available-for-sale investment securities held by our foreign subsidiaries (i.e., any entities where
earnings would be subject to U.S. tax upon repatriation) was $3.6 billion and $2.5 billion at December 31, 2013 and
2012, respectively, or 57% and 50% of our total cash, cash equivalents and available-for-sale investment securities as
of such dates. It is our present intention to permanently reinvest the undistributed earnings associated with our foreign
subsidiaries as of December 31, 2013 outside of the United States (as disclosed in Note 17 (Income Tax) to the
consolidated financial statements included in Part II, Item 8 of this Report), and our current plans do not require
repatriation of these earnings. If these earnings are needed for U.S operations or can no longer be permanently reinvested
outside of the United States, the Company would be subject to U.S. tax upon repatriation.
Our liquidity and access to capital could be negatively impacted by global credit market conditions. The Company
guarantees the settlement of many of the MasterCard, Cirrus and Maestro branded transactions between our issuers
and acquirers. See Note 19 (Settlement and Other Risk Management) to the consolidated financial statements in Part
II, Item 8 of this Report for a description of these guarantees. Historically, payments under these guarantees have not
been significant; however, historical trends may not be an indication of the future. The risk of loss on these guarantees
is specific to individual customers, but may also be driven significantly by regional or global economic conditions,
including, but not limited to the health of the financial institutions in a country or region.
Our liquidity and access to capital could also be negatively impacted by the outcome of any of the legal or regulatory
proceedings to which we are a party. See our risk factor in "Risk Factors - Legal and Regulatory Risks" in Part I, Item
1A and Note 18 (Legal and Regulatory Proceedings) to the consolidated financial statements included in Part II, Item
8 of this Report; and Part II, Item 7 (Business Environment) of this Report for additional discussion of these and other
risks facing our business.
Cash Flow
The table below shows a summary of the cash flows from operating, investing and financing activities for the years
ended December 31:
2013 2012 2011
(in millions)
Cash Flow Data:
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . $ 4,135 $ 2,948 $ 2,684
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . (4) (2,839) (748)
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . (2,629) (1,798) (1,215)
Net cash provided by operating activities for the years ended December 31, 2013 and 2012 was $4.1 billion and $2.9
billion, respectively, primarily due to net income.