Visa 2011 Annual Report Download - page 54

Table of Contents
Cash used in financing activities during fiscal 2009 primarily reflects contractually-required redemption of certain series of our class C common shares
for $2.6 billion, deposits of $1.8 billion to the litigation escrow account and dividend payments of $318 million, offset by covered litigation payments totaling
$2.0 billion from the litigation escrow account.
Sources of Liquidity
Our primary sources of liquidity are cash on hand, cash flow from our operations, our investment portfolio, and access to various equity and borrowing
arrangements. Funds from operations are maintained in cash and cash equivalents, short-term available-for-sale investment securities, or long-term available-
for-sale investment securities based upon our funding requirements, access to liquidity from these holdings, and return that these holdings provide.
As of September 30, 2011, $2.1 billion of cash, cash equivalent and available-for-sale investments securities was held by our foreign subsidiaries. If
these funds are needed for our operations in the U.S., we would be required to accrue and pay U.S. taxes to repatriate these funds, up to the amount of
undistributed earnings of $1.9 billion. However, our intent is to indefinitely reinvest these funds outside of the U.S., and our current plans do not demonstrate
a need to repatriate them to fund our U.S. operations.
Investment portfolio. Our investment portfolio is primarily comprised of securities which enable us to meet our working capital needs. Our investment
portfolio primarily consists of liquid securities, including money market funds and debt securities issued by the U.S. Treasury or U.S. government-sponsored
agencies. The liquidity of our investment portfolio is subject to uncertainties that are difficult to predict.
Other factors that may impact the liquidity of our investment portfolio include changes to credit ratings of the securities as well as to the underlying
assets supporting certain securities, rates of default of the underlying assets, underlying collateral value, discount rates, and 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—Unprecedented economic events in financial markets around the world have and are likely to continue to affect our clients,
merchants and cardholders, resulting in a material and adverse impact on our prospects, growth, profitability, revenue and overall business.
Revolving credit facilities. On February 15, 2008, we entered into a $3.0 billion five-year revolving credit facility with a syndicate of banks including
affiliates of certain holders of shares of our class B and class C common stock and certain of our clients and affiliates of our clients. Loans under the five-year
facility may be in the form of: (1) Base Rate Advance, which will bear interest at a rate equal to the higher of the Federal Funds Rate plus 0.5% and the Bank
of America prime rate; (2) Eurocurrency Advance, which will bear interest at a rate equal to LIBOR (as adjusted for applicable reserve requirements) plus an
applicable cost adjustment and an applicable margin of 0.11% to 0.30% based on our credit rating; or (3) U.S. Swing Loan, Euro Swing Loan, or Foreign
Currency Swing Loan, which will bear interest at the rate equal to the applicable Swing Loan rate for that currency plus the same applicable margin plus
additionally for Euro and Sterling loans, an applicable reserve requirement and cost adjustment. We also agreed to pay a facility fee on the aggregate
commitment amount, whether used or unused, at a rate ranging from 0.04% to 0.10% and a utilization fee on loans at a rate ranging from 0.05% to 0.10%
based on our credit rating. Currently, the applicable margin is 0.15%, the facility fee is 0.05% and the utilization fee is 0.05%. This facility contains certain
covenants, including financial
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