Visa 2012 Annual Report Download - page 46

Table of Contents
Based on our current cash flow budgets and forecasts of our short-term and long-term liquidity needs, we believe that our
projected sources of liquidity will be sufficient to meet our projected liquidity needs for more than the next 12 months. We 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
The following table summarizes our cash flow activity for the fiscal years presented:
Operating activities. Total cash provided by operating activities was higher during fiscal 2012
compared to prior year, primarily
reflecting higher operating revenue in fiscal 2012 . We believe that cash flow generated from operating activities will be more than
sufficient to meet our ongoing operational needs. Total cash provided by operating activities was higher during fiscal 2011
compared to fiscal 2010 , primarily reflecting continued growth in our net income and the absence of a $682 million prepayment of
our Retailers' litigation obligation in fiscal 2010.
Investing activities. Cash used in investing activities during fiscal 2012 and fiscal 2011 was relatively consistent, reflecting our
continued investment in available-for-sale securities. See Note 4—Fair Value Measurements and Investments to our consolidated
financial statements. Comparatively, cash used in investing activities in fiscal 2010 primarily included $1.8 billion for the acquisition
of CyberSource.
Financing activities. Cash used in financing activities during fiscal 2012, 2011 and 2010 reflects our continued commitment to
return excess cash to shareholders through reduction in the as-converted class A share count, either through purchases in the
open market or deposits made into the litigation escrow, and increased dividends. See Note 3—Retrospective Responsibility Plan
and Note 15—Stockholders' Equity to our consolidated financial statements.
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.
Funds held by our foreign subsidiaries include cash, cash equivalents and available-for-sale investment securities, both short
and long-term. 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 $2.6 billion , which we intend to indefinitely reinvest outside of the U.S. Our current
plans do not demonstrate a need to repatriate them to fund our U.S. operations.
Available-for-sale investment securities. Our investment portfolio is designed to invest excess cash in securities which enable
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, $3.3 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 changes to credit ratings of the securities, uncertainty
related to regulatory developments, actions by central banks and other monetary authorities,
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• optimize income earned by investing excess cash in securities that enable us to meet our working capital and liquidity
needs.
2012
2011 2010
(in millions)
Total cash provided by (used in):
Operating activities
$
5,009
$
3,872
$
2,691
Investing activities
(2,414
)
(2,299
)
(1,904
)
Financing activities
(2,655
)
(3,304
)
(1,542
)
Effect of exchange rate changes on cash and cash equivalents
7
(9
)
5
Decrease in cash and cash equivalents
$
(53
)
$
(1,740
)
$
(750
)