Visa 2008 Annual Report Download - page 86

Table of Contents
Contractual Obligations
Our contractual commitments will have an impact on our future liquidity. The contractual obligations identified in the table below include both on-and
off-balance sheet transactions that represent a material expected or contractually committed future obligation at September 30, 2008. We believe that we will
be able to fund these obligations through cash generated from operations and from our existing cash balances, proceeds from our IPO, and available credit
facilities.
Payments Due by Period
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years Total
(in millions)
Purchase orders(1) $ 666 $ 57 $ 2 $ — $ 725
Operating leases(2) 35 47 18 37 137
Equipment, software and other(2) 14 15 — — 29
Volume and support incentives(3) 1,069 1,913 1,318 483 4,783
Marketing and sponsorships(4) 107 152 97 25 381
Litigation payments(5) 2,461 970 270 — 3,701
Redemption of class C (series II) common stock(6) 1,136 — — — 1,136
Redemption of class C (series III) common stock(6) 1,508 — — — 1,508
Debt(7) 52 24 21 11 108
Interest on debt(7) 7 7 3 1 18
Total $ 7,055 $ 3,185 $ 1,729 $ 557 $ 12,526
(1) Purchase obligations include agreements to purchase goods and services that are enforceable and legally binding and that specify significant terms,
including: fixed or minimum quantities to be purchased and fixed, minimum or variable price provisions, and the approximate timing of the transaction.
(2) Visa Inc. leases certain premises such as its data centers, certain regional offices, equipment and software under non-cancelable operating leases with
varying expiration dates.
(3) Visa Inc. generally has non-cancelable agreements with financial institutions and merchants for various programs designed to build sales volume and
increase payment product acceptance. These agreements, which range in term from one to 13 years, provide card issuance, marketing and program
support based on specific performance requirements. Payments under these agreements will be offset by revenues earned from higher payments and
transaction volumes in connection with these agreements. These amounts are estimates and could change based on customer performance.
(4) Visa Inc. is a party to contractual sponsorship agreements ranging from less than one year to 8 years. These contracts are designed to help us increase
Visa-branded cards and volumes. Over the life of these contracts, Visa is required to make payments in exchange for certain advertising and
promotional rights. In connection with these contractual commitments, Visa has an obligation to spend certain minimum amounts for advertising and
marketing promotion over the contract terms.
(5) Represents amounts due in accordance with settlement agreements in the Retailers' Litigation, American Express, Discover and other litigation
settlements.
(6) In October 2008, we redeemed all of the class C (series II) common stock for an aggregate redemption price of $1.1 billion (subject to reduction for
dividends and other adjustments) and we redeemed 35,263,585 shares of class C (series III) common stock for an aggregate redemption price of $1.5
billion. See Note 16—Stockholders' Equity and Redeemable Shares.
(7) Represents payments on medium-term notes, 2002 series B senior secured notes, 1994 and 1995 series B secured notes. See Note 11—Debt to our
consolidated financial statements included elsewhere in this report.
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