Visa 2009 Annual Report Download - page 45

Table of Contents
(1) Historical balances for periods prior to October 1, 2007 represent balances for Visa U.S.A. the accounting acquirer in the business combination.
Operating Activities. Cash provided by operating activities for fiscal 2009 consisted of net income of $2.4 billion and adjustments for non-cash items of
$1.5 billion. Standard non-cash adjustments for volume and support incentive accruals and depreciation and amortization were offset by a $473 million book
gain on the sale of our investment in VisaNet do Brasil which is reflected in investing activities. Cash from operating activities also reflects the use of $3.3
billion to fund significant operational payments including litigation and volume and support incentives.
Cash provided by operating activities for fiscal 2008 consisted of net income of $804 million and adjustments for non-cash items of $3.1 billion. Cash
provided by operating activities was lower than income provided by operations, reflecting the use of $92 million to satisfy payments settlement activities;
$115 million of compensation benefit payments net of new accruals; and $217 million of volume and support incentive payments net of new accruals. These
uses of cash were offset by deferred taxes payable, depreciation and amortization and other non-cash items, as well as changes in other operating assets and
liabilities.
Investing Activities. Cash provided by investing activities for fiscal 2009 primarily reflects $884 million of cash distribution from the Reserve Primary
Fund (the "Fund"), net cash proceeds of $290 million from the sales and maturities of investment securities and $1.0 billion from the sale of our 10%
ownership in VisaNet do Brasil, all of which were reinvested in money market funds. We also purchased $306 million of property, equipment and technology
primarily related to construction of our east coast data center.
Cash provided by investing activities for fiscal 2008, reflects $1,002 million of cash acquired through the reorganization, $949 million of net cash
proceeds from the sales and maturities of investment securities that were re-invested in shorter-term cash equivalents and $415 million of property, equipment
and technology purchases primarily related to construction of our data center. In addition, we reclassified our $953 million investment in the Fund from cash
equivalents to other current assets on our consolidated balance sheet. See further discussion under Sources of Liquidity, below, and Note 6—Prepaid Expenses
and Other Assets to our consolidated financial statements.
Financing Activities. Cash used in financing activities during fiscal 2009 primarily reflects contractually-required redemption of our class C (series II)
and class C (series III) common shares for $2.6 billion, funding of $1.8 billion to the litigation Escrow Account and dividend payments of $318 million, offset
by funding of covered litigation payments totaling $2.0 billion from the litigation Escrow Account.
Cash provided by financing activities for fiscal 2008 is attributed to IPO related activities including $19.1 billion in net proceeds from the issuance of
class A common stock, offset by $13.4 billion used for the partial redemption of class B and class C (series I) common stock, and $3.0 billion payment to the
litigation Escrow Account for the covered litigation matters in accordance with the Retrospective Responsibility Plan. See Note 4—Retrospective
Responsibility Plan to our consolidated financial statements. In addition, there was a source of cash of $1.1 billion, reflecting funding of covered litigation
payments from the litigation Escrow Account, offset by $93 million and $22 million for dividend and routine debt payments, respectively.
Sources of Liquidity
Our primary sources of liquidity are cash on hand, cash flow from our operations, an 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-
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