Visa 2015 Annual Report Download - page 68

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 as of September 30, 2015.
We believe that we will be able to fund these obligations through cash generated from our operations
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) ............................ $ 855 $ 196 $ 49 $ — $ 1,100
Leases(2) .................................... 95 120 70 107 392
Client incentives(3) ............................ 3,917 5,668 3,792 4,067 17,444
Marketing and sponsorship(4) ................... 112 242 229 71 654
Dividends(5) .................................. 341 — — — 341
Total(6,7,8) .................................... $5,320 $6,226 $4,140 $4,245 $19,931
(1) Represents agreements to purchase goods and services 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) Includes operating leases for premises, equipment and software licenses, which range in terms
from one to thirteen years.
(3) Represents future cash payments for long-term contracts with financial institution clients and other
business partners for various programs designed to build payments volume, increase Visa-branded
card and product acceptance and win merchant routing transactions over our network. These
agreements, which range in terms from one to thirteen years, can provide card issuance and/or
conversion support, volume/growth targets and marketing and program support based on specific
performance requirements. Payments under these agreements will generally be offset by revenues
earned from higher corresponding payments and transaction volumes. These payment amounts are
estimates and will change based on client performance, amendments to existing contracts or
execution of new contracts. Related amounts disclosed in Note 17—Commitments and
Contingencies to our consolidated financial statements represent the associated expected
reduction of revenue related to these agreements that we estimate we will record.
(4) Visa is a party to contractual sponsorship agreements ranging from approximately three to sixteen
years. These contracts are designed to increase Visa brand recognition, drive Visa-branded
product usage, and differentiate Visa against competition. 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 life of the contract. For obligations where
the individual years of spend are not specified in the contract, we have estimated the timing of
when these amounts will be spent.
(5) Includes expected dividend amount of $341 million as dividends were declared in October 2015
and will be paid on December 1, 2015 to all holders of record of Visa’s common stock as of
November 13, 2015.
(6) We have liabilities for uncertain tax positions of $752 million. At September 30, 2015, we had also
accrued $33 million of interest and $6 million of penalties associated with our uncertain tax
positions. We cannot determine the range of cash payments that will be made and the timing of the
cash settlements, if any, associated with our uncertain tax positions. Therefore, no amounts related
to these obligations have been included in the table.
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