Document and Entity Information

3 Months Ended

Dec. 31, 2014

Jan. 23, 2015

Class A common stock

Jan. 23, 2015

Class B common stock

Jan. 23, 2015

Class C common stock

Entity Registrant Name

VISA INC.

Entity Central Index Key

0001403161

Current Fiscal Year End Date

--09-30

Entity Filer Category

Large Accelerated Filer

Document Type

10-Q

Document Period End Date

Dec. 31, 2014

Document Fiscal Year Focus

2015

Document Fiscal Period Focus

Q1

Amendment Flag

false

Entity Common Stock, Shares Outstanding

490,962,259

245,513,385

21,762,506

CONSOLIDATED BALANCE SHEETS (USD $)

In Millions, unless otherwise specified

Dec. 31, 2014

Sep. 30, 2014

Assets

Cash and cash equivalents

$ 2,085

$ 1,971

Restricted cash—litigation escrow (Note 2)

1,398

1,498

Investment securities (Note 3):

Trading

78

69

Available-for-sale

2,417

1,910

Settlement receivable

500

786

Accounts receivable

900

822

Customer collateral (Note 5)

1,041

961

Current portion of client incentives

200

210

Deferred tax assets

927

1,028

Prepaid expenses and other current assets

318

307

Total current assets

9,864

9,562

Investment securities, available-for-sale (Note 3)

3,028

3,015

Client incentives

87

81

Property, equipment and technology, net

1,861

1,892

Other assets

896

855

Intangible assets, net

11,395

11,411

Goodwill

11,753

Total assets

38,884

38,569

Liabilities

Accounts payable

135

147

Settlement payable

855

1,332

Customer collateral (Note 5)

1,041

961

Accrued compensation and benefits

307

450

Client incentives

1,058

1,036

Accrued liabilities (Note 6)

1,049

624

Accrued litigation (Note 11)

1,353

1,456

Total current liabilities

5,798

6,006

Deferred tax liabilities

4,139

4,145

Other liabilities (Note 6)

1,005

Total liabilities

10,942

11,156

Equity

Preferred stock, $0.0001 par value, 25 shares authorized and none issued

0

Additional paid-in capital

18,200

18,299

Accumulated income

9,732

9,131

Accumulated other comprehensive income (loss), net:

Investment securities, available-for-sale

11

31

Defined benefit pension and other postretirement plans

(80)

(84)

Derivative instruments classified as cash flow hedges

80

38

Foreign currency translation adjustments

(1)

(2)

Total accumulated other comprehensive income (loss), net

10

(17)

Total equity

27,942

27,413

Total liabilities and equity

38,884

38,569

Class A common stock

Equity

Common stock

0

Class B common stock

Equity

Common stock

0

Class C common stock

Equity

Common stock

$ 0

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)

In Millions, except Per Share data, unless otherwise specified

Dec. 31, 2014

Sep. 30, 2014

Preferred Stock

Preferred stock, par value

$ 0.0001

Preferred stock, shares authorized

25

Preferred stock, shares issued

0

Class A common stock

Common stock, par value

$ 0.0001

Common stock, shares authorized

2,001,622

Common stock, shares issued

495

Common stock, shares outstanding

495

Class B common stock

Common stock, par value

$ 0.0001

Common stock, shares authorized

622

Common stock, shares issued

245

Common stock, shares outstanding

245

Class C common stock

Common stock, par value

$ 0.0001

Common stock, shares authorized

1,097

Common stock, shares issued

20

22

Common stock, shares outstanding

20

22

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

Dec. 31, 2014

Dec. 31, 2013

Operating Revenues

Service revenues

$ 1,538

$ 1,419

Data processing revenues

1,383

1,264

International transaction revenues

970

891

Other revenues

204

180

Client incentives

(713)

(599)

Total operating revenues

3,382

3,155

Operating Expenses

Personnel

509

470

Marketing

205

186

Network and processing

114

132

Professional fees

70

75

Depreciation and amortization

120

107

General and administrative

126

108

Total operating expenses

1,144

1,078

Operating income

2,238

2,077

Non-operating income

24

6

Income before income taxes

2,262

2,083

Income tax provision (Note 10)

693

676

Net income

$ 1,569

$ 1,407

Class A common stock

Earnings Per Share

Basic earnings per share (Note 8) (in dollars per share)

$ 2.54

$ 2.21

Basic weighted-average shares outstanding (Note 8) (in shares)

494

505

Diluted earnings per share (Note 8) (in dollars per share)

$ 2.53

$ 2.20

Diluted weighted-average shares outstanding (Note 8) (in shares)

619

639

Class B common stock

Earnings Per Share

Basic earnings per share (Note 8) (in dollars per share)

$ 1.05

$ 0.93

Basic weighted-average shares outstanding (Note 8) (in shares)

245

Diluted earnings per share (Note 8) (in dollars per share)

$ 1.04

$ 0.93

Diluted weighted-average shares outstanding (Note 8) (in shares)

245

Class C common stock

Earnings Per Share

Basic earnings per share (Note 8) (in dollars per share)

$ 2.54

$ 2.21

Basic weighted-average shares outstanding (Note 8) (in shares)

22

27

Diluted earnings per share (Note 8) (in dollars per share)

$ 2.53

$ 2.20

Diluted weighted-average shares outstanding (Note 8) (in shares)

22

27

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2014

Dec. 31, 2013

Net income

$ 1,569

$ 1,407

Investment securities, available-for-sale:

Net unrealized (loss) gain

(10)

17

Income tax effect

3

(6)

Reclassification adjustment for net gain realized in net income

(21)

0

Income tax effect

8

0

Defined benefit pension and other postretirement plans:

Net unrealized actuarial gain and prior service credit

6

1

Income tax effect

(1)

0

Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), before Tax

(1)

(2)

Income tax effect

0

1

Derivative instruments classified as cash flow hedges:

Net unrealized gain

63

24

Income tax effect

(17)

(4)

Reclassification adjustment for net gain realized in net income

(6)

(11)

Income tax effect

2

Foreign currency translation adjustments

1

0

Other comprehensive income, net of tax

27

22

Comprehensive income

$ 1,596

$ 1,429

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $)

In Millions, unless otherwise specified

Total

USD ($)

Additional Paid-in Capital

USD ($)

Accumulated Income

USD ($)

Accumulated Other Comprehensive Income (Loss)

USD ($)

Class A common stock

Common Stock

Class B common stock

Common Stock

Class C common stock

Common Stock

Beginning Balance at Sep. 30, 2014

$ 27,413

$ 18,299

$ 9,131

$ (17)

Beginning Balance (in shares) at Sep. 30, 2014

495

245

22

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net income

1,569 ¹ ²

1,569

Other comprehensive income, net of tax

27

Comprehensive income

1,596

Issuance of restricted stock awards³

0

Conversion of class C common stock upon sale into public market (in shares)

2

(2)

Share-based compensation

45

Excess tax benefit for share-based compensation

58

Cash proceeds from exercise of stock options (in shares)

1

Cash proceeds from exercise of stock options

30

Restricted stock and performance-based shares settled in cash for taxes³

(100)

Cash dividends declared and paid, at a quarterly amount of $0.48 per as-converted share (Note 7)

(297)

Repurchase of class A common stock (Note 9) (in shares)

(3)⁴

(3)

Repurchase of class A common stock (Note 7)

(803)

(132)

(671)

Ending Balance at Dec. 31, 2014

$ 27,942

$ 18,200

$ 9,732

$ 10

Ending Balance (in shares) at Dec. 31, 2014

495

245

20

[1] Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers.

[2] Net income is allocated based on proportional ownership on an as-converted basis. The weighted-average number of shares of as-converted class B common stock used in the income allocation was 101 million and 103 million for the three months ended December 31, 2014 and 2013, respectively.

[3] Increase in class A common stock is less than 1 million shares.

[4] All shares repurchased in the open market have been retired and constitute authorized but unissued shares.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

Dec. 31, 2014

Class A common stock

Common Stock

Restricted stock and performance-based shares settled in cash for taxes (in shares, less than 1 million)

1 ¹

Restricted stock instruments settled in cash for taxes shares (in shares, less than 1 million)

1 ²

[1] Increase in class A common stock is less than 1 million shares.

[2] Decrease in class A common stock is less than 1 million shares.

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2014

Dec. 31, 2013

Operating Activities

Net income

$ 1,569

$ 1,407

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of client incentives

713

599

Share-based compensation

45

Excess tax benefit for share-based compensation

(58)

(54)

Depreciation and amortization of property, equipment, technology and intangible assets

120

107

Deferred income taxes

97

19

Other

(19)

5

Change in operating assets and liabilities:

Settlement receivable

286

(89)

Accounts receivable

(78)

(79)

Client incentives

(687)

(616)

Other assets

(141)

(77)

Accounts payable

10

(80)

Settlement payable

(477)

21

Accrued and other liabilities

484

334

Accrued litigation (Note 11)

(103)

(1)

Net cash provided by operating activities

1,761

1,541

Investing Activities

Purchases of property, equipment, technology and intangible assets

(104)

(120)

Investment securities, available-for-sale:

Purchases

(758)

(754)

Proceeds from sales and maturities

226

600

Purchases of / contributions to other investments

0

(2)

Net cash used in investing activities

(636)

(276)

Financing Activities

Repurchase of class A common stock (Note 7)

(803)

(1,091)

Dividends paid (Note 7)

(297)

(254)

Payments from litigation escrow account—retrospective responsibility plan (Note 2 and Note 11)

100

0

Cash proceeds from exercise of stock options

30

38

Restricted stock and performance-based shares settled in cash for taxes

(100)

(77)

Excess tax benefit for share-based compensation

58

54

Net cash used in financing activities

(1,012)

(1,330)

Effect of exchange rate changes on cash and cash equivalents

1

0

Increase (decrease) in cash and cash equivalents

114

(65)

Cash and cash equivalents at beginning of year

1,971

2,186

Cash and cash equivalents at end of period

2,085

2,121

Supplemental Disclosure

Income taxes paid, net of refunds

57

96

Accruals related to purchases of property, equipment, technology and intangible assets

$ 21

$ 20

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2014

Statement of Cash Flows [Abstract]

Cash Acquired from Acquisition

$ 25

Summary of Significant Accounting Policies

Note 1—Summary of Significant Accounting Policies

Organization. Visa Inc. (“Visa” or the “Company”) is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. Visa and its wholly-owned consolidated subsidiaries, including Visa U.S.A. Inc. (“Visa U.S.A.”), Visa International Service Association (“Visa International”), Visa Worldwide Pte. Limited, Visa Canada Corporation, Inovant LLC and CyberSource Corporation (“CyberSource”), operate one of the world’s most advanced processing networks — VisaNet — which facilitates authorization, clearing and settlement of payment transactions worldwide. VisaNet also offers fraud protection for account holders and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for account holders on Visa-branded cards and payment products. In most cases, account holder and merchant relationships belong to, and are managed by, Visa's financial institution clients. Visa provides a wide variety of payment solutions that support payment products that issuers can offer to their account holders: pay now with debit, pay ahead with prepaid or pay later with credit products. Visa also offers a growing suite of innovative digital, eCommerce and mobile products and services. These services facilitate transactions on Visa's network among account holders, merchants, financial institutions and governments in mature and emerging markets globally.

Consolidation and basis of presentation. The accompanying unaudited consolidated financial statements include the accounts of Visa and its consolidated entities and are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company consolidates its majority-owned and controlled entities, including variable interest entities ("VIEs") for which the Company is the primary beneficiary. The Company’s investments in VIEs have not been material to its consolidated financial statements as of and for the periods presented. All significant intercompany accounts and transactions are eliminated in consolidation.

Certain prior period amounts within the accompanying unaudited consolidated financial statements have been reclassified to conform to current period presentation. These reclassifications did not affect the Company's financial position, total operating revenues, net income, comprehensive income, or cash flows as of and for the periods presented.

The accompanying unaudited consolidated financial statements are presented in accordance with the U.S. Securities and Exchange Commission ("SEC") requirements for Quarterly Reports on Form 10-Q and, consequently, do not include all of the annual disclosures required by U.S. GAAP. Reference should be made to the Visa Annual Report on Form 10-K for the year ended September 30, 2014 for additional disclosures, including a summary of the Company’s significant accounting policies.

In the opinion of management, the accompanying unaudited consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the interim periods presented.

Recently Issued and Adopted Accounting Pronouncements.

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-04, which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The Company adopted the standard effective October 1, 2014. The adoption did not have a material impact on the consolidated financial statements.

In March 2013, the FASB issued ASU 2013-05, which clarifies the applicable guidance for the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity, or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The Company adopted the standard effective October 1, 2014. The adoption did not have a material impact on the consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, which provides guidance for the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The standard impacts presentation only. The Company adopted the standard effective October 1, 2014. The adoption did not have a material impact on the consolidated financial statements.

In November 2014, the FASB issued ASU 2014-17, which permits an acquired entity to elect the option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtained control of the acquired entity. The Company adopted the standard prospectively effective November 18, 2014. The adoption did not have a material impact on the consolidated financial statements.

Retrospective Responsibility Plan

Note 2—Retrospective Responsibility Plan

Under the terms of the retrospective responsibility plan, the Company maintains an escrow account from which settlements of, or judgments in, the covered litigation are paid. At December 31, 2014 and September 30, 2014, the balance of the escrow account was $1.4 billion and $1.5 billion, respectively. The Company paid $100 million to opt-out merchants from the litigation escrow account during the three months ended December 31, 2014 associated with the interchange multidistrict litigation, and an additional $179 million between January 1, 2015 and January 29, 2015. See Note 11—Legal Matters.

The accrual related to the covered litigation could be either higher or lower than the litigation escrow account balance. The Company did not record an additional accrual for the covered litigation during the three months ended December 31, 2014. See Note 11—Legal Matters.

Fair Value Measurements and Investments

Note 3—Fair Value Measurements and Investments

Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis



	Fair Value Measurements Using Inputs Considered as
	Level 1				Level 2				Level 3
	December 31, 2014		September 30, 2014		December 31, 2014		September 30, 2014		December 31, 2014		September 30, 2014
	(in millions)
Assets
Cash equivalents and restricted cash:
Money market funds	$	2,307	$	2,277
Commercial paper					$	45	$	37
Investment securities, trading:
Equity securities	78		69
Investment securities, available-for-sale:
U.S. government-sponsored debt securities					2,206		2,162
U.S. Treasury securities	2,627		2,176
Equity securities	25		58
Corporate debt securities					580		522
Auction rate securities									$	7	$	7
Prepaid and other current assets:
Foreign exchange derivative instruments					86		40
Total	$	5,037	$	4,580	$	2,917	$	2,761	$	7	$	7
Liabilities
Accrued liabilities:
Visa Europe put option									$	145	$	145
Foreign exchange derivative instruments					$	7	$	6
Total	$	—	$	—	$	7	$	6	$	145	$	145

There were no significant transfers between Level 1 and Level 2 assets during the three months ended December 31, 2014 and 2013.

Level 1 assets measured at fair value on a recurring basis. Money market funds, publicly-traded equity securities and U.S. Treasury securities are classified as Level 1 within the fair value hierarchy, as fair value is based on quoted prices in active markets.

Level 2 assets and liabilities measured at fair value on a recurring basis. The fair value of U.S. government-sponsored debt securities and corporate debt securities, as provided by third-party pricing vendors, is based on quoted prices in active markets for similar, not identical, assets. The pricing data obtained from outside sources is reviewed internally for reasonableness, compared against benchmark quotes from independent pricing sources, then confirmed or revised accordingly. Commercial paper and foreign exchange derivative instruments are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. There were no substantive changes to the valuation techniques and related inputs used to measure fair value during the three months ended December 31, 2014.

Level 3 assets and liabilities measured at fair value on a recurring basis. Auction rate securities are classified as Level 3 due to a lack of trading in active markets and a lack of observable inputs in measuring fair value. There were no substantive changes to the valuation techniques and related inputs used to measure fair value during the three months ended December 31, 2014.

Visa Europe put option agreement. The Company has granted Visa Europe a perpetual put option, or the put option, which, if exercised, will require Visa Inc. to purchase all of the outstanding shares of capital stock of Visa Europe from its members. The put option provides a formula for determining the purchase price of the Visa Europe shares, which, subject to certain adjustments, applies Visa Inc.’s forward price-to-earnings multiple (as defined in the put option agreement), or the P/E ratio, at the time the option is exercised, to Visa Europe’s adjusted net income for the forward 12-month period (as defined in the put option agreement), or the adjusted sustainable income. The calculation of Visa Europe’s adjusted sustainable income under the terms of the put option agreement includes potentially material adjustments for cost synergies and other negotiated items. Upon exercise, the key inputs to this formula, including Visa Europe’s adjusted sustainable income, will be the result of negotiation between the Company and Visa Europe. The put option provides an arbitration mechanism in the event that the two parties are unable to agree on the ultimate purchase price.

The fair value of the put option represents the value of Visa Europe’s option, which under certain conditions could obligate the Company to purchase its member equity interest for an amount above fair value. While the put option is in fact non-transferable, its fair value represents the Company’s estimate of the amount the Company would be required to pay a third-party market participant to transfer the potential obligation in an orderly transaction at the measurement date. The valuation of the put option therefore requires substantial judgment. The most subjective estimates applied in valuing the put option are the assumed probability that Visa Europe will elect to exercise its option and the estimated differential between the P/E ratio and the P/E ratio applicable to Visa Europe on a standalone basis at the time of exercise, or the P/E differential. The liability is classified within Level 3, as the assumed probability that Visa Europe will elect to exercise its option, the estimated P/E differential, and other inputs used to value the put option are unobservable.

At December 31, 2014 and September 30, 2014, the Company determined the fair value of the put option to be $145 million. While $145 million represents the fair value of the put option at December 31, 2014, it does not represent the actual purchase price that the Company may be required to pay if the option is exercised. Given current economic conditions, the purchase price under the terms of the put option would likely be in excess of $10 billion. During the three months ended December 31, 2014, there were no changes to the valuation methodology used to estimate the fair value of the put option. At December 31, 2014, the key unobservable inputs included a 40% probability of exercise by Visa Europe at some point in the future and an estimated P/E differential of 1.9x. At December 31, 2014, the Company's spot P/E was 21.7x, and there was a differential of 1.0x between this ratio and the estimated spot ratio applicable to Visa Europe. These ratios are for reference only and are not necessarily indicative of the ratio or differential that could be applicable if the put option was exercised at any point in the future. The use of an assumed probability of exercise that is 5% higher than the Company's estimate would have resulted in an increase of approximately $18 million in the value of the put option. An increase of 1.0x in the assumed P/E differential would have resulted in an increase of approximately $84 million in the value of the put option.

The put option is exercisable at any time at the sole discretion of Visa Europe. As such, the put option liability is included in accrued liabilities on the Company's consolidated balance sheet at December 31, 2014. Classification in current liabilities is not an indication of management’s expectation of exercise and simply reflects the fact that the obligation resulting from the exercise of the instrument could become payable within 12 months. Changes in fair value are recorded as non-cash, non-operating income on the consolidated statements of operations.

Assets Measured at Fair Value on a Non-recurring Basis.

Non-marketable equity investments and investments accounted for under the equity method. These investments are classified as Level 3 due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment. When certain events or circumstances indicate that impairment may exist, the Company revalues the investments using various assumptions, including the financial metrics and ratios of comparable public companies. There were no

events or circumstances that indicated these investments became impaired during the three months ended December 31, 2014 or 2013. At December 31, 2014 and September 30, 2014, these investments totaled $32 million and $35 million, respectively. These assets are classified in other assets on the consolidated balance sheets.

Non-financial assets and liabilities. Long-lived assets such as goodwill, indefinite-lived intangible assets, finite-lived intangible assets, and property, equipment and technology are considered non-financial assets. The Company does not have any non-financial liabilities measured at fair value on a non-recurring basis. Finite-lived intangible assets primarily consist of customer relationships, tradenames and reseller relationships, all of which were obtained through acquisitions.

If the Company were required to perform a quantitative assessment for impairment testing of goodwill and indefinite-lived intangible assets, the fair values would generally be estimated using an income approach. As the assumptions employed to measure these assets on a non-recurring basis are based on management's judgment using internal and external data, these fair value determinations are classified as Level 3 in the fair value hierarchy. There were no events or changes in circumstances that indicate impairment at December 31, 2014.

Other Financial Instruments Not Measured at Fair Value

The following financial instruments are not measured at fair value on the Company's consolidated balance sheet at December 31, 2014, but require disclosure of their fair values: time deposits recorded in prepaid expenses and other current assets, settlement receivable and payable, and customer collateral. The estimated fair value of such instruments at December 31, 2014, approximates their carrying value due to their generally short maturities. If measured at fair value in the financial statements, these financial instruments would be classified as Level 2 in the fair value hierarchy.

Investments

Available-for-sale investment securities

The Company had $19 million in gross unrealized gains and $3 million in gross unrealized losses at December 31, 2014. There were $48 million gross unrealized gains and no gross unrealized losses at September 30, 2014. The gross unrealized gains at December 31, 2014 and September 30, 2014 primarily relate to the Company's available-for-sale equity securities. A majority of the Company's available-for-sale investment securities with stated maturities are due within one to three years.

Pension and Other Postretirement Benefits

Note 4—Pension and Other Postretirement Benefits

The Company sponsors various qualified and non-qualified defined benefit pension and other postretirement benefit plans that provide for retirement and medical benefits for substantially all employees residing in the United States. The Company also sponsors other pension benefit plans that provide benefits for internationally-based employees at certain non-U.S. locations, which are not presented below as they are not material.

The components of net periodic benefit cost are as follows:



	Pension Benefits						Other Postretirement Benefits
	Three Months Ended December 31,						Three Months Ended December 31,
	2014			2013			2014			2013
	(in millions)
Service cost	$	12		$	11		$	—		$	—
Interest cost	10			10			—			—
Expected return on assets	(18		)	(17		)	—			—
Amortization of prior service credit	(2		)	(2		)	(1		)	(1		)
Settlement loss	2			1			—			—
Total net periodic benefit cost	$	4		$	3		$	(1	)	$	(1	)

Settlement Guarantee Management

Note 5—Settlement Guarantee Management

The Company indemnifies its financial institution clients for settlement losses suffered due to failure of any other clients to fund its settlement obligations in accordance with Visa’s operating regulations. The indemnification creates settlement risk for the Company due to the difference in timing between the date of a payment transaction and the date of subsequent settlement. The exposure to settlement losses through Visa's settlement indemnification is accounted for as a settlement risk guarantee. The Company’s settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time. The Company requires certain financial institution clients that do not meet its credit standards to post collateral to offset potential loss from their estimated unsettled transactions. The Company’s estimated maximum settlement exposure was $57.6 billion at December 31, 2014, compared to $56.9 billion at September 30, 2014. Of these settlement exposure amounts, $2.9 billion and $3.2 billion were covered by collateral at December 31, 2014 and September 30, 2014, respectively.

The Company maintained collateral as follows:



	December 31, 2014		September 30, 2014
	(in millions)
Cash equivalents	$	1,041	$	961
Pledged securities at market value	142		148
Letters of credit	1,218		1,242
Guarantees	1,215		1,554
Total	$	3,616	$	3,905

The total available collateral balances presented in the table above were greater than the settlement exposure covered by customer collateral held due to instances in which the available collateral exceeded the total settlement exposure for certain financial institutions at each date presented.

The fair value of the settlement risk guarantee is estimated based on a proprietary probability-weighted model and was approximately $2 million at December 31, 2014 and September 30, 2014, respectively. These amounts are reflected in accrued liabilities on the consolidated balance sheets.

Accrued and Other Liabilities

Other Liabilities

Note 6—Accrued and Other Liabilities

Accrued liabilities consisted of the following:



	December 31, 2014		September 30, 2014
	(in millions)
Accrued operating expenses	$	164	$	199
Visa Europe put option—(See Note 3—Fair Value Measurements and Investments)⁽¹⁾	145		145
Deferred revenue	79		82
Accrued income taxes⁽²⁾	470		73
Other	191		125
Total	$	1,049	$	624

Other non-current liabilities consisted of the following:



	December 31, 2014		September 30, 2014
	(in millions)
Accrued income taxes	$	861	$	855
Employee benefits	83		92
Other	61		58
Total	$	1,005	$	1,005

⁽¹⁾

The put option is exercisable at any time at the sole discretion of Visa Europe with payment required 285 days thereafter. Classification in current liabilities is not an indication of management’s expectation of exercise and simply reflects the fact that the obligation resulting from the exercise of the instrument could become payable within 12 months. The fair value of the put option does not represent the actual purchase price that the Company may be required to pay if the option is exercised, which would likely be in excess of $10 billion.


⁽²⁾	The increase in current accrued income taxes is primarily related to current income taxes accrued in the first quarter of fiscal 2015, but payable in the second quarter of fiscal 2015.

Stockholders' Equity

Note 7—Stockholders' Equity

The number of shares of each class and the number of shares of class A common stock on an as-converted basis at December 31, 2014, are as follows:



(in millions, except conversion rate)	Shares Outstanding	Conversion Rate Into Class A Common Stock		As-converted Class A Common Stock⁽¹⁾
Class A common stock	495	—		495
Class B common stock	245	0.4121	⁽²⁾	101
Class C common stock	20	1.0000		20
Total				616


⁽¹⁾	Figures in the table may not recalculate exactly due to rounding. As-converted class A common stock is calculated based on unrounded numbers.


⁽²⁾	The class B to class A common stock conversion rate has been rounded for purposes of this disclosure. Conversion calculations for dividend payments are based on a conversion rate rounded to the tenth decimal.

Reduction in as-converted class A common stock. The following table presents share repurchases in the open market.



(in millions, except per share data)	Three Months Ended December 31, 2014
Shares repurchased in the open market ⁽¹⁾	3
Average repurchase price per share ⁽²⁾	$	259.52
Total cost	$	803


⁽¹⁾	All shares repurchased in the open market have been retired and constitute authorized but unissued shares.


⁽²⁾	Figures in the table may not recalculate exactly due to rounding. Average repurchase price per share is calculated based on unrounded numbers.

In October 2014, the Company's board of directors authorized a new $5.0 billion share repurchase program. As of December 31, 2014, the program had remaining authorized funds of $4.9 billion for share repurchase. All share repurchase programs authorized prior to October 2014 have been completed.

Class A common stock split. On January 28, 2015, Visa’s board of directors declared a four-for-one split of its class A common stock. Trading will begin on a split-adjusted basis on March 19, 2015. See Note 12—Subsequent Events.

Dividends. In January 2015, the Company’s board of directors declared a quarterly cash dividend of $0.48 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis). The cash dividend will be paid on March 3, 2015, to all holders of record of the Company's class A, B and C common stock as of February 13, 2015, on a pre-split basis. The Company declared and paid $297 million in dividends during the three months ended December 31, 2014.

Earnings Per Share

Note 8—Earnings Per Share

The following table presents earnings per share for the three months ended December 31, 2014.⁽¹⁾



	Basic Earnings Per Share					Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)	Earnings per Share = (A)/(B)		Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)		Earnings per Share = (A)/(B)
Class A common stock	$	1,253	494	$	2.54	$	1,569	619	⁽³⁾	$	2.53
Class B common stock	257		245	$	1.05	$	257	245		$	1.04
Class C common stock	55		22	$	2.54	$	55	22		$	2.53
Participating securities⁽⁴⁾	4		Not presented	Not presented		$	4	Not presented		Not presented
Net income	$	1,569

The following table presents earnings per share for the three months ended December 31, 2013.⁽¹⁾



	Basic Earnings Per Share					Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)	Earnings per Share = (A)/(B)		Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)		Earnings per Share = (A)/(B)
Class A common stock	$	1,115	505	$	2.21	$	1,407	639	⁽³⁾	$	2.20
Class B common stock	228		245	$	0.93	$	228	245		$	0.93
Class C common stock	59		27	$	2.21	$	59	27		$	2.20
Participating securities⁽⁴⁾	5		Not presented	Not presented		$	5	Not presented		Not presented
Net income	$	1,407


⁽¹⁾	Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers.


⁽²⁾	Net income is allocated based on proportional ownership on an as-converted basis. The weighted-average number of shares of as-converted class B common stock used in the income allocation was 101 million and 103 million for the three months ended December 31, 2014 and 2013, respectively.

⁽³⁾

Weighted-average diluted shares outstanding are calculated on an as-converted basis, and include incremental common stock equivalents, as calculated under the treasury stock method. The computation includes approximately 1 million and 2 million common stock equivalents for the three months ended December 31, 2014 and 2013, respectively, because their effect would be dilutive. The calculation excludes less than 1 million of common stock equivalents for the three months ended December 31, 2014 and 2013, because their effect would have been anti-dilutive.


⁽⁴⁾	Participating securities are unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, such as the Company's restricted stock awards, restricted stock units and earned performance-based shares.

Share-based Compensation

Note 9—Share-based Compensation

The Company granted the following equity awards to employees and non-employee directors under the 2007 Equity Incentive Compensation Plan during the three months ended December 31, 2014:



	Granted	Weighted-Average Grant Date Fair Value		Weighted-Average Exercise Price
Non-qualified stock options	340,680	$	47.85	$	249.86
Restricted stock awards ("RSAs")	425,628	$	249.86
Restricted stock units ("RSUs")	178,594	$	249.86
Performance-based shares⁽¹⁾	196,471	$	279.14


⁽¹⁾	Represents the maximum number of performance-based shares which could be earned.

The Company’s non-qualified stock options, RSAs and RSUs are equity awards with service-only conditions and are accordingly expensed on a straight-line basis over the vesting period. The Company's performance-based shares are equity awards with service, market and performance conditions that are accounted for using the graded-vesting method. Compensation cost is recorded net of estimated forfeitures, which are adjusted as appropriate.

Income Taxes

Note 10—Income Taxes

The effective income tax rates were 31% and 32% for the three months ended December 31, 2014 and 2013, respectively. The effective tax rate for the three months ended December 31, 2014 differs from the effective tax rate in the same period in the prior fiscal year primarily due to the reversal of previously established reserves related to an uncertain state tax position based on new information received in the quarter ended December 31, 2014.

During the three months ended December 31, 2014, there were no significant changes in total unrecognized tax benefits or interest and penalties related to uncertain tax positions.

Legal Matters

Note 11—Legal Matters

The Company is party to various legal and regulatory proceedings. Some of these proceedings involve complex claims that are subject to substantial uncertainties and unascertainable damages. Accordingly, except as disclosed, the Company has not established reserves or ranges of possible loss related to these proceedings, as at this time in the proceedings, the matters do not relate to a probable loss and/or the amount or range of losses are not reasonably estimable. Although the Company believes that it has strong defenses for the litigation and regulatory proceedings described below, it could, in the future, incur judgments or fines or enter into settlements of claims that could have a material adverse effect on the Company's financial position, results of operations or cash flows. From time to time, the Company may engage in settlement discussions or mediations with respect to one or more of its outstanding litigation matters, either on its own behalf or collectively with other parties.

The litigation accrual is an estimate and is based on management’s understanding of its litigation profile, the specifics of each case, advice of counsel to the extent appropriate and management’s best estimate of incurred loss as of the balance sheet date.

The following table summarizes activity related to accrued litigation.



	Fiscal 2015			Fiscal 2014
	(in millions)
Balance at October 1	$	1,456		$	5
Payments on legal matters	(103		)	(1		)
Balance at December 31	$	1,353		$	4
Payments on legal matters made subsequent to December 31	(179		)	—
Balance at January 29	$	1,174		$	4

Covered Litigation

Visa Inc., Visa U.S.A. and Visa International are parties to certain legal proceedings that are covered by the retrospective responsibility plan, which the Company refers to as the covered litigation. See Note 2—Retrospective Responsibility Plan. An accrual for the covered litigation and a charge to the litigation provision are recorded when loss is deemed to be probable and reasonably estimable. In making this determination, the Company evaluates available information, including but not limited to actions taken by the litigation committee. The total accrual related to the covered litigation could be either higher or lower than the escrow account balance.

The following table summarizes the activity related to covered litigation.



	Fiscal 2015			Fiscal 2014
	(in millions)
Balance at October 1	$	1,449		$	—
Payments on covered litigation	(100		)	—
Balance at December 31	$	1,349		$	—
Payments on covered litigation made subsequent to December 31	$	(179	)	$	—
Balance at January 29	$	1,170		$	—

Interchange Multidistrict Litigation (MDL)

On January 14, 2015, following a Court-approved process to give class members who previously opted out of the damages portion of the class settlement an option to rejoin it, the class administrator submitted a report stating that it had received 1,179 requests by merchants to rejoin the cash settlement class, some of which may include multiple merchants.

Consumer Interchange Litigation

On November 26, 2014, in the putative class action filed on behalf of an alleged class of Visa and MasterCard payment cardholders, the court dismissed plaintiffs’ federal law claim and declined to exercise jurisdiction over plaintiffs’ state law claim. Both sides have asked the court to reconsider aspects of its decision, and have filed notices of appeal.

Interchange Opt-out Litigation

Beginning in May 2013, more than 40 opt-out cases have been filed by hundreds of merchants in various federal district courts, generally pursuing damages claims on allegations similar to those raised in MDL 1720. A number of the cases also include allegations that Visa has monopolized, attempted to monopolize, and/or conspired to monopolize debit card-related market segments, and one of the cases seeks an injunction against the fixed acquirer network fee. The cases name as defendants Visa Inc., Visa U.S.A., Visa International, MasterCard Incorporated, and MasterCard International Incorporated, although some also include certain U.S. financial institutions as defendants.

Wal-Mart Stores Inc. and its subsidiaries filed an opt-out complaint that also added Visa Europe Limited and Visa Europe Services Inc. as defendants. Visa Europe Limited and Visa Europe Services Inc. filed a motion to dismiss Wal-Mart’s claims against them.

As of the date of filing this quarterly report, Visa has reached settlement agreements with a number of merchants representing approximately 21% of the Visa-branded payment card sales volume of merchants who opted out.

On December 23, 2014, a similar case was filed in New Mexico state court by New Mexico’s attorney general on behalf of the state, state agencies, and citizens of the state, generally pursuing claims on allegations similar to those raised in MDL 1720. If this case is transferred to or otherwise included in MDL 1720, it will be covered litigation for purposes of the retrospective responsibility plan. See Note 2—Retrospective Responsibility Plan.

Other Litigation

"Indirect Purchaser" Actions

In early December 2014, objectors to the settlement in the consolidated Credit/Debit Card Tying Cases petitioned for review by the California Supreme Court.

European Competition Proceedings

U.K. Merchant Litigation. On defendants’ application for summary judgment, the court has limited the potential damages of most merchants who have commenced proceedings to 6 years prior to the filing of their claims. The claimants have been granted permission to appeal the court’s ruling.

Data Pass Litigation

On January 9, 2015, Webloyalty.com, GameStop, and Visa each filed motions to dismiss the second amended class action complaint.

Target Data Breach

On December 30, 2014, the court granted plaintiffs’ notice of voluntary dismissal without prejudice of all claims against Visa and MasterCard.

Pulse Network

On November 25, 2014, Pulse Network LLC filed suit against Visa Inc. in federal district court in Texas. Pulse alleges that Visa has monopolized and attempted to monopolize debit card network services markets. Pulse also alleges that Visa has entered into agreements in restraint of trade, engaged in unlawful exclusive dealing and tying, violated the Texas Free Enterprise and Antitrust Act, and engaged in tortious interference with prospective business relationships. Pulse seeks unspecified treble damages, attorneys’ fees, and injunctive relief, including to enjoin the fixed acquirer network fee structure, Visa’s conduct regarding PIN-Authenticated Visa Debit, and Visa agreements with merchants and acquirers relating to debit acceptance. On January 23, 2015, Visa filed a motion to dismiss the complaint.

Subsequent Events

Note 12—Subsequent Events

Credit facility renewal. On January 28, 2015, the Company, Visa International Service Association and Visa U.S.A. Inc. (collectively, the "Borrowers") entered into a 364-day, unsecured $3.0 billion revolving credit facility (the “Credit Facility”) with Bank of America, N.A., as administrative agent and the lenders party thereto. JPMorgan Chase Bank, N.A., acted as syndication agent in connection with the Credit Facility; Bank of China, Los Angeles Branch, Barclays Bank PLC, Citibank, N.A., HSBC Bank USA, N.A., Royal Bank of Canada, Standard Chartered Bank, The Bank of Tokyo-Mitsubishi UFJ, Ltd., U.S. Bank National Association and Wells Fargo Bank, National Association, acted as Documentation Agents; and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bank of China, Los Angeles Branch, Barclays Bank PLC, Citigroup Global Markets, INC., HSBC Bank USA, N.A., RBC Capital Markets, Standard Chartered Bank, The Bank of Tokyo-Mitsubishi UFJ, Ltd., U.S. Bank National Association and Wells Fargo Securities, LLC, acted as joint lead arrangers and joint book runners. The Credit Facility, which expires on January 27, 2016, replaced the Company’s prior $3.0 billion credit facility, which expired on January 28, 2015.

The Credit Facility provides the Borrowers with a borrowing capacity of up to $3.0 billion. Borrowings under the Credit Facility are available for general corporate purposes. Interest on the borrowings under the Credit Facility would be charged at the London Interbank Offered Rate (LIBOR) or an alternative base rate, in each case plus applicable margins that fluctuate based on the applicable rating of senior unsecured long-term debt securities of the Company. The Borrowers have agreed to pay a commitment fee which will fluctuate based on such applicable rating of the Company.

Other material terms are:


•	a financial covenant which requires the Company to maintain a Consolidated Indebtedness to Consolidated EBITDA Ratio (as defined in the Credit Facility) of not greater than 3.75 to 1.00;


•	customary restrictive covenants, which limit the Borrowers' ability to, among other things, create certain liens, effect fundamental changes to their business, or merge or dispose of substantially all of their assets, subject in each case to customary exceptions and amounts;


•	customary events of default, upon the occurrence of which, after any applicable grace period, the requisite lenders will have the ability to accelerate all outstanding loans thereunder and terminate the commitments; and


•	other customary and standard terms and conditions.

The Borrowers currently have no borrowings under the Credit Facility. The participating lenders in the Credit Facility include certain holders of the Company’s class B and class C common stock, certain of the Borrowers' customers, and their affiliates.

Class A common stock split. On January 28, 2015, Visa’s board of directors declared a four -for-one split of its class A common stock. Each class A common stockholder of record at the close of business on February 13, 2015 ("Record Date"), will receive a dividend of three additional shares on March 18, 2015 for every share held as of the Record Date. Trading will begin on a split-adjusted basis on March 19, 2015. Holders of class B and C common stock will not receive a stock dividend. Instead, the conversion rate for class B common stock will increase to 1.6483 shares of class A common stock per share of class B common stock, and the conversion rate for class C common stock will increase to 4.0 shares of class A common stock per share of class C common stock. Immediately following the split, the class A, B and C stockholders will retain the same relative ownership percentages that they had prior to the stock split. The stock split will increase the Company’s total as-converted shares of class A common stock outstanding as of March 19, 2015, from approximately 614 million shares to approximately 2.5 billion shares based on the share count as of January 27, 2015. All per share amounts and number of shares outstanding in these unaudited consolidated financial statements and accompanying notes are presented on a pre-split basis. As a result of the stock split, all historical per share data and number of shares outstanding presented in future financial statements will be retroactively adjusted.

Dividends. In January 2015, the Company’s board of directors declared a quarterly cash dividend of $0.48 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis). The cash dividend will be paid on March 3, 2015, to all holders of record of the Company's class A, B and C common stock as of February 13, 2015, on a pre-split basis.

Summary of Significant Accounting Policies (Policies)

Organization

Organization. Visa Inc. (“Visa” or the “Company”) is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. Visa and its wholly-owned consolidated subsidiaries, including Visa U.S.A. Inc. (“Visa U.S.A.”), Visa International Service Association (“Visa International”), Visa Worldwide Pte. Limited, Visa Canada Corporation, Inovant LLC and CyberSource Corporation (“CyberSource”), operate one of the world’s most advanced processing networks — VisaNet — which facilitates authorization, clearing and settlement of payment transactions worldwide. VisaNet also offers fraud protection for account holders and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for account holders on Visa-branded cards and payment products. In most cases, account holder and merchant relationships belong to, and are managed by, Visa's financial institution clients. Visa provides a wide variety of payment solutions that support payment products that issuers can offer to their account holders: pay now with debit, pay ahead with prepaid or pay later with credit products. Visa also offers a growing suite of innovative digital, eCommerce and mobile products and services. These services facilitate transactions on Visa's network among account holders, merchants, financial institutions and governments in mature and emerging markets globally.

Consolidation and basis of presentation

Consolidation and basis of presentation. The accompanying unaudited consolidated financial statements include the accounts of Visa and its consolidated entities and are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company consolidates its majority-owned and controlled entities, including variable interest entities ("VIEs") for which the Company is the primary beneficiary. The Company’s investments in VIEs have not been material to its consolidated financial statements as of and for the periods presented. All significant intercompany accounts and transactions are eliminated in consolidation.

Certain prior period amounts within the accompanying unaudited consolidated financial statements have been reclassified to conform to current period presentation. These reclassifications did not affect the Company's financial position, total operating revenues, net income, comprehensive income, or cash flows as of and for the periods presented.

The accompanying unaudited consolidated financial statements are presented in accordance with the U.S. Securities and Exchange Commission ("SEC") requirements for Quarterly Reports on Form 10-Q and, consequently, do not include all of the annual disclosures required by U.S. GAAP. Reference should be made to the Visa Annual Report on Form 10-K for the year ended September 30, 2014 for additional disclosures, including a summary of the Company’s significant accounting policies.

In the opinion of management, the accompanying unaudited consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the interim periods presented.

Recently adopted accounting pronouncements

Recently Issued and Adopted Accounting Pronouncements.

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-04, which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The Company adopted the standard effective October 1, 2014. The adoption did not have a material impact on the consolidated financial statements.

In March 2013, the FASB issued ASU 2013-05, which clarifies the applicable guidance for the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity, or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The Company adopted the standard effective October 1, 2014. The adoption did not have a material impact on the consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, which provides guidance for the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The standard impacts presentation only. The Company adopted the standard effective October 1, 2014. The adoption did not have a material impact on the consolidated financial statements.

In November 2014, the FASB issued ASU 2014-17, which permits an acquired entity to elect the option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtained control of the acquired entity. The Company adopted the standard prospectively effective November 18, 2014. The adoption did not have a material impact on the consolidated financial statements.

Fair Value Measurements and Investments (Tables)

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis



	Fair Value Measurements Using Inputs Considered as
	Level 1				Level 2				Level 3
	December 31, 2014		September 30, 2014		December 31, 2014		September 30, 2014		December 31, 2014		September 30, 2014
	(in millions)
Assets
Cash equivalents and restricted cash:
Money market funds	$	2,307	$	2,277
Commercial paper					$	45	$	37
Investment securities, trading:
Equity securities	78		69
Investment securities, available-for-sale:
U.S. government-sponsored debt securities					2,206		2,162
U.S. Treasury securities	2,627		2,176
Equity securities	25		58
Corporate debt securities					580		522
Auction rate securities									$	7	$	7
Prepaid and other current assets:
Foreign exchange derivative instruments					86		40
Total	$	5,037	$	4,580	$	2,917	$	2,761	$	7	$	7
Liabilities
Accrued liabilities:
Visa Europe put option									$	145	$	145
Foreign exchange derivative instruments					$	7	$	6
Total	$	—	$	—	$	7	$	6	$	145	$	145

Pension and Other Postretirement Benefits (Tables)

Schedule of Defined Benefit Plans Disclosures

The components of net periodic benefit cost are as follows:



	Pension Benefits						Other Postretirement Benefits
	Three Months Ended December 31,						Three Months Ended December 31,
	2014			2013			2014			2013
	(in millions)
Service cost	$	12		$	11		$	—		$	—
Interest cost	10			10			—			—
Expected return on assets	(18		)	(17		)	—			—
Amortization of prior service credit	(2		)	(2		)	(1		)	(1		)
Settlement loss	2			1			—			—
Total net periodic benefit cost	$	4		$	3		$	(1	)	$	(1	)

Settlement Guarantee Management (Tables)

Schedule of Customer Collateral

The Company maintained collateral as follows:



	December 31, 2014		September 30, 2014
	(in millions)
Cash equivalents	$	1,041	$	961
Pledged securities at market value	142		148
Letters of credit	1,218		1,242
Guarantees	1,215		1,554
Total	$	3,616	$	3,905

Accrued and Other Liabilities (Tables)

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following:



	December 31, 2014		September 30, 2014
	(in millions)
Accrued operating expenses	$	164	$	199
Visa Europe put option—(See Note 3—Fair Value Measurements and Investments)⁽¹⁾	145		145
Deferred revenue	79		82
Accrued income taxes⁽²⁾	470		73
Other	191		125
Total	$	1,049	$	624

Other non-current liabilities consisted of the following:



	December 31, 2014		September 30, 2014
	(in millions)
Accrued income taxes	$	861	$	855
Employee benefits	83		92
Other	61		58
Total	$	1,005	$	1,005

⁽¹⁾

The put option is exercisable at any time at the sole discretion of Visa Europe with payment required 285 days thereafter. Classification in current liabilities is not an indication of management’s expectation of exercise and simply reflects the fact that the obligation resulting from the exercise of the instrument could become payable within 12 months. The fair value of the put option does not represent the actual purchase price that the Company may be required to pay if the option is exercised, which would likely be in excess of $10 billion.


⁽²⁾	The increase in current accrued income taxes is primarily related to current income taxes accrued in the first quarter of fiscal 2015, but payable in the second quarter of fiscal 2015.

Stockholders' Equity (Tables)

Schedule of Stock by Class

The number of shares of each class and the number of shares of class A common stock on an as-converted basis at December 31, 2014, are as follows:



(in millions, except conversion rate)	Shares Outstanding	Conversion Rate Into Class A Common Stock		As-converted Class A Common Stock⁽¹⁾
Class A common stock	495	—		495
Class B common stock	245	0.4121	⁽²⁾	101
Class C common stock	20	1.0000		20
Total				616


⁽¹⁾	Figures in the table may not recalculate exactly due to rounding. As-converted class A common stock is calculated based on unrounded numbers.


⁽²⁾	The class B to class A common stock conversion rate has been rounded for purposes of this disclosure. Conversion calculations for dividend payments are based on a conversion rate rounded to the tenth decimal.

Share Repurchase Program Disclosure

on rate has been rounded for purposes of this disclosure. Conversion calculations for dividend payments are based on a conversion rate rounded to the tenth decimal.

Reduction in as-converted class A common stock. The following table presents share repurchases in the open market.



(in millions, except per share data)	Three Months Ended December 31, 2014
Shares repurchased in the open market ⁽¹⁾	3
Average repurchase price per share ⁽²⁾	$	259.52
Total cost	$	803


⁽¹⁾	All shares repurchased in the open market

Earnings Per Share (Tables)

Schedule of Earnings Per Share, Basic and Diluted

The following table presents earnings per share for the three months ended December 31, 2014.⁽¹⁾



	Basic Earnings Per Share					Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)	Earnings per Share = (A)/(B)		Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)		Earnings per Share = (A)/(B)
Class A common stock	$	1,253	494	$	2.54	$	1,569	619	⁽³⁾	$	2.53
Class B common stock	257		245	$	1.05	$	257	245		$	1.04
Class C common stock	55		22	$	2.54	$	55	22		$	2.53
Participating securities⁽⁴⁾	4		Not presented	Not presented		$	4	Not presented		Not presented
Net income	$	1,569

The following table presents earnings per share for the three months ended December 31, 2013.⁽¹⁾



	Basic Earnings Per Share					Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)	Earnings per Share = (A)/(B)		Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)		Earnings per Share = (A)/(B)
Class A common stock	$	1,115	505	$	2.21	$	1,407	639	⁽³⁾	$	2.20
Class B common stock	228		245	$	0.93	$	228	245		$	0.93
Class C common stock	59		27	$	2.21	$	59	27		$	2.20
Participating securities⁽⁴⁾	5		Not presented	Not presented		$	5	Not presented		Not presented
Net income	$	1,407


⁽¹⁾	Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers.


⁽²⁾	Net income is allocated based on proportional ownership on an as-converted basis. The weighted-average number of shares of as-converted class B common stock used in the income allocation was 101 million and 103 million for the three months ended December 31, 2014 and 2013, respectively.

⁽³⁾

Weighted-average diluted shares outstanding are calculated on an as-converted basis, and include incremental common stock equivalents, as calculated under the treasury stock method. The computation includes approximately 1 million and 2 million common stock equivalents for the three months ended December 31, 2014 and 2013, respectively, because their effect would be dilutive. The calculation excludes less than 1 million of common stock equivalents for the three months ended December 31, 2014 and 2013, because their effect would have been anti-dilutive.


⁽⁴⁾	Participating securities are unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, such as the Company's restricted stock awards, restricted stock units and earned performance-based shares.

Share-based Compensation (Tables)

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

The Company granted the following equity awards to employees and non-employee directors under the 2007 Equity Incentive Compensation Plan during the three months ended December 31, 2014:



	Granted	Weighted-Average Grant Date Fair Value		Weighted-Average Exercise Price
Non-qualified stock options	340,680	$	47.85	$	249.86
Restricted stock awards ("RSAs")	425,628	$	249.86
Restricted stock units ("RSUs")	178,594	$	249.86
Performance-based shares⁽¹⁾	196,471	$	279.14


⁽¹⁾	Represents the maximum number of performance-based shares which could be earned.

Legal Matters (Tables)

Schedule of Loss Contingencies by Contingency

The following table summarizes activity related to accrued litigation.



	Fiscal 2015			Fiscal 2014
	(in millions)
Balance at October 1	$	1,456		$	5
Payments on legal matters	(103		)	(1		)
Balance at December 31	$	1,353		$	4
Payments on legal matters made subsequent to December 31	(179		)	—
Balance at January 29	$	1,174		$	4

Schedule of Loss Contingencies by Contingency

The following table summarizes the activity related to covered litigation.



	Fiscal 2015			Fiscal 2014
	(in millions)
Balance at October 1	$	1,449		$	—
Payments on covered litigation	(100		)	—
Balance at December 31	$	1,349		$	—
Payments on covered litigation made subsequent to December 31	$	(179	)	$	—
Balance at January 29	$	1,170		$	—

Retrospective Responsibility Plan Changes in the Escrow Account (Details) (USD $)

3 Months Ended

1 Months Ended

3 Months Ended

1 Months Ended

Dec. 31, 2014

Sep. 30, 2014

Dec. 31, 2014

Opt-out Merchants [Member]

Jan. 29, 2014

Covered Litigation [Member]

Dec. 31, 2014

Covered Litigation [Member]

Dec. 31, 2013

Covered Litigation [Member]

Jan. 29, 2015

Covered Litigation [Member]

Subsequent Event

Escrow Account [Roll Forward]

Restricted Cash and Cash Equivalents

$ 1,400,000,000

$ 1,500,000,000

Payments to opt-out merchants

100,000,000

Loss Contingency Accrual, Payments

$ 0

$ 100,000,000

$ 0

$ 179,000,000

Fair Value Measurements and Investments - Additional Information (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2014

Sep. 30, 2014

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Visa Europe put option

$ 145 ¹

Probability of exercise by Visa Europe

40.00%

P/E differential at the time of exercise

1.9x

P/E differential at the time of exercise, ratio

190.00%

Spot price to earnings

21.7x

Spot price to earnings, ratio

2,170.00%

Incremental price to earnings differential compared to estimate

1.0x

Incremental price to earnings differential compared to estimate, ratio

100.00%

Incremental probability of exercise by Visa Europe

5.00%

Increase in put option value due to increase in probability of exercise

18

Incremental assumed price to earnings differential at time of exercise

1.0x

Incremental P/E differential at time of exercise, ratio

100.00%

Increase in put option value due to increase in price to earnings differential

84

Non-marketable equity investments

32

35

Available-for-sale securities, gross unrealized gains

19

48

Available-for-sale debt securities, accumulated gross unrealized loss, before tax

3

Available-for-sale securities, gross unrealized losses

0

Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Visa Europe put option

$ 145

[1] The put option is exercisable at any time at the sole discretion of Visa Europe with payment required 285 days thereafter. Classification in current liabilities is not an indication of management’s expectation of exercise and simply reflects the fact that the obligation resulting from the exercise of the instrument could become payable within 12 months. The fair value of the put option does not represent the actual purchase price that the Company may be required to pay if the option is exercised, which would likely be in excess of $10 billion.

Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) (USD $)

In Millions, unless otherwise specified

Dec. 31, 2014

Sep. 30, 2014

Investment securities:

Trading

$ 78

$ 69

Accrued liabilities

Visa Europe put option

145 ¹

Fair Value, Measurements, Recurring

Accrued liabilities

Visa Europe put option

145

Level 1 |
Fair Value, Measurements, Recurring

Prepaid and other current assets:

Fair value, total assets

5,037

4,580

Accrued liabilities

Fair value, total liabilities

0

Level 2 |
Fair Value, Measurements, Recurring

Prepaid and other current assets:

Fair value, total assets

2,917

2,761

Accrued liabilities

Fair value, total liabilities

7

6

Level 3 |
Fair Value, Measurements, Recurring

Prepaid and other current assets:

Fair value, total assets

7

Accrued liabilities

Fair value, total liabilities

145

Visa Europe put option |
Level 3 |
Fair Value, Measurements, Recurring

Accrued liabilities

Visa Europe put option

145

Foreign exchange derivative instruments |
Level 2 |
Fair Value, Measurements, Recurring

Accrued liabilities

Foreign exchange derivative instruments

7

6

Money market funds |
Level 1 |
Fair Value, Measurements, Recurring

Cash equivalents and restricted cash:

2,307

2,277

Commercial paper |
Level 2 |
Fair Value, Measurements, Recurring

Cash equivalents and restricted cash:

45

37

Equity securities |
Level 1 |
Fair Value, Measurements, Recurring

Investment securities:

Trading

78

69

Available-for-sale securities

25

58

U.S. government-sponsored debt securities |
Level 2 |
Fair Value, Measurements, Recurring

Investment securities:

Available-for-sale securities

2,206

2,162

U.S. Treasury securities |
Level 1 |
Fair Value, Measurements, Recurring

Investment securities:

Available-for-sale securities

2,627

2,176

Corporate Debt Securities |
Level 2 |
Fair Value, Measurements, Recurring

Investment securities:

Available-for-sale securities

580

522

Auction rate securities |
Level 3 |
Fair Value, Measurements, Recurring

Investment securities:

Available-for-sale securities

7

Foreign exchange derivative instruments |
Level 2 |
Fair Value, Measurements, Recurring

Prepaid and other current assets:

$ 86

$ 40

[1] The put option is exercisable at any time at the sole discretion of Visa Europe with payment required 285 days thereafter. Classification in current liabilities is not an indication of management’s expectation of exercise and simply reflects the fact that the obligation resulting from the exercise of the instrument could become payable within 12 months. The fair value of the put option does not represent the actual purchase price that the Company may be required to pay if the option is exercised, which would likely be in excess of $10 billion.

Components of Net Periodic Benefit Cost (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2014

Dec. 31, 2013

Pension Benefits

Defined Benefit Plan Disclosure [Line Items]

Service cost

$ 12

$ 11

Interest cost

10

Expected return on assets

(18)

(17)

Amortization of prior service credit

(2)

Settlement loss

2

1

Total net periodic benefit cost

4

3