Document and Entity Information

3 Months Ended

Dec. 31, 2015

Jan. 22, 2016

Class A common stock

Jan. 22, 2016

Class B common stock

Jan. 22, 2016

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, 2015

Document Fiscal Year Focus

2016

Document Fiscal Period Focus

Q1

Amendment Flag

false

Entity Common Stock, Shares Outstanding

1,919,130,968

245,513,385

19,411,327

CONSOLIDATED BALANCE SHEETS (USD $)

In Millions, unless otherwise specified

Dec. 31, 2015

Sep. 30, 2015

Assets

Cash and cash equivalents

$ 12,837

$ 3,518

Restricted cash—litigation escrow (Note 3)

1,061

1,072

Investment securities (Note 4):

Trading

80

66

Available-for-sale

8,428

2,431

Settlement receivable

443

408

Accounts receivable

922

847

Customer collateral (Note 7)

1,041

1,023

Current portion of client incentives

414

303

Prepaid expenses and other current assets

247

353

Total current assets

25,473

10,021

Investment securities, available-for-sale (Note 4)

3,487

3,384

Client incentives

128

110

Property, equipment and technology, net

1,884

1,888

Other assets

832

778

Intangible assets, net

11,348

11,361

Goodwill

11,825

Total assets

54,977

39,367

Liabilities

Accounts payable

118

127

Settlement payable

744

780

Customer collateral (Note 7)

1,041

1,023

Accrued compensation and benefits

317

503

Client incentives

1,116

1,049

Accrued liabilities (Note 8)

1,009

849

Accrued litigation (Note 13)

1,012

1,024

Total current liabilities

5,357

5,355

Long-term debt (Note 5)

15,877

0

Deferred tax liabilities

3,344

3,273

Other liabilities (Note 8)

923

897

Total liabilities

25,501

9,525

Equity

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

0

Additional paid-in capital

17,824

18,073

Accumulated income

11,701

11,843

Accumulated other comprehensive loss, net:

Investment securities, available-for-sale

23

5

Defined benefit pension and other postretirement plans

(131)

(161)

Derivative instruments classified as cash flow hedges

60

83

Foreign currency translation adjustments

(1)

Total accumulated other comprehensive loss, net

(49)

(74)

Total equity

29,476

29,842

Total liabilities and equity

54,977

39,367

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, 2015

Sep. 30, 2015

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

1,926

1,950

Common stock, shares outstanding

1,926

1,950

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

19

20

Common stock, shares outstanding

19

20

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

Dec. 31, 2015

Dec. 31, 2014

Operating Revenues

Service revenues

$ 1,645

$ 1,538

Data processing revenues

1,479

1,383

International transaction revenues

1,031

970

Other revenues

198

204

Client incentives

(788)

(713)

Total operating revenues

3,565

3,382

Operating Expenses

Personnel

499

509

Marketing

194

205

Network and processing

128

114

Professional fees

72

70

Depreciation and amortization

120

General and administrative

156

126

Total operating expenses

1,169

1,144

Operating income

2,396

2,238

Non-operating Income

Interest expense

(29)

(3)

Other

272

27

Total non-operating income

243

24

Income before income taxes

2,639

2,262

Income tax provision (Note 12)

698

693

Net income

$ 1,941

$ 1,569

Class A common stock

Earnings Per Share

Basic earnings per share (Note 10) (in dollars per share)

$ 0.80 ¹

$ 0.63 ¹

Basic weighted-average shares outstanding (Note 10) (in shares)

1,937

1,974

Diluted earnings per share (Note 10) (in dollars per share)

$ 0.80 ¹

$ 0.63 ¹

Diluted weighted-average shares outstanding (Note 10) (in shares)

2,430 ²

2,478 ²

Class B common stock

Earnings Per Share

Basic earnings per share (Note 10) (in dollars per share)

$ 1.32 ¹ ³

$ 1.05 ¹ ³

Basic weighted-average shares outstanding (Note 10) (in shares)

245 ³

Diluted earnings per share (Note 10) (in dollars per share)

$ 1.32 ¹ ³

$ 1.04 ¹ ³

Diluted weighted-average shares outstanding (Note 10) (in shares)

245 ³

Class C common stock

Earnings Per Share

Basic earnings per share (Note 10) (in dollars per share)

$ 3.20 ¹ ³

$ 2.54 ¹ ³

Basic weighted-average shares outstanding (Note 10) (in shares)

20 ³

22 ³

Diluted earnings per share (Note 10) (in dollars per share)

$ 3.20 ¹ ³

$ 2.53 ¹ ³

Diluted weighted-average shares outstanding (Note 10) (in shares)

20 ³

22 ³

[1] Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers. The number of shares and per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the fiscal second quarter of 2015. See Note 9—Stockholders' Equity.

[2] 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 5 million common stock equivalents for the three months ended December 31, 2015 and 2014, because their effect would be dilutive. The computation excludes 1 million and 2 million of common stock equivalents for the three months ended December 31, 2015 and 2014, respectively, because their effect would have been anti-dilutive.

[3] The outstanding number of shares of class B and C common stock were not impacted by the stock split as these stockholders received an adjustment to their respective conversion ratios instead of stock dividends. See Note 9—Stockholders' Equity. Weighted-average basic and diluted shares outstanding for class B and C common stock are calculated based on the common shares outstanding of each respective class rather than on an as-converted basis.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2015

Dec. 31, 2014

Statement of Comprehensive Income [Abstract]

Net income

$ 1,941

$ 1,569

Investment securities, available-for-sale:

Net unrealized gain (loss)

34

(10)

Income tax effect

(16)

3

Reclassification adjustment for net gain realized in net income

0

(21)

Income tax effect

0

8

Defined benefit pension and other postretirement plans:

Net unrealized actuarial gain and prior service credit

56

6

Income tax effect

(21)

(1)

Amortization of actuarial loss and prior service credit realized in net income

(7)

(1)

Income tax effect

2

0

Derivative instruments classified as cash flow hedges:

Net unrealized gain

16

63

Income tax effect

(5)

(17)

Reclassification adjustment for net gain realized in net income

(48)

(6)

Income tax effect

14

2

Foreign currency translation adjustments

0

1

Other comprehensive income, net of tax

25

27

Comprehensive income

$ 1,966

$ 1,596

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 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, 2015

$ 29,842

$ 18,073

$ 11,843

$ (74)

Beginning Balance (in shares) at Sep. 30, 2015

1,950

245

20

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

Net income

1,941 ¹

1,941

Other comprehensive income, net of tax

25

Comprehensive income

1,966

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

1

(1)

Issuance and vesting of restricted stock and performance-based shares (in shares)

1

Issuance and vesting of restricted stock and performance-based shares

0

Share-based compensation, net of forfeitures (Note 11) (in shares)²

0

Share-based compensation, net of forfeitures (Note 11)

39

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

(1)

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

(81)

Excess tax benefit for share-based compensation

36

Cash proceeds from issuance of common stock under equity plans (in shares)

1

Cash proceeds from issuance of common stock under employee equity plans

29

Cash dividends declared and paid, at a quarterly amount of $0.14 per as-converted share (Note 9)

(340)

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

(26)³

(26)

Repurchase of class A common stock (Note 9)

(2,015)

(272)

(1,743)

Ending Balance at Dec. 31, 2015

$ 29,476

$ 17,824

$ 11,701

$ (49)

Ending Balance (in shares) at Dec. 31, 2015

1,926

245

19

[1] 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 405 million for the three months ended December 31, 2015 and 2014. The weighted-average number of shares of as-converted class C common stock used in the income allocation was 78 million and 88 million for the three months ended December 31, 2015 and 2014, respectively.

[2] Decrease in class A common stock related to forfeitures of restricted stock awards is less than 1 million shares.

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical)

3 Months Ended

Dec. 31, 2015

Dividends, Common Stock, Cash

$ 0.14

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2015

Dec. 31, 2014

Operating Activities

Net income

$ 1,941

$ 1,569

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

Amortization of client incentives

788

713

Fair value adjustment for the Visa Europe put option

(255)

0

Share-based compensation

39

45

Excess tax benefit for share-based compensation

(36)

(58)

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

120

Deferred income taxes

45

97

Other

5

(19)

Change in operating assets and liabilities:

Settlement receivable

(35)

286

Accounts receivable

(75)

(78)

Client incentives

(850)

(687)

Other assets

23

(141)

Accounts payable

(10)

Settlement payable

(36)

(477)

Accrued and other liabilities

317

484

Accrued litigation (Note 13)

(12)

(103)

Net cash provided by operating activities

1,979

1,761

Investing Activities

Purchases of property, equipment, technology and intangible assets

(126)

(104)

Investment securities, available-for-sale:

Purchases

(6,803)

(758)

Proceeds from maturities and sales

739

226

Purchases of / contributions to other investments

(8)

Proceeds / distributions from other investments

4

Net cash used in investing activities

(6,194)

(636)

Financing Activities

Repurchase of class A common stock (Note 9)

(2,015)

(803)

Dividends paid (Note 9)

(340)

(297)

Proceeds from issuance of senior notes (Note 5)

15,971

0

Debt issuance costs (Note 5)

77

0

Payments from litigation escrow account—U.S. retrospective responsibility plan (Note 3 and Note 13)

11

100

Cash proceeds from issuance of common stock under employee equity plans

29

30

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

(81)

(100)

Excess tax benefit for share-based compensation

36

58

Net cash provided by (used in) financing activities

13,534

(1,012)

Effect of exchange rate changes on cash and cash equivalents

0

1

Increase in cash and cash equivalents

9,319

114

Cash and cash equivalents at beginning of year

3,518

1,971

Cash and cash equivalents at end of period

12,837

2,085

Supplemental Disclosure

Income taxes paid, net of refunds

79

57

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

$ 40

$ 21

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.

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, 2015 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 April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, which simplifies the presentation of debt issuance costs by requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The standard impacts presentation only. The Company elected to early adopt the standard effective October 1, 2015 and the carrying amount of the Company's debt liability is presented net of issuance costs on the consolidated financial statements. Also see Note 5—Debt.

In September 2015, the FASB issued ASU No. 2015-16, which simplifies the accounting for post-acquisition adjustments by eliminating the requirement to retrospectively account for the adjustments made to provisional amounts recognized in a business combination. The Company elected to early adopt this guidance on a prospective basis effective October 1, 2015. The adoption did not have a material impact on the consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, which simplifies the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be presented as non-current. The standard impacts presentation only. The Company elected to early adopt the standard on a retrospective basis effective October 1, 2015 and all deferred tax assets and liabilities are classified as non-current. Previously, current deferred tax assets had been presented separately and current deferred tax liabilities had been included in accrued liabilities on the consolidated balance sheets. All prior period amounts within the consolidated financial statements have been reclassed to conform to current period presentation. The reclass did not affect the Company's total equity, operating revenues, net income, comprehensive income or cash flows as of and for the periods presented.

In January 2016, the FASB issued ASU 2016-01, which amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including the requirement to measure certain equity investments at fair value with changes in fair value recognized in net income. The Company will adopt the standard effective October 1, 2018. The adoption is not expected to have a material impact on the consolidated financial statements.

Visa Europe

Note 2—Visa Europe

Acquisition of Visa Europe

On November 2, 2015, the Company and Visa Europe entered into a transaction agreement (the "Transaction Agreement"), pursuant to which the Company and Visa Europe agreed on the terms and conditions of the Company’s acquisition of 100% of the share capital of Visa Europe for a total purchase price of up to €21.2 billion. The purchase price consists of: (a) at the closing of the transaction, up-front cash consideration of €11.5 billion and preferred stock of the Company convertible upon certain conditions into class A common stock or class A equivalent preferred stock of the Company, as described below, valued at approximately €5.0 billion, and (b) following the end of sixteen fiscal quarters post-closing, contingent cash consideration of up to €4.0 billion (plus up to an additional €0.7 billion in interest), determined based on the achievement of specified net revenue levels during such post-closing period. Closing is subject to regulatory approvals and other customary conditions, and is currently expected to occur in the fiscal third quarter of 2016.

Transaction agreement and option amendment. The Transaction Agreement provides for the acquisition to be effected pursuant to the exercise of the amended Visa Europe put option (the "Amended Put Option"), as described further below. In connection with the execution of the Transaction Agreement, the Company and Visa Europe entered into an amendment (the "Put Option Amendment") to the Visa Europe put option (the "Put") to align certain terms of the Put with the terms of the Transaction Agreement. Under the terms and conditions of the Transaction Agreement, the Visa Europe board of directors is required to exercise the Amended Put Option on the closing date of the transaction to effect Visa’s purchase of all of Visa Europe’s share capital. If the Transaction Agreement is terminated for any reason prior to the completion of the transaction, the Put Option Amendment will also terminate and the Put will revert to its original, unamended form. The Transaction Agreement may be terminated by the Company or Visa Europe, subject to specified exceptions, if the transaction is not consummated by August 2, 2016, or if legal restraints that prohibit the closing have become final and non-appealable.

Preferred stock. In connection with the transaction, the board of directors of the Company has authorized the creation of three new series of preferred stock of the Company:


•	series A convertible participating preferred stock, par value $0.0001 per share, which is designed to be economically equivalent to the Company’s class A common stock (the “class A equivalent preferred stock”);


•	series B convertible participating preferred stock, par value $0.0001 per share (the “U.K.&I preferred stock”); and


•	series C convertible participating preferred stock, par value $0.0001 per share (the “Europe preferred stock”).

The Transaction Agreement provides that, subject to the terms and conditions thereof, at closing, the Company will issue 2,480,500 shares of U.K.&I preferred stock to those of Visa Europe’s member financial institutions in the United Kingdom and Ireland that are entitled to receive preferred stock at closing, and 3,157,000 shares of Europe preferred stock to those of Visa Europe’s other member financial institutions that are entitled to receive preferred stock at closing. Subject to the reduction in conversion rates described below, the U.K.&I preferred stock will be convertible into a number of shares of class A common stock or class A equivalent preferred stock valued at approximately €2.2 billion and the Europe preferred stock will be convertible into a number of shares of class A common stock or class A equivalent preferred stock valued at approximately €2.8 billion. These approximate values of the UK&I and Europe preferred stock to be issued at closing are based on the average price of the class A common stock of $71.68 per share, and the euro-dollar exchange rate of 1.12750 for the 30 trading days ended October 19, 2015.

The UK&I and Europe preferred stock will be convertible into shares of class A common stock or class A equivalent preferred stock, at an initial conversion rate of 13.952 shares of class A common stock for each share of U.K.&I preferred stock and Europe preferred stock. The conversion rates may be reduced from time to time to offset certain liabilities, if any, which may be incurred by the Company, Visa Europe or their affiliates as a result of certain existing and potential litigation relating to the setting of multilateral interchange fee rates in the Visa Europe territory. A reduction in the conversion rates of the U.K.&I preferred stock and the Europe preferred stock have the same economic effect on earnings per share as repurchasing the Company's class A common stock because it reduces the as-converted class A common stock share count. Additionally, the shares of U.K.&I and Europe preferred stock will be subject to restrictions on transfer and may become convertible in stages based on developments in the existing and potential litigation. The shares of U.K.&I and Europe preferred stock will become fully convertible on the 12th anniversary of closing, subject only to a holdback to cover any then-pending claims. See Note 3—U.S. Retrospective Responsibility Plan and Potential Visa Europe Liabilities.

Upon issuance of the preferred stock at closing, the holders of the U.K.&I and Europe preferred stock will have no right to vote on any matters, except for certain defined matters, including, in specified circumstances, any consolidation, merger or combination of the Company. Holders of the class A equivalent preferred stock, upon issuance at conversion, will have similar voting rights to the rights of the holders of the U.K.&I and Europe preferred stock. With respect to those limited matters on which the holders of preferred stock may vote, approval by the holders of the preferred stock requires the affirmative vote of the outstanding voting power of each such series of preferred stock, each such series voting as a single class. Once issued, all three series of preferred stock will participate on an as-converted basis in regular quarterly cash dividends declared on the Company's class A common stock.

U.K. loss sharing agreement and litigation management deed. On November 2, 2015, the Company, Visa Europe and certain of Visa Europe’s member financial institutions located in the United Kingdom (the “U.K. LSA members”) entered into a loss sharing agreement (the “U.K. loss sharing agreement”), pursuant to which each of the U.K. LSA members has agreed, on a several and not joint basis, to compensate the Company for certain losses which may be incurred by the Company, Visa Europe or their affiliates as a result of certain existing and potential litigation relating to the setting and implementation of domestic multilateral interchange fee rates in the United Kingdom, subject to the terms and conditions set forth therein and, with respect to each U.K. LSA member, up to a maximum amount of the up-front cash consideration to be received by such U.K. LSA member. The U.K. LSA members’ obligations under the U.K. loss sharing agreement are conditional upon, among other things, the acquisition closing, and additionally upon either (a) losses valued at in excess of the sterling equivalent at closing of €1.0 billion having arisen in claims relating to the U.K. domestic multilateral interchange fees (with such losses being recoverable through reductions in the conversion rate of the U.K.&I preferred stock), or (b) the conversion rate of the UK&I preferred stock having been reduced to zero pursuant to losses arising in claims relating to multilateral interchange fee rate setting in the Visa Europe territory, as described above. See Note 3—U.S. Retrospective Responsibility Plan and Potential Visa Europe Liabilities.

Prior to closing, the Company and the other parties thereto will enter into a litigation management deed, which will set forth the agreed upon procedures for the management of the existing and potential litigation, as described above, relating to the setting and implementation of multilateral interchange fee rates in the Visa Europe territory (the "Europe covered claims"), the allocation of losses resulting from the Europe covered claims, and any accelerated conversion or reduction in the conversion rate of the shares of U.K.&I and Europe preferred stock. Subject to the terms and conditions set forth therein, the litigation management deed provides that the Company will generally control the conduct of the Europe covered claims, subject to certain obligations to report and consult with newly established Europe litigation management committees. The Europe litigation management committees, which will be composed of representatives of certain Visa Europe members, will also be granted consent rights to approve certain material decisions in relation to the Europe covered claims.

U.S. Retrospective Responsibility Plan and Potential Visa Europe Liabilities

Note 3—U.S. Retrospective Responsibility Plan and Potential Visa Europe Liabilities

U.S. Retrospective Responsibility Plan

Under the terms of the U.S. retrospective responsibility plan, the Company maintains an escrow account from which settlements of, or judgments in, the covered litigation are paid. The balance of the escrow account was $1.1 billion at December 31, 2015 and September 30, 2015. The Company paid $11 million to opt-out merchants from the litigation escrow account during the three months ended December 31, 2015 to settle their claims associated with the interchange multidistrict litigation. See Note 13—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, 2015. See Note 13—Legal Matters.

Potential Visa Europe Liabilities

On November 2, 2015, the Company and Visa Europe entered into the Transaction Agreement pursuant to which the Company agreed to acquire Visa Europe. Closing of the acquisition is subject to various conditions including regulatory approvals, and is expected to occur in the fiscal third quarter of 2016. Visa Inc., Visa Europe or their affiliates are, or may become, a party to certain existing and potential litigation relating to the setting of multilateral interchange fee rates in the Visa Europe territory. The Company has obtained certain protection in respect of losses resulting from existing and potential litigation through the preferred stock and the U.K. loss sharing agreement, and has agreed to certain terms regarding the conduct of such litigation, all of which is conditioned on the closing of the acquisition of Visa Europe by the Company. See Note 2—Visa Europe.

Fair Value Measurements and Investments

Note 4—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, 2015		September 30, 2015		December 31, 2015		September 30, 2015		December 31, 2015		September 30, 2015
	(in millions)
Assets
Cash equivalents and restricted cash:
Money market funds	$	3,517	$	3,051
U.S. Treasury securities	5,999		—
U.S. government-sponsored debt securities					3,198		280
Investment securities, trading:
Equity securities	80		66
Investment securities, available-for-sale:
U.S. Treasury securities	3,871		2,656
U.S. government-sponsored debt securities					7,535		2,615
Equity securities	59		4
Corporate debt securities					443		533
Auction rate securities									$	7	$	7
Prepaid and other current assets:
Foreign exchange derivative instruments					50		76
Total	$	13,526	$	5,777	$	11,226	$	3,504	$	7	$	7
Liabilities
Accrued liabilities:
Visa Europe put option									$	—	$	255
Foreign exchange derivative instruments					$	10	$	13
Total	$	—	$	—	$	10	$	13	$	—	$	255

There were no transfers between Level 1 and Level 2 assets during the three months ended December 31, 2015 and 2014.

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. 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, 2015.

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, 2015.

Visa Europe put option agreement. On November 2, 2015, the Company and Visa Europe entered into the Put Option Amendment to align certain terms of the Put with the terms of the Visa Europe Transaction Agreement. Under the terms and conditions of the Transaction Agreement, the Visa Europe board of directors is required to exercise the Amended Put Option on the closing date of the transaction to effect Visa’s purchase of all of Visa Europe’s share capital. If the Transaction Agreement is terminated for any reason prior to the completion of the transaction, the Put Option Amendment will also terminate and the Put will revert to its original, unamended form.

Exercise of the Amended Put Option by the Visa Europe board of directors is mandatory, subject to the satisfaction of the terms and conditions of the Transaction Agreement. As such, for accounting purposes, it is not treated as a written put option and is not required to be recorded at fair value. At December 31, 2015, Visa expected to complete the transaction in accordance with the Transaction Agreement. Therefore, management concluded that it does not expect the Put to revert to its original, unamended form or to be unilaterally exercised by Visa Europe in the future. As a result, the value of the Put was reduced to zero at December 31, 2015.

Changes in the fair value of the Put are recorded as non-cash, non-operating income in the Company's 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, 2015 or 2014. At December 31, 2015 and September 30, 2015, these investments totaled $47 million and $45 million, respectively. These assets are classified in other assets on the consolidated balance sheets.

Due to the completion of an initial public offering by one of the Company's investees during the quarter ended December 31, 2015, the Company reclassified equity securities previously accounted for as a cost method investment, with a carrying value of $4 million, to short-term available-for-sale investment securities. The fair value of this investment at December 31, 2015 was $55 million, resulting in the recognition of a pre-tax unrealized gain of $51 million in other comprehensive income.

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, trade names 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, 2015.

Other Fair Value Disclosures

Long-term debt. In December 2015, the Company issued fixed-rate senior notes in an aggregate principal amount of $16.0 billion, with maturities ranging between 2 and 30 years. See Note 5—Debt. These debt instruments are measured at amortized cost on the Company's consolidated balance sheet at December 31, 2015. The fair value of these notes, 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. If measured at fair value in the financial statements, these instruments would be classified as Level 2 in the fair value hierarchy.

The following table presents the carrying amount and estimated fair value of the Company’s debt in order of maturity:



	December 31, 2015
	Carrying Amount		Estimated Fair Value
1.20% Senior Notes due December 2017	$	1,745	$	1,748
2.20% Senior Notes due December 2020	2,986		2,995
2.80% Senior Notes due December 2022	2,237		2,259
3.15% Senior Notes due December 2025	3,962		4,005
4.15% Senior Notes due December 2035	1,485		1,514
4.30% Senior Notes due December 2045	3,462		3,551
	$	15,877	$	16,072

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, 2015, 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, 2015 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 $55 million in gross unrealized gains and $14 million in gross unrealized losses at December 31, 2015. The unrealized gains were primarily related to the Company's reclassified equity investment discussed above. There were $7 million gross unrealized gains and no gross unrealized losses at September 30, 2015. A majority of the Company's available-for-sale investment securities with stated maturities are due within one to two years.

Debt

Note 5—Debt

The Company had outstanding debt as follows:



	December 31, 2015
	Principal Amount		Unamortized Discounts and Debt Issuance Costs			Carrying Amount		Effective Interest Rate
	(in millions, except percentages)
1.20% Senior Notes due December 2017 (the "2017 Notes")	$	1,750	$	(5	)	$	1,745	1.36	%
2.20% Senior Notes due December 2020 (the "2020 Notes")	3,000		(14		)	2,986		2.30	%
2.80% Senior Notes due December 2022 (the "2022 Notes")	2,250		(13		)	2,237		2.89	%
3.15% Senior Notes due December 2025 (the "2025 Notes")	4,000		(38		)	3,962		3.26	%
4.15% Senior Notes due December 2035 (the "2035 Notes")	1,500		(15		)	1,485		4.23	%
4.30% Senior Notes due December 2045 (the "2045 Notes")	3,500		(38		)	3,462		4.37	%
Total long-term debt	$	16,000	$	(123	)	$	15,877

Senior Notes

In December 2015, the Company issued fixed-rate senior notes (the 2017 Notes, 2020 Notes, 2022 Notes, 2025 Notes, 2035 Notes and 2045 Notes, or collectively, the "Notes") in conjunction with the anticipated acquisition of Visa Europe, in an aggregate principal amount of $16.0 billion, with maturities ranging between 2 and 30 years. Interest on the Notes, at a rate ranging between 1.20% and 4.30%, is payable semi-annually on June 14 and December 14 of each year, commencing June 14, 2016. The Company recognized interest expense of $24 million for the quarter ended December 31, 2015 as non-operating expense. The net aggregate proceeds from the issuance of the Notes, after deducting discounts and debt issuance costs, were $15.9 billion. The discounts and debt issuance costs will be amortized over the respective term of each note using the effective interest method. The indenture governing the Notes contains customary event of default provisions. The Notes are senior unsecured obligations of the Company, ranking equally and ratably among themselves and with the Company's existing and future unsecured and unsubordinated debt. The Notes are not secured by any assets of the Company and are not guaranteed by any of the Company's subsidiaries. The Company was in compliance with all related covenants as of December 31, 2015.

Each series of the Notes may be redeemed as a whole or in part, at the Company’s option at any time, prior to, with respect to the 2017 Notes, their maturity date, and with respect to the 2020 Notes, the 2022 Notes, the 2025 Notes, the 2035 Notes and the 2045 Notes, the applicable par call date (as set forth in the table below), at a price equal to the greater of:


•	100% of the principal amount of such Notes; and


•	the sum of the present value of the remaining scheduled payments of principal and interest through the maturity or par call date for each of the Notes below at the treasury rate defined under the terms of the Notes, plus the applicable spread for such Notes (as set forth in the table below),

plus, in each case, accrued and unpaid interest to, but excluding, the date of redemption.



Series	Maturity/Par Call Date	Spread
2017 Notes	December 14, 2017	5 bps
2020 Notes	November 14, 2020	10 bps
2022 Notes	October 14, 2022	12.5 bps
2025 Notes	September 14, 2025	15 bps
2035 Notes	June 14, 2035	20 bps
2045 Notes	June 14, 2045	20 bps

On or after the applicable par call date, the Notes, except the 2017 Notes, may be redeemed as a whole or in part, at the Company’s option at any time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued interest.

In the event that the Visa Europe acquisition has not been consummated on or prior to February 2, 2017 (which date may be extended in accordance with the terms of the Notes), the Company will be required to redeem all outstanding 2017 Notes, 2020 Notes, 2022 Notes and 2025 Notes on the special mandatory redemption date, as defined in the terms of the Notes, at a redemption price equal to 101% of the aggregate principal amount of such Notes plus accrued and unpaid interest. The 2035 Notes and 2045 Notes are not subject to the special mandatory redemption provision.

Future principal payments on the Company's outstanding debt are as follows:



Fiscal Year	2016		2017		2018		2019		2020		Thereafter		Total
(in millions)	$	—	$	—	$	1,750	$	—	$	—	$	14,250	$	16,000

Credit Facility Renewal. On January 27, 2016, the Company, Visa International Service Association and Visa U.S.A. Inc. (collectively, the "Borrowers") entered into a 5-year, unsecured $4.0 billion revolving credit facility (the "Credit Facility") with Bank of America, N.A., as administrative agent and the lenders party thereto. JP Morgan 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, Wells Fargo Bank, National Association, Deutsche Bank Securities Inc. and Toronto Dominion (New York) LLC, 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, Wells Fargo Securities, LLC, Deutsche Bank Securities Inc. and TD Securities (USA) LLC, acted as joint lead arrangers and joint book runners. The Credit Facility, which expires on January 27, 2021, replaced the Company's prior $3.0 billion credit facility, which expired on January 27, 2016.

The Credit Facility provides the Borrowers with a borrowing capacity of up to $4.0 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.

Pension and Other Postretirement Benefits

Note 6—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.

In October 2015, the Company's board of directors approved an amendment of the qualified defined benefit pension plan such that the Company discontinued employer provided credits after December 31, 2015. Plan participants continue to earn interest credits on existing balances at the time of the freeze. As a result, a curtailment gain totaling $8 million was recognized as part of the Company's net periodic benefit cost. The Company also recorded a net unrealized actuarial gain of $56 million from the remeasurement of its pension plan in the first quarter of fiscal 2016 within other comprehensive income.

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,
	2015			2014			2015			2014
	(in millions)
Service cost	$	13		$	12		$	—		$	—
Interest cost	11			10			—			—
Expected return on assets	(17		)	(18		)	—			—
Amortization of:
Prior service credit	(1		)	(2		)	(1		)	(1		)
Actuarial loss	2			—			—			—
Curtailment gain	(8		)	—			—			—
Settlement loss	—			2			—			—
Total net periodic benefit cost	$	—		$	4		$	(1	)	$	(1	)

Settlement Guarantee Management

Note 7—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 the Visa Rules. This 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 $42.5 billion for the quarter ended December 31, 2015, compared to $43.5 billion for the quarter ended September 30, 2015. Of these amounts, $2.2 billion were covered by collateral at December 31, 2015 and September 30, 2015.

The Company maintained collateral as follows:



	December 31, 2015		September 30, 2015
	(in millions)
Cash equivalents	$	1,041	$	1,023
Pledged securities at market value	151		154
Letters of credit	1,131		1,178
Guarantees	935		971
Total	$	3,258	$	3,326

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 $1 million at December 31, 2015 and September 30, 2015. These amounts are reflected in accrued liabilities on the consolidated balance sheets.

Accrued and Other Liabilities

[1] On November 2, 2015, the Company and Visa Europe entered into the Put Option Amendment to align certain terms of the Put with the terms of the Visa Europe Transaction Agreement. Exercise of the Amended Put Option by the Visa Europe board of directors is mandatory, subject to the satisfaction of the terms and conditions of the Transaction Agreement. As such, for accounting purposes, it is not treated as a written put option and is not required to be recorded at fair value. At December 31, 2015, Visa expected to complete the transaction in accordance with the Transaction Agreement. Therefore, management concluded that it does not expect the Put to revert to its original, unamended form or to be unilaterally exercised by Visa Europe in the future. As a result, the value of the Put was reduced to zero at December 31, 2015. See Note 2—Visa Europe and Note 4—Fair Value Measurements and Investments.

Accrued and Other Liabilities

Note 8—Accrued and Other Liabilities

Accrued liabilities consisted of the following:



	December 31, 2015		September 30, 2015
	(in millions)
Accrued operating expenses	$	220	$	257
Visa Europe put option ⁽¹⁾	—		255
Deferred revenue	80		81
Accrued interest expenses ⁽²⁾	23		—
Accrued income taxes ⁽³⁾	522		75
Other ⁽⁴⁾	164		181
Total	$	1,009	$	849

Other non-current liabilities consisted of the following:



	December 31, 2015		September 30, 2015
	(in millions)
Accrued income taxes	$	771	$	752
Employee benefits	82		77
Other	70		68
Total	$	923	$	897

⁽¹⁾

On November 2, 2015, the Company and Visa Europe entered into the Put Option Amendment to align certain terms of the Put with the terms of the Visa Europe Transaction Agreement. Exercise of the Amended Put Option by the Visa Europe board of directors is mandatory, subject to the satisfaction of the terms and conditions of the Transaction Agreement. As such, for accounting purposes, it is not treated as a written put option and is not required to be recorded at fair value. At December 31, 2015, Visa expected to complete the transaction in accordance with the Transaction Agreement. Therefore, management concluded that it does not expect the Put to revert to its original, unamended form or to be unilaterally exercised by Visa Europe in the future. As a result, the value of the Put was reduced to zero at December 31, 2015. See Note 2—Visa Europe and Note 4—Fair Value Measurements and Investments.


⁽²⁾	The balance at December 31, 2015 is due to the issuance of long-term debt in conjunction with the anticipated acquisition of Visa Europe. See Note 2—Visa Europe and Note 5—Debt.


⁽³⁾	The increase in accrued income taxes is primarily related to current income taxes accrued in the first quarter of fiscal 2016, but payable in the second quarter of fiscal 2016.


⁽⁴⁾	Prior period current deferred tax liabilities have been retroactively reclassed to non-current deferred tax liabilities on the consolidated balance sheets upon adoption of FASB issued ASU 2015-17. See Note 1—Summary of Significant Accounting Policies and Note 12—Income Taxes.

Stockholders' Equity

Note 9—Stockholders' Equity

Class A common stock split. In January 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"), received a dividend of three additional shares on March 18, 2015 for every share held as of the Record Date. Trading began on a split-adjusted basis on March 19, 2015. Holders of class B and C common stock did not receive a stock dividend. Instead, the conversion rate for class B common stock increased 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 increased 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 retained the same relative ownership percentages that they had prior to the stock split. All per share amounts and number of shares outstanding in these unaudited consolidated financial statements and accompanying notes are presented on a post-split basis. As a result of the stock split, all historical per share data and number of shares outstanding presented have been retroactively adjusted.

As-Converted Class A Common Stock. 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, 2015, are as follows:



(in millions, except conversion rates)	Shares Outstanding	Conversion Rate Into Class A Common Stock		As-converted Class A Common Stock⁽¹⁾
Class A common stock	1,926	—		1,926
Class B common stock	245	1.6483	⁽²⁾	405
Class C common stock	19	4.0000		78
Total				2,409


⁽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 is presented on a rounded basis. 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, 2015
Shares repurchased in the open market ⁽¹⁾	26
Average repurchase price per share ⁽²⁾	$	78.52
Total cost	$	2,015


⁽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 2015, the Company's board of directors authorized a new $5.0 billion share repurchase program, in addition to the existing October 2014 program. As of December 31, 2015, the Company had remaining authorized funds of $5.8 billion for share repurchase.

Dividends. The Company declared and paid $340 million in dividends during the three months ended December 31, 2015.

Earnings Per Share

Note 10—Earnings Per Share

Basic earnings per share is computed by dividing net income available to each class and series by the weighted-average number of shares of common stock outstanding and participating securities in the form of unvested restricted stock awards, unvested restricted stock units and unvested earned performance-based shares during the period. Net income is allocated to each class and series of common stock based on its proportional ownership on an as-converted basis. The weighted number of shares of each class and series of common stock outstanding reflects changes in ownership over the periods presented. See Note 9—Stockholders' Equity.

Diluted earnings per share is computed by dividing net income available by the weighted-average number of shares of common stock outstanding, participating securities in the form of unvested restricted stock awards, unvested restricted stock units and unvested earned performance-based shares and, if dilutive, potential class A common stock equivalent shares outstanding during the period. Dilutive class A common stock equivalents may consist of: (1) shares of class A common stock issuable upon the conversion of class B and class C common stock based on the conversion rate in effect through the period, and (2) incremental shares of class A common stock calculated by applying the treasury stock method to the assumed exercise of employee stock options, the assumed purchase of stock under the Employee Stock Purchase Plan and the assumed vesting of unearned performance shares.

The following table presents earnings per share for the three months ended December 31, 2015.⁽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	$	1,550	1,937	$	0.80	$	1,941	2,430	⁽³⁾	$	0.80
Class B common stock⁽⁴⁾	324		245	$	1.32	$	323	245		$	1.32
Class C common stock⁽⁴⁾	63		20	$	3.20	$	63	20		$	3.20
Participating securities⁽⁵⁾	4		Not presented	Not presented		$	4	Not presented		Not presented
Net income	$	1,941

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	1,974	$	0.63	$	1,569	2,478	⁽³⁾	$	0.63
Class B common stock⁽⁴⁾	257		245	$	1.05	$	257	245		$	1.04
Class C common stock⁽⁴⁾	55		22	$	2.54	$	55	22		$	2.53
Participating securities⁽⁵⁾	4		Not presented	Not presented		$	4	Not presented		Not presented
Net income	$	1,569


⁽¹⁾	Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers. The number of shares and per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the fiscal second quarter of 2015. See Note 9—Stockholders' Equity.

⁽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 405 million for the three months ended December 31, 2015 and 2014. The weighted-average number of shares of as-converted class C common stock used in the income allocation was 78 million and 88 million for the three months ended December 31, 2015 and 2014, 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 5 million common stock equivalents for the three months ended December 31, 2015 and 2014, because their effect would be dilutive. The computation excludes 1 million and 2 million of common stock equivalents for the three months ended December 31, 2015 and 2014, respectively, because their effect would have been anti-dilutive.

⁽⁴⁾

The outstanding number of shares of class B and C common stock were not impacted by the stock split as these stockholders received an adjustment to their respective conversion ratios instead of stock dividends. See Note 9—Stockholders' Equity. Weighted-average basic and diluted shares outstanding for class B and C common stock are calculated based on the common shares outstanding of each respective class rather than on an as-converted basis.


⁽⁵⁾	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 unvested earned performance-based shares.

Share-based Compensation

Note 11—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, 2015:



	Granted	Weighted-Average Grant Date Fair Value		Weighted-Average Exercise Price
Non-qualified stock options	1,362,840	$	15.09	$	80.15
Restricted stock units ("RSUs")	2,346,825	$	80.15
Performance-based shares⁽¹⁾	604,219	$	92.71


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

The Company’s non-qualified stock options 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 12—Income Taxes

The effective income tax rates were 26% and 31% for the three months ended December 31, 2015 and 2014, respectively. The effective tax rate for the three months ended December 31, 2015 differs from the effective tax rate in the same period in the prior fiscal year primarily due to:


•	the non-taxable revaluation of the Visa Europe put option recorded in the quarter ended December 31, 2015;


•	foreign tax credit benefits related to prior fiscal years recognized during the quarter ended December 31, 2015; and


•	the absence of the reversal of previously established state tax reserves in the quarter ended December 31, 2014.

During the three months ended December 31, 2015, the Company's gross unrecognized tax benefits increased by $20 million, which would favorably impact the effective tax rate if recognized. The increase in gross unrecognized tax benefits is primarily related to various tax positions across several jurisdictions. During the three months ended December 31, 2015 and 2014, respectively, there were no significant changes in interest and penalties related to uncertain tax positions.

The Company’s tax filings are subject to examination by the U.S. federal, state and foreign taxing authorities. The timing and outcome of the final resolutions of the various ongoing income tax examinations are highly uncertain. It is not reasonably possible to estimate the increase or decrease in unrecognized tax benefits within the next twelve months.

In November 2015, the FASB issued Accounting Standards Update 2015-17, which simplifies the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be presented as non-current. The standard impacts presentation only. The Company elected to early adopt the standard on a retrospective basis effective October 1, 2015 and all deferred tax assets and liabilities are classified as non-current on the Company's consolidated balance sheets. All prior period amounts have been reclassified to conform with the current period presentation.

Legal Matters

Note 13—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 the activity related to accrued litigation.



	Fiscal 2016			Fiscal 2015
	(in millions)
Balance at October 1	$	1,024		$	1,456
Payments on legal matters	(12		)	(103		)
Balance at December 31	$	1,012		$	1,353

U.S. Covered Litigation

Visa Inc., Visa U.S.A. and Visa International are parties to certain legal proceedings that are covered by the U.S. retrospective responsibility plan, which the Company refers to as the U.S. covered litigation. See Note 3—U.S. Retrospective Responsibility Plan and Potential Visa Europe Liabilities. An accrual for the U.S. 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 U.S. covered litigation could be either higher or lower than the escrow account balance. The following table summarizes the activity related to U.S. covered litigation.



	Fiscal 2016			Fiscal 2015
	(in millions)
Balance at October 1	$	1,023		$	1,449
Payments on covered litigation	(11		)	(100		)
Balance at December 31	$	1,012		$	1,349

Interchange Opt-out Litigation

Beginning in May 2013, more than 50 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 adds Visa Europe Limited and Visa Europe Services Inc. as defendants.

Visa reached a settlement agreement with Wal-Mart Stores Inc. and its subsidiaries, which will terminate if, following all appeals, the MDL class settlement is reversed or vacated with respect to certification of the Rule 23 (b) (2) settlement class or the consideration provided to or release provided by that class. Including this settlement with Wal-Mart, as of the date of filing, Visa has reached settlement agreements with a number of merchants representing approximately 49% of the Visa-branded payment card sales volume of merchants who opted out.

European Competition Proceedings

U.K. Merchant Litigation. A total of approximately 50 merchants (together with subsidiary/affiliate companies) have now commenced proceedings against Visa Europe, Visa Inc. and Visa International relating to interchange rates in Europe.

Other Litigation

"Indirect Purchaser" Actions

On December 1, 2015, the objector's appeal from the trial court's order regarding the distribution of certain settlement funds was dismissed.

Canadian Competition Proceedings

Merchant Litigation. The court approved the settlement agreements entered into by the three named financial institutions, which are not significant Canadian issuers. A settlement with another financial institution is pending court approval.

U.S. ATM Access Fee Litigation

On January 27, 2016, defendants filed petitions for writ of certiorari with the U.S. Supreme Court seeking review of the decisions of the U.S. Court of Appeals for the District of Columbia Circuit.

Pulse Network

On December 17, 2015, the court denied Visa's motion to dismiss the complaint.

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.

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, 2015 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 April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, which simplifies the presentation of debt issuance costs by requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The standard impacts presentation only. The Company elected to early adopt the standard effective October 1, 2015 and the carrying amount of the Company's debt liability is presented net of issuance costs on the consolidated financial statements. Also see Note 5—Debt.

In September 2015, the FASB issued ASU No. 2015-16, which simplifies the accounting for post-acquisition adjustments by eliminating the requirement to retrospectively account for the adjustments made to provisional amounts recognized in a business combination. The Company elected to early adopt this guidance on a prospective basis effective October 1, 2015. The adoption did not have a material impact on the consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, which simplifies the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be presented as non-current. The standard impacts presentation only. The Company elected to early adopt the standard on a retrospective basis effective October 1, 2015 and all deferred tax assets and liabilities are classified as non-current. Previously, current deferred tax assets had been presented separately and current deferred tax liabilities had been included in accrued liabilities on the consolidated balance sheets. All prior period amounts within the consolidated financial statements have been reclassed to conform to current period presentation. The reclass did not affect the Company's total equity, operating revenues, net income, comprehensive income or cash flows as of and for the periods presented.

In January 2016, the FASB issued ASU 2016-01, which amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including the requirement to measure certain equity investments at fair value with changes in fair value recognized in net income. The Company will adopt the standard effective October 1, 2018. The adoption is not expected to 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, 2015		September 30, 2015		December 31, 2015		September 30, 2015		December 31, 2015		September 30, 2015
	(in millions)
Assets
Cash equivalents and restricted cash:
Money market funds	$	3,517	$	3,051
U.S. Treasury securities	5,999		—
U.S. government-sponsored debt securities					3,198		280
Investment securities, trading:
Equity securities	80		66
Investment securities, available-for-sale:
U.S. Treasury securities	3,871		2,656
U.S. government-sponsored debt securities					7,535		2,615
Equity securities	59		4
Corporate debt securities					443		533
Auction rate securities									$	7	$	7
Prepaid and other current assets:
Foreign exchange derivative instruments					50		76
Total	$	13,526	$	5,777	$	11,226	$	3,504	$	7	$	7
Liabilities
Accrued liabilities:
Visa Europe put option									$	—	$	255
Foreign exchange derivative instruments					$	10	$	13
Total	$	—	$	—	$	10	$	13	$	—	$	255

Schedule of Long-term Debt Instruments

The following table presents the carrying amount and estimated fair value of the Company’s debt in order of maturity:



	December 31, 2015
	Carrying Amount		Estimated Fair Value
1.20% Senior Notes due December 2017	$	1,745	$	1,748
2.20% Senior Notes due December 2020	2,986		2,995
2.80% Senior Notes due December 2022	2,237		2,259
3.15% Senior Notes due December 2025	3,962		4,005
4.15% Senior Notes due December 2035	1,485		1,514
4.30% Senior Notes due December 2045	3,462		3,551
	$	15,877	$	16,072

Debt (Tables)

Schedule of Debt

The Company had outstanding debt as follows:



	December 31, 2015
	Principal Amount		Unamortized Discounts and Debt Issuance Costs			Carrying Amount		Effective Interest Rate
	(in millions, except percentages)
1.20% Senior Notes due December 2017 (the "2017 Notes")	$	1,750	$	(5	)	$	1,745	1.36	%
2.20% Senior Notes due December 2020 (the "2020 Notes")	3,000		(14		)	2,986		2.30	%
2.80% Senior Notes due December 2022 (the "2022 Notes")	2,250		(13		)	2,237		2.89	%
3.15% Senior Notes due December 2025 (the "2025 Notes")	4,000		(38		)	3,962		3.26	%
4.15% Senior Notes due December 2035 (the "2035 Notes")	1,500		(15		)	1,485		4.23	%
4.30% Senior Notes due December 2045 (the "2045 Notes")	3,500		(38		)	3,462		4.37	%
Total long-term debt	$	16,000	$	(123	)	$	15,877

Debt Instrument Redemption



Series	Maturity/Par Call Date	Spread
2017 Notes	December 14, 2017	5 bps
2020 Notes	November 14, 2020	10 bps
2022 Notes	October 14, 2022	12.5 bps
2025 Notes	September 14, 2025	15 bps
2035 Notes	June 14, 2035	20 bps
2045 Notes	June 14, 2045	20 bps

Schedule of Future Principal Payments on Outstanding Debt

Future principal payments on the Company's outstanding debt are as follows:



Fiscal Year	2016		2017		2018		2019		2020		Thereafter		Total
(in millions)	$	—	$	—	$	1,750	$	—	$	—	$	14,250	$	16,000

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,
	2015			2014			2015			2014
	(in millions)
Service cost	$	13		$	12		$	—		$	—
Interest cost	11			10			—			—
Expected return on assets	(17		)	(18		)	—			—
Amortization of:
Prior service credit	(1		)	(2		)	(1		)	(1		)
Actuarial loss	2			—			—			—
Curtailment gain	(8		)	—			—			—
Settlement loss	—			2			—			—
Total net periodic benefit cost	$	—		$	4		$	(1	)	$	(1	)

Settlement Guarantee Management (Tables)

Schedule of Customer Collateral

The Company maintained collateral as follows:



	December 31, 2015		September 30, 2015
	(in millions)
Cash equivalents	$	1,041	$	1,023
Pledged securities at market value	151		154
Letters of credit	1,131		1,178
Guarantees	935		971
Total	$	3,258	$	3,326

Accrued and Other Liabilities (Tables)

Schedule of Accrued and Other Liabilities

Accrued liabilities consisted of the following:



	December 31, 2015		September 30, 2015
	(in millions)
Accrued operating expenses	$	220	$	257
Visa Europe put option ⁽¹⁾	—		255
Deferred revenue	80		81
Accrued interest expenses ⁽²⁾	23		—
Accrued income taxes ⁽³⁾	522		75
Other ⁽⁴⁾	164		181
Total	$	1,009	$	849

Other non-current liabilities consisted of the following:



	December 31, 2015		September 30, 2015
	(in millions)
Accrued income taxes	$	771	$	752
Employee benefits	82		77
Other	70		68
Total	$	923	$	897

⁽¹⁾

On November 2, 2015, the Company and Visa Europe entered into the Put Option Amendment to align certain terms of the Put with the terms of the Visa Europe Transaction Agreement. Exercise of the Amended Put Option by the Visa Europe board of directors is mandatory, subject to the satisfaction of the terms and conditions of the Transaction Agreement. As such, for accounting purposes, it is not treated as a written put option and is not required to be recorded at fair value. At December 31, 2015, Visa expected to complete the transaction in accordance with the Transaction Agreement. Therefore, management concluded that it does not expect the Put to revert to its original, unamended form or to be unilaterally exercised by Visa Europe in the future. As a result, the value of the Put was reduced to zero at December 31, 2015. See Note 2—Visa Europe and Note 4—Fair Value Measurements and Investments.


⁽²⁾	The balance at December 31, 2015 is due to the issuance of long-term debt in conjunction with the anticipated acquisition of Visa Europe. See Note 2—Visa Europe and Note 5—Debt.


⁽³⁾	The increase in accrued income taxes is primarily related to current income taxes accrued in the first quarter of fiscal 2016, but payable in the second quarter of fiscal 2016.


⁽⁴⁾	Prior period current deferred tax liabilities have been retroactively reclassed to non-current deferred tax liabilities on the consolidated balance sheets upon adoption of FASB issued ASU 2015-17. See Note 1—Summary of Significant Accounting Policies and Note 12—Income Taxes.

Stockholders' Equity (Tables)

Schedule of Stock by Class

As-Converted Class A Common Stock. 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, 2015, are as follows:



(in millions, except conversion rates)	Shares Outstanding	Conversion Rate Into Class A Common Stock		As-converted Class A Common Stock⁽¹⁾
Class A common stock	1,926	—		1,926
Class B common stock	245	1.6483	⁽²⁾	405
Class C common stock	19	4.0000		78
Total				2,409


⁽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 is presented on a rounded basis. Conversion calculations for dividend payments are based on a conversion rate rounded to the tenth decimal.

Share Repurchase Program Disclosure

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, 2015
Shares repurchased in the open market ⁽¹⁾	26
Average repurchase price per share ⁽²⁾	$	78.52
Total cost	$	2,015


⁽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.

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, 2015.⁽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	$	1,550	1,937	$	0.80	$	1,941	2,430	⁽³⁾	$	0.80
Class B common stock⁽⁴⁾	324		245	$	1.32	$	323	245		$	1.32
Class C common stock⁽⁴⁾	63		20	$	3.20	$	63	20		$	3.20
Participating securities⁽⁵⁾	4		Not presented	Not presented		$	4	Not presented		Not presented
Net income	$	1,941

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	1,974	$	0.63	$	1,569	2,478	⁽³⁾	$	0.63
Class B common stock⁽⁴⁾	257		245	$	1.05	$	257	245		$	1.04
Class C common stock⁽⁴⁾	55		22	$	2.54	$	55	22		$	2.53
Participating securities⁽⁵⁾	4		Not presented	Not presented		$	4	Not presented		Not presented
Net income	$	1,569


⁽¹⁾	Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers. The number of shares and per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the fiscal second quarter of 2015. See Note 9—Stockholders' Equity.

⁽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 405 million for the three months ended December 31, 2015 and 2014. The weighted-average number of shares of as-converted class C common stock used in the income allocation was 78 million and 88 million for the three months ended December 31, 2015 and 2014, 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 5 million common stock equivalents for the three months ended December 31, 2015 and 2014, because their effect would be dilutive. The computation excludes 1 million and 2 million of common stock equivalents for the three months ended December 31, 2015 and 2014, respectively, because their effect would have been anti-dilutive.

⁽⁴⁾

The outstanding number of shares of class B and C common stock were not impacted by the stock split as these stockholders received an adjustment to their respective conversion ratios instead of stock dividends. See Note 9—Stockholders' Equity. Weighted-average basic and diluted shares outstanding for class B and C common stock are calculated based on the common shares outstanding of each respective class rather than on an as-converted basis.


⁽⁵⁾	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 unvested 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, 2015:



	Granted	Weighted-Average Grant Date Fair Value		Weighted-Average Exercise Price
Non-qualified stock options	1,362,840	$	15.09	$	80.15
Restricted stock units ("RSUs")	2,346,825	$	80.15
Performance-based shares⁽¹⁾	604,219	$	92.71


⁽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 the activity related to accrued litigation.



	Fiscal 2016			Fiscal 2015
	(in millions)
Balance at October 1	$	1,024		$	1,456
Payments on legal matters	(12		)	(103		)
Balance at December 31	$	1,012		$	1,353

Schedule of Loss Contingencies by Contingency

The following table summarizes the activity related to U.S. covered litigation.



	Fiscal 2016			Fiscal 2015
	(in millions)
Balance at October 1	$	1,023		$	1,449
Payments on covered litigation	(11		)	(100		)
Balance at December 31	$	1,012		$	1,349

Summary of Significant Accounting Policies (Details)

Dec. 31, 2015

country

Accounting Policies [Abstract]

Number of countries in which entity operates (more than)

200

Visa Europe (Details) (Visa Europe)

0 Months Ended

Nov. 2, 2015

EUR (€)

quarter

Nov. 2, 2015

EUR (€)

Oct. 19, 2015

day

Nov. 2, 2015

Class A equivalent preferred stock

USD ($)

Nov. 2, 2015

U.K.&I. preferred stock

Nov. 2, 2015

U.K.&I. preferred stock

USD ($)

Nov. 2, 2015

U.K.&I. preferred stock

EUR (€)

Nov. 2, 2015

Europe preferred stock

Nov. 2, 2015

Europe preferred stock

USD ($)

Nov. 2, 2015

Europe preferred stock

EUR (€)

Oct. 19, 2015

Class A common stock

USD ($)

Nov. 2, 2015

Loss Sharing Agreement

Nov. 2, 2015

Loss Sharing Agreement

EUR (€)

Class of Stock [Line Items]

Share capital of Visa Europe acquired (percent)

100.00%

Total purchase price

€ 21,200,000,000

Up-front cash consideration

11,500,000,000

Consideration, preferred stock of the Company

5,000,000,000

Number of fiscal quarters included in contingent consideration period

16

Contingent consideration

4,000,000,000

Accrued interest on contingent consideration

700,000,000

Preferred stock, par value

$ 0.0001

Shares issued at closing (shares)

2,480,500

3,157,000

Value of shares issued at closing

2,200,000,000

2,800,000,000

Average price of common stock (in USD per share)

$ 71.68

Euro-dollar exchange rate

1.12750

Consecutive trading days used in calculation of average stock price and Euro-dollar exchange rate

30

Initial conversion rate of UK&I and Europe preferred stock into Class A equivalent preferred stock

13.952

Loss sharing agreement

€ 1,000,000,000

Conversion rate of U.K.&I. preferred stock

0

U.S. Retrospective Responsibility Plan and Potential Visa Europe Liabilities (Details) (USD $)

3 Months Ended

Dec. 31, 2015

Sep. 30, 2015

Dec. 31, 2015

Opt-out Merchants [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Restricted Cash and Cash Equivalents

$ 1,100,000,000

Payments for Legal Settlements

$ 11,000,000

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

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2015

Sep. 30, 2015

Dec. 31, 2015

Minimum

Dec. 31, 2015

Maximum

Dec. 31, 2015

Senior Notes

Minimum

Dec. 31, 2015

Senior Notes

Maximum

Dec. 31, 2015

Senior Notes

2017 Notes

Dec. 31, 2015

Senior Notes

2020 Notes

Dec. 31, 2015

Senior Notes

2022 Notes

Dec. 31, 2015

Senior Notes

2025 Notes

Dec. 31, 2015

Senior Notes

2035 Notes

Dec. 31, 2015

Senior Notes

2045 Notes

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

Visa Europe put option

$ 0 ¹

$ 255 ¹

Non-marketable equity investments

47

45

Carrying value of cost method investments, reclassified as available for sale

4

Fair value of available for sale securities previously classified as cost method investments

55

Pre-tax unrealized gain on available-for-sale securities, previously classified as cost method investments

51

Principal Amount

16,000

1,750

3,000

2,250

4,000

1,500

3,500

Debt maturity period

2 years

30 years

Long-term Debt

15,877

0

1,745

2,986

2,237

3,962

1,485

3,462

Long-term Debt, Fair Value

16,072

1,748

2,995

2,259

4,005

1,514

3,551

Available-for-sale securities, gross unrealized gains

55

7

Available-for-sale securities, gross unrealized losses

$ 14

$ 0

Available-for-sale investment securities, stated maturities

1 year

2 years

[1] On November 2, 2015, the Company and Visa Europe entered into the Put Option Amendment to align certain terms of the Put with the terms of the Visa Europe Transaction Agreement. Exercise of the Amended Put Option by the Visa Europe board of directors is mandatory, subject to the satisfaction of the terms and conditions of the Transaction Agreement. As such, for accounting purposes, it is not treated as a written put option and is not required to be recorded at fair value. At December 31, 2015, Visa expected to complete the transaction in accordance with the Transaction Agreement. Therefore, management concluded that it does not expect the Put to revert to its original, unamended form or to be unilaterally exercised by Visa Europe in the future. As a result, the value of the Put was reduced to zero at December 31, 2015. See Note 2—Visa Europe and Note 4—Fair Value Measurements and Investments.

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

Dec. 31, 2015

Sep. 30, 2015

Dec. 31, 2014

Investment securities:

Trading

$ 80,000,000

$ 66,000,000

Accrued liabilities

Visa Europe put option

0 ¹

255,000,000 ¹

Fair value, assets transferred between Level 1 and Level 2

0

Level 1 |
Fair Value, Measurements, Recurring

Prepaid and other current assets:

Fair value, total assets

13,526,000,000

5,777,000,000

Accrued liabilities

Fair value, total liabilities

0

Level 2 |
Fair Value, Measurements, Recurring

Prepaid and other current assets:

Fair value, total assets

11,226,000,000

3,504,000,000

Accrued liabilities

Fair value, total liabilities

10,000,000

13,000,000

Level 3 |
Fair Value, Measurements, Recurring

Prepaid and other current assets:

Fair value, total assets

7,000,000

Accrued liabilities

Fair value, total liabilities

0

255,000,000

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

Accrued liabilities

Visa Europe put option

0

255,000,000

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

Accrued liabilities

Foreign exchange derivative instruments

10,000,000

13,000,000

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

Cash equivalents and restricted cash:

3,517,000,000

3,051,000,000

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

Cash equivalents and restricted cash:

5,999,000,000

0

Investment securities:

Available-for-sale securities

3,871,000,000

2,656,000,000

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

Cash equivalents and restricted cash:

3,198,000,000

280,000,000

Investment securities:

Available-for-sale securities

7,535,000,000

2,615,000,000

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

Investment securities:

Trading

80,000,000

66,000,000

Available-for-sale securities

59,000,000

4,000,000

Corporate debt securities |
Level 2 |
Fair Value, Measurements, Recurring

Investment securities:

Available-for-sale securities

443,000,000

533,000,000

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

Investment securities:

Available-for-sale securities

7,000,000

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

Prepaid and other current assets:

$ 50,000,000

$ 76,000,000

[1] On November 2, 2015, the Company and Visa Europe entered into the Put Option Amendment to align certain terms of the Put with the terms of the Visa Europe Transaction Agreement. Exercise of the Amended Put Option by the Visa Europe board of directors is mandatory, subject to the satisfaction of the terms and conditions of the Transaction Agreement. As such, for accounting purposes, it is not treated as a written put option and is not required to be recorded at fair value. At December 31, 2015, Visa expected to complete the transaction in accordance with the Transaction Agreement. Therefore, management concluded that it does not expect the Put to revert to its original, unamended form or to be unilaterally exercised by Visa Europe in the future. As a result, the value of the Put was reduced to zero at December 31, 2015. See Note 2—Visa Europe and Note 4—Fair Value Measurements and Investments.

Debt - Senior Notes (Details) (USD $)

In Millions, unless otherwise specified

Dec. 31, 2015

Sep. 30, 2015

Debt Instrument [Line Items]

Principal Amount

$ 16,000

Unamortized discounts and Debt Issuance Costs

(123)

Long-term Debt

15,877

0

Senior Notes |
2017 Notes

Debt Instrument [Line Items]

Stated interest rate (percent)

1.20%

Principal Amount

1,750

Unamortized discounts and Debt Issuance Costs

(5)

Long-term Debt

1,745

Effective Interest Rate (percent)

1.36%

Senior Notes |
2020 Notes

Debt Instrument [Line Items]

Stated interest rate (percent)

2.20%

Principal Amount

3,000

Unamortized discounts and Debt Issuance Costs

(14)

Long-term Debt

2,986

Effective Interest Rate (percent)

2.30%

Senior Notes |
2022 Notes

Debt Instrument [Line Items]

Stated interest rate (percent)

2.80%

Principal Amount

2,250

Unamortized discounts and Debt Issuance Costs

(13)

Long-term Debt

2,237

Effective Interest Rate (percent)

2.89%

Senior Notes |
2025 Notes

Debt Instrument [Line Items]

Stated interest rate (percent)

3.15%

Principal Amount

4,000

Unamortized discounts and Debt Issuance Costs

(38)

Long-term Debt

3,962

Effective Interest Rate (percent)

3.26%

Senior Notes |
2035 Notes

Debt Instrument [Line Items]

Stated interest rate (percent)

4.15%

Principal Amount

1,500

Unamortized discounts and Debt Issuance Costs

(15)

Long-term Debt

1,485

Effective Interest Rate (percent)

4.23%

Senior Notes |
2045 Notes

Debt Instrument [Line Items]

Stated interest rate (percent)

4.30%

Principal Amount

3,500

Unamortized discounts and Debt Issuance Costs

(38)

Long-term Debt

$ 3,462

Effective Interest Rate (percent)

4.37%

Debt - Narrative (Details) (USD $)

3 Months Ended

0 Months Ended

3 Months Ended

Dec. 31, 2015

Sep. 30, 2015

Dec. 31, 2015

Senior Notes

Dec. 31, 2015

Senior Notes

Subsequent to defined date on 2017

2017 Notes, 2020 Notes, 2022 Notes, 2025 Notes

Dec. 31, 2015

Senior Notes

Minimum

Dec. 31, 2015

Senior Notes

Maximum

Jan. 28, 2015

Revolving Credit Facility

Credit Facility Expiring January 27, 2016 [Member]

Jan. 27, 2016

Revolving Credit Facility

Subsequent Event

Credit Facility Expiring January 27, 2021 [Member]

Jan. 27, 2016

Revolving Credit Facility

Subsequent Event

Credit Facility Expiring January 27, 2021 [Member]

Dec. 31, 2015

If Redeemed Prior to Maturity Date or Par Call Date, as Applicable

Senior Notes

Dec. 31, 2015

If Redeemed on or after Par Call Date, except for 2017 Notes

Senior Notes

Debt Instrument [Line Items]

Line of credit facility, maximum borrowing capacity

$ 3,000,000,000.0

$ 4,000,000,000.0

Principal Amount

16,000,000,000

Debt maturity period

2 years

30 years

5 years

Interest rate on senior notes, minimum

1.20%

Interest rate on senior notes, maximum

4.30%

Interest expense

24,000,000

Net aggregate proceeds

$ 15,877,000,000

$ 0

Redemption price, as percentage of principal amount (percent)

101.00%

100.00%

Consolidated Indebtedness to Consolidated EBITDA Ratio (not greater than)

3.75

Debt - Debt Redemption (Details) (Senior Notes)

3 Months Ended

Dec. 31, 2015

2017 Notes

Debt Instrument [Line Items]

Redemption price, additional basis spread (percent)

0.05%

2020 Notes

Debt Instrument [Line Items]

Redemption price, additional basis spread (percent)

0.10%

2022 Notes

Debt Instrument [Line Items]

Redemption price, additional basis spread (percent)

0.125%

2025 Notes

Debt Instrument [Line Items]

Redemption price, additional basis spread (percent)

0.15%

2035 Notes

Debt Instrument [Line Items]

Redemption price, additional basis spread (percent)

0.20%

2045 Notes

Debt Instrument [Line Items]

Redemption price, additional basis spread (percent)

0.20%

Debt - Debt Maturities (Details) (USD $)

In Millions, unless otherwise specified

Dec. 31, 2015

Debt Disclosure [Abstract]

2016

$ 0

2017

0

2018

1,750

2019

0

2020

0

Thereafter

14,250

Total

$ 16,000

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

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2015

Dec. 31, 2014

Defined Benefit Plan Disclosure [Line Items]

Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Actuarial Gain (Loss), before Tax

$ 56

Pension Benefits

Defined Benefit Plan Disclosure [Line Items]

Service cost

13

12

Interest cost

11

10

Expected return on assets

(17)

(18)

Amortization of:

Prior service credit

(1)

(2)

Actuarial loss

2

0

Curtailment gain

(8)

0

Settlement loss

0

2

Total net periodic benefit cost

0

4