VISA INC., 10-K filed on 11/22/2013
Annual Report
Document and Entity Information Document (USD $)
In Billions, except Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Mar. 29, 2013
Nov. 15, 2013
Class A common stock
Nov. 15, 2013
Class B common stock
Nov. 15, 2013
Class C common stock
Entity Information [Line Items]
 
 
 
 
 
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-K 
 
 
 
 
Document Period End Date
Sep. 30, 2013 
 
 
 
 
Document Fiscal Year Focus
2013 
 
 
 
 
Document Fiscal Period Focus
FY 
 
 
 
 
Amendment Flag
false 
 
 
 
 
Entity Common Stock, Shares Outstanding
 
 
506,590,408 
245,513,385 
26,695,266 
Entity Well-known Seasoned Issuer
Yes 
 
 
 
 
Entity Voluntary Filers
No 
 
 
 
 
Entity Current Reporting Status
Yes 
 
 
 
 
Entity Public Float
 
$ 87.8 
 
 
 
CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Assets
 
 
Cash and cash equivalents
$ 2,186 
$ 2,074 
Restricted cash—litigation escrow (Note 3)
49 
4,432 
Investment securities (Note 4):
 
 
Trading
75 
66 
Available-for-sale
1,994 
677 
Income tax receivable (Note 19)
142 
179 
Settlement receivable
799 
454 
Accounts receivable
761 
723 
Customer collateral (Note 11)
866 
823 
Current portion of client incentives
282 
209 
Deferred tax assets (Note 19)
481 
2,027 
Prepaid expenses and other current assets (Note 5)
187 
122 
Total current assets
7,822 
11,786 
Investment securities, available-for-sale (Note 4)
2,760 
3,283 
Client incentives
89 
58 
Property, equipment and technology, net (Note 6)
1,732 
1,634 
Other assets (Note 5)
521 
151 
Intangible assets, net (Note 7)
11,351 
11,420 
Goodwill
11,681 
11,681 
Total assets
35,956 
40,013 
Liabilities
 
 
Accounts payable
184 
152 
Settlement payable
1,225 
719 
Customer collateral (Note 11)
866 
823 
Accrued compensation and benefits
523 
460 
Client incentives
919 
830 
Accrued liabilities (Note 8)
613 
584 
Accrued litigation (Note 20)
5 
4,386 
Total current liabilities
4,335 
7,954 
Deferred tax liabilities (Note 19)
4,149 
4,058 
Other liabilities (Note 8)
602 
371 
Total liabilities
9,086 
12,383 
Commitments and contingencies (Note 17)
   
   
Equity
 
 
Additional paid-in capital
18,875 
19,992 
Accumulated income
7,974 
7,809 
Accumulated other comprehensive income (loss), net:
 
 
Investment securities, available-for-sale
59 
3 
Defined benefit pension and other postretirement plans
(60)
(186)
Derivative instruments classified as cash flow hedges
23 
13 
Foreign currency translation adjustments
(1)
(1)
Total accumulated other comprehensive income (loss), net
21 
(171)
Total equity
26,870 
27,630 
Total liabilities and equity
35,956 
40,013 
Preferred stock
 
 
Equity
 
 
Preferred stock, $0.0001 par value, 25 shares authorized and none issued
0 
0 
Class A common stock
 
 
Equity
 
 
Common stock (Note 14)
0 
0 
Class B common stock
 
 
Equity
 
 
Common stock (Note 14)
0 
0 
Class C common stock
 
 
Equity
 
 
Common stock (Note 14)
$ 0 
$ 0 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Per Share data, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Preferred stock
 
 
Preferred stock, par value
$ 0.0001 
$ 0.0001 
Preferred stock, shares authorized
25 
25 
Preferred stock, shares issued
0 
0 
Class A common stock
 
 
Common stock, par value
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
2,001,622 
2,001,622 
Common stock, shares, issued
508 
535 
Common stock, shares, outstanding
508 
535 
Class B common stock
 
 
Common stock, par value
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
622 
622 
Common stock, shares, issued
245 
245 
Common stock, shares, outstanding
245 
245 
Class C common stock
 
 
Common stock, par value
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
1,097 
1,097 
Common stock, shares, issued
27 
31 
Common stock, shares, outstanding
27 
31 
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Operating Revenues
 
 
 
Service revenues
$ 5,352 
$ 4,872 
$ 4,261 
Data processing revenues
4,642 
3,975 
3,478 
International transaction revenues
3,389 
3,025 
2,674 
Other revenues
716 
704 
655 
Client incentives
(2,321)
(2,155)
(1,880)
Total operating revenues
11,778 
10,421 
9,188 
Operating Expenses
 
 
 
Personnel
1,932 
1,726 
1,459 
Marketing
876 
873 
870 
Network and processing
468 
414 
357 
Professional fees
412 
385 
337 
Depreciation and amortization
397 
333 
288 
General and administrative
451 
451 
414 
Litigation provision (Note 20)
3 
4,100 
7 
Total operating expenses
4,539 
8,282 
3,732 
Operating income
7,239 
2,139 
5,456 
Non-operating income
18 
68 
200 
Income before income taxes
7,257 
2,207 
5,656 
Income tax provision
2,277 
65 
2,010 
Net income including non-controlling interest
4,980 
2,142 
3,646 
Loss attributable to non-controlling interest
0 
2 
4 
Net income attributable to Visa Inc.
4,980 1
2,144 1
3,650 1
Class A common stock
 
 
 
Operating Expenses
 
 
 
Net income attributable to Visa Inc.
3,959 1
1,664 1
2,638 1
Earnings Per Share [Abstract]
 
 
 
Basic earnings per share (Note 15)
$ 7.61 2
$ 3.17 2
$ 5.18 2
Basic weighted-average shares outstanding (Note 15)
520 
524 
509 
Diluted earnings per share (Note 15)
$ 7.59 2
$ 3.16 2
$ 5.16 2
Diluted weighted-average shares outstanding (Note 15)
656 
678 3
707 3
Class B common stock
 
 
 
Operating Expenses
 
 
 
Net income attributable to Visa Inc.
786 1
343 1
636 1
Earnings Per Share [Abstract]
 
 
 
Basic earnings per share (Note 15)
$ 3.20 2
$ 1.40 2
$ 2.59 2
Basic weighted-average shares outstanding (Note 15)
245 
245 
245 
Diluted earnings per share (Note 15)
$ 3.19 2
$ 1.39 2
$ 2.58 2
Diluted weighted-average shares outstanding (Note 15)
245 
245 
245 
Class C common stock
 
 
 
Operating Expenses
 
 
 
Net income attributable to Visa Inc.
$ 216 1
$ 130 1
$ 364 1
Earnings Per Share [Abstract]
 
 
 
Basic earnings per share (Note 15)
$ 7.61 2
$ 3.17 2
$ 5.18 2
Basic weighted-average shares outstanding (Note 15)
28 
41 
70 
Diluted earnings per share (Note 15)
$ 7.59 2
$ 3.16 2
$ 5.16 2
Diluted weighted-average shares outstanding (Note 15)
28 
41 
70 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Net income including non-controlling interest
$ 4,980 
$ 2,142 
$ 3,646 
Investment securities, available-for-sale:
 
 
 
Net unrealized gain (loss)
88 
4 
(1)
Income tax effect
(33)
(1)
0 
Reclassification adjustment for net loss (gain) realized in net income including non-controlling interest
1 
0 
(4)
Income tax effect
0 
0 
2 
Defined benefit pension and other postretirement plans
203 
0 
(117)
Income tax effect
(77)
0 
46 
Derivative instruments classified as cash flow hedges:
 
 
 
Net unrealized gain
39 
3 
18 
Income tax effect
(6)
(1)
(9)
Reclassification adjustment for net (gain) loss realized in net income including non-controlling interest
(29)
(14)
62 
Income tax effect
6 
7 
(13)
Foreign currency translation adjustments
0 
7 
(9)
Other comprehensive income (loss), net of tax
192 
5 
(25)
Comprehensive income including non-controlling interest
5,172 
2,147 
3,621 
Comprehensive loss attributable to non-controlling interest
0 
2 
4 
Comprehensive income attributable to Visa Inc.
$ 5,172 
$ 2,149 
$ 3,625 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $)
In Millions, except Share data
Total
USD ($)
Common Stock Class A
Common Stock Class B
Common Stock Class C
Additional Paid-In Capital
USD ($)
Accumulated Income (Deficit)
USD ($)
Accumulated Other Comprehensive Income (Loss)
USD ($)
Non- Controlling Interest
USD ($)
Beginning Balance at Sep. 30, 2010
$ 25,014 
 
 
 
$ 20,794 
$ 4,368 
$ (151)
$ 3 
Beginning Balance (in shares) at Sep. 30, 2010
 
493,000,000 
245,000,000 
97,000,000 
 
 
 
 
Net income attributable to Visa Inc.
3,650 1
 
 
 
 
3,650 
 
 
Loss attributable to non-controlling interest
(4)
 
 
 
 
 
 
(4)
Other comprehensive income, net of tax
(25)
 
 
 
 
 
(25)
 
Comprehensive income including noncontrolling interest
3,621 
 
 
 
 
 
 
 
Issuance of restricted share awards (in shares)
 
1,000,000 
 
 
 
 
 
 
Vesting of restricted stock units and performance shares (in shares)
 
1,000,000 
 
 
 
 
 
 
Conversion of class C common stock upon sale into public market (in shares)
 
50,000,000 
 
(50,000,000)
 
 
 
 
Share-based compensation (Note 16)
154 
 
 
 
154 
 
 
 
Excess tax benefit for share-based compensation
18 
 
 
 
18 
 
 
 
Cash proceeds from exercise of stock options (in shares)
 
3,000,000 
 
 
 
 
 
 
Cash proceeds from exercise of stock options
99 
 
 
 
99 
 
 
 
Restricted stock instruments settled in cash for taxes (in shares)
 
(1,000,000)
 
 
 
 
 
 
Restricted stock instruments settled in cash for taxes
(22)
 
 
 
(22)
 
 
 
Cash dividends declared and paid, at a quarterly amount of $0.33 in 2013, $0.22 in 2012, and $0.15 in 2011 per as-converted share
(423)
 
 
 
 
(423)
 
 
Repurchase of class A common stock (in shares)
 
(27,000,000)
 
 
 
 
 
 
Repurchase of class A common stock
(2,024)
 
 
 
(1,135)
(889)
 
 
Investment in partially-owned consolidated subsidiary
0 
 
 
 
(1)
 
 
1 
Ending Balance at Sep. 30, 2011
26,437 
 
 
 
19,907 
6,706 
(176)
0 
Ending Balance (in shares) at Sep. 30, 2011
 
520,000,000 
245,000,000 
47,000,000 
 
 
 
 
Net income attributable to Visa Inc.
2,144 1
 
 
 
 
2,144 
 
 
Loss attributable to non-controlling interest
(2)
 
 
 
 
 
 
(2)
Other comprehensive income, net of tax
5 
 
 
 
 
 
5 
 
Comprehensive income including noncontrolling interest
2,147 
 
 
 
 
 
 
 
Issuance of restricted share awards (in shares)
 
1,000,000 
 
 
 
 
 
 
Conversion of class C common stock upon sale into public market (in shares)
 
16,000,000 
 
(16,000,000)
 
 
 
 
Share-based compensation (Note 16)
147 
 
 
 
147 
 
 
 
Excess tax benefit for share-based compensation
71 
 
 
 
71 
 
 
 
Cash proceeds from exercise of stock options (in shares)
 
4,000,000 
 
 
 
 
 
 
Cash proceeds from exercise of stock options
174 
 
 
 
174 
 
 
 
Restricted stock instruments settled in cash for taxes (in shares)2
 
0 
 
 
 
 
 
 
Restricted stock instruments settled in cash for taxes2
(40)
 
 
 
(40)
 
 
 
Cash dividends declared and paid, at a quarterly amount of $0.33 in 2013, $0.22 in 2012, and $0.15 in 2011 per as-converted share
(595)
 
 
 
 
(595)
 
 
Repurchase of class A common stock (in shares)
(6,000,000)3
6,000,000 
 
 
 
 
 
 
Repurchase of class A common stock
(710)
 
 
 
(264)
(446)
 
 
Purchase of non-controlling interest
(1)
 
 
 
(3)
 
 
2 
Ending Balance at Sep. 30, 2012
27,630 
 
 
 
19,992 
7,809 
(171)
0 
Ending Balance (in shares) at Sep. 30, 2012
 
535,000,000 
245,000,000 
31,000,000 
 
 
 
 
Net income attributable to Visa Inc.
4,980 1
 
 
 
 
4,980 
 
 
Loss attributable to non-controlling interest
0 
 
 
 
 
 
 
 
Other comprehensive income, net of tax
192 
 
 
 
 
 
192 
 
Comprehensive income including noncontrolling interest
5,172 
 
 
 
 
 
 
 
Issuance of restricted share awards (in shares)
 
1,000,000 
 
 
 
 
 
 
Conversion of class C common stock upon sale into public market (in shares)
 
4,000,000 
 
(4,000,000)
 
 
 
 
Share-based compensation (Note 16)
179 
 
 
 
179 
 
 
 
Excess tax benefit for share-based compensation
74 
 
 
 
74 
 
 
 
Cash proceeds from exercise of stock options (in shares)
1,796,021 
1,000,000 
 
 
 
 
 
 
Cash proceeds from exercise of stock options
108 
 
 
 
108 
 
 
 
Restricted stock instruments settled in cash for taxes (in shares)2
 
0 
 
 
 
 
 
 
Restricted stock instruments settled in cash for taxes2
(64)
 
 
 
(64)
 
 
 
Cash dividends declared and paid, at a quarterly amount of $0.33 in 2013, $0.22 in 2012, and $0.15 in 2011 per as-converted share
(864)
 
 
 
 
(864)
 
 
Repurchase of class A common stock (in shares)
(33,000,000)3
(33,000,000)
 
 
 
 
 
 
Repurchase of class A common stock
(5,365)
 
 
 
(1,414)
(3,951)
 
 
Ending Balance at Sep. 30, 2013
$ 26,870 
 
 
 
$ 18,875 
$ 7,974 
$ 21 
$ 0 
Ending Balance (in shares) at Sep. 30, 2013
 
508,000,000 
245,000,000 
27,000,000 
 
 
 
 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical)
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Cash dividends declared and paid, quarterly, per as-converted share
$ 0.33 
$ 0.22 
$ 0.15 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Operating Activities
 
 
 
Net income including non-controlling interest
$ 4,980 
$ 2,142 
$ 3,646 
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:
 
 
 
Amortization of client incentives
2,321 
2,155 
1,880 
Share-based compensation
179 
147 
154 
Excess tax benefit for share-based compensation
(74)
(71)
(18)
Depreciation and amortization of property, equipment, technology and intangible assets
397 
333 
288 
Deferred income taxes
1,527 
(1,690)
164 
Litigation provision and accretion (Note 20)
3 
4,101 
18 
Fair value adjustment for the Visa Europe put option
0 
0 
(122)
Other
50 
(8)
(104)
Change in operating assets and liabilities:
 
 
 
Income tax receivable
37 
(67)
28 
Settlement receivable
(345)
(42)
(4)
Accounts receivable
(38)
(161)
(79)
Client incentives
(2,336)
(1,757)
(1,857)
Other assets
(543)
41 
(26)
Accounts payable
40 
(17)
29 
Settlement payable
506 
270 
36 
Accrued and other liabilities
702 
(227)
129 
Accrued litigation (Note 20)
(4,384)
(140)
(290)
Net cash provided by operating activities
3,022 
5,009 
3,872 
Investing Activities
 
 
 
Purchases of property, equipment, technology and intangible assets
(471)
(376)
(353)
Proceeds from disposal of property, equipment and technology
0 
2 
0 
Investment securities, available-for-sale:
 
 
 
Purchases
(3,164)
(4,140)
(1,910)
Proceeds from sales and maturities
2,440 
2,093 
129 
Purchases of / contributions to other investments
(3)
(12)
(13)
Proceeds / distributions from other investments
34 
22 
116 
Acquisitions, net of cash received
0 
(3)
(268)
Net cash used in investing activities
(1,164)
(2,414)
(2,299)
Financing Activities
 
 
 
Repurchase of class A common stock (Note 14)
(5,365)
(710)
(2,024)
Dividends paid (Note 14)
(864)
(595)
(423)
Deposits into litigation escrow account—retrospective responsibility plan (Note 3)
0 
(1,715)
(1,200)
Payments from litigation escrow account—retrospective responsibility plan (Note 3)
4,383 
140 
280 
Cash proceeds from exercise of stock options
108 
174 
99 
Restricted stock and performance shares settled in cash for taxes
(64)
0 
0 
Excess tax benefit for share-based compensation
74 
71 
18 
Payments for earn-out related to PlaySpan acquisition
(12)
(14)
0 
Principal payments on capital lease obligations
(6)
(6)
(10)
Principal payments on debt
0 
0 
(44)
Net cash used in financing activities
(1,746)
(2,655)
(3,304)
Effect of exchange rate changes on cash and cash equivalents
0 
7 
(9)
Increase (decrease) in cash and cash equivalents
112 
(53)
(1,740)
Cash and cash equivalents at beginning of year
2,074 
2,127 
3,867 
Cash and cash equivalents at end of year
2,186 
2,074 
2,127 
Supplemental Disclosure
 
 
 
Income taxes paid, net of refunds
595 
2,057 
1,731 
Non-cash accruals related to purchases of property, equipment, technology and intangible assets
46 
67 
36 
Interest payments on debt
$ 0 
$ 0 
$ 3 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Note 1—Summary of Significant Accounting Policies
Organization. In a series of transactions from October 1 to October 3, 2007, Visa Inc. ("Visa" or the "Company") undertook a reorganization in which Visa U.S.A. Inc. ("Visa U.S.A."), Visa International Service Association ("Visa International"), Visa Canada Corporation ("Visa Canada") and Inovant LLC ("Inovant") became direct or indirect subsidiaries of Visa and established the retrospective responsibility plan (the "October 2007 reorganization" or "reorganization"). See Note 3—Retrospective Responsibility Plan. The reorganization was reflected as a single transaction on October 1, 2007 using the purchase method of accounting with Visa U.S.A. as the accounting acquirer. Visa Europe Limited ("Visa Europe") did not become a subsidiary of Visa Inc., but rather remained owned and governed by its European member financial institutions. See Note 2—Visa Europe.
Visa 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., Visa International, Visa Worldwide Pte. Limited (“VWPL”), Visa Canada, Inovant 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. 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 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. Non-controlling interests are reported as a component of equity. All significant intercompany accounts and transactions are eliminated in consolidation.
Beginning in fiscal 2013, current income tax receivable is presented separately on the consolidated balance sheets. Previously, it had been included in the prepaid expenses and other current assets line. The Company also combined the interest income (expense), investment income and other lines on the consolidated statements of operations into one line entitled, "Non-operating income." All prior period information has been reclassified to conform to current period presentation.
The Company's activities are interrelated, and each activity is dependent upon and supportive of the other. All significant operating decisions are based on analysis of Visa as a single global business. Accordingly, the Company has one reportable segment, Payment Services.
Use of estimates. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Future actual results could differ materially from these estimates. The use of estimates in specific accounting policies is described further below as appropriate.
Cash and cash equivalents. Cash and cash equivalents include cash and certain highly liquid investments with original maturities of 90 days or less from the date of purchase. Cash equivalents are primarily recorded at cost, which approximates fair value due to their generally short maturities.
Restricted cash—litigation escrow. The Company maintains an escrow account from which settlements of, or judgments in, the covered litigation are paid. See Note 3—Retrospective Responsibility Plan and Note 20—Legal Matters for a discussion of the covered litigation. The escrow funds are held in money market investments, together with the interest earned, less applicable taxes payable, and classified as restricted cash on the consolidated balance sheets. Interest earned on escrow funds is included in non-operating income, on the consolidated statements of operations.
Investments and fair value. The Company measures certain assets and liabilities at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are reported under a three-level valuation hierarchy. See Note 4—Fair Value Measurements and Investments. The classification of the Company’s financial assets and liabilities within the hierarchy is as follows:
Level 1—Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 assets include money market funds, publicly-traded equity securities and U.S. Treasury securities.
Level 2—Inputs to the valuation methodology can include: (1) quoted prices in active markets for similar (not identical) assets or liabilities; (2) quoted prices for identical or similar assets in non-active markets; (3) inputs other than quoted prices that are observable for the asset or liability; or (4) inputs that are derived principally from or corroborated by observable market data. The Company's Level 2 assets and liabilities include commercial paper, U.S. government-sponsored debt securities, corporate debt securities and foreign exchange derivative instruments.
Level 3—Inputs to the valuation methodology are unobservable and cannot be corroborated by observable market data. The Company's Level 3 assets and liabilities include auction rate securities, the Visa Europe put option and the earn-out related to the PlaySpan acquisition.
Trading investment securities include mutual fund equity security investments related to various employee compensation and benefit plans. Trading activity in these investments is at the direction of the Company's employees. These investments are held in a trust and are not available for the Company's operational or liquidity needs. Interest and dividend income and changes in fair value are recorded in non-operating income, and offset in personnel expense on the consolidated statements of operations.
Available-for-sale investment securities include investments in debt and equity securities. These securities are recorded at cost at the time of purchase and are carried at fair value. The Company considers these securities to be available-for-sale to meet working capital and liquidity needs. Investments with original maturities of greater than 90 days and stated maturities of less than one year from the balance sheet date, or investments that the Company intends to sell within one year, are classified as current assets, while all other securities are classified as non-current assets. The majority of these investments are classified as non-current as they have stated maturities of more than one year from the balance sheet date. However, these investments are generally available to meet short-term liquidity needs. Unrealized gains and losses are reported in accumulated other comprehensive income or loss on the consolidated balance sheets until realized. The specific identification method is used to calculate realized gain or loss on the sale of marketable securities, which is recorded in non-operating income on the consolidated statements of operations. Dividend and interest income are recognized when earned and are included in non-operating income on the consolidated statements of operations.
The Company evaluates its debt and equity securities for other-than-temporary impairment, or OTTI, on an ongoing basis. When there has been a decline in fair value of a debt or equity security below the amortized cost basis, the Company recognizes OTTI if: (1) it has the intent to sell the security; (2) it is more likely than not that it will be required to sell the security before recovery of the amortized cost basis; or (3) it does not expect to recover the entire amortized cost basis of the security. The Company has not presented required separate disclosures because its gross unrealized loss positions in debt or equity securities for the periods presented are not material. The Company had no OTTI for available-for-sale securities during fiscal 2013 and 2011. The Company recognized $4 million of OTTI for available-for-sale securities during fiscal 2012.
The Company applies the equity method of accounting for investments in other entities when it holds between 20% and 50% ownership in the entity or when it exercises significant influence. Under the equity method, the Company’s share of each entity’s profit or loss is reflected in non-operating income on the consolidated statements of operations. The equity method of accounting is also used for flow-through entities such as limited partnerships and limited liability companies when the investment ownership percentage is equal to or greater than 5% of outstanding ownership interests, regardless of whether the Company has significant influence over the investees.
The Company applies the cost method of accounting for investments in other entities when it holds less than 20% ownership in the entity and does not exercise significant influence, or for flow-through entities when the investment ownership is less than 5% and the Company does not exercise significant influence. These investments consist of equity holdings in non-public companies and are recorded in other assets on the consolidated balance sheets.
The Company regularly reviews investments accounted for under the cost and equity methods for possible impairment, which generally involves an analysis of the facts and changes in circumstances influencing the investment, expectations of the entity’s cash flows and capital needs, and the viability of its business model.
Financial instruments. The Company considers the following to be financial instruments: cash and cash equivalents, restricted cash-litigation escrow, trading and available-for-sale investment securities, settlement receivable and payable, customer collateral, non-marketable equity investments, settlement risk guarantee, derivative instruments, the Visa Europe put option and the earn-out provision related to the PlaySpan acquisition. See Note 4—Fair Value Measurements and Investments.
Settlement receivable and payable. The Company operates systems for authorizing, clearing and settling payment transactions worldwide. U.S. dollar settlements are typically settled within the same day and do not result in a receivable or payable balance, while settlement currencies other than the U.S. dollar generally remain outstanding for one to two business days, resulting in amounts due from and to clients. These amounts are presented as settlement receivable and settlement payable on the consolidated balance sheets, respectively.
Customer collateral. The Company holds cash deposits and other non-cash assets from certain clients in order to ensure their performance of settlement obligations arising from Visa-branded cards and payment products processed in accordance with the Company's operating regulations. The cash collateral assets are restricted and fully offset by corresponding liabilities and both balances are presented on the consolidated balance sheets. Non-cash collateral assets are held on behalf of the Company by a third party and are not recorded on the consolidated balance sheets. See Note 11—Settlement Guarantee Management.
Client incentives. The Company enters into long-term contracts with financial institution clients and other business partners for various programs designed to build payments volume, increase Visa-branded card and product acceptance and win merchant routing transactions over Visa's network. These incentives are primarily accounted for as reductions to operating revenues or as operating expenses if a separate identifiable benefit at fair value can be established. The Company generally capitalizes advance incentive payments under these agreements if select criteria are met. The capitalization criteria include the existence of future economic benefits to Visa, the existence of legally enforceable recoverability language (e.g., early termination clauses), management's ability and intent to enforce the recoverability language and the ability to generate future earnings from the agreement in excess of amounts deferred. Capitalized amounts are amortized over the shorter of the period of contractual recoverability or the corresponding period of economic benefit. Incentives not yet paid are accrued systematically and rationally based on management's estimate of each client's performance. These accruals are regularly reviewed and estimates of performance are adjusted, as appropriate, based on changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts. See Note 17—Commitments and Contingencies.
Property, equipment and technology, net. Property, equipment and technology are recorded at historical cost less accumulated depreciation and amortization, which are computed on a straight-line basis over the asset’s estimated useful life. Depreciation and amortization of technology, furniture, fixtures and equipment are computed over estimated useful lives ranging from 2 to 7 years. Capital leases are amortized over the lease term and leasehold improvements are amortized over the shorter of the useful life of the asset or lease term. Building improvements are depreciated between 3 and 40 years, and buildings are depreciated over 40 years. Improvements that increase functionality of the asset are capitalized and depreciated over the asset’s remaining useful life. Land and construction-in-progress are not depreciated. Fully depreciated assets are retained in property, equipment and technology, net, until removed from service.
Technology includes purchased and internally developed software, including technology assets obtained through acquisitions. Internally developed software represents software primarily used by the VisaNet electronic payment network and CyberSource platform. Internal and external costs incurred during the preliminary project stage are expensed as incurred. Qualifying costs incurred during the application development stage are capitalized. Once the project is substantially complete and ready for its intended use these costs are amortized on a straight-line basis over the technology's estimated useful life. Acquired technology assets are initially recorded at fair value and amortized on a straight-line basis over the estimated useful life.
The Company evaluates the recoverability of long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If the sum of expected undiscounted net future cash flows is less than the carrying amount of an asset or asset group, an impairment loss is recognized to the extent that the carrying amount of the asset or asset group exceeds its fair value. See Note 6—Property, Equipment and Technology, Net.
Leases. The Company enters into operating and capital leases for the use of premises, software and equipment. Rent expense related to operating lease agreements, which may or may not contain lease incentives, is primarily recorded on a straight-line basis over the lease term.
Intangible assets, net. The Company records identifiable intangible assets at fair value on the date of acquisition and evaluates the useful life of each asset.
Finite-lived intangible assets primarily consist of customer relationships, reacquired rights, reseller relationships and tradenames obtained through acquisitions. Finite-lived intangible assets are amortized on a straight-line basis and are tested for recoverability if events or changes in circumstances indicate that their carrying amounts may not be recoverable. These intangibles have useful lives ranging from 1 to 15 years. No events or changes in circumstances indicate that impairment existed as of September 30, 2013. See Note 7—Intangible Assets, Net.
Indefinite-lived intangible assets consist of tradename, customer relationships and the Visa Europe franchise right acquired in the October 2007 reorganization. Intangible assets with indefinite useful lives are not amortized but are evaluated for impairment annually or more frequently if events or changes in circumstances indicate that impairment may exist. The Company tests each category of indefinite-lived intangible assets for impairment on an aggregate basis, which may require the allocation of cash flows and/or an estimate of fair value to the assets or asset group. Impairment exists if the fair value of the indefinite-lived intangible asset is less than the carrying value. The Company relies on a number of factors when completing impairment assessments, including a review of discounted net future cash flows, business plans and the use of present value techniques.
In July 2012, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2012-02, which allows an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangible assets. The Company adopted ASU 2012-02 effective October 1, 2012, and applied the new guidance in its annual impairment review of indefinite-lived intangible assets as of February 1, 2013. The adoption did not have a material impact on the consolidated financial statements.
The Company completed its annual impairment review of indefinite-lived intangible assets as of February 1, 2013, and concluded there was no impairment as of that date. No recent events or changes in circumstances indicate that impairment of the Company's indefinite-lived intangible assets existed as of September 30, 2013.
Goodwill. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not amortized but is evaluated for impairment at the reporting unit level annually as of February 1, or more frequently if events or changes in circumstances indicate that impairment may exist.
The Company evaluated its goodwill for impairment on February 1, 2013, and concluded there was no impairment as of that date. No recent events or changes in circumstances indicate that impairment existed as of September 30, 2013.
Accrued litigation. The Company evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings to which it is a party and records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These judgments are subjective, based on the status of such legal or regulatory proceedings, the merits of the Company's defenses and consultation with corporate and external legal counsel. Actual outcomes of these legal and regulatory proceedings may differ materially from the Company's estimates. Litigation accruals associated with settled obligations to be paid over periods longer than one year are recorded at the present value of future payment obligations. The obligation is accreted to its full payment value with the corresponding accretion charge included in non-operating income in the consolidated statements of operations. The Company expenses legal costs as incurred in professional fees in the consolidated statements of operations. See Note 20—Legal Matters.
Revenue recognition. The Company's operating revenues are comprised principally of service revenues, data processing revenues, international transaction revenues and other revenues, reduced by costs incurred under client incentives arrangements. The Company recognizes revenue when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.
Service revenues consist of revenues earned for providing financial institution clients with support services for the delivery of Visa-branded payment products and solutions. Current quarter service revenues are primarily assessed using a calculation of current pricing applied to the prior quarter's payments volume. The Company also earns revenues from assessments designed to support ongoing acceptance and volume growth initiatives, which are recognized in the same period the related volume is transacted.
Data processing revenues consist of revenues earned for authorization, clearing, settlement, network access and other maintenance and support services that facilitate transaction and information processing among the Company's financial institution clients globally and with Visa Europe. Data processing revenues are also earned for transactions processed by CyberSource's online payment gateway platform. Data processing revenues are recognized in the same period the related transactions occur or services are rendered.
International transaction revenues are earned for cross-border transaction processing and currency conversion activities. Cross-border transactions arise when the country of origin of the issuer is different from that of the merchant. International transaction revenues are primarily generated by cross-border payments and cash volume.
Other revenues consist mainly of license fees for use of the Visa brand, revenues earned from Visa Europe in connection with the Visa Europe Framework Agreement (see Note 2—Visa Europe), fees from account holder services, licensing and certification and other activities related to the Company's acquired entities. Other revenues also include optional service or product enhancements, such as extended account holder protection and concierge services. Other revenues are recognized in the same period the related transactions occur or services are rendered.
Marketing. The Company expenses costs for the production of advertising as incurred. The cost of media advertising is expensed when the advertising takes place. Sponsorship costs are recognized over the period in which the Company benefits from the sponsorship rights. Promotional items are expensed as incurred, when the related services are received, or when the related event occurs.
Income taxes. The Company's income tax expense consists of two components: current and deferred. Current income tax expense represents taxes paid or payable for the current period. Deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to temporary differences between the financial statement carrying amounts and the respective tax basis of existing assets and liabilities, and operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing whether deferred tax assets are realizable, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. A valuation allowance is recorded for the portions that are not expected to be realized based on the level of historical taxable income, projections of future taxable income over the periods in which the temporary differences are deductible, and qualifying tax planning strategies.
Where interpretation of the tax law may be uncertain, the Company recognizes, measures and discloses income tax uncertainties. The Company accounts for interest expense and penalties related to uncertain tax positions in non-operating income in the consolidated statements of operations. The Company files a consolidated federal income tax return and, in certain states, combined state tax returns. Foreign taxes paid have historically been deducted to reduce federal income taxes payable. The Company elects to claim foreign tax credits in any given year if such election is beneficial to the Company. See Note 19—Income Taxes.
Pension and other postretirement benefit plans. The Company’s defined benefit pension and other postretirement benefit plans are actuarially evaluated, incorporating various critical assumptions including the discount rate and the expected rate of return on plan assets (for qualified pension plans). The discount rate is based on a "bond duration matching" methodology, which reflects the matching of projected plan obligation cash flows to an average of high-quality corporate bond yield curves whose duration matches the projected cash flows. The expected rate of return on pension plan assets considers the current and expected asset allocation, as well as historical and expected returns on each plan asset class. Any difference between actual and expected plan experience, including asset return experience, in excess of a 10% corridor is recognized in net periodic pension cost over the expected average employee future service period, which is approximately 8 years for United States plans. Other assumptions involve demographic factors such as retirement age, mortality, attrition and the rate of compensation increases. The Company evaluates assumptions annually and modifies them as appropriate.
The Company recognizes the funded status of its benefit plans in its consolidated balance sheets as other assets, accrued liabilities and other liabilities. The Company recognizes settlement losses when it settles pension benefit obligations, including making lump-sum cash payments to plan participants in exchange for their rights to receive specified pension benefits, when certain thresholds are met. See Note 10—Pension, Postretirement and Other Benefits.
Foreign currency remeasurement and translation. The Company's functional currency is the U.S. dollar for the majority of its foreign operations. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses related to conversion and remeasurement are recorded in general and administrative expense in the consolidated statements of operations.
For certain foreign operations, the Company's functional currency may be the local currency in which a foreign subsidiary executes its business transactions. Translation from the local currency to the U.S. dollar is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using an average exchange rate for the period. Resulting translation adjustments are reported as a component of accumulated other comprehensive income or loss on the consolidated balance sheets.
Derivative financial instruments. The Company uses foreign exchange forward derivative contracts to reduce its exposure to foreign currency rate changes on non-functional currency denominated forecasted operational cash flows. Derivatives are carried at fair value on a gross basis in either prepaid and other current assets or accrued liabilities on the consolidated balance sheets. At September 30, 2013, derivatives outstanding mature within 12 months or less. Gains and losses resulting from changes in fair value of derivative instruments are accounted for either in accumulated other comprehensive income or loss on the consolidated balance sheets, or in the consolidated statements of operations (in the corresponding account where revenue or expense is hedged, or to general and administrative for hedge amounts determined to be ineffective) depending on whether they are designated and qualify for hedge accounting. Fair value represents the difference in the value of the derivative instruments at the contractual rate and the value at current market rates, and generally reflects the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date based on broker quotes for the same or similar instruments. The Company does not enter into derivative contracts for speculative or trading purposes. See Note 12—Derivative Financial Instruments.
Guarantees and indemnifications. The Company recognizes an obligation at inception for guarantees and indemnifications that qualify for recognition, regardless of the probability of occurrence. The Company indemnifies financial institution clients from settlement losses suffered due to the failure of any other client to honor Visa-branded cards and payment products processed in accordance with Visa's operating regulations. The estimated fair value of the liability for settlement indemnification is included in accrued liabilities on the consolidated balance sheets and is described in Note 11—Settlement Guarantee Management. The Company indemnifies Visa Europe for claims arising from the Company’s or Visa Europe’s activities that are brought outside of Visa Europe’s region, as described in Note 2—Visa Europe.
Share-based compensation. The Company recognizes share-based compensation cost using the fair value method of accounting. The Company recognizes compensation cost for awards with only service conditions on a straight-line basis over the requisite service period, which is generally the vesting period. Compensation cost for performance and market-condition-based awards is recognized on a graded-vesting basis. The amount is initially estimated based on target performance and is adjusted as appropriate based on management's best estimate throughout the performance period. See Note 16—Share-based Compensation.
Earnings per share. The Company calculates earnings per share using the two-class method to reflect the different rights of each class and series of outstanding common stock. The dilutive effect of incremental common stock equivalents is reflected in diluted earnings per share by application of the treasury stock method. See Note 15—Earnings Per Share.
Recently Issued Accounting Pronouncements
In June 2011, the FASB issued ASU 2011-05, which impacts the presentation of comprehensive income. The guidance requires components of other comprehensive income to be presented with net income to arrive at total comprehensive income. This ASU impacts presentation only and does not impact the underlying components of other comprehensive income or net income. In December 2011, the FASB issued an amendment to ASU 2011-05, which deferred the requirement to report the effect of significant reclassifications out of other comprehensive income on the respective line items in net income. All other components of ASU 2011-05 became effective October 1, 2012. Adoption did not have a material impact on the consolidated financial statements.
In February 2013, the FASB issued ASU 2013-02, which established the effective date for the requirement to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income. The standard impacts presentation only and does not impact the underlying components of other comprehensive income or net income. The Company will adopt the standard effective October 1, 2013. The adoption is not expected to have a material impact on the consolidated financial statements.
In January 2013, the FASB issued ASU 2013-01, which clarifies the scope of ASU 2011-11. As amended, ASU 2011-11 requires disclosure of the effect or potential effect of offsetting arrangements on a Company's financial position as well as enhanced disclosure of the rights of offset associated with a Company's recognized derivative instruments, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and lending transactions. The amended standard impacts presentation only and is not expected to have a material impact on the consolidated financial statements. The Company will adopt the standard effective October 1, 2013.
In February 2013, the FASB issued ASU 2013-04, which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
In March 2013, the FASB issued ASU 2013-05, which clarifies the applicable guidance for the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity, or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
In July 2013, the FASB issued ASU 2013-11, which provides guidance for the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
Visa Europe
Visa Europe
Note 2—Visa Europe
As part of Visa's October 2007 reorganization, Visa Europe exchanged its ownership interest in Visa International and Inovant for Visa common stock, a put-call option agreement and a Framework Agreement, as described below.
Visa Europe put option agreement. The Company granted Visa Europe a perpetual put option, which if exercised, will require Visa to purchase all of the outstanding shares of capital stock of Visa Europe from its members. The Company is required to purchase the shares of Visa Europe no later than 285 days after exercise of the put option. The put option agreement provides a formula for determining the purchase price of the Visa Europe shares, which, subject to certain adjustments, applies Visa Inc.'s forward price-to-earnings multiple, or the P/E ratio (as defined in the option agreement), at the time the option is exercised to Visa Europe's adjusted sustainable income for the forward 12-month period (as defined in the option agreement), or the adjusted sustainable income. The calculation of Visa Europe's adjusted sustainable income under the terms of the put option agreement includes potentially material adjustments for cost synergies and other negotiated items. Upon exercise, the key inputs to this formula, including Visa Europe's adjusted sustainable income, will be the result of negotiation between the Company and Visa Europe. The put option agreement provides an arbitration mechanism in the event that the two parties are unable to agree on the ultimate purchase price.
The fair value of the put option represents the value of Visa Europe's option, which, under certain conditions, could obligate the Company to purchase its member equity interest for an amount above fair value. The fair value of the put option does not represent the actual purchase price that the Company may be required to pay if the option is exercised, which could be several billion dollars or more. While the put option is in fact non-transferable, its fair value represents the Company's estimate of the amount the Company would be required to pay a third-party market participant to transfer the potential obligation in an orderly transaction.
The fair value of the put option is computed by comparing the estimated strike price, under the terms of the put option agreement, to the estimated fair value of Visa Europe. The fair value of Visa Europe is defined as the estimated amount a third-party market participant might pay in an arm's-length transaction under normal business conditions. A probability of exercise assumption is applied to reflect the possibility that Visa Europe will never exercise its option.
The estimated fair value of the put option represents a Level 3 accounting estimate due to a lack of trading in active markets and a lack of observable inputs in measuring fair value. See Note 4—Fair Value Measurements and Investments. The valuation of the put option therefore requires substantial judgment. The most subjective of estimates applied in valuing the put option are the assumed probability that Visa Europe will elect to exercise its option and the estimated differential between the P/E ratio and the P/E ratio applicable to Visa Europe on a standalone basis at the time of exercise, which the Company refers to as the “P/E differential.”
Exercise of the put option is at the sole discretion of Visa Europe (on behalf of the Visa Europe shareholders pursuant to authority granted to Visa Europe, under its Articles of Association). The Company estimates the assumed probability of exercise based on reasonably available information including, but not limited to: (i) Visa Europe's stated intentions; (ii) indications that Visa Europe is preparing to exercise as reflected in its reported financial results; (iii) evaluation of market conditions, including the regulatory environment, that could impact the potential future profitability of Visa Europe; and (iv) qualitative factors applicable to Visa Europe's largest members, which could indicate a change in their need or desire to liquidate their investment holdings. Factors impacting the assumed P/E differential used in the calculation include material changes in the P/E ratio of Visa and those of a group of comparable companies used to estimate the forward price-to-earnings multiple applicable to Visa Europe.
The Company determined the fair value of the put option to be approximately $145 million at September 30, 2013 and 2012. In determining the fair value of the put option on these dates, the Company assumed a 40% probability of exercise by Visa Europe at some point in the future and an estimated long-term P/E differential at the time of exercise of 1.9x. Changes in the fair value of the put option are recorded as non-cash, non-operating income in the Company's consolidated statements of operations. During fiscal 2011, the Company reduced the value of the put option by $122 million, recording non-cash, non-operating income in the consolidated statement of operations. The decrease in the value of the put option reflected the overall decrease in Visa's P/E during fiscal 2011 as compared to fiscal 2010, and does not reflect any change in the likelihood that Visa Europe will exercise its option.
The put option is exercisable at any time at the sole discretion of Visa Europe. As such, the put option liability is included in accrued liabilities on the Company's consolidated balance sheet at September 30, 2013. Classification in current liabilities is not an indication of management's expectation of exercise and simply reflects the fact that the obligation resulting from the exercise of the instrument could become payable within 12 months.
Visa call option agreement. Visa Europe granted to Visa a perpetual call option under which the Company may be entitled to purchase all of the share capital of Visa Europe. The Company may exercise the call option in the event of certain triggering events. These triggering events involve the performance of Visa Europe measured as an unremediated decline in the number of merchants or ATM's in the Visa Europe region that accepts Visa-branded products. The Company believes the likelihood of these events occurring is remote.
The Framework Agreement. The relationship between Visa and Visa Europe is governed by a Framework Agreement, which provides for trademark and technology licenses and bilateral services as described below.
The Company granted to Visa Europe exclusive, irrevocable and perpetual licenses to use the Visa trademarks and technology intellectual property owned by the Company and certain affiliates within the Visa Europe region for use in the field of financial services, payments, related information technology and information processing services and participation in the Visa system. Visa Europe may sublicense the Visa trademarks and technology intellectual property to its members and other sublicensees under agreed-upon circumstances.
The base fee for these irrevocable and perpetual licenses is recorded in other revenues and was approximately $143 million per year for fiscal 2013, 2012 and 2011. This fee is eligible for adjustment annually based on the annual growth of the gross domestic product of the European Union, although the adjustment can never reduce the annual fee below $143 million. The Company determined through an analysis of the fee rates implied by the economics of the agreement that the base fee, as adjusted in future periods based on the growth of the gross domestic product of the European Union, approximates fair value.
In addition to the licenses, Visa provides Visa Europe with authorization, clearing and settlement services for cross-border transactions involving Visa Europe's region and the rest of the world. Visa Europe must comply with certain agreed-upon global rules governing the interoperability of Visa's systems with the systems of Visa Europe as well as the use and interoperability of the Visa trademarks. The parties will also guarantee the obligations of their respective clients and members to settle transactions, manage certain relationships with sponsors, clients and merchants, and comply with rules relating to the operation of the Visa enterprise. Under the Framework Agreement, the Company indemnifies Visa Europe for claims arising from the Company’s or Visa Europe’s activities that are brought outside of Visa Europe’s region; and Visa Europe likewise indemnifies the Company for such claims brought within Visa Europe’s region. However, Visa Europe has expressed an “initial” view that it is not obligated to indemnify the Company for any claim relating to the European Competition Proceedings, including claims asserted in both the European Commission matter and the U.K. Merchant Litigation. See Note 20—Legal Matters. The Company continues to firmly believe that Visa Europe is obligated to indemnify the Company for all such claims.
The Company has not recorded liabilities associated with these obligations as the fair value of such obligations was determined to be insignificant at September 30, 2013 and 2012, respectively. The Company has determined that the value of services exchanged as a result of these various agreements approximates fair value at September 30, 2013 and 2012, respectively.
Retrospective Responsibility Plan
Retrospective Responsibility Plan
Note 3—Retrospective Responsibility Plan
The Company has established several related mechanisms designed to address potential liability under certain litigation referred to as the “covered litigation." These mechanisms are included in and referred to as the retrospective responsibility plan, or the plan, and consist of a litigation escrow agreement, the conversion feature of the Company's shares of class B common stock, the indemnification obligations of the Visa U.S.A. members, an interchange judgment sharing agreement and a loss sharing agreement.
Covered litigation consists of:
•
the Discover Litigation. Discover Financial Services Inc. v. Visa U.S.A. Inc., Case No. 04-CV-07844 (S.D.N.Y) (settled); 
•
the American Express Litigation. American Express Travel Related Services Co., Inc. v. Visa U.S.A. Inc. et al., No. 04-CV-0897 (S.D.N.Y.), which the Company refers to as the American Express litigation (settled); 
•
the Attridge Litigation. Attridge v. Visa U.S.A. Inc. et al., Case No. CGC-04-436920 (Cal. Super.); 
•
the Interchange Multidistrict Litigation. In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 1:05-md-01720-JG-JO (E.D.N.Y.) or MDL 1720, including all cases currently included in MDL 1720, any other case that includes claims for damages relating to the period prior to the Company's IPO that has been or is transferred for coordinated or consolidated pre-trial proceedings at any time to MDL 1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of any court of competent jurisdiction and Kendall v. Visa U.S.A., Inc. et al., Case No. CO4-4276 JSW (N.D. Cal.); and 
•
any claim that challenges the reorganization or the consummation thereof; provided that such claim is transferred for coordinated or consolidated pre-trial proceedings at any time to MDL 1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of any court of competent jurisdiction.
Litigation escrow agreement. In accordance with the litigation escrow agreement, the Company maintains an escrow account, from which settlements of, or judgments in, the covered litigation are paid. The amount of the escrow is determined by the board of directors and the Company's litigation committee, all members of which are affiliated with, or act for, certain Visa U.S.A. members. The escrow funds are held in money market investments along with the interest earned, less applicable taxes, and are classified as restricted cash on the consolidated balance sheets.
The following table sets forth the changes in the litigation escrow account:
 
Fiscal 2013
 
Fiscal 2012
 
(in millions)
Balance at October 1
$
4,432

 
$
2,857

Payments to settlement funds:(1)
 
 
 
Class plaintiffs
(4,033
)
 
—

Individual plaintiffs
(350
)
 
—

Payments to American Express
—

 
(140
)
Deposits into the litigation escrow account
—

 
1,715

Balance at September 30
$
49

 
$
4,432


(1)
These payments are associated with the interchange multidistrict litigation. The settlement with the class plaintiffs in these proceedings is subject to final court approval, which the Company cannot assure will be received, and to the adjudication of any appeals. See Note 20—Legal Matters.
An accrual for the covered litigation and a change 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 recommendations made by the litigation committee. 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 fiscal 2013. See Note 20—Legal Matters.
Conversion feature. Under the terms of the plan, when the Company funds the litigation escrow account, the shares of class B common stock are subject to dilution through an adjustment to the conversion rate of the shares of class B common stock to shares of class A common stock. This has the same effect on earnings per share as repurchasing the Company's class A common stock, by reducing the class B conversion rate and consequently the as-converted class A common stock share count. See Note 14—Stockholders' Equity.
Indemnification obligations. To the extent that amounts available under the litigation escrow arrangement and other agreements in the plan are insufficient to fully resolve the covered litigation, the Company will use commercially reasonable efforts to enforce the indemnification obligations of Visa U.S.A.'s members for such excess amount, including but not limited to enforcing indemnification obligations pursuant to Visa U.S.A.'s certificate of incorporation and bylaws and in accordance with their membership agreements.
Interchange judgment sharing agreement. Visa U.S.A. and Visa International have entered into an interchange judgment sharing agreement with certain Visa U.S.A. members that have been named as defendants in the interchange multidistrict litigation, which is described in Note 20—Legal Matters. Under this judgment sharing agreement, Visa U.S.A. members that are signatories will pay their membership proportion of the amount of a final judgment not allocated to the conduct of MasterCard.
Loss sharing agreement. Visa has entered into a loss sharing agreement with Visa U.S.A., Visa International and certain Visa U.S.A. members. The loss sharing agreement provides for the indemnification of Visa U.S.A., Visa International and, in certain circumstances, Visa with respect to: (i) the amount of a final judgment paid by Visa U.S.A. or Visa International in the covered litigation after the operation of the interchange judgment sharing agreement, plus any amounts reimbursable to the interchange judgment sharing agreement signatories; or (ii) the damages portion of a settlement of a covered litigation that is approved as required under Visa U.S.A.'s certificate of incorporation by the vote of Visa U.S.A.'s specified voting members. The several obligation of each bank that is a party to the loss sharing agreement will equal the amount of any final judgment enforceable against Visa U.S.A., Visa International or any other signatory to the interchange judgment sharing agreement, or the amount of any approved settlement of a covered litigation, multiplied by such bank's then-current membership proportion as calculated in accordance with Visa U.S.A.'s certificate of incorporation.
Omnibus agreement. Visa entered into an omnibus agreement with MasterCard and certain Visa U.S.A. members that confirmed and memorialized the signatories’ intentions with respect to the loss sharing agreement, the interchange judgment sharing agreement and other agreements relating to the interchange multidistrict litigation. The Visa portion of a settlement or judgment in the interchange multidistrict litigation covered by the omnibus agreement would be allocated in accordance with specified provisions of the retrospective responsibility plan. See Note 20—Legal Matters.
Fair Value Measurements and Investments
Fair Value Measurements and Investments
Note 4—Fair Value Measurements and Investments
Fair Value Measurements
The Company measures certain assets and liabilities at fair value. See Note 1—Summary of Significant Accounting Policies.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
 
Fair Value Measurements at September 30
Using Inputs Considered as
 
Level 1
 
Level 2
 
Level 3
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents and restricted cash:
 
 
 
 
 
 
 
 
 
 
 
Money market funds
$
1,071

 
$
5,676

 
 
 
 
 
 
 
 
Commercial paper
 
 
 
 
$
51

 
$
93

 
 
 
 
Investment securities, trading:
 
 
 
 
 
 
 
 
 
 
 
Equity securities
75

 
66

 
 
 
 
 
 
 
 
Investment securities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
U.S. government-sponsored debt securities
 
 
 
 
2,704

 
2,821

 
 
 
 
U.S. Treasury securities
1,673

 
1,066

 
 
 
 
 
 
 
 
Equity securities
101

 
2

 
 
 
 
 
 
 
 
Corporate debt securities
 
 
 
 
269

 
63

 
 
 
 
Auction rate securities
 
 
 
 
 
 
 
 
$
7

 
$
7

Prepaid and other current assets:
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange derivative instruments
 
 
 
 
23

 
13

 
 
 
 
Total
$
2,920

 
$
6,810

 
$
3,047

 
$
2,990

 
$
7

 
$
7

Liabilities
 
 
 
 
 
 
 
 
 
 
 
Accrued liabilities:
 
 
 
 
 
 
 
 
 
 
 
Visa Europe put option
 
 
 
 
 
 
 
 
$
145

 
$
145

Earn-out related to PlaySpan acquisition
 
 
 
 
 
 
 
 
—

 
12

Foreign exchange derivative instruments
 
 
 
 
$
15

 
$
11

 
 
 
 
Total
$
—

 
$
—

 
$
15

 
$
11

 
$
145

 
$
157


There were no significant transfers between Level 1 and Level 2 assets during fiscal 2013.
Level 1 assets measured at fair value on a recurring basis. Money market funds, publicly-traded equity securities and U.S. Treasury securities are classified as Level 1 within the fair value hierarchy, as fair value is based on quoted prices in active markets. The overall decrease in the Company's Level 1 assets primarily reflects payments from the litigation escrow account totaling $4.4 billion in connection with the covered litigation. See Note 3—Retrospective Responsibility Plan and Note 20—Legal Matters.
Level 2 assets and liabilities measured at fair value on a recurring basis. The fair value of U.S. government-sponsored debt securities and corporate debt securities, as provided by third-party pricing vendors, is based on quoted prices in active markets for similar, not identical, assets. The pricing data obtained from outside sources is reviewed internally for reasonableness, compared against benchmark quotes from independent pricing sources, then confirmed or revised accordingly. Commercial paper and foreign exchange derivative instruments are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. There were no substantive changes to the valuation techniques and related inputs used to measure fair value during fiscal 2013.
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 fiscal 2013.
Visa Europe put option agreement. The Company has granted Visa Europe a perpetual put option which is carried at fair value in accrued liabilities on the consolidated balance sheets. The fair value of the put option was $145 million at September 30, 2013 and 2012. Changes in fair value are recorded as non-cash, non-operating income in the Company's consolidated statements of operations. See Note 2—Visa Europe. The liability is classified within Level 3 as the assumed probability that Visa Europe will elect to exercise its option and the estimated P/E differential are among several unobservable inputs used to value the put option.
Earn-out related to PlaySpan acquisition. In connection with the PlaySpan acquisition, the Company initially recorded a liability of $24 million to reflect the fair value of a potential earn-out provision included in the purchase agreement. The liability was classified as Level 3 due to a lack of observable inputs, such as the likelihood of meeting certain future revenue targets and other milestones. The fair value of the earn-out was reduced to zero, reflecting payments made in full during fiscal 2013, upon achieving certain revenue targets and other milestones.
A separate roll-forward of Level 3 investments measured at fair value on a recurring basis is not presented because the primary activities during fiscal 2013 and 2012 are already discussed above.
Assets Measured at Fair Value on a Nonrecurring 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. The Company recognized a $15 million other-than-temporary impairment loss related to these investments during fiscal 2013, compared with a $2 million impairment loss recognized during fiscal 2012 and no impairment charges during fiscal 2011. At September 30, 2013 and 2012, these investments totaled $30 million and $86 million, respectively. These assets are classified in other assets on the consolidated balance sheets. See Note 5—Prepaid Expenses and Other Assets.
Due to a change in the Company's relationship with one of its investees during fiscal 2013, the Company reclassified equity securities previously accounted for as an equity method investment, with a carrying value of $12 million, to long-term available-for-sale investment securities. The fair value of this investment at September 30, 2013 was $99 million, resulting in the recognition of a pre-tax unrealized gain of $87 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, tradenames, and reseller relationships, all of which were obtained through acquisitions. See Note 7—Intangible Assets, Net.
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. The Company completed its annual impairment review of its indefinite-lived intangible assets and goodwill as of February 1, 2013, and concluded that there was no impairment. No recent events or changes in circumstances indicate that impairment existed at September 30, 2013. See Note 1—Summary of Significant Accounting Policies.
Other Financial Instruments not Measured at Fair Value
Certain financial instruments are not measured at fair value on the Company's consolidated balance sheet but require disclosure of their fair values, including cash, settlement receivable and payable, and customer collateral. The estimated fair value of such instruments at September 30, 2013, approximates their carrying value due to their generally short maturities.
Investments
Trading Investment Securities
Trading investment securities include mutual fund equity security investments related to various employee compensation and benefit plans. Trading activity in these investments is at the direction of the Company's employees. These investments are held in trust and are not available for the Company's operational or liquidity needs. Interest and dividend income and changes in fair value are recorded in non-operating income, and offset in personnel expense on the consolidated statements of operations. As of September 30, 2013 and 2012, trading investment securities totaled $75 million and $66 million, respectively.
Available-for-sale Investment Securities
The amortized cost, unrealized gains and losses and fair value of available-for-sale investment securities are as follows:
 
September 30, 2013
 
September 30, 2012

 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Gains
 
Losses
 
Gains
 
Losses
 
 
(in millions)
U.S. government-sponsored debt securities
$
2,701

 
$
3

 
$
—

 
$
2,704

 
$
2,818

 
$
3

 
$
—

 
$
2,821

U.S. Treasury securities
1,671

 
2

 
—

 
1,673

 
1,065

 
1

 
—

 
1,066

Equity securities
14

 
88

 
(1
)
 
101

 
4

 
—

 
(1
)
 
3

Corporate debt securities
269

 
—

 
—

 
269

 
63

 
—

 
—

 
63

Auction rate securities
7

 
—

 
—

 
7

 
7

 
—

 
—

 
7

Total
$
4,662

 
$
93

 
$
(1
)
 
$
4,754

 
$
3,957

 
$
4

 
$
(1
)
 
$
3,960

Less: current portion of available-for-sale investment securities
 
 
 
 
 
 
(1,994
)
 
 
 
 
 
 
 
(677
)
Long-term available-for-sale investment securities
 
 
 
 
 
 
$
2,760

 
 
 
 
 
 
 
$
3,283

The available-for-sale investment securities primarily include U.S. government-sponsored debt securities, U.S. Treasury securities and corporate debt securities. Available-for-sale debt securities are presented below in accordance with their stated maturities. The majority of these investments, $2.8 billion, are classified as non-current, as they have stated maturities of more than one year from the balance sheet date. However, these investments are generally available to meet short-term liquidity needs.
 
Amortized Cost
 
Fair Value
 
(in millions)
September 30, 2013:
 
 
 
Due within one year
$
1,989

 
$
1,992

Due after 1 year through 5 years
2,652

 
2,654

Due after 5 years through 10 years
—

 
—

Due after 10 years
7

 
7

Total
$
4,648

 
$
4,653


Investment Income
Investment income is recorded as non-operating income in the Company's consolidated statements of operations and consisted of the following:
 
For the Years Ended
September 30,
 
2013
 
2012
 
2011
 
(in millions)
Interest and dividend income on cash and investments
$
27

 
$
17

 
$
16

Gain on other investments
5

 
17

 
92

Investment securities, trading:
 
 
 
 
 
Unrealized gains (losses), net
4

 
9

 
(5
)
Realized gains (losses), net
2

 
(1
)
 
1

Investment securities, available-for-sale:
 
 
 
 
 
Realized (losses) gains, net
(1
)
 
—

 
4

Other-than-temporary impairment on investments
(15
)
 
(6
)
 
—

Investment income
$
22

 
$
36

 
$
108


The gain on other investments in fiscal 2011 primarily includes the pre-tax gain from the sale of the Company's equity interest in Visa Vale issuer Companhia Brasileira de Soluções e Serviços, or CBSS, of $85 million.
Prepaid Expenses and Other Assets
Prepaid Expenses and Other Assets
Note 5—Prepaid Expenses and Other Assets
Prepaid expenses and other current assets consisted of the following:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Prepaid expenses and maintenance
$
111

 
$
69

Foreign exchange derivative instruments—(See Note 12—Derivative Financial Instruments)
23

 
13

Other
53

 
40

Total
$
187

 
$
122


Other non-current assets consisted of the following: 
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Non-current income tax receivable—(See Note 19—Income Taxes)(1)
$
253

 
$
—

Pension assets—(See Note 10—Pension, Postretirement and Other Benefits)(2)
192

 
23

Other investments—(See Note 4—Fair Value Measurements and Investments)(3)
30

 
86

Long-term prepaid expenses and other
46

 
42

Total
$
521

 
$
151

(1) 
The increase in non-current income tax receivable is mainly due to amended tax returns filed during fiscal 2013.
(2) 
The increase in pension assets was mainly due to a higher-than-expected rate of return on pension assets during the year and an increase in the discount rate at September 30, 2013 compared to September 30, 2012.
(3) 
The decrease in other investments was mainly due to the recognition of an other-than-temporary impairment loss and subsequent sale of an investment, combined with a reclassification of equity securities to long-term available-for-sale investment securities following a change in the Company's relationship with an investee.
Property, Equipment and Technology, Net
Property, Equipment and Technology, Net
Note 6—Property, Equipment and Technology, Net
Property, equipment and technology, net, consisted of the following:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Land
$
71

 
$
71

Buildings and building improvements
766

 
751

Furniture, equipment and leasehold improvements
983

 
837

Construction-in-progress
74

 
69

Technology
1,545

 
1,353

Total property, equipment and technology
3,439

 
3,081

Accumulated depreciation and amortization
(1,707
)
 
(1,447
)
Property, equipment and technology, net
$
1,732

 
$
1,634


Technology consists of both purchased and internally developed software. Internally developed software primarily represents software utilized by the VisaNet electronic payment network and CyberSource platform. At September 30, 2013 and 2012, accumulated amortization for technology was $959 million and $812 million, respectively.
At September 30, 2013, estimated future amortization expense on technology was as follows:
Fiscal (in millions)
2014
 
2015
 
2016
 
2017
 
2018 and
thereafter
 
Total
Estimated future amortization expense
$
175

 
$
162

 
$
129

 
$
85

 
$
35

 
$
586

Depreciation and amortization expense related to property, equipment and technology was $328 million, $265 million and $225 million for fiscal 2013, 2012 and 2011, respectively. Included in those amounts was amortization expense on technology of $173 million, $132 million and $102 million for fiscal 2013, 2012 and 2011, respectively.
Intangible Assets, Net
Intangible Assets, Net
Note 7—Intangible Assets, Net
At September 30, 2013 and 2012, the Company’s indefinite-lived intangible assets consisted of customer relationships of $6.8 billion, Visa tradename of $2.6 billion and a Visa Europe franchise right of $1.5 billion, all of which were acquired as part of the Company’s October 2007 reorganization. Customer relationships represent the value of relationships with clients outside of the United States, excluding the European Union. Tradenames represent the value of the Visa brand outside of the United States, excluding the European Union. Visa Europe’s franchise right represents the value of the right to franchise the use of the Visa brand, use of Visa technology and access to the overall Visa network in the European Union.
Indefinite-lived and finite-lived intangible assets consisted of the following: 
 
September 30, 2013
 
September 30, 2012
 
Gross
 
Accumulated
Amortization
 
Net
 
Gross
 
Accumulated
Amortization
 
Net
 
(in millions)
Finite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
339

 
$
(125
)
 
$
214

 
$
339

 
$
(84
)
 
$
255

Tradenames
192

 
(41
)
 
151

 
192

 
(28
)
 
164

Reseller relationships
95

 
(36
)
 
59

 
95

 
(25
)
 
70

Other
52

 
(8
)
 
44

 
52

 
(4
)
 
48

Total finite-lived intangible assets
$
678

 
$
(210
)
 
$
468

 
$
678

 
$
(141
)
 
$
537

Indefinite-lived intangible assets
 
 
 
 
10,883

 
 
 
 
 
10,883

Total intangible assets, net
 
 
 
 
$
11,351

 
 
 
 
 
$
11,420


Amortization expense related to finite-lived intangible assets was $69 million, $68 million and $63 million for fiscal 2013, 2012 and 2011, respectively. At September 30, 2013, estimated future amortization expense on finite-lived intangible assets is as follows:
Fiscal (in millions)
2014
 
2015
 
2016
 
2017
 
2018 and
thereafter
 
Total
Estimated future amortization expense
$
66

 
$
62

 
$
49

 
$
47

 
$
244

 
$
468


There was no impairment related to the Company’s indefinite-lived or finite-lived intangible assets during fiscal 2013, 2012 or 2011.
Accrued and Other Liabilities
Accrued and Other Liabilities
Note 8—Accrued and Other Liabilities
Accrued liabilities consisted of the following:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Accrued operating expenses
$
182

 
$
194

Visa Europe put option—(See Note 2—Visa Europe)(1)
145

 
145

Deferred revenue
60

 
59

Accrued marketing and product expenses
27

 
22

Accrued income taxes—(See Note 19—Income Taxes)
64

 
58

Other
135

 
106

Total
$
613

 
$
584


Other long-term liabilities consisted of the following:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Accrued income taxes—(See Note 19—Income Taxes)(2)
$
453

 
$
171

Employee benefits
86

 
93

Other
63

 
107

Total
$
602

 
$
371

(1) 
The put option is exercisable at any time at the sole discretion of Visa Europe with payment required 285 days thereafter. Classification in current liabilities is not an indication of management’s expectation of exercise and simply reflects the fact that the obligation resulting from the exercise of the instrument could become payable within 12 months.
(2) 
The increase in accrued income taxes is primarily related to increases in unrecognized tax benefits.
Debt
Debt
Note 9—Debt
Commercial paper program. Visa maintains a commercial paper program to support its working capital requirements and for other general corporate purposes. On February 7, 2013, the Company replaced the existing $500 million program with a new commercial paper program. Under the new program, the Company is authorized to issue up to $3.0 billion in outstanding notes, with maturities up to 397 days from the date of issuance. The Company had no outstanding obligations under the new program at September 30, 2013.
Credit facility. On January 31, 2013, the Company entered into an unsecured $3.0 billion revolving credit facility. This credit facility, which expires on January 30, 2014, replaced the Company's existing $3.0 billion credit facility, which would have expired on February 15, 2013. The new credit facility contains covenants and events of default customary for facilities of this type. The participating lenders in the new credit facility include affiliates of certain holders of the Company's class B and class C common stock and some of the Company's clients or affiliates of its clients. The new credit facility is maintained to provide liquidity in the event of settlement failures by the Company's clients, to back up the commercial paper program and for general corporate purposes.
Interest on 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 credit rating of the Company's senior unsecured long-term debt. Visa also agreed to pay a commitment fee that fluctuates based on the credit rating of the Company's senior unsecured long-term debt. Currently, the applicable margin is 0.00% to 0.75% depending on the type of the loan, and the commitment fee is 0.05%. There were no borrowings under this facility and the Company was in compliance with all related covenants at September 30, 2013.
Pension, Postretirement and Other Benefits
Pension, Postretirement and Other 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 uses a September 30 measurement date for its pension and other postretirement benefit plans.
Defined benefit pension plans. The defined benefit pension plan benefits are based on years of service, age and eligible compensation. Prior to January 1, 2011, employees hired before January 1, 2008 earned benefits based on their pay during their last five years of employment. Employees hired or rehired on or after January 1, 2008, earned benefits based on a cash balance formula. Effective January 1, 2011, all employees began accruing benefits under the cash balance formula and ceased accruing benefits under any other formula. An employee’s cash balance account is credited with an amount equal to 6% of eligible compensation plus interest based on 30-year Treasury securities. The funding policy is to contribute annually no less than the minimum required contribution under ERISA. 
Postretirement benefits plan. The postretirement benefits plan provides medical benefits for retirees and dependents who meet minimum age and service requirements. Benefits are provided from retirement date until age 65. Retirees must contribute on a monthly basis for the same coverage that is generally available to active employees and their dependents. The Company’s contributions are funded on a current basis.
Summary of Plan Activities
Change in Benefit Obligation:
 
Pension Benefits
 
Other
Postretirement Benefits
 
September 30,
 
September 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions)
Benefit obligation—beginning of fiscal year
$
990

 
$
839

 
$
32

 
$
38

Service cost
43

 
38

 
—

 
—

Interest cost
35

 
40

 
1

 
1

Actuarial (gain) loss
(127
)
 
132

 
(4
)
 
(3
)
Benefit payments
(44
)
 
(60
)
 
(4
)
 
(4
)
Settlements
—

 
1

 
—

 
—

Benefit obligation—end of fiscal year
$
897

 
$
990

 
$
25

 
$
32

Accumulated benefit obligation
$
892

 
$
982

 
NA

 
NA

Change in Plan Assets:
 
 
 
 
 
 
 
Fair value of plan assets—beginning of fiscal year
$
973

 
$
783

 
$
—

 
$
—

Actual return on plan assets
126

 
166

 
—

 
—

Company contribution
—

 
84

 
4

 
4

Benefit payments
(44
)
 
(60
)
 
(4
)
 
(4
)
Fair value of plan assets—end of fiscal year
$
1,055

 
$
973

 
$
—

 
$
—

Funded status at end of fiscal year
$
158

 
$
(17
)
 
$
(25
)
 
$
(32
)
Recognized in Consolidated Balance Sheets:
 
 
 
 
 
 
 
Non-current asset
$
192

 
$
23

 
$
—

 
$
—

Current liability
(8
)
 
(8
)
 
(4
)
 
(4
)
Non-current liability
(26
)
 
(32
)
 
(21
)
 
(28
)
Funded status at end of fiscal year
$
158

 
$
(17
)
 
$
(25
)
 
$
(32
)
 
 
 
 
 
 
 
 

Amounts recognized in accumulated other comprehensive income before tax: 
 
Pension Benefits
 
Other
Postretirement Benefits
September 30,
 
September 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions)
Net actuarial loss (gain)
$
108

 
$
328

 
$
(6
)
 
$
(3
)
Prior service credit
(23
)
 
(33
)
 
(11
)
 
(14
)
Total
$
85

 
$
295

 
$
(17
)
 
$
(17
)

Amounts from accumulated other comprehensive income to be amortized into net periodic benefit cost in fiscal 2014: 
 
Pension Benefits
 
Other
Postretirement
 Benefits
 
(in millions)
Actuarial loss (gain)
$
2

 
$
(1
)
Prior service credit
(9
)
 
(3
)
Total
$
(7
)
 
$
(4
)

Benefit obligation and fair value of plan assets with obligations in excess of plan assets:
 
Pension Benefits
September 30,
 
2013
 
2012
 
(in millions)
Accumulated benefit obligation in excess of plan assets
 
 
 
Accumulated benefit obligation—end of year
$
(33
)
 
$
(39
)
Fair value of plan assets—end of year
$
—

 
$
—

Projected benefit obligation in excess of plan assets
 
 
 
Benefit obligation—end of year
$
(34
)
 
$
(40
)
Fair value of plan assets—end of year
$
—

 
$
—


Net periodic pension and other postretirement plan cost:
 
Pension Benefits
 
Other
Postretirement Benefits
Fiscal
 
2013
 
2012
 
2011
 
2013
 
2012
 
2011
 
(in millions)
Service cost
$
43

 
$
38

 
$
41

 
$
—

 
$
—

 
$
—

Interest cost
35

 
40

 
38

 
1

 
1

 
1

Expected return on assets
(61
)
 
(55
)
 
(54
)
 
—

 
—

 
—

Amortization of:
 
 
 
 
 
 
 
 
 
 
 
Prior service credit
(9
)
 
(9
)
 
(9
)
 
(3
)
 
(3
)
 
(3
)
Actuarial loss (gain)
28

 
33

 
19

 
(1
)
 
—

 
(1
)
Net benefit cost
$
36

 
$
47

 
$
35

 
$
(3
)
 
$
(2
)
 
$
(3
)
Settlement loss
—

 
3

 
2

 
—

 
—

 
—

Total net periodic benefit cost
$
36

 
$
50

 
$
37

 
$
(3
)
 
$
(2
)
 
$
(3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Other changes in plan assets and benefit obligations recognized in other comprehensive income: 
 
Pension Benefits
 
Other
Postretirement Benefits
2013
 
2012
 
2013
 
2012
 
(in millions)
Current year actuarial (gain) loss
$
(191
)
 
$
21

 
$
(4
)
 
$
(3
)
Amortization of actuarial (loss) gain
(28
)
 
(36
)
 
1

 
—

Amortization of prior service credit
9

 
9

 
3

 
3

Total recognized in other comprehensive income
$
(210
)
 
$
(6
)
 
$
—

 
$
—

Total recognized in net periodic benefit cost and other comprehensive income
$
(174
)
 
$
44

 
$
(3
)
 
$
(2
)
 
 
 
 
 
 
 
 

Weighted Average Actuarial Assumptions:
 
Fiscal
 
2013
 
2012
 
2011
Discount rate for benefit obligation:(1)
 
 
 
 
 
Pension
4.81
%
 
3.85
%
 
4.70
%
Postretirement
2.76
%
 
2.21
%
 
3.39
%
Discount rate for net periodic benefit cost:
 
 
 
 
 
Pension
3.85
%
 
4.70
%
 
5.25
%
Postretirement
2.21
%
 
3.39
%
 
3.45
%
Expected long-term rate of return on plan assets(2)
7.00
%
 
7.50
%
 
7.50
%
Rate of increase in compensation levels for:
 
 
 
 
 
Benefit obligation
4.50
%
 
4.50
%
 
4.50
%
Net periodic benefit cost
4.50
%
 
4.50
%
 
4.50
%
(1) 
Based on a “bond duration matching” methodology, which reflects the matching of projected plan liability cash flows to an average of high-quality corporate bond yield curves whose duration matches the projected cash flows.
(2) 
Primarily based on the targeted allocation, and evaluated for reasonableness by considering such factors as: (i) actual return on plan assets; (ii) historical rates of return on various asset classes in the portfolio; (iii) projections of returns on various asset classes; and (iv) current and prospective capital market conditions and economic forecasts.
The assumed annual rate of future increases in health benefits for the other postretirement benefits plan is 8.5% for fiscal 2014. The rate is assumed to decrease to 5% by 2020 and remain at that level thereafter. These trend rates reflect management’s expectations of future rates. Increasing or decreasing the healthcare cost trend by 1% would change the postretirement plan benefit obligation by less than $1 million. 
Pension Plan Assets
Pension plan assets are managed with a long-term perspective to ensure that there is an adequate level of assets to support benefit payments to participants over the life of the pension plan. Pension plan assets are managed by external investment managers. Investment manager performance is measured against benchmarks for each asset class on a quarterly basis. An independent consultant assists management with investment manager selections and performance evaluations.
Pension plan assets are broadly diversified to maintain a prudent level of risk and to provide adequate liquidity for benefit payments. The Company generally evaluates and rebalances the pension plan assets, as appropriate, to ensure that allocations are consistent with target allocation ranges. The current target allocation for pension plan assets is as follows: equity securities of 50% to 80%, fixed income securities of 25% to 35% and other, primarily consisting of cash to meet near term expected benefit payments and expenses, of up to 7%. At September 30, 2013, pension plan asset allocations for the above categories were 71%, 26% and 3%, respectively, which were within target allocation ranges.
The following table sets forth by level, within the fair value hierarchy, the pension plan’s investments at fair value as of September 30, 2013 and 2012, including the impact of unsettled transactions:
 
 
Fair Value Measurements at September 30,
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
 
(in millions)
Cash equivalents
$
26

 
$
79

 
 
 
 
 
 
 
 
 
$
26

 
$
79

Collective investment funds
 
 
 
 
$
—

 
$
391

 
 
 
 
 
—

 
391

Corporate debt securities
 
 
 
 
106

 
115

 
 
 
 
 
106

 
115

Debt securities of U.S. Treasury and federal agencies
 
 
 
 
149

 
121

 
 
 
 
 
149

 
121

Asset-backed securities
 
 
 
 
 
 
 
 
$
23

 
$
25

 
23

 
25

Equity securities
751

 
242

 
 
 
 
 
 
 
 
 
751

 
242

Total
$
777

 
$
321

 
$
255

 
$
627

 
$
23

 
$
25

 
$
1,055

 
$
973


Level 1 assets. Cash equivalents (money market funds) and equity 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. The fair values of government-sponsored and corporate debt securities are based on quoted prices in active markets for similar assets as provided by third-party pricing vendors. This pricing data is reviewed internally for reasonableness through comparisons with benchmark quotes from independent third-party sources. Based on this review, the valuation is confirmed or revised accordingly. Collective investment funds are unregistered investment vehicles that commingle the assets of multiple fiduciary clients, such as pension and other employee benefits plans, to invest in portfolios of stocks, bonds or other securities. A single collective investment fund, previously held by the pension plan, was ultimately invested in common stocks of companies in the S&P 500 index, and as its own unit value was not directly observable, it was therefore classified as Level 2.
Level 3 assets. Asset-backed securities are bonds that are backed by various types of assets and primarily consist of mortgage-backed securities. Asset-backed securities are classified as Level 3 due to a lack of observable inputs in measuring fair value.
There were no transfers between Level 1 and Level 2 assets during fiscal 2013 or 2012. A separate roll-forward of Level 3 plan assets measured at fair value is not presented because activities during fiscal 2013 and 2012 were immaterial.
Cash Flows
 
Pension
Benefits
 
Other
Postretirement
Benefits
Actual employer contributions
(in millions)
2013
$
—

 
$
4

2012
$
84

 
$
4

Expected employer contributions
 
 
 
2014
$
8

 
$
4

Expected benefit payments
 
 
 
2014
$
116

 
$
4

2015
$
105

 
$
4

2016
$
108

 
$
3

2017
$
100

 
$
3

2018
$
96

 
$
3

2019-2023
$
413

 
$
10


The lower contribution to pension benefits in fiscal 2013 was driven by a higher-than-expected rate of return on the Company's plan assets during the year and an increase in the discount rate at September 30, 2013 compared to September 30, 2012.
Other Benefits
The Company sponsors a defined contribution plan, or 401(k) plan, that covers substantially all of its employees residing in the United States. Personnel costs included $44 million, $37 million and $34 million in fiscal 2013, 2012 and 2011, respectively, for expenses attributable to the Company’s employees under the 401(k) plan. The Company’s contributions to this 401(k) plan are funded on a current basis, and the related expenses are recognized in the period that the payroll expenses are incurred.
Settlement Guarantee Management
Settlement Guarantee Management
Note 11—Settlement Guarantee Management
The Company indemnifies its financial institution clients for settlement losses suffered due to failure of any other client to honor Visa-branded cards and payment products processed in accordance with Visa's operating regulations. 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. Settlement at risk, or exposure, is estimated based on the sum of the following inputs: (1) average daily volumes during the quarter multiplied by the estimated number of days to settle plus a safety margin; (2) four months of rolling average chargebacks volume; and (3) the total balance for outstanding Visa Travelers Cheques.
The Company maintains and regularly reviews global settlement risk policies and procedures to manage settlement exposure, which may require clients to post collateral if certain credit standards are not met.
The Company's settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time. The Company's estimated maximum settlement exposure increased to approximately $53.8 billion at September 30, 2013, compared to $49.3 billion at September 30, 2012, as a result of continued growth in the Company's business. Of these amounts, $3.0 billion and $3.5 billion at September 30, 2013 and 2012, respectively, were covered by collateral. The decrease in covered collateral was primarily due to a change in the composition of clients required to post collateral based on the Company's settlement risk policies. The total available collateral balances presented below 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 Company maintained collateral as follows:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Cash equivalents
$
866

 
$
823

Pledged securities at market value
256

 
307

Letters of credit
1,191

 
1,084

Guarantees
1,411

 
2,022

Total
$
3,724

 
$
4,236

 
Cash equivalents collateral is reflected in customer collateral on the consolidated balance sheets as it is held in escrow in the Company's name. All other collateral is excluded from the consolidated balance sheets. Pledged securities are held by third parties in trust for the Company and clients. Letters of credit are provided primarily by client financial institutions to serve as irrevocable guarantees of payment. Guarantees are provided primarily by parent financial institutions to secure the obligations of their subsidiaries. The Company routinely evaluates the financial viability of institutions providing the guarantees.
The fair value of the settlement risk guarantee is estimated using a proprietary model which considers statistically derived loss factors based on historical experience, estimated settlement exposures at period end and a standardized grading process for clients (using, where available, third-party estimates of the probability of customer failure). Historically, the Company experienced minimum losses, which has contributed to an estimated probability-weighted value of the guarantee of approximately $1 million at September 30, 2013 and 2012. These amounts were reflected in accrued liabilities on the consolidated balance sheets.
Derivative Financial Instruments
Derivative Financial Instruments
Note 12—Derivative Financial Instruments
The Company maintains a rolling cash flow hedge program with the objective of reducing exchange rate risk from forecasted net exposures of revenues derived from and payments made in non-functional currencies during the following twelve months. The aggregate notional amounts of the Company's derivative contracts outstanding in its hedge program were $1.1 billion and $690 million at September 30, 2013 and 2012, respectively. The growth in the notional value of the Company's hedge program is mainly due to an increase in Visa's forecasted net exposure, combined with the Company's decision to hedge a larger percentage of those forecasted net exposures. As of September 30, 2013, the Company’s cash flow hedges in an asset position totaled $23 million and were classified in prepaid expenses and other current assets on the consolidated balance sheet, while cash flow hedges in a liability position totaled $13 million and were classified in accrued liabilities on the consolidated balance sheet. These amounts are subject to master netting agreements, which provide the Company with a legal right to net settle multiple payable and receivable positions with the same counterparty, in a single currency through a single payment. However, the Company presents fair values on a gross basis on the consolidated balance sheets. See Note 1—Summary of Significant Accounting Policies.
To qualify for cash flow hedge accounting treatment, the Company formally documents, at inception of the hedge, all relationships between the hedging transactions and the hedged items, as well as the Company's risk management objective and strategy for undertaking various hedge transactions. The Company also formally assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows of the hedged items and whether those derivatives may be expected to remain highly effective in future periods.
The Company uses regression analysis to assess effectiveness prospectively and retrospectively. The effectiveness tests are performed on the foreign exchange forward contracts based on changes in the spot rate of the derivative instrument compared to changes in the spot rate of the forecasted hedged transaction. Forward points are excluded for effectiveness testing and measurement purposes. The excluded forward points are reported in earnings. For fiscal 2013, 2012 and 2011, the amounts by which earnings were reduced relating to excluded forward points were $14 million, $16 million and $20 million, respectively.
The effective portion of changes in the fair value of derivative contracts is recorded as a component of accumulated other comprehensive income or loss on the consolidated balance sheets. When the forecasted transaction occurs and is recognized in earnings, the amount in accumulated other comprehensive income or loss related to that hedge is reclassified to operating revenue or expense. The Company expects to reclassify $29 million pre-tax, to earnings during fiscal 2014.
The Company's derivative financial instruments are subject to both credit and market risk. The Company monitors the credit-worthiness of the financial institutions that are counterparties to its derivative financial instruments and does not consider the risks of counterparty nonperformance to be significant. The Company mitigates this risk by entering into master netting agreements which require each party to post collateral against its net liability position with the respective counterparty. As of September 30, 2013, the Company has posted and received collateral of $4 million and $14 million, respectively, with counterparties, which are included in prepaid and other current assets, and accrued liabilities, respectively, on the consolidated balance sheet. Notwithstanding the Company’s efforts to manage foreign exchange risk, there can be no absolute assurance that its hedging activities will adequately protect against the risks associated with foreign currency fluctuations. Credit and market risks related to derivative instruments were not considered significant at September 30, 2013.
Additional disclosures that demonstrate how derivative instruments and related hedged items affect an entity's financial position, financial performance and cash flows have not been presented because the impact of derivative instruments is immaterial to the overall consolidated financial statements.
Enterprise-wide Disclosures and Concentration of Business
Enterprise-wide Disclosures and Concentration of Business
The Company’s long-lived net property, equipment and technology assets are classified by major geographic areas as follows:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
United States
$
1,621

 
$
1,539

International
111

 
95

Total
$
1,732

 
$
1,634

 
Revenue by geographic market is primarily based on the location of the issuing financial institution. Revenues earned in the United States were approximately 54%, 55% and 56% of total operating revenues in fiscal 2013, 2012 and 2011, respectively. No individual country, other than the United States, generated more than 10% of total operating revenues in these years.
A significant portion of Visa’s operating revenues is concentrated among its largest clients. Loss of business from any of these clients could have an adverse effect on the Company. The Company did not have any customer that generated greater than 10% of its net operating revenues in fiscal 2013, 2012 or 2011
Stockholders' Equity
Stockholders' Equity
Note 14—Stockholders' Equity
The number of shares of each class and the number of shares of class A common stock on an as-converted basis at September 30, 2013, are as follows:  
(in millions except conversion rate)
Shares
Outstanding
 
Conversion Rate Into Class A
Common Stock
 
As-converted Class A Common
Stock (1)
Class A common stock
508
 
—
 
508
Class B common stock
245
 
0.4206
 
103
Class C common stock
27
 
1.0000
 
27
Total
 
 
 
 
638

(1)  
Figures in the table may not recalculate exactly due to rounding. As-converted class A common stock is calculated based on whole numbers, not the rounded numbers presented.
Reduction in as-converted class A common stock. The following table presents share repurchases in the open market during the following fiscal years:
(in millions, except per share data)
2013
 
2012
Shares repurchased in the open market (1)
33

 
6

Weighted-average repurchase price per share
$
161.94

 
$
114.87

Total cost
$
5,365

 
$
710

(1) 
All shares repurchased in the open market have been retired and constitute authorized but unissued shares.
In July 2013, the Company's board of directors authorized a $1.5 billion share repurchase program to be in effect through July 2014. As of September 30, 2013, the program had remaining authorized funds of $251 million. All share repurchase programs authorized prior to July 2013 have been completed. In October 2013, the Company's board of directors authorized a new $5.0 billion share repurchase program.
Under the terms of the retrospective responsibility plan, when the Company makes a deposit into the litigation escrow account, the shares of class B common stock are subject to dilution through an adjustment to the conversion rate of the shares of class B common stock to shares of class A common stock. These deposits have the same economic effect on earnings per share as repurchasing the Company's class A common stock, because they reduce the class B conversion rate and consequently the as-converted class A common stock share count.
The following table presents as-converted class B common stock after deposits into the litigation escrow account in fiscal 2012. There were no deposits into the litigation escrow account in fiscal 2013.
 
Fiscal 2012
(in millions, except per share and conversion rate data)
July 2012
 
December 2011
Deposits under the retrospective responsibility plan
$
150

 
$
1,565

Effective price per share(1)
$
125.50

 
$
101.75

Reduction in equivalent number of shares of class A common stock
1

 
15

Conversion rate of class B common stock to class A common stock after deposits
0.4206

 
0.4254

As-converted class B common stock after deposits
103

 
104

(1)
Effective price per share calculated using the volume-weighted average price of the Company's class A common stock over a pricing period in accordance with the Company's current certificate of incorporation.
Class B common stock. The class B common stock is not convertible or transferable until the date on which all of the covered litigation has been finally resolved. This transfer restriction is subject to limited exceptions, including transfers to other holders of class B common stock. After termination of the restrictions, the class B common stock will be convertible into class A common stock if transferred to a person that was not a Visa Member (as defined in the current certificate of incorporation) or similar person or an affiliate of a Visa Member or similar person. Upon such transfer, each share of class B common stock will automatically convert into a number of shares of class A common stock based upon the applicable conversion rate in effect at the time of such transfer.
Adjustment of the conversion rate occurs upon: (i) the completion of any follow-on offering of class A common stock completed to increase the size of the litigation escrow account (or any cash deposit by the Company in lieu thereof) resulting in a further corresponding decrease in the conversion rate; or (ii) the final resolution of the covered litigation and the release of funds remaining on deposit in the litigation escrow account to the Company resulting in a corresponding increase in the conversion rate.
Class C common stock. As of September 30, 2013, all of the shares of class C common stock have been released from transfer restrictions, and 125 million shares have been converted from class C to class A common stock upon their sale into the public market.
Preferred stock. Preferred stock may be issued as redeemable or non-redeemable, and it has preference over any class of common stock with respect to the payment of dividends and distribution of the Company’s assets in the event of a liquidation or dissolution. The Company had no shares of preferred stock outstanding during and at the end of fiscal 2013 and 2012.
Voting rights. Holders of class A common stock have the right to vote on all matters on which stockholders generally are entitled to vote. Holders of classes B and C common stock have no right to vote on any matters, except for certain defined matters, including any consolidation, merger, combination or any decision to exit the core payments business, in which case the holders of classes B and C common stock are entitled to cast a number of votes equal to the number of shares of classes B or C common stock held multiplied by the applicable conversion rate in effect on the record date.
Dividends declared. In October 2013, the Company’s board of directors declared a quarterly cash dividend of $0.40 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis), which will be paid on December 3, 2013, to all holders of record of the Company’s classes A, B and C common stock as of November 15, 2013. The Company declared and paid $864 million in dividends in fiscal 2013 at a quarterly rate of $0.33 per share.
Earnings Per Share
Earnings Per Share
Note 15—Earnings Per Share
The following table presents earnings per share for fiscal 2013.(1) 
 
Basic Earnings Per Share
 
 
Diluted Earnings Per Share
 
(in millions, except per share data)
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
 
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
Class A common stock
$
3,959

 
520

 
$
7.61

 
 
$
4,980

 
656

(3) 
$
7.59

Class B common stock
786

 
245

 
$
3.20

 
 
$
784

 
245

 
$
3.19

Class C common stock
216

 
28

 
$
7.61

 
 
$
215

 
28

 
$
7.59

Participating securities(4)
19

 
Not presented

 
Not presented

 
 
$
19

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
4,980

 
 
 
 
 
 
 
 
 
 
 
The following table presents earnings per share for fiscal 2012.(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
$
1,664

 
524

 
$
3.17

 
 
$
2,144

 
678

(3) 
$
3.16

Class B common stock
343

 
245

 
$
1.40

 
 
$
341

 
245

 
$
1.39

Class C common stock
130

 
41

 
$
3.17

 
 
$
129

 
41

 
$
3.16

Participating securities(4)
7

 
Not presented

 
Not presented

 
 
$
7

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
2,144

 
 
 
 
 
 
 
 
 
 
 
The following table presents earnings per share for fiscal 2011.(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
$
2,638

 
509

 
$
5.18

 
 
$
3,650

 
707

(3 
) 
$
5.16

Class B common stock
636

 
245

 
$
2.59

 
 
$
633

 
245

 
$
2.58

Class C common stock
364

 
70

 
$
5.18

 
 
$
363

 
70

 
$
5.16

Participating securities(4)
12

 
Not presented

 
Not presented

 
 
$
12

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
3,650

 
 
 
 
 
 
 
 
 
 
 

(1)
Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on whole numbers, not the rounded numbers presented.
(2)
Net income attributable to Visa Inc. is allocated based on proportional ownership on an as-converted basis. The weighted-average numbers of shares of as-converted class B common stock used in the income allocation were 103 million, 108 million and 123 million for fiscal 2013, 2012 and 2011, 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 2 million common stock equivalents for fiscal 2013 and 3 million for fiscal 2012 and fiscal 2011, because their effect would have been dilutive. The computation excludes less than 1 million of common stock equivalents for fiscal 2013 and 2012, and 2 million for fiscal 2011 because their effect would have been anti-dilutive.
(4)
Participating securities are unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, such as the Company's restricted stock awards, restricted stock units and earned performance-based shares.
Share-based Compensation
Share-based Compensation
Note 16—Share-based Compensation
The Company’s 2007 Equity Incentive Compensation Plan, or the EIP, authorizes the compensation committee of the board of directors to grant non-qualified stock options ("options"), restricted stock awards ("RSAs"), restricted stock units ("RSUs") and performance-based shares to its employees and non-employee directors, for up to 59 million shares of class A common stock. Shares available for award may be either authorized and unissued or previously issued shares subsequently acquired by the Company. The EIP will continue to be in effect until all of the common stock available under the EIP is delivered and all restrictions on those shares have lapsed, unless the EIP is terminated earlier by the Company’s board of directors. No awards may be granted under the plan on or after 10 years from its effective date.
Share-based compensation cost is recorded net of estimated forfeitures on a straight-line basis for awards with service conditions only, and on a graded-vesting basis for awards with service, performance and market conditions. The Company’s estimated forfeiture rate is based on an evaluation of historical, actual and trended forfeiture data. For fiscal 2013, 2012, and 2011, the Company recorded share-based compensation cost of $179 million, $147 million and $154 million, respectively, in personnel on its consolidated statements of operations. The amount of capitalized share-based compensation cost was immaterial during fiscal 2013, 2012 and 2011.
Options
Options issued under the EIP expire 10 years from the date of grant and vest ratably over three years from the date of grant, subject to earlier vesting in full under certain conditions.
During fiscal 2013, 2012 and 2011, the fair value of each stock option was estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:
 
 
2013
 
2012
 
2011
Expected term (in years)(1)
 
6.08

 
6.02

 
5.16

Risk-free rate of return(2)
 
0.8
%
 
1.2
%
 
1.2
%
Expected volatility(3)
 
29.3
%
 
34.9
%
 
33.4
%
Expected dividend yield(4)
 
0.9
%
 
0.9
%
 
0.8
%
Fair value per option granted
 
$
39.03

 
$
29.65

 
$
27.50


(1) 
Based on a set of peer companies that management believes is generally comparable to Visa.
(2) 
Based upon the zero coupon U.S. treasury bond rate over the expected term of the awards.
(3) 
Based on the average of the Company’s implied and historical volatility. As the Company’s publicly-traded stock history is relatively short, historical volatility relies in part on the historical volatility of a group of peer companies that management believes is generally comparable to Visa. The relative weighting between Visa historical volatility and the historical volatility of the peer companies is based on the percentage of years Visa stock price information has been available since its initial public offering compared to the expected term. The expected volatilities ranged from 27% to 29% in fiscal 2013.
(4) 
Based on the Company’s annual dividend rate on the date of grant.
The following table summarizes the Company’s option activity for fiscal 2013:
 
Options
 
Weighted-
Average
Exercise Price
Per Share
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
Outstanding at October 1, 2012
5,185,675

 
$
59.46

 
 
 
 
Granted
579,318

 
$
147.37

 
 
 
 
Forfeited
(51,766
)
 
$
109.35

 
 
 
 
Exercised
(1,796,021
)
 
$
58.56

 
 
 
 
Outstanding at September 30, 2013
3,917,206

 
$
72.21

 
5.7
 
$466
Options exercisable at September 30, 2013
2,973,421

 
$
57.74

 
4.8
 
$397
Options exercisable and expected to be vested at September 30, 2013(2)
3,822,828

 
$
71.08

 
5.6
 
$459
(1) 
Calculated using the closing stock price on the last trading day of fiscal 2013 of $191.10, less the option exercise price, multiplied by the number of instruments.
(2) 
Applies a forfeiture rate to unvested options outstanding at September 30, 2013 to estimate the number expected to vest in the future.
For the options exercised during fiscal 2013, 2012 and 2011, the total intrinsic value was $176 million, $247 million and $77 million, respectively, and the tax benefit realized was $59 million, $86 million and $28 million, respectively. As of September 30, 2013, there was $15 million of total unrecognized compensation cost related to unvested options, which is expected to be recognized over a weighted-average period of approximately 1.2 years.
Restricted Stock Awards and Restricted Stock Units
RSAs and RSUs issued under the EIP primarily vest ratably over three years from the date of grant, subject to earlier vesting in full under certain conditions.
Upon vesting, the RSAs are settled in class A common stock on a one-for-one basis. During the vesting period, RSA award recipients are eligible to receive dividends and participate in the same voting rights as those granted to the holders of the underlying class A common stock. Upon vesting, RSUs can be settled in class A common stock on a one-for-one basis or in cash, or a combination thereof, at the Company’s option. The Company does not currently intend to settle any RSUs in cash. During the vesting period, RSU award recipients are eligible to receive dividend equivalents, but do not participate in the voting rights granted to the holders of the underlying class A common stock.
The fair value and compensation cost before estimated forfeitures for RSAs and RSUs is calculated using the closing price of class A common stock on the date of grant. The weighted-average grant-date fair value of RSAs granted during fiscal 2013, 2012 and 2011 was $147.18, $96.39 and $79.80, respectively. The weighted-average grant-date fair value of RSUs granted during fiscal 2013, 2012 and 2011 was $146.18, $96.97 and $79.97, respectively. The total grant-date fair value of RSAs and RSUs vested during fiscal 2013, 2012 and 2011 was $98 million, $81 million and $55 million, respectively.
The following table summarizes the Company's RSA and RSU activity for fiscal 2013:
 
Restricted Stock
 
Weighted-
Average
Grant Date
Fair Value
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
 
Awards
 
Units
 
RSA
 
RSU
 
RSA
 
RSU
 
RSA
 
RSU
Outstanding at October 1, 2012
1,736,989

 
637,645

 
$
88.77

 
$
91.17

 
 
 
 
 
 
 
 
Granted
895,659

 
329,322

 
$
147.18

 
$
146.18

 
 
 
 
 
 
 
 
Vested
(834,269
)
 
(289,821
)
 
$
87.02

 
$
88.22

 
 
 
 
 
 
 
 
Forfeited
(100,398
)
 
(27,464
)
 
$
109.62

 
$
112.27

 
 
 
 
 
 
 
 
Outstanding at September 30, 2013
1,697,981

 
649,682

 
$
119.20

 
$
119.49

 
1.5
 
1.3
 
$324
 
$124
(1) 
Calculated by multiplying the closing stock price on the last trading day of fiscal 2013 of $191.10 by the number of instruments.
At September 30, 2013, there was $117 million and $38 million of total unrecognized compensation cost related to unvested RSAs and RSUs, respectively, which is expected to be recognized over a weighted-average period of approximately 1.5 years for RSAs and 1.3 years for RSUs.
Performance-based Shares
The following table summarizes the maximum number of performance-based shares which could be earned and related activity for fiscal 2013:
 
Shares
 
Weighted-
Average
Grant Date
Fair Value
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
Outstanding at October 1, 2012
526,227

 
$
88.56

 
 
 
 
Granted(2)
230,518

 
$
164.14

 
 
 
 
Vested and earned
(271,418
)
 
$
85.87

 
 
 
 
Unearned
(9,928
)
 
$
85.05

 
 
 
 
Forfeited
(15,500
)
 
$
129.36

 
 
 
 
Outstanding at September 30, 2013
459,899

 
$
126.24

 
1.0
 
$88
(1) 
Calculated by multiplying the closing stock price on the last trading day of fiscal 2013 of $191.10 by the number of instruments.
(2) 
Represents the maximum number of performance-based shares which could be earned.
For the Company's performance-based shares, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of both performance and market conditions. The performance condition is based on the Company's earnings per share target. The market condition is based on the Company's total shareholder return ranked against that of other companies that are included in the Standard & Poor's 500 Index. The fair value of the performance-based shares, incorporating the market condition, is estimated on the grant date using a Monte Carlo simulation model. The grant-date fair value of performance-based shares in fiscal 2013, 2012 and 2011 was $164.14, $97.84 and $85.05 per share, respectively. Earned performance shares granted in fiscal 2013 and 2012 vest approximately three years from the initial grant date. Earned performance shares granted in fiscal 2011 vest in two equal installments approximately two and three years from their respective grant dates. All performance awards are subject to earlier vesting in full under certain conditions.
Compensation cost for performance-based shares is initially estimated based on target performance. It is recorded net of estimated forfeitures and adjusted as appropriate throughout the performance period. At September 30, 2013, there was $15 million of total unrecognized compensation cost related to unvested performance-based shares, which is expected to be recognized over a weighted-average period of approximately 1.0 years.
Commitments and Contingencies
Commitments and Contingencies
Note 17—Commitments and Contingencies
Commitments. The Company leases certain premises and equipment throughout the world with varying expiration dates. The Company incurred total rent expense of $94 million, $89 million and $76 million in fiscal 2013, 2012 and 2011, respectively. Future minimum payments on leases, and marketing and sponsorship agreements per fiscal year, at September 30, 2013, are as follows:
(in millions)
2014
 
2015
 
2016
 
2017
 
2018
 
Thereafter
 
Total
Operating leases
$
100

 
$
77

 
$
43

 
$
35

 
$
20

 
$
82

 
$
357

Marketing and sponsorships
116

 
117

 
61

 
54

 
54

 
178

 
580

Total
$
216

 
$
194

 
$
104

 
$
89

 
$
74

 
$
260

 
$
937

Select sponsorship agreements require the Company to spend certain minimum amounts for advertising and marketing promotion over the life of the contract. For commitments where the individual years of spend are not specified in the contract, the Company has estimated the timing of when these amounts will be spent. In addition to the fixed payments stated above, select sponsorship agreements require the Company to undertake marketing, promotional or other activities up to stated monetary values to support events which the Company is sponsoring. The stated monetary value of these activities typically represents the value in the marketplace, which may be significantly in excess of the actual costs incurred by the Company.
Client incentives. The Company has agreements with financial institution clients and other business partners for various programs designed to build payments volume, increase Visa-branded card and product acceptance and win merchant routing transactions. These agreements, with original terms ranging from one to thirteen years, can provide card issuance and/or conversion support, volume/growth targets and marketing and program support based on specific performance requirements. These agreements are designed to encourage client business and to increase overall Visa-branded payment and transaction volume, thereby reducing per-unit transaction processing costs and increasing brand awareness for all Visa clients.
Payments made that qualify for capitalization, and obligations incurred under these programs are reflected on the consolidated balance sheet. Client incentives are recognized primarily as a reduction to operating revenue in the period the related volumes and transactions occur, based on management's estimate of the client's performance in accordance with the terms of the incentive agreement. The agreements may or may not limit the amount of client incentive payments.
The table below sets forth the expected future reduction of revenue per fiscal year for client incentive agreements in effect at September 30, 2013: 
(in millions)
2014
 
2015
 
2016
 
2017
 
2018
 
Thereafter
 
Total
Client incentives
$
2,450

 
$
2,206

 
$
1,802

 
$
1,429

 
$
987

 
$
1,447

 
$
10,321


The amount of client incentives recorded as a reduction of revenue in future periods under the Company's incentive arrangements, will be greater or less than the estimates above due to changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts. Based on these agreements, increases in incentive payments are generally driven by increased payment and transaction volume, and as a result, in the event incentive payments exceed the above estimates, such payments are not expected to have a material effect on the Company's financial condition, results of operations or cash flows.
Related Parties
Related Parties
Note 18—Related Parties
Visa considers an entity to be a related party for purposes of this disclosure if that entity owns more than 10% of Visa’s total voting common stock at the end of the fiscal year, or if an officer or employee of that entity also serves on the Company's board of directors. The Company considers an investee to be a related party if the Company’s: (i) ownership interest in the investee is greater than or equal to 10% or (ii) if the investment is accounted for under the equity method of accounting. At September 30, 2013 and 2012, no entity owned more than 10% of the Company’s total voting common stock. Except as described below, there were no significant transactions with related parties during fiscal 2013, 2012 and 2011.
In fiscal 2011, the Company recognized $172 million in operating revenues from clients that were represented on the Company's board of directors. Due to changes in the board of directors made in January 2011, the Company's non-executive board members are now comprised exclusively of independent directors, and these clients are no longer considered related parties.
Income Taxes
Income Taxes
Note 19—Income Taxes
The Company’s income before taxes by fiscal year consisted of the following:
 
2013
 
2012
 
2011
 
(in millions)
U.S.
$
5,992

 
$
1,030

 
$
4,650

Non-U.S.
1,265

 
1,177

 
1,006

Total income before taxes and non-controlling interest
$
7,257

 
$
2,207

 
$
5,656


U.S. income before taxes included $2.0 billion, $1.6 billion and $1.3 billion from non-U.S. clients for fiscal 2013, 2012 and 2011, respectively.
Income tax provision by fiscal year consisted of the following:
 
2013
 
2012
 
2011
 
(in millions)
Current:
 
 
 
 
 
U.S. federal
$
568

 
$
1,376

 
$
1,365

State and local
(58
)
 
165

 
311

Non-U.S.
239

 
214

 
168

Total current taxes
749

 
1,755

 
1,844

Deferred:
 
 
 
 
 
U.S. federal
1,401

 
(1,276
)
 
160

State and local
114

 
(415
)
 
(2
)
Non-U.S.
13

 
1

 
8

Total deferred taxes
1,528

 
(1,690
)
 
166

Total income tax provision
$
2,277

 
$
65

 
$
2,010


The tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities at September 30, 2013 and 2012, are presented below:
 
2013
 
2012
 
(in millions)
Deferred Tax Assets:
 
 
 
Accrued compensation and benefits
$
154

 
$
103

Comprehensive (income) loss
(8
)
 
102

Investments in joint ventures
14

 
11

Accrued litigation obligation
1

 
1,654

Client incentives
226

 
227

Net operating loss carryforward
31

 
33

Tax credits
22

 
23

Federal benefit of state taxes
176

 
90

Federal benefit of foreign taxes
13

 
16

Other
108

 
92

Valuation allowance
(25
)
 
(13
)
Deferred tax assets
712

 
2,338

Deferred Tax Liabilities:
 
 
 
Property, equipment and technology, net
(310
)
 
(288
)
Intangible assets
(4,003
)
 
(4,027
)
Foreign taxes
(55
)
 
(44
)
Other
(12
)
 
(10
)
Deferred tax liabilities
(4,380
)
 
(4,369
)
Net deferred tax liabilities
$
(3,668
)
 
$
(2,031
)

Total net deferred tax assets and liabilities are included in the Company’s consolidated balance sheets as follows:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Current deferred tax assets
$
481

 
$
2,027

Non-current deferred tax liabilities
(4,149
)
 
(4,058
)
Net deferred tax liabilities
$
(3,668
)
 
$
(2,031
)

The decrease in the deferred tax asset for accrued litigation obligation reflects the $1.6 billion reduction in tax payable due to the fiscal 2013 tax deductions of the $4.4 billion covered litigation payments. See Note 3—Retrospective Responsibility Plan and Note 20—Legal Matters.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible. The fiscal 2013 and 2012 valuation allowances relate primarily to foreign net operating losses from subsidiaries acquired in recent years. 
As of September 30, 2013, the Company had $56 million state and $115 million foreign net operating loss carryforwards. The state net operating loss carryforwards will expire in fiscal 2025 through 2031. The foreign net operating loss may be carried forward indefinitely. The Company expects to fully utilize the state net operating loss carryforwards in future years.
As of September 30, 2013, the Company also had federal and state research and development tax credit carryforwards of $2 million and $21 million, respectively. The federal carryforwards will expire in fiscal 2029. The state carryforwards may be carried forward indefinitely. The Company also has federal alternative minimum tax credits of approximately $1 million, which do not expire. The Company expects to realize the benefit of the credit carryforwards in future years.
The income tax provision differs from the amount of income tax determined by applying the applicable U.S. federal statutory rate of 35% to pretax income, as a result of the following:
 
 
For the Years Ended September 30,
 
2013
 
2012
 
2011
 
Dollars
 
Percent
 
Dollars
 
Percent
 
Dollars
 
Percent
 
(in millions, except percentages)
U.S. federal income tax at statutory rate
$
2,540

 
35
 %
 
$
772

 
35
 %
 
$
1,980

 
35
 %
State income taxes, net of federal benefit
42

 
1
 %
 
36

 
2
 %
 
203

 
4
 %
Non-U.S. tax effect, net of federal benefit
(328
)
 
(5
)%
 
(257
)
 
(12
)%
 
(150
)
 
(2
)%
Reversal of tax reserves related to the deductibility of covered litigation expense
—

 
—
 %
 
(299
)
 
(14
)%
 
—

 
—
 %
Remeasurement of deferred taxes due to:
 
 
 
 
 
 
 
 
 
 
 
California state apportionment rule changes
—

 
—
 %
 
(208
)
 
(9
)%
 
—

 
—
 %
Other state apportionment changes
(6
)
 
—
 %
 
11

 
1
 %
 
(3
)
 
—
 %
Revaluation of Visa Europe put option
—

 
—
 %
 
—

 
—
 %
 
(43
)
 
(1
)%
Other, net
29

 
—
 %
 
10

 
—
 %
 
23

 
—
 %
Income tax provision
$
2,277

 
31
 %
 
$
65

 
3
 %
 
$
2,010

 
36
 %

The effective income tax rate in fiscal 2013 differs from the rates in fiscal 2012 and 2011 mainly due to:
•
the decrease in overall ongoing state tax rate beginning in fiscal 2012 as a result of changes in California apportionment rules adopted in that year;
•
a tax benefit recognized in fiscal 2013 as a result of new guidance issued by the state of California regarding apportionment rules for years prior to fiscal 2012;
•
certain foreign tax credit benefits related to prior years recognized in fiscal 2013; and
•
the absence of the following in fiscal 2013:
•
the fiscal 2012 reversal of previously recorded tax reserves associated with uncertainties related to the deductibility of covered litigation expense;
•
a fiscal 2012 one-time, non-cash benefit from the remeasurement of existing net deferred tax liabilities due to the changes in California apportionment rules adopted in that year;
•
the effect of applying the aforementioned fiscal 2012 tax benefits to a fiscal 2012 pre-tax income that was reduced by the $4.1 billion covered litigation provision; and
•
the nontaxable revaluation of the Visa Europe put option recorded in fiscal 2011.
Current income taxes receivable were $142 million and $179 million at September 30, 2013 and 2012, respectively. Non-current income taxes receivable of $253 million were included in other assets at September 30, 2013. See Note 5—Prepaid Expenses and Other Assets. At September 30, 2013 and 2012, income taxes payable of $64 million and $58 million, respectively, were included in accrued income taxes as part of accrued liabilities, and accrued income taxes of $453 million and $171 million, respectively, were included in other long-term liabilities. See Note 8—Accrued and Other Liabilities.
Cumulative undistributed earnings of the Company’s international subsidiaries that are intended to be reinvested indefinitely outside the United States amounted to $3.8 billion at September 30, 2013. The amount of income taxes that would have resulted had such earnings been repatriated is not practicably determinable.
The Company’s largest operating hub outside the United States is located in Singapore. It operates under a tax incentive agreement which is effective through September 30, 2014, and may be extended through September 30, 2023, if certain additional requirements are satisfied. The tax incentive agreement is conditional upon certain employment and investment thresholds being met by the Company. The tax incentive agreement decreased Singapore tax by $158 million, $130 million and $111 million, and the benefit of the tax incentive agreement on diluted earnings per share was $0.24, $0.19 and $0.16 in fiscal 2013, 2012 and 2011, respectively.
In accordance with Accounting Standards Codification 740, the Company is required to inventory, evaluate and measure all uncertain tax positions taken or to be taken on tax returns, and to record liabilities for the amount of such positions that may not be sustained, or may only partially be sustained, upon examination by the relevant taxing authorities.
At September 30, 2013 and 2012, the Company’s total gross unrecognized tax benefits were $1.0 billion and $679 million, respectively, exclusive of interest and penalties described below. Included in the $1.0 billion and $679 million are $801 million and $537 million of unrecognized tax benefits, respectively, that if recognized, would reduce the effective tax rate in a future period.
A reconciliation of beginning and ending unrecognized tax benefits by fiscal year is as follows: 
 
2013
 
2012
 
(in millions)
Beginning balance at October 1
$
679

 
$
850

Increases of unrecognized tax benefits related to prior years
335

 
186

Decreases of unrecognized tax benefits related to prior years
(133
)
 
(445
)
Increases of unrecognized tax benefits related to current year
144

 
89

Reductions related to lapsing statute of limitations
(2
)
 
(1
)
Ending balance at September 30
$
1,023

 
$
679

It is the Company’s policy to account for interest expense and penalties related to uncertain tax positions in non-operating income, and general and administrative expense, respectively, in its consolidated statements of operations. In fiscal 2013, the Company recognized $9 million of interest expense, related to uncertain tax positions. In fiscal 2012 and 2011, the Company reversed $45 million, and recognized $7 million, of interest expense, respectively, related to uncertain tax positions. In fiscal 2013, 2012 and 2011, the Company reversed $4 million, $1 million and $2 million of penalties, respectively. At September 30, 2013 and 2012, the Company had accrued interest of $29 million and $20 million, respectively, and accrued penalties of $3 million and $7 million, respectively, related to uncertain tax positions in its other long-term liabilities. 
In September 2012, the IRS completed the examination of the Company's fiscal 2006, 2007 and 2008 U.S. federal income tax returns with no significant adjustments. The statute of limitations for these years is expected to expire in December of 2013.
The IRS began the examination of the Company's fiscal 2009, 2010 and 2011 tax returns in fiscal 2013. The Company's California fiscal 2006, 2007 and 2008 tax returns are currently under examination. Except for certain outstanding refund claims, the federal and California statutes of limitations have expired for fiscal years prior to fiscal 2006. During fiscal 2013, the Canada Revenue Agency (CRA) completed its examination of the Company's fiscal 2003 to 2011 Canadian tax returns and proposed certain assessments. The Company has filed or will file notices of objection against these assessments and believes that its income tax provision adequately reflects its obligations to the CRA. The Company is also subject to examinations by various state and foreign tax authorities. All material state and foreign tax matters have been concluded for years through fiscal 2002. The timing and outcome of the final resolutions of the federal, state and foreign tax examinations and refund claims are uncertain. As such, it is not reasonably possible to estimate the impact that the final outcomes could have on the Company's unrecognized tax benefits in the next 12 months.
Legal Matters
Legal Matters
Note 20—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 2013
 
Fiscal 2012
 
(in millions)
Balance at October 1
$
4,386

 
$
425

Provision for unsettled legal matters
3

 
4,100

Interest accretion on settled matters
—

 
1

Payments on unsettled matters(1)
(4,033
)
 
—

Payments on settled matters
(351
)
 
(140
)
Balance at September 30
$
5

 
$
4,386

(1) 
On December 10, 2012, the Company paid approximately $4.0 billion from the litigation escrow account into a settlement fund established pursuant to the definitive class settlement agreement in the interchange multidistrict litigation. The settlement with the class plaintiffs is subject to final court approval, which the Company cannot assure will be received, and to the adjudication of any appeals. See further discussion below.
Covered Litigation
Visa Inc., Visa U.S.A. and Visa International are parties to certain legal proceedings that are covered by the retrospective responsibility plan, which the Company refers to as the covered litigation. See Note 3—Retrospective Responsibility Plan. An accrual for the covered litigation and a charge to the litigation provision are recorded when loss is deemed to be probable and reasonably estimable. In making this determination, the Company evaluates available information, including but not limited to actions taken by the litigation committee. The total accrual related to the covered litigation could be either higher or lower than the escrow account balance. The Company recorded an additional accrual of $4.1 billion for the covered litigation during fiscal 2012, which increased its total reserve for the covered litigation from $285 million to $4.4 billion. During fiscal 2013, the Company paid approximately $4.4 billion from the litigation escrow account into settlement funds pursuant to settlement agreements with individual and class plaintiffs in the interchange multidistrict litigation.
The Attridge Litigation
On December 8, 2004, a complaint was filed in California state court on behalf of an alleged class of consumers asserting claims against Visa U.S.A., Visa International and MasterCard. The claims in this action, Attridge v. Visa U.S.A. Inc., et al., allege that Visa's bylaw 2.10(e) and MasterCard's Competitive Programs Policy, which prohibited their respective members from issuing American Express or Discover cards, constitute unlawful restraints of trade under California's Unfair Competition Law and the Cartwright Act. On May 19, 2006, the court entered an order dismissing plaintiff's Cartwright Act claims with prejudice but allowing the plaintiff to proceed with his Unfair Competition Law claims, which seek restitution, injunctive relief, and attorneys' fees and costs. On December 14, 2007, the plaintiff amended his complaint to add Visa Inc. as a defendant.
In the separate "Indirect Purchaser" Credit/Debit Card Tying Cases, also pending in California state court (see below), Visa entered into a settlement agreement on September 14, 2009 which potentially could have had the effect of releasing the claims asserted in the Attridge case, subject to the ruling of the Attridge court. On August 23, 2010, final approval of the Credit/Debit Card Tying Cases settlement was granted. The plaintiff in Attridge and others appealed the final approval order. On February 15, 2011, the court ordered that the Attridge case be stayed until 30 days following the final resolution of the appeals in the Credit/Debit Card Tying Cases. On January 9, 2012, the appeals court reversed the approval of the Credit/Debit Card Tying Cases settlement, and the case was remanded to the trial court for consideration of the fairness and adequacy of the settlement in light of the inclusion of the Attridge claims in the release.
The parties in the Credit/Debit Card Tying Cases subsequently agreed upon a revised written settlement agreement, which was finally approved by the court on April 11, 2013. Objectors have filed notices of appeal in those cases and the Attridge case. On September 18, 2013, in light of the proceedings in the Credit/Debit Card Tying Cases, the Attridge case was stayed until April 11, 2014.
Interchange Multidistrict Litigation (MDL)
Beginning in May 2005, approximately fifty-five complaints (all but thirteen of which were styled as class actions) were filed in U.S. federal district courts by merchants against Visa U.S.A., Visa International, and/or MasterCard, and in some cases, certain Visa member financial institutions. The complaints challenged, among other things, Visa's and MasterCard's purported setting of interchange reimbursement fees, their "no surcharge" rules, and alleged tying and bundling of transaction fees under the federal antitrust laws, and, in some cases, certain state unfair competition laws. On October 19, 2005, the Judicial Panel on Multidistrict Litigation issued an order transferring the cases to the U.S. District Court for the Eastern District of New York for coordination of pre-trial proceedings in MDL 1720. A group of purported class plaintiffs filed a Second Consolidated Amended Class Action Complaint on January 29, 2009 which, together with the thirteen complaints brought by individual merchants, sought money damages alleged to range in the tens of billions of dollars (subject to trebling), as well as attorneys' fees and injunctive relief. The class plaintiffs also filed a Second Supplemental Class Action Complaint against Visa Inc. and certain member financial institutions challenging Visa's reorganization and IPO under the antitrust laws and seeking unspecified money damages and declaratory and injunctive relief, including an order that the IPO be unwound.
On July 1, 2007, as part of the retrospective responsibility plan, Visa U.S.A. and Visa International entered into an interchange judgment sharing agreement with certain member financial institutions of Visa U.S.A.
On February 7, 2011, Visa entered into an omnibus agreement that confirmed and memorialized the signatories' intentions with respect to the loss sharing agreement, the judgment sharing agreement and other agreements relating to the interchange multidistrict litigation. Under the omnibus agreement, the monetary portion of any settlement of the interchange multidistrict litigation covered by the omnibus agreement would be divided into a MasterCard portion at 33.3333% and a Visa portion at 66.6667%. In addition, the monetary portion of any judgment assigned to Visa-related claims in accordance with the omnibus agreement would be treated as a Visa portion. Visa would have no liability for the monetary portion of any judgment assigned to MasterCard-related claims in accordance with the omnibus agreement, and if a judgment is not assigned to Visa-related claims or MasterCard-related claims in accordance with the omnibus agreement, then any monetary liability would be divided into a MasterCard portion at 33.3333% and a Visa portion at 66.6667%. The Visa portion of a settlement or judgment covered by the omnibus agreement would be allocated in accordance with specified provisions of the Company's retrospective responsibility plan. The litigation provision on the consolidated statements of operations is not impacted by the execution of the omnibus agreement.
On October 19, 2012, the Company and the individual plaintiffs whose claims were consolidated with the MDL (the "Individual Plaintiffs") signed a settlement agreement to resolve the Individual Plaintiffs' claims against the Company for approximately $350 million. This payment was made from the litigation escrow account under the retrospective responsibility plan on October 29, 2012. On November 6, 2012, the court entered an order dismissing the Individual Plaintiffs' claims with prejudice.
In addition, on October 19, 2012, Visa Inc., its wholly-owned subsidiaries Visa U.S.A. and Visa International, MasterCard Incorporated, MasterCard International Incorporated, various U.S. financial institution defendants, and the class plaintiffs signed a settlement agreement (the "Settlement Agreement") to resolve the class plaintiffs' claims.
The terms of the Settlement Agreement include, among other terms:
•
A comprehensive release from participating class members for liability arising out of claims asserted in the litigation, and a further release to protect against future litigation regarding default interchange and the other U.S. rules at issue in the MDL;
•
Settlement payments from the Company of approximately $4.0 billion, to be paid from the Company's previously funded litigation escrow account established under the retrospective responsibility plan, see Note 3—Retrospective Responsibility Plan;
•
Distribution to class merchants of an amount equal to 10 basis points of default interchange across all credit rate categories for a period of eight consecutive months, which otherwise would have been paid to issuers and which effectively reduces credit interchange for that period of time. The eight month period for the reduction would begin within 60 days after completion of the court-ordered period during which individual class members may opt out of this settlement;
•
Certain modifications to the Company's rules, including modifications to permit surcharging on credit transactions under certain circumstances, subject to a cap and a level playing field with other general purpose card competitors; and
•
Agreement that the Company will meet with merchant buying groups that seek to negotiate interchange rates collectively.
The district court entered the preliminary approval order of the Settlement Agreement on November 27, 2012. On November 27, 2012, certain objectors filed a notice of appeal from the preliminary approval order in the U.S. Court of Appeals for the Second Circuit. On December 10, 2012, the court of appeals entered an order deferring briefing for the appeal until after the district court enters an order of final approval and final judgment with respect to the settlement, or otherwise concludes the matters by entry of a final judgment.
On December 10, 2012, Visa paid approximately $4.0 billion from the litigation escrow account into a settlement fund established pursuant to the Settlement Agreement.
Certain merchants in the proposed settlement classes thereafter objected to the settlement, opted out of the damages portion of the class settlement, and/or are seeking to opt out of the rules portion of the class settlement. Details of merchants who have filed an opt-out claim may be found below (see "Interchange Opt-out Litigation" below).
Certain competitors and other interested parties have also objected to the class settlement, including Discover, which filed a motion to intervene on May 28, 2013. Discover sought, among other things, to object to the Settlement Agreement and to file a proposed complaint challenging certain aspects of the Settlement Agreement as a restraint of trade in violation of Section 1 of the Sherman Act. On August 16, 2013, defendants responded to Discover's objections. On September 12, 2013, the district court held a hearing on the motion for final approval of the class settlement. Until the Settlement Agreement is finally approved by the court and any appeals are finally adjudicated, no assurance can be provided that the Company will be able to resolve the class plaintiffs' claims as contemplated by the Settlement Agreement.
Under the Settlement Agreement, if class members opt out of the damages portion of the class settlement, the defendants are entitled to receive payments of no more than 25% of the original cash payments made into the settlement fund, based on the percentage of payment card sales volume for a defined period attributable to merchants who opted out (the "takedown payments"). The class administrator has filed an amended report stating that the administrator had received 7,953 requests to opt out of the settlement, some of which may include multiple merchants. Based on the payment card sales volume of merchants requesting to opt out, in the event of final approval, the defendants will receive takedown payments equal to an amount calculated as 25% of the original cash payments made into the settlement fund. Visa's portion of the takedown payments is calculated to be approximately $1.1 billion, and would be deposited into the litigation escrow account.
Interchange Opt-out Litigation
Beginning in May 2013, approximately twenty 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 similar case has been filed by a merchant in Texas state court. 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. All but one of the cases originally filed in federal court either were filed in the U.S. District Court for the Eastern District of New York and have been assigned to the judge presiding over MDL 1720, or have been transferred by the Judicial Panel on Multidistrict Litigation for inclusion in MDL 1720. Visa is seeking to transfer that one case to MDL 1720, and the plaintiff in that case has filed a motion opposing such transfer. Visa has also removed the Texas state court case to federal court and is seeking to transfer it to MDL 1720; the plaintiff in that case has opposed such transfer. Cases that are transferred to or otherwise included in MDL 1720 will be covered litigation for purposes of the retrospective responsibility plan. See Note 3—Retrospective Responsibility Plan.
On May 24, 2013, Visa, MasterCard, and certain U.S. financial institution defendants in MDL 1720 filed a complaint in the Eastern District of New York against certain named class representative plaintiffs who had opted out or stated their intention to opt out of the damages portion of the MDL class settlement. On June 10, 2013, Visa filed a similar complaint in the Eastern District of New York against Wal-Mart Stores Inc. Both complaints seek a declaration that, from January 1, 2004 to November 27, 2012, the time period for which opt-outs may seek damages under the MDL class settlement, Visa's conduct in, among other things, continuing to set default interchange rates, maintaining its "honor all cards" rule, enforcing certain rules relating to merchants, and restructuring itself, did not violate federal or state antitrust laws. Both cases have been assigned to the same district court judge presiding over MDL 1720.
Other Litigation
"Indirect Purchaser" Actions
Complaints were filed on behalf of consumers in nineteen different states and the District of Columbia against Visa U.S.A. and MasterCard (and, in California, Visa International). The complaints allege, among other things, that Visa U.S.A.'s "honor all cards" rule and a similar MasterCard rule violated state antitrust and consumer protection laws, and common law. The claims in these class actions asserted that merchants, faced with excessive merchant discount fees, passed on some portion of those fees to consumers in the form of higher prices on goods and services sold. Plaintiffs seek money damages and injunctive relief. Visa U.S.A. has been successful in the majority of these cases, as courts in eighteen jurisdictions have granted Visa U.S.A.'s motion to dismiss for failure to state a claim or plaintiffs have voluntarily dismissed their complaints. In California, in the consolidated Credit/Debit Card Tying Cases, the court dismissed claims brought under the Cartwright Act, but denied a similar motion with respect to Unfair Competition Law claims for unlawful, unfair and/or fraudulent business practices. On October 3, 2008, the parties agreed to confidential settlement terms to resolve the dispute. A written settlement agreement executed on September 14, 2009, was submitted to the court for approval. After the parties amended the settlement agreement in certain respects, the court entered an order granting final approval on August 23, 2010. The plaintiff in Attridge, who had filed objections to the settlement, filed a notice of appeal from the final approval order, as did other objectors to the settlement. The amount of the settlement is not considered material to the consolidated financial statements.
On January 9, 2012, the Court of Appeal of the State of California reversed the judgment approving the settlement agreement, and the case was remanded to the trial court for consideration of the fairness and adequacy of the settlement in light of the inclusion of the Attridge claims in the release. The parties subsequently agreed upon a revised written settlement agreement. On April 11, 2013, the court entered an order finally approving the settlement and entered judgment. Objectors to the settlement have filed notices of appeal.
Vale Canjeable
In November and December of 2006, Vale Canjeable Ticketven, C.A. filed two separate actions against Todoticket 2004, C.A., and Visa International. In the first action, the plaintiff was granted an injunction on November 29, 2006 prohibiting the defendants' use of the “Vale” mark in Venezuela’s food voucher market (the “Injunction”). In the second action, plaintiffs sought damages for trademark infringement (the “Trademark Action”). The Injunction and Trademark Action have been litigated extensively through the Venezuelan court system. On June 5, 2013, the Supreme Tribunal's Commercial Chamber dismissed the Trademark Action in its entirety and invalidated the Injunction effective immediately. On August 7, 2013, the plaintiff filed a motion requesting that the Supreme Tribunal's Constitutional Chamber enjoin or annul the Commercial Chamber's judgment, and either rule directly on the merits of the Trademark Action or resubmit the cases to the Commercial Chamber for a new decision on the merits. Visa filed an opposition to the plaintiff's motion on October 29, 2013.
European Competition Proceedings
European Commission. On April 3, 2009, the European Commission ("EC") issued a Statement of Objections ("SO") to Visa Europe, Visa International and Visa Inc. alleging a breach of European competition law. Visa Inc. and Visa International were served with the Statement of Objections on June 1, 2009. The SO alleged a breach of Article 81 of the European Community Treaty and Article 53 of the European Economic Area Agreement (the "EEA Agreement"). The SO was directed to Visa Inc. and Visa International with respect to the "honor all cards" rule, the "no-surcharge" rule, and certain consumer card interchange fee practices.
On April 26, 2010, Visa Europe announced an agreement with the EC, subject to public consultation, to end the proceedings with respect to Visa Europe's debit interchange fees. After public consultation, on December 8, 2010, the EC concluded that the proposed agreement with Visa Europe addressed its competition concerns, made the agreement legally binding upon Visa Europe, and closed its investigation with regard to interchange fees for consumer debit card transactions.
On July 31, 2012, the EC announced a supplementary Statement of Objections ("SSO") that was sent to Visa Europe concerning interchange for consumer credit card transactions. On March 8, 2013, Visa Inc. and Visa International received a redacted version of the SSO. The SSO alleges a breach of Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA Agreement. Among other things, the SSO asserts claims jointly against Visa Europe, Visa Inc., and Visa International, objecting to domestic, cross-border, and inter-regional interchange, Visa Europe's rules relating to cross-border acquiring, and Visa Europe’s point of sale rules. The SSO also announces the EC's intention to impose fines. The potential amount of any fine cannot be estimated at this time.
Visa Europe has offered commitments addressing domestic interchange, cross-border interchange within Europe, cross-border acquiring within Europe, and other Visa Europe rules. The EC will consider whether to accept those commitments after a period of public comment.
U.K. Merchant Litigation. On August 2, 2013, Visa Inc. and Visa International were served with claims filed in the High Court of Justice Queen's Bench Division Commercial Court in London on behalf of eleven merchants in the supermarket, clothing, and other retail business. Visa Europe is also named in the case. The claimants seek damages for alleged anti-competitive conduct relating to U.K. domestic, Irish domestic, and intra-EEA interchange fees for credit and debit cards. The claimants also assert that the alleged anticompetitive effects of interchange fees are reinforced by Visa Europe's "honor all cards" and "no discrimination" rules and rules limiting cross-border issuing and acquiring. On October 16, 2013, Visa Inc. and Visa International were served with a similar claim by a twelfth merchant that is represented by the same counsel as the other eleven merchants. The twelve merchants seek damages exceeding $825 million. Previously, on March 22, 2013, Visa Inc. learned that counsel for a separate group of merchant plaintiffs threatened to file litigation against Visa Europe, Visa Inc., and Visa International with respect to interchange rates in Europe. On March 28, 2013, Visa Europe, Visa Inc., and Visa International entered into (1) a standstill agreement with respect to those merchants' claims, and (2) a costs agreement, which preserved the then-current recoverability rules in the United Kingdom. While the amount of interchange being challenged could be substantial, no claims have yet been filed and the full scope of the claims is not yet known.
Visa Europe is obligated to indemnify Visa Inc. and Visa International in connection with the European Competition Proceedings, in our opinion, including payment of any fines that may be imposed. However, Visa Europe has expressed an "initial" view that it is not obligated to indemnify Visa Inc. or Visa International for any claim in the European Competition Proceedings, including claims asserted in both the European Commission matter and the U.K. Merchant Litigation. Visa Inc. continues to firmly believe that Visa Europe is obligated to indemnify for all such claims, and has been in discussions with Visa Europe to resolve this issue. While the parties are not currently in non-binding arbitration, both parties have initiated the executive engagement aspect of the dispute resolution procedure contemplated by the Framework Agreement to resolve their dispute regarding this indemnification issue.
Canadian Competition Proceedings
Competition Bureau. On December 15, 2010, following a civil inquiry regarding interchange and certain Visa policies related to merchant acceptance practices, the Commissioner of Competition filed a Notice of Application against Visa Canada Corporation ("Visa Canada") and MasterCard. The proceeding challenged certain Visa policies regarding merchant acceptance practices, including Visa’s "no-surcharge" and "honor all cards" policies under the Competition Act.
The hearing before the Competition Tribunal on the merits of the case was held from May 8, 2012 through June 21, 2012. On July 23, 2013, the Competition Tribunal ruled in favor of Visa Canada and MasterCard, dismissing the Commissioner of Competition's challenges to Visa's "no-surcharge" and "honor all cards" policies. The Competition Tribunal found that the Commissioner failed to establish that either policy constituted resale price maintenance under Section 76 of the Competition Act. The Commissioner did not file an appeal prior to the deadline of September 30, 2013.
Merchant Litigation. Beginning in December 2010, a number of purported civil follow-on cases to the Competition Bureau's proceeding were filed in Quebec, British Columbia, Ontario, Saskatchewan, and Alberta against Visa Canada, MasterCard, and ten financial institutions on behalf of purported classes of merchants and others that accept payment by Visa and MasterCard. The purported class action lawsuits allege conduct contrary to Section 45 of the Competition Act and also assert claims of civil conspiracy, interference with economic interests, and unjust enrichment, among others. Plaintiffs allege that Visa and MasterCard each conspired with their member financial institutions to set supra-competitive default interchange rates and merchant discount fees, and that Visa and MasterCard's respective "no-surcharge" and "honor all cards" policies had the anticompetitive effect of increasing merchant discount fees. The lawsuits seek unspecified monetary damages and injunctive relief.
In the British Columbia lawsuit, a hearing on class certification commenced on April 22, 2013 and concluded on May 1, 2013. The lawsuits in Quebec, Ontario, and Alberta are being held in abeyance pending further proceedings in the British Columbia lawsuit. In Saskatchewan, applications for a stay of proceedings and carriage of the lawsuits have been filed.
Dynamic Currency Conversion
On February 4, 2013, following an investigation into Visa's policies relating to the provision of Dynamic Currency Conversion (DCC), the Australian Competition and Consumer Commission ("ACCC") commenced proceedings in the Federal Court of Australia against Visa Inc., Visa U.S.A., V.W.P.L., and Visa AP (Australia) Pty Limited alleging that certain Visa policies related to the provision of DCC services contravened Australian competition law. DCC refers to conversion from one currency to another, either of the price of goods or services by the merchant, or of cash withdrawals by an ATM. Among other things, the ACCC alleges that: (1) from May 2010 to October 2010, Visa prohibited DCC services with respect to transactions on Visa international payment cards conducted at Australian merchant outlets that had not previously been conducting DCC transactions; and (2) from at least May 2007, Visa prohibited DCC services with respect to cash withdrawals at Australian ATMs on Visa international payment cards. The ACCC seeks declaratory relief and a monetary penalty. On June 6, 2013, Visa filed its response to the ACCC's allegations. On August 8, 2013, the ACCC filed an amended claim which, among other things, added Visa International as a respondent. On October 4, 2013, Visa filed its response to the amended claim. The potential amount of any penalty cannot be estimated at this time.
Data Pass Litigation
On November 19, 2010, a consumer filed an amended class action complaint against Webloyalty.com, Inc., Gamestop Corporation, and Visa Inc. in federal district court in Connecticut. The plaintiff claims, among other things, that consumers who made online purchases at merchants were deceived into also incurring charges for services from Webloyalty.com through the alleged unauthorized passing of cardholder account information during the sales transaction ("data pass"), in violation of federal and state consumer protection statutes and common law. Visa allegedly aided and abetted the conduct of the other defendants. Plaintiff seeks certification of a class of persons and entities whose credit card or debit card data was improperly accessed by Webloyalty.com since October 1, 2008, and seeks damages, restitution, and injunctive relief. On December 23, 2010, Webloyalty.com, GameStop, and Visa each filed motions to dismiss the amended complaint.
Korean Fair Trade Commission
Following a complaint lodged by a Visa client, in July 2011 the Korean Fair Trade Commission ("KFTC") initiated an investigation into Visa’s requirements for the processing of international transactions over VisaNet. The KFTC has the authority to issue an injunction or a fine. The potential amount of any fine cannot be estimated at this time.
U.S. ATM Access Fee Litigation
National ATM Council Class Action. On October 12, 2011, the National ATM Council and thirteen non-bank ATM operators filed a class action lawsuit against Visa (Visa Inc., Visa International, Visa U.S.A., and Plus System, Inc.) and MasterCard in the U.S. District Court for the District of Columbia. The complaint challenges Visa's rule (and a similar MasterCard rule) that if an ATM operator chooses to charge consumers an access fee for a Visa or Plus transaction, that fee cannot be greater than the access fee charged for transactions on other networks. Plaintiffs claim that the rule violates Section 1 of the Sherman Act, and seek damages "in an amount not presently known, but which is tens of millions of dollars, prior to trebling," injunctive relief, and attorneys’ fees. On January 10, 2012, plaintiffs filed an amended class action complaint against the same defendants, also asserting that the ATM access fee rule violates Section 1 of the Sherman Act. Plaintiffs request treble damages, injunctive relief and attorneys' fees.
Consumer Class Actions. In October 2011, a purported consumer class action (Stoumbos) was filed against Visa and MasterCard in the same federal court challenging the same ATM access fee rules. Two other purported consumer class actions were also filed in October 2011 in the same federal court, and were later combined into a single amended complaint (Mackmin). The amended complaint challenges the same ATM access fee rules and names Visa, MasterCard and three financial institutions as defendants. Both Stoumbos and Mackmin purport to represent classes and sub-classes of consumers in claims brought under Section 1 of the Sherman Act, and also allege claims under antitrust and/or consumer protection statutes in certain states and the District of Columbia. The lawsuits seek injunctive relief, attorneys' fees, treble damages, and restitution where available under state law.
On January 30, 2012, Visa, MasterCard, and the defendant financial institutions filed motions to dismiss the complaints in the National ATM Council class action and the consumer class actions. On February 13, 2013, the court granted the motion to dismiss and dismissed the cases without prejudice. On March 12, 2013, plaintiffs in the National ATM Council class action and the consumer class actions moved for an order altering or amending the court's February 13, 2013 order to provide that (1) the complaints (as opposed to the cases) are dismissed without prejudice, and (2) plaintiffs may move to amend their complaints. On April 15, 2013, plaintiffs in the National ATM Council class action and the Stoumbos case moved for leave to file amended complaints. On April 18, 2013, plaintiffs in the Mackmin case moved for leave to file an amended complaint. Defendants filed responses opposing the motions on the grounds that they are not procedurally proper and would be futile in any event. On April 24, 2013, the court ordered the defendants to file further detailed responses, addressing futility in particular. Briefing on the motions is complete.
U.S. Department of Justice Civil Investigative Demand
On March 13, 2012, the Antitrust Division of the United States Department of Justice (the "Division") issued a Civil Investigative Demand, or "CID," to Visa Inc. seeking documents and information regarding a potential violation of Section 1 or 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. The CID focuses on PIN-Authenticated Visa Debit and Visa's competitive responses to the Dodd-Frank Act, including Visa's fixed acquirer network fee. Visa is cooperating with the Division in connection with the CID.
Federal Trade Commission Voluntary Access Letter
On September 21, 2012, the Bureau of Competition of the United States Federal Trade Commission (the "Bureau") requested that Visa provide on a voluntary basis documents and information regarding potential violations of certain regulations associated with the Dodd-Frank Act, particularly Section 920(b)(1)(B) of the Electronic Funds Transfer Act, 15 U.S.C. 1693o-2, and Regulation II, 12 C.F.R. § 235.7(b) (commonly known as the “Durbin Amendment” and regulations). The request focuses on information related to the purposes, implementation, and impact of the optional PIN Debit Gateway Service. The revenue generated by the PIN Debit Gateway Service is not material to the Company’s financial statements. Visa is cooperating with the Bureau and responding to its information requests.
Consumer Financial Protection Bureau
On February 7, 2013, Visa received a letter from the Consumer Financial Protection Bureau ("CFPB") seeking documents and information, on a voluntary basis, regarding Visa's practices with respect to the conversion of U.S. cardholder foreign transactions from foreign currency into U.S. dollars. On March 20, 2013, Visa met with the CFPB and provided information and materials in response to the requests. Visa is continuing to cooperate with the CFPB's inquiry.
Subsequent Events
Subsequent Events
Note 21—Subsequent Events
In October 2013, the Company’s board of directors authorized an additional $5.0 billion share repurchase program. See Note 14—Stockholders' Equity.
In October 2013, the Company’s board of directors declared a dividend in the aggregate amount of $0.40 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis). See Note 14—Stockholders' Equity.
Summary of Significant Accounting Policies (Policies)
Organization 
Organization. In a series of transactions from October 1 to October 3, 2007, Visa Inc. ("Visa" or the "Company") undertook a reorganization in which Visa U.S.A. Inc. ("Visa U.S.A."), Visa International Service Association ("Visa International"), Visa Canada Corporation ("Visa Canada") and Inovant LLC ("Inovant") became direct or indirect subsidiaries of Visa and established the retrospective responsibility plan (the "October 2007 reorganization" or "reorganization"). See Note 3—Retrospective Responsibility Plan. The reorganization was reflected as a single transaction on October 1, 2007 using the purchase method of accounting with Visa U.S.A. as the accounting acquirer. Visa Europe Limited ("Visa Europe") did not become a subsidiary of Visa Inc., but rather remained owned and governed by its European member financial institutions. See Note 2—Visa Europe.
Visa 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., Visa International, Visa Worldwide Pte. Limited (“VWPL”), Visa Canada, Inovant 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. These services facilitate transactions on Visa's network among account holders, merchants, financial institutions and governments in mature and emerging markets globally.
Basis of presentation 
Consolidation and basis of presentation. The 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. Non-controlling interests are reported as a component of equity. All significant intercompany accounts and transactions are eliminated in consolidation.
Consolidation 
The Company's activities are interrelated, and each activity is dependent upon and supportive of the other. All significant operating decisions are based on analysis of Visa as a single global business.
Use of estimates 
Use of estimates. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Future actual results could differ materially from these estimates. The use of estimates in specific accounting policies is described further below as appropriate.
Cash and cash equivalents 
Cash and cash equivalents. Cash and cash equivalents include cash and certain highly liquid investments with original maturities of 90 days or less from the date of purchase. Cash equivalents are primarily recorded at cost, which approximates fair value due to their generally short maturities.
Restricted cash--litigation escrow 
Restricted cash—litigation escrow. The Company maintains an escrow account from which settlements of, or judgments in, the covered litigation are paid. See Note 3—Retrospective Responsibility Plan and Note 20—Legal Matters for a discussion of the covered litigation. The escrow funds are held in money market investments, together with the interest earned, less applicable taxes payable, and classified as restricted cash on the consolidated balance sheets. Interest earned on escrow funds is included in non-operating income, on the consolidated statements of operations.
Investments 
Investments and fair value. The Company measures certain assets and liabilities at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are reported under a three-level valuation hierarchy. See Note 4—Fair Value Measurements and Investments. The classification of the Company’s financial assets and liabilities within the hierarchy is as follows:
Level 1—Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 assets include money market funds, publicly-traded equity securities and U.S. Treasury securities.
Level 2—Inputs to the valuation methodology can include: (1) quoted prices in active markets for similar (not identical) assets or liabilities; (2) quoted prices for identical or similar assets in non-active markets; (3) inputs other than quoted prices that are observable for the asset or liability; or (4) inputs that are derived principally from or corroborated by observable market data. The Company's Level 2 assets and liabilities include commercial paper, U.S. government-sponsored debt securities, corporate debt securities and foreign exchange derivative instruments.
Level 3—Inputs to the valuation methodology are unobservable and cannot be corroborated by observable market data. The Company's Level 3 assets and liabilities include auction rate securities, the Visa Europe put option and the earn-out related to the PlaySpan acquisition.
Trading investment securities include mutual fund equity security investments related to various employee compensation and benefit plans. Trading activity in these investments is at the direction of the Company's employees. These investments are held in a trust and are not available for the Company's operational or liquidity needs. Interest and dividend income and changes in fair value are recorded in non-operating income, and offset in personnel expense on the consolidated statements of operations.
Available-for-sale investment securities include investments in debt and equity securities. These securities are recorded at cost at the time of purchase and are carried at fair value. The Company considers these securities to be available-for-sale to meet working capital and liquidity needs. Investments with original maturities of greater than 90 days and stated maturities of less than one year from the balance sheet date, or investments that the Company intends to sell within one year, are classified as current assets, while all other securities are classified as non-current assets. The majority of these investments are classified as non-current as they have stated maturities of more than one year from the balance sheet date. However, these investments are generally available to meet short-term liquidity needs. Unrealized gains and losses are reported in accumulated other comprehensive income or loss on the consolidated balance sheets until realized. The specific identification method is used to calculate realized gain or loss on the sale of marketable securities, which is recorded in non-operating income on the consolidated statements of operations. Dividend and interest income are recognized when earned and are included in non-operating income on the consolidated statements of operations.
The Company evaluates its debt and equity securities for other-than-temporary impairment, or OTTI, on an ongoing basis. When there has been a decline in fair value of a debt or equity security below the amortized cost basis, the Company recognizes OTTI if: (1) it has the intent to sell the security; (2) it is more likely than not that it will be required to sell the security before recovery of the amortized cost basis; or (3) it does not expect to recover the entire amortized cost basis of the security. The Company has not presented required separate disclosures because its gross unrealized loss positions in debt or equity securities for the periods presented are not material. The Company had no OTTI for available-for-sale securities during fiscal 2013 and 2011. The Company recognized $4 million of OTTI for available-for-sale securities during fiscal 2012.
The Company applies the equity method of accounting for investments in other entities when it holds between 20% and 50% ownership in the entity or when it exercises significant influence. Under the equity method, the Company’s share of each entity’s profit or loss is reflected in non-operating income on the consolidated statements of operations. The equity method of accounting is also used for flow-through entities such as limited partnerships and limited liability companies when the investment ownership percentage is equal to or greater than 5% of outstanding ownership interests, regardless of whether the Company has significant influence over the investees.
The Company applies the cost method of accounting for investments in other entities when it holds less than 20% ownership in the entity and does not exercise significant influence, or for flow-through entities when the investment ownership is less than 5% and the Company does not exercise significant influence. These investments consist of equity holdings in non-public companies and are recorded in other assets on the consolidated balance sheets.
The Company regularly reviews investments accounted for under the cost and equity methods for possible impairment, which generally involves an analysis of the facts and changes in circumstances influencing the investment, expectations of the entity’s cash flows and capital needs, and the viability of its business model.
Financial instruments 
Financial instruments. The Company considers the following to be financial instruments: cash and cash equivalents, restricted cash-litigation escrow, trading and available-for-sale investment securities, settlement receivable and payable, customer collateral, non-marketable equity investments, settlement risk guarantee, derivative instruments, the Visa Europe put option and the earn-out provision related to the PlaySpan acquisition.
Settlement receivable and payable 
Settlement receivable and payable. The Company operates systems for authorizing, clearing and settling payment transactions worldwide. U.S. dollar settlements are typically settled within the same day and do not result in a receivable or payable balance, while settlement currencies other than the U.S. dollar generally remain outstanding for one to two business days, resulting in amounts due from and to clients. These amounts are presented as settlement receivable and settlement payable on the consolidated balance sheets, respectively.
Customer collateral 
Customer collateral. The Company holds cash deposits and other non-cash assets from certain clients in order to ensure their performance of settlement obligations arising from Visa-branded cards and payment products processed in accordance with the Company's operating regulations. The cash collateral assets are restricted and fully offset by corresponding liabilities and both balances are presented on the consolidated balance sheets. Non-cash collateral assets are held on behalf of the Company by a third party and are not recorded on the consolidated balance sheets.
Client incentives 
Client incentives. The Company enters into long-term contracts with financial institution clients and other business partners for various programs designed to build payments volume, increase Visa-branded card and product acceptance and win merchant routing transactions over Visa's network. These incentives are primarily accounted for as reductions to operating revenues or as operating expenses if a separate identifiable benefit at fair value can be established. The Company generally capitalizes advance incentive payments under these agreements if select criteria are met. The capitalization criteria include the existence of future economic benefits to Visa, the existence of legally enforceable recoverability language (e.g., early termination clauses), management's ability and intent to enforce the recoverability language and the ability to generate future earnings from the agreement in excess of amounts deferred. Capitalized amounts are amortized over the shorter of the period of contractual recoverability or the corresponding period of economic benefit. Incentives not yet paid are accrued systematically and rationally based on management's estimate of each client's performance. These accruals are regularly reviewed and estimates of performance are adjusted, as appropriate, based on changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts.
Property, equipment and technology, net 
Property, equipment and technology, net. Property, equipment and technology are recorded at historical cost less accumulated depreciation and amortization, which are computed on a straight-line basis over the asset’s estimated useful life. Depreciation and amortization of technology, furniture, fixtures and equipment are computed over estimated useful lives ranging from 2 to 7 years. Capital leases are amortized over the lease term and leasehold improvements are amortized over the shorter of the useful life of the asset or lease term. Building improvements are depreciated between 3 and 40 years, and buildings are depreciated over 40 years. Improvements that increase functionality of the asset are capitalized and depreciated over the asset’s remaining useful life. Land and construction-in-progress are not depreciated. Fully depreciated assets are retained in property, equipment and technology, net, until removed from service.
Technology includes purchased and internally developed software, including technology assets obtained through acquisitions. Internally developed software represents software primarily used by the VisaNet electronic payment network and CyberSource platform. Internal and external costs incurred during the preliminary project stage are expensed as incurred. Qualifying costs incurred during the application development stage are capitalized. Once the project is substantially complete and ready for its intended use these costs are amortized on a straight-line basis over the technology's estimated useful life. Acquired technology assets are initially recorded at fair value and amortized on a straight-line basis over the estimated useful life.
The Company evaluates the recoverability of long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If the sum of expected undiscounted net future cash flows is less than the carrying amount of an asset or asset group, an impairment loss is recognized to the extent that the carrying amount of the asset or asset group exceeds its fair value.
Leases 
Leases. The Company enters into operating and capital leases for the use of premises, software and equipment. Rent expense related to operating lease agreements, which may or may not contain lease incentives, is primarily recorded on a straight-line basis over the lease term.
Intangible assets, net 
Intangible assets, net. The Company records identifiable intangible assets at fair value on the date of acquisition and evaluates the useful life of each asset.
Finite-lived intangible assets primarily consist of customer relationships, reacquired rights, reseller relationships and tradenames obtained through acquisitions. Finite-lived intangible assets are amortized on a straight-line basis and are tested for recoverability if events or changes in circumstances indicate that their carrying amounts may not be recoverable. These intangibles have useful lives ranging from 1 to 15 years. No events or changes in circumstances indicate that impairment existed as of September 30, 2013. See Note 7—Intangible Assets, Net.
Indefinite-lived intangible assets consist of tradename, customer relationships and the Visa Europe franchise right acquired in the October 2007 reorganization. Intangible assets with indefinite useful lives are not amortized but are evaluated for impairment annually or more frequently if events or changes in circumstances indicate that impairment may exist. The Company tests each category of indefinite-lived intangible assets for impairment on an aggregate basis, which may require the allocation of cash flows and/or an estimate of fair value to the assets or asset group. Impairment exists if the fair value of the indefinite-lived intangible asset is less than the carrying value. The Company relies on a number of factors when completing impairment assessments, including a review of discounted net future cash flows, business plans and the use of present value techniques.
Goodwill 
Goodwill. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not amortized but is evaluated for impairment at the reporting unit level annually as of February 1, or more frequently if events or changes in circumstances indicate that impairment may exist.
Accrued litigation 
Accrued litigation. The Company evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings to which it is a party and records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These judgments are subjective, based on the status of such legal or regulatory proceedings, the merits of the Company's defenses and consultation with corporate and external legal counsel. Actual outcomes of these legal and regulatory proceedings may differ materially from the Company's estimates. Litigation accruals associated with settled obligations to be paid over periods longer than one year are recorded at the present value of future payment obligations. The obligation is accreted to its full payment value with the corresponding accretion charge included in non-operating income in the consolidated statements of operations. The Company expenses legal costs as incurred in professional fees in the consolidated statements of operations. See Note 20—Legal Matters.
Revenue recognition 
Revenue recognition. The Company's operating revenues are comprised principally of service revenues, data processing revenues, international transaction revenues and other revenues, reduced by costs incurred under client incentives arrangements. The Company recognizes revenue when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.
Service revenues consist of revenues earned for providing financial institution clients with support services for the delivery of Visa-branded payment products and solutions. Current quarter service revenues are primarily assessed using a calculation of current pricing applied to the prior quarter's payments volume. The Company also earns revenues from assessments designed to support ongoing acceptance and volume growth initiatives, which are recognized in the same period the related volume is transacted.
Data processing revenues consist of revenues earned for authorization, clearing, settlement, network access and other maintenance and support services that facilitate transaction and information processing among the Company's financial institution clients globally and with Visa Europe. Data processing revenues are also earned for transactions processed by CyberSource's online payment gateway platform. Data processing revenues are recognized in the same period the related transactions occur or services are rendered.
International transaction revenues are earned for cross-border transaction processing and currency conversion activities. Cross-border transactions arise when the country of origin of the issuer is different from that of the merchant. International transaction revenues are primarily generated by cross-border payments and cash volume.
Other revenues consist mainly of license fees for use of the Visa brand, revenues earned from Visa Europe in connection with the Visa Europe Framework Agreement (see Note 2—Visa Europe), fees from account holder services, licensing and certification and other activities related to the Company's acquired entities. Other revenues also include optional service or product enhancements, such as extended account holder protection and concierge services. Other revenues are recognized in the same period the related transactions occur or services are rendered.
Marketing 
Marketing. The Company expenses costs for the production of advertising as incurred. The cost of media advertising is expensed when the advertising takes place. Sponsorship costs are recognized over the period in which the Company benefits from the sponsorship rights. Promotional items are expensed as incurred, when the related services are received, or when the related event occurs.
Income taxes 
Income taxes. The Company's income tax expense consists of two components: current and deferred. Current income tax expense represents taxes paid or payable for the current period. Deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to temporary differences between the financial statement carrying amounts and the respective tax basis of existing assets and liabilities, and operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing whether deferred tax assets are realizable, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. A valuation allowance is recorded for the portions that are not expected to be realized based on the level of historical taxable income, projections of future taxable income over the periods in which the temporary differences are deductible, and qualifying tax planning strategies.
Where interpretation of the tax law may be uncertain, the Company recognizes, measures and discloses income tax uncertainties. The Company accounts for interest expense and penalties related to uncertain tax positions in non-operating income in the consolidated statements of operations. The Company files a consolidated federal income tax return and, in certain states, combined state tax returns. Foreign taxes paid have historically been deducted to reduce federal income taxes payable. The Company elects to claim foreign tax credits in any given year if such election is beneficial to the Company.
Pension and other postretirement benefit plans 
Pension and other postretirement benefit plans. The Company’s defined benefit pension and other postretirement benefit plans are actuarially evaluated, incorporating various critical assumptions including the discount rate and the expected rate of return on plan assets (for qualified pension plans). The discount rate is based on a "bond duration matching" methodology, which reflects the matching of projected plan obligation cash flows to an average of high-quality corporate bond yield curves whose duration matches the projected cash flows. The expected rate of return on pension plan assets considers the current and expected asset allocation, as well as historical and expected returns on each plan asset class. Any difference between actual and expected plan experience, including asset return experience, in excess of a 10% corridor is recognized in net periodic pension cost over the expected average employee future service period, which is approximately 8 years for United States plans. Other assumptions involve demographic factors such as retirement age, mortality, attrition and the rate of compensation increases. The Company evaluates assumptions annually and modifies them as appropriate.
The Company recognizes the funded status of its benefit plans in its consolidated balance sheets as other assets, accrued liabilities and other liabilities. The Company recognizes settlement losses when it settles pension benefit obligations, including making lump-sum cash payments to plan participants in exchange for their rights to receive specified pension benefits, when certain thresholds are met.
Foreign currency remeasurement and translation 
Foreign currency remeasurement and translation. The Company's functional currency is the U.S. dollar for the majority of its foreign operations. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses related to conversion and remeasurement are recorded in general and administrative expense in the consolidated statements of operations.
For certain foreign operations, the Company's functional currency may be the local currency in which a foreign subsidiary executes its business transactions. Translation from the local currency to the U.S. dollar is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using an average exchange rate for the period. Resulting translation adjustments are reported as a component of accumulated other comprehensive income or loss on the consolidated balance sheets.
Derivative financial instruments 
Derivative financial instruments. The Company uses foreign exchange forward derivative contracts to reduce its exposure to foreign currency rate changes on non-functional currency denominated forecasted operational cash flows. Derivatives are carried at fair value on a gross basis in either prepaid and other current assets or accrued liabilities on the consolidated balance sheets. At September 30, 2013, derivatives outstanding mature within 12 months or less. Gains and losses resulting from changes in fair value of derivative instruments are accounted for either in accumulated other comprehensive income or loss on the consolidated balance sheets, or in the consolidated statements of operations (in the corresponding account where revenue or expense is hedged, or to general and administrative for hedge amounts determined to be ineffective) depending on whether they are designated and qualify for hedge accounting. Fair value represents the difference in the value of the derivative instruments at the contractual rate and the value at current market rates, and generally reflects the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date based on broker quotes for the same or similar instruments. The Company does not enter into derivative contracts for speculative or trading purposes.
Guarantees and indemnifications 
Guarantees and indemnifications. The Company recognizes an obligation at inception for guarantees and indemnifications that qualify for recognition, regardless of the probability of occurrence. The Company indemnifies financial institution clients from settlement losses suffered due to the failure of any other client to honor Visa-branded cards and payment products processed in accordance with Visa's operating regulations. The estimated fair value of the liability for settlement indemnification is included in accrued liabilities on the consolidated balance sheets and is described in Note 11—Settlement Guarantee Management. The Company indemnifies Visa Europe for claims arising from the Company’s or Visa Europe’s activities that are brought outside of Visa Europe’s region, as described in Note 2—Visa Europe.
Share-based compensation 
Share-based compensation. The Company recognizes share-based compensation cost using the fair value method of accounting. The Company recognizes compensation cost for awards with only service conditions on a straight-line basis over the requisite service period, which is generally the vesting period. Compensation cost for performance and market-condition-based awards is recognized on a graded-vesting basis. The amount is initially estimated based on target performance and is adjusted as appropriate based on management's best estimate throughout the performance period. See Note 16—Share-based Compensation.
Earnings per share 
Earnings per share. The Company calculates earnings per share using the two-class method to reflect the different rights of each class and series of outstanding common stock. The dilutive effect of incremental common stock equivalents is reflected in diluted earnings per share by application of the treasury stock method. See Note 15—Earnings Per Share.
Recently Issued Accounting Pronouncements 
Recently Issued Accounting Pronouncements
In June 2011, the FASB issued ASU 2011-05, which impacts the presentation of comprehensive income. The guidance requires components of other comprehensive income to be presented with net income to arrive at total comprehensive income. This ASU impacts presentation only and does not impact the underlying components of other comprehensive income or net income. In December 2011, the FASB issued an amendment to ASU 2011-05, which deferred the requirement to report the effect of significant reclassifications out of other comprehensive income on the respective line items in net income. All other components of ASU 2011-05 became effective October 1, 2012. Adoption did not have a material impact on the consolidated financial statements.
In February 2013, the FASB issued ASU 2013-02, which established the effective date for the requirement to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income. The standard impacts presentation only and does not impact the underlying components of other comprehensive income or net income. The Company will adopt the standard effective October 1, 2013. The adoption is not expected to have a material impact on the consolidated financial statements.
In January 2013, the FASB issued ASU 2013-01, which clarifies the scope of ASU 2011-11. As amended, ASU 2011-11 requires disclosure of the effect or potential effect of offsetting arrangements on a Company's financial position as well as enhanced disclosure of the rights of offset associated with a Company's recognized derivative instruments, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and lending transactions. The amended standard impacts presentation only and is not expected to have a material impact on the consolidated financial statements. The Company will adopt the standard effective October 1, 2013.
In February 2013, the FASB issued ASU 2013-04, which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
In March 2013, the FASB issued ASU 2013-05, which clarifies the applicable guidance for the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity, or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
In July 2013, the FASB issued ASU 2013-11, which provides guidance for the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
Retrospective Responsibility Plan (Tables)
Schedule of Restricted Cash and Cash Equivalents
The following table sets forth the changes in the litigation escrow account:
 
Fiscal 2013
 
Fiscal 2012
 
(in millions)
Balance at October 1
$
4,432

 
$
2,857

Payments to settlement funds:(1)
 
 
 
Class plaintiffs
(4,033
)
 
—

Individual plaintiffs
(350
)
 
—

Payments to American Express
—

 
(140
)
Deposits into the litigation escrow account
—

 
1,715

Balance at September 30
$
49

 
$
4,432


(1)
These payments are associated with the interchange multidistrict litigation. The settlement with the class plaintiffs in these proceedings is subject to final court approval, which the Company cannot assure will be received, and to the adjudication of any appeals. See Note 20—Legal Matters.
Fair Value Measurements and Investments (Tables)
Fair Value, Assets and Liabilities Measured on Recurring Basis 
Assets and Liabilities Measured at Fair Value on a Recurring Basis
 
Fair Value Measurements at September 30
Using Inputs Considered as
 
Level 1
 
Level 2
 
Level 3
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents and restricted cash:
 
 
 
 
 
 
 
 
 
 
 
Money market funds
$
1,071

 
$
5,676

 
 
 
 
 
 
 
 
Commercial paper
 
 
 
 
$
51

 
$
93

 
 
 
 
Investment securities, trading:
 
 
 
 
 
 
 
 
 
 
 
Equity securities
75

 
66

 
 
 
 
 
 
 
 
Investment securities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
U.S. government-sponsored debt securities
 
 
 
 
2,704

 
2,821

 
 
 
 
U.S. Treasury securities
1,673

 
1,066

 
 
 
 
 
 
 
 
Equity securities
101

 
2

 
 
 
 
 
 
 
 
Corporate debt securities
 
 
 
 
269

 
63

 
 
 
 
Auction rate securities
 
 
 
 
 
 
 
 
$
7

 
$
7

Prepaid and other current assets:
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange derivative instruments
 
 
 
 
23

 
13

 
 
 
 
Total
$
2,920

 
$
6,810

 
$
3,047

 
$
2,990

 
$
7

 
$
7

Liabilities
 
 
 
 
 
 
 
 
 
 
 
Accrued liabilities:
 
 
 
 
 
 
 
 
 
 
 
Visa Europe put option
 
 
 
 
 
 
 
 
$
145

 
$
145

Earn-out related to PlaySpan acquisition
 
 
 
 
 
 
 
 
—

 
12

Foreign exchange derivative instruments
 
 
 
 
$
15

 
$
11

 
 
 
 
Total
$
—

 
$
—

 
$
15

 
$
11

 
$
145

 
$
157

Available-for-sale Securities 
The amortized cost, unrealized gains and losses and fair value of available-for-sale investment securities are as follows:
 
September 30, 2013
 
September 30, 2012

 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Gains
 
Losses
 
Gains
 
Losses
 
 
(in millions)
U.S. government-sponsored debt securities
$
2,701

 
$
3

 
$
—

 
$
2,704

 
$
2,818

 
$
3

 
$
—

 
$
2,821

U.S. Treasury securities
1,671

 
2

 
—

 
1,673

 
1,065

 
1

 
—

 
1,066

Equity securities
14

 
88

 
(1
)
 
101

 
4

 
—

 
(1
)
 
3

Corporate debt securities
269

 
—

 
—

 
269

 
63

 
—

 
—

 
63

Auction rate securities
7

 
—

 
—

 
7

 
7

 
—

 
—

 
7

Total
$
4,662

 
$
93

 
$
(1
)
 
$
4,754

 
$
3,957

 
$
4

 
$
(1
)
 
$
3,960

Less: current portion of available-for-sale investment securities
 
 
 
 
 
 
(1,994
)
 
 
 
 
 
 
 
(677
)
Long-term available-for-sale investment securities
 
 
 
 
 
 
$
2,760

 
 
 
 
 
 
 
$
3,283

Available for Sale Investments Classified by Contractual Maturity Date 
The majority of these investments, $2.8 billion, are classified as non-current, as they have stated maturities of more than one year from the balance sheet date. However, these investments are generally available to meet short-term liquidity needs.
 
Amortized Cost
 
Fair Value
 
(in millions)
September 30, 2013:
 
 
 
Due within one year
$
1,989

 
$
1,992

Due after 1 year through 5 years
2,652

 
2,654

Due after 5 years through 10 years
—

 
—

Due after 10 years
7

 
7

Total
$
4,648

 
$
4,653


Investment Income 
Investment income is recorded as non-operating income in the Company's consolidated statements of operations and consisted of the following:
 
For the Years Ended
September 30,
 
2013
 
2012
 
2011
 
(in millions)
Interest and dividend income on cash and investments
$
27

 
$
17

 
$
16

Gain on other investments
5

 
17

 
92

Investment securities, trading:
 
 
 
 
 
Unrealized gains (losses), net
4

 
9

 
(5
)
Realized gains (losses), net
2

 
(1
)
 
1

Investment securities, available-for-sale:
 
 
 
 
 
Realized (losses) gains, net
(1
)
 
—

 
4

Other-than-temporary impairment on investments
(15
)
 
(6
)
 
—

Investment income
$
22

 
$
36

 
$
108

Prepaid Expenses and Other Assets (Tables)
Prepaid Expenses and Other Current Assets Disclosure 
Prepaid expenses and other current assets consisted of the following:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Prepaid expenses and maintenance
$
111

 
$
69

Foreign exchange derivative instruments—(See Note 12—Derivative Financial Instruments)
23

 
13

Other
53

 
40

Total
$
187

 
$
122

Schedule of Other Assets, Noncurrent 
Other non-current assets consisted of the following: 
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Non-current income tax receivable—(See Note 19—Income Taxes)(1)
$
253

 
$
—

Pension assets—(See Note 10—Pension, Postretirement and Other Benefits)(2)
192

 
23

Other investments—(See Note 4—Fair Value Measurements and Investments)(3)
30

 
86

Long-term prepaid expenses and other
46

 
42

Total
$
521

 
$
151

(1) 
The increase in non-current income tax receivable is mainly due to amended tax returns filed during fiscal 2013.
(2) 
The increase in pension assets was mainly due to a higher-than-expected rate of return on pension assets during the year and an increase in the discount rate at September 30, 2013 compared to September 30, 2012.
(3) 
The decrease in other investments was mainly due to the recognition of an other-than-temporary impairment loss and subsequent sale of an investment, combined with a reclassification of equity securities to long-term available-for-sale investment securities following a change in the Company's relationship with an investee.
Property, Equipment and Technology, Net (Tables)
Property, Plant and Equipment 
Property, equipment and technology, net, consisted of the following:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Land
$
71

 
$
71

Buildings and building improvements
766

 
751

Furniture, equipment and leasehold improvements
983

 
837

Construction-in-progress
74

 
69

Technology
1,545

 
1,353

Total property, equipment and technology
3,439

 
3,081

Accumulated depreciation and amortization
(1,707
)
 
(1,447
)
Property, equipment and technology, net
$
1,732

 
$
1,634

Expected amortization expense 
At September 30, 2013, estimated future amortization expense on technology was as follows:
Fiscal (in millions)
2014
 
2015
 
2016
 
2017
 
2018 and
thereafter
 
Total
Estimated future amortization expense
$
175

 
$
162

 
$
129

 
$
85

 
$
35

 
$
586

Intangible Assets, Net (Tables)
Schedule of Intangible Assets by Major Class 
Indefinite-lived and finite-lived intangible assets consisted of the following: 
 
September 30, 2013
 
September 30, 2012
 
Gross
 
Accumulated
Amortization
 
Net
 
Gross
 
Accumulated
Amortization
 
Net
 
(in millions)
Finite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
339

 
$
(125
)
 
$
214

 
$
339

 
$
(84
)
 
$
255

Tradenames
192

 
(41
)
 
151

 
192

 
(28
)
 
164

Reseller relationships
95

 
(36
)
 
59

 
95

 
(25
)
 
70

Other
52

 
(8
)
 
44

 
52

 
(4
)
 
48

Total finite-lived intangible assets
$
678

 
$
(210
)
 
$
468

 
$
678

 
$
(141
)
 
$
537

Indefinite-lived intangible assets
 
 
 
 
10,883

 
 
 
 
 
10,883

Total intangible assets, net
 
 
 
 
$
11,351

 
 
 
 
 
$
11,420

Schedule of Estimated Future Amortization Expense 
At September 30, 2013, estimated future amortization expense on finite-lived intangible assets is as follows:
Fiscal (in millions)
2014
 
2015
 
2016
 
2017
 
2018 and
thereafter
 
Total
Estimated future amortization expense
$
66

 
$
62

 
$
49

 
$
47

 
$
244

 
$
468

Accrued and Other Liabilities (Tables)
Accrued Liabilities Table 
Accrued liabilities consisted of the following:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Accrued operating expenses
$
182

 
$
194

Visa Europe put option—(See Note 2—Visa Europe)(1)
145

 
145

Deferred revenue
60

 
59

Accrued marketing and product expenses
27

 
22

Accrued income taxes—(See Note 19—Income Taxes)
64

 
58

Other
135

 
106

Total
$
613

 
$
584


Other Noncurrent Liabilities, Table 
Other long-term liabilities consisted of the following:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Accrued income taxes—(See Note 19—Income Taxes)(2)
$
453

 
$
171

Employee benefits
86

 
93

Other
63

 
107

Total
$
602

 
$
371

(1) 
The put option is exercisable at any time at the sole discretion of Visa Europe with payment required 285 days thereafter. Classification in current liabilities is not an indication of management’s expectation of exercise and simply reflects the fact that the obligation resulting from the exercise of the instrument could become payable within 12 months.
(2) 
The increase in accrued income taxes is primarily related to increases in unrecognized tax benefits.
Pension, Postretirement and Other Benefits (Tables)
Plans With Accumulated And Projected Benefit Obligations In Excess Of The Fair Value Of Plan Assets, Disclosure 
Benefit obligation and fair value of plan assets with obligations in excess of plan assets:
 
Pension Benefits
September 30,
 
2013
 
2012
 
(in millions)
Accumulated benefit obligation in excess of plan assets
 
 
 
Accumulated benefit obligation—end of year
$
(33
)
 
$
(39
)
Fair value of plan assets—end of year
$
—

 
$
—

Projected benefit obligation in excess of plan assets
 
 
 
Benefit obligation—end of year
$
(34
)
 
$
(40
)
Fair value of plan assets—end of year
$
—

 
$
—

Change in Benefit Obligation:
 
Pension Benefits
 
Other
Postretirement Benefits
 
September 30,
 
September 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions)
Benefit obligation—beginning of fiscal year
$
990

 
$
839

 
$
32

 
$
38

Service cost
43

 
38

 
—

 
—

Interest cost
35

 
40

 
1

 
1

Actuarial (gain) loss
(127
)
 
132

 
(4
)
 
(3
)
Benefit payments
(44
)
 
(60
)
 
(4
)
 
(4
)
Settlements
—

 
1

 
—

 
—

Benefit obligation—end of fiscal year
$
897

 
$
990

 
$
25

 
$
32

Accumulated benefit obligation
$
892

 
$
982

 
NA

 
NA

Change in Plan Assets:
 
 
 
 
 
 
 
Fair value of plan assets—beginning of fiscal year
$
973

 
$
783

 
$
—

 
$
—

Actual return on plan assets
126

 
166

 
—

 
—

Company contribution
—

 
84

 
4

 
4

Benefit payments
(44
)
 
(60
)
 
(4
)
 
(4
)
Fair value of plan assets—end of fiscal year
$
1,055

 
$
973

 
$
—

 
$
—

Funded status at end of fiscal year
$
158

 
$
(17
)
 
$
(25
)
 
$
(32
)
Recognized in Consolidated Balance Sheets:
 
 
 
 
 
 
 
Non-current asset
$
192

 
$
23

 
$
—

 
$
—

Current liability
(8
)
 
(8
)
 
(4
)
 
(4
)
Non-current liability
(26
)
 
(32
)
 
(21
)
 
(28
)
Funded status at end of fiscal year
$
158

 
$
(17
)
 
$
(25
)
 
$
(32
)
 
 
 
 
 
 
 
 
Pension and Other Postretirement Benefits, Recognized in Accumulated Comprehensive Income (Loss) Disclosure 
Amounts recognized in accumulated other comprehensive income before tax: 
 
Pension Benefits
 
Other
Postretirement Benefits
September 30,
 
September 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions)
Net actuarial loss (gain)
$
108

 
$
328

 
$
(6
)
 
$
(3
)
Prior service credit
(23
)
 
(33
)
 
(11
)
 
(14
)
Total
$
85

 
$
295

 
$
(17
)
 
$
(17
)
Pension And Other Postretirement Benefits, Expected Amortization Of Accumulated Other Comprehensive Income, Disclosure 
Amounts from accumulated other comprehensive income to be amortized into net periodic benefit cost in fiscal 2014: 
 
Pension Benefits
 
Other
Postretirement
 Benefits
 
(in millions)
Actuarial loss (gain)
$
2

 
$
(1
)
Prior service credit
(9
)
 
(3
)
Total
$
(7
)
 
$
(4
)
Schedule of Defined Benefit Plans Disclosures 
Net periodic pension and other postretirement plan cost:
 
Pension Benefits
 
Other
Postretirement Benefits
Fiscal
 
2013
 
2012
 
2011
 
2013
 
2012
 
2011
 
(in millions)
Service cost
$
43

 
$
38

 
$
41

 
$
—

 
$
—

 
$
—

Interest cost
35

 
40

 
38

 
1

 
1

 
1

Expected return on assets
(61
)
 
(55
)
 
(54
)
 
—

 
—

 
—

Amortization of:
 
 
 
 
 
 
 
 
 
 
 
Prior service credit
(9
)
 
(9
)
 
(9
)
 
(3
)
 
(3
)
 
(3
)
Actuarial loss (gain)
28

 
33

 
19

 
(1
)
 
—

 
(1
)
Net benefit cost
$
36

 
$
47

 
$
35

 
$
(3
)
 
$
(2
)
 
$
(3
)
Settlement loss
—

 
3

 
2

 
—

 
—

 
—

Total net periodic benefit cost
$
36

 
$
50

 
$
37

 
$
(3
)
 
$
(2
)
 
$
(3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension and Other Postretirement Benefits, Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss (Income) Disclosure 
Other changes in plan assets and benefit obligations recognized in other comprehensive income: 
 
Pension Benefits
 
Other
Postretirement Benefits
2013
 
2012
 
2013
 
2012
 
(in millions)
Current year actuarial (gain) loss
$
(191
)
 
$
21

 
$
(4
)
 
$
(3
)
Amortization of actuarial (loss) gain
(28
)
 
(36
)
 
1

 
—

Amortization of prior service credit
9

 
9

 
3

 
3

Total recognized in other comprehensive income
$
(210
)
 
$
(6
)
 
$
—

 
$
—

Total recognized in net periodic benefit cost and other comprehensive income
$
(174
)
 
$
44

 
$
(3
)
 
$
(2
)
 
 
 
 
 
 
 
 
Pension and Other Postretirement Benefits, Net Periodic Benefit Costs Weighted Average Assumptions Disclosure 
Weighted Average Actuarial Assumptions:
 
Fiscal
 
2013
 
2012
 
2011
Discount rate for benefit obligation:(1)
 
 
 
 
 
Pension
4.81
%
 
3.85
%
 
4.70
%
Postretirement
2.76
%
 
2.21
%
 
3.39
%
Discount rate for net periodic benefit cost:
 
 
 
 
 
Pension
3.85
%
 
4.70
%
 
5.25
%
Postretirement
2.21
%
 
3.39
%
 
3.45
%
Expected long-term rate of return on plan assets(2)
7.00
%
 
7.50
%
 
7.50
%
Rate of increase in compensation levels for:
 
 
 
 
 
Benefit obligation
4.50
%
 
4.50
%
 
4.50
%
Net periodic benefit cost
4.50
%
 
4.50
%
 
4.50
%
(1) 
Based on a “bond duration matching” methodology, which reflects the matching of projected plan liability cash flows to an average of high-quality corporate bond yield curves whose duration matches the projected cash flows.
(2) 
Primarily based on the targeted allocation, and evaluated for reasonableness by considering such factors as: (i) actual return on plan assets; (ii) historical rates of return on various asset classes in the portfolio; (iii) projections of returns on various asset classes; and (iv) current and prospective capital market conditions and economic forecasts.
Fair Value of Net Pension Plan Assets Disclosure 
The following table sets forth by level, within the fair value hierarchy, the pension plan’s investments at fair value as of September 30, 2013 and 2012, including the impact of unsettled transactions:
 
 
Fair Value Measurements at September 30,
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
 
(in millions)
Cash equivalents
$
26

 
$
79

 
 
 
 
 
 
 
 
 
$
26

 
$
79

Collective investment funds
 
 
 
 
$
—

 
$
391

 
 
 
 
 
—

 
391

Corporate debt securities
 
 
 
 
106

 
115

 
 
 
 
 
106

 
115

Debt securities of U.S. Treasury and federal agencies
 
 
 
 
149

 
121

 
 
 
 
 
149

 
121

Asset-backed securities
 
 
 
 
 
 
 
 
$
23

 
$
25

 
23

 
25

Equity securities
751

 
242

 
 
 
 
 
 
 
 
 
751

 
242

Total
$
777

 
$
321

 
$
255

 
$
627

 
$
23

 
$
25

 
$
1,055

 
$
973

Pension and Other Postretirement Benefits, Employer Contributions and Expected Benefit Payments Disclosure 
 
Pension
Benefits
 
Other
Postretirement
Benefits
Actual employer contributions
(in millions)
2013
$
—

 
$
4

2012
$
84

 
$
4

Expected employer contributions
 
 
 
2014
$
8

 
$
4

Expected benefit payments
 
 
 
2014
$
116

 
$
4

2015
$
105

 
$
4

2016
$
108

 
$
3

2017
$
100

 
$
3

2018
$
96

 
$
3

2019-2023
$
413

 
$
10

Settlement Guarantee Management (Tables)
Schedule of Customer Collateral
The Company maintained collateral as follows:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Cash equivalents
$
866

 
$
823

Pledged securities at market value
256

 
307

Letters of credit
1,191

 
1,084

Guarantees
1,411

 
2,022

Total
$
3,724

 
$
4,236

 
Enterprise-wide Disclosures and Concentration of Business (Tables)
Schedule of long-lived net property, equipment and technology assets by major geographic area
The Company’s long-lived net property, equipment and technology assets are classified by major geographic areas as follows:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
United States
$
1,621

 
$
1,539

International
111

 
95

Total
$
1,732

 
$
1,634

Stockholders' Equity (Tables)
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Stockholders' Equity Note [Abstract]
 
 
Schedule of Common Stock as Converted
Text Block 
 
Schedule of Treasury Stock by Class
 
Text Block 
Share Repurchase Program Disclosure
Text Block 
 
Schedule of Common Stock as Converted 
The number of shares of each class and the number of shares of class A common stock on an as-converted basis at September 30, 2013, are as follows:  
(in millions except conversion rate)
Shares
Outstanding
 
Conversion Rate Into Class A
Common Stock
 
As-converted Class A Common
Stock (1)
Class A common stock
508
 
—
 
508
Class B common stock
245
 
0.4206
 
103
Class C common stock
27
 
1.0000
 
27
Total
 
 
 
 
638

(1)  
Figures in the table may not recalculate exactly due to rounding. As-converted class A common stock is calculated based on whole numbers, not the rounded numbers presented.
Schedule of Treasury Stock by Class 
The following table presents share repurchases in the open market during the following fiscal years:
(in millions, except per share data)
2013
 
2012
Shares repurchased in the open market (1)
33

 
6

Weighted-average repurchase price per share
$
161.94

 
$
114.87

Total cost
$
5,365

 
$
710

(1) 
All shares repurchased in the open market have been retired and constitute authorized but unissued shares.
Share Repurchase Program Disclosure 
The following table presents as-converted class B common stock after deposits into the litigation escrow account in fiscal 2012. There were no deposits into the litigation escrow account in fiscal 2013.
 
Fiscal 2012
(in millions, except per share and conversion rate data)
July 2012
 
December 2011
Deposits under the retrospective responsibility plan
$
150

 
$
1,565

Effective price per share(1)
$
125.50

 
$
101.75

Reduction in equivalent number of shares of class A common stock
1

 
15

Conversion rate of class B common stock to class A common stock after deposits
0.4206

 
0.4254

As-converted class B common stock after deposits
103

 
104

(1)
Effective price per share calculated using the volume-weighted average price of the Company's class A common stock over a pricing period in accordance with the Company's current certificate of incorporation.
Earnings Per Share (Tables)
Schedule of Earnings Per Share
The following table presents earnings per share for fiscal 2013.(1) 
 
Basic Earnings Per Share
 
 
Diluted Earnings Per Share
 
(in millions, except per share data)
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
 
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
Class A common stock
$
3,959

 
520

 
$
7.61

 
 
$
4,980

 
656

(3) 
$
7.59

Class B common stock
786

 
245

 
$
3.20

 
 
$
784

 
245

 
$
3.19

Class C common stock
216

 
28

 
$
7.61

 
 
$
215

 
28

 
$
7.59

Participating securities(4)
19

 
Not presented

 
Not presented

 
 
$
19

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
4,980

 
 
 
 
 
 
 
 
 
 
 
The following table presents earnings per share for fiscal 2012.(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
$
1,664

 
524

 
$
3.17

 
 
$
2,144

 
678

(3) 
$
3.16

Class B common stock
343

 
245

 
$
1.40

 
 
$
341

 
245

 
$
1.39

Class C common stock
130

 
41

 
$
3.17

 
 
$
129

 
41

 
$
3.16

Participating securities(4)
7

 
Not presented

 
Not presented

 
 
$
7

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
2,144

 
 
 
 
 
 
 
 
 
 
 
The following table presents earnings per share for fiscal 2011.(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
$
2,638

 
509

 
$
5.18

 
 
$
3,650

 
707

(3 
) 
$
5.16

Class B common stock
636

 
245

 
$
2.59

 
 
$
633

 
245

 
$
2.58

Class C common stock
364

 
70

 
$
5.18

 
 
$
363

 
70

 
$
5.16

Participating securities(4)
12

 
Not presented

 
Not presented

 
 
$
12

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
3,650

 
 
 
 
 
 
 
 
 
 
 

(1)
Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on whole numbers, not the rounded numbers presented.
(2)
Net income attributable to Visa Inc. is allocated based on proportional ownership on an as-converted basis. The weighted-average numbers of shares of as-converted class B common stock used in the income allocation were 103 million, 108 million and 123 million for fiscal 2013, 2012 and 2011, 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 2 million common stock equivalents for fiscal 2013 and 3 million for fiscal 2012 and fiscal 2011, because their effect would have been dilutive. The computation excludes less than 1 million of common stock equivalents for fiscal 2013 and 2012, and 2 million for fiscal 2011 because their effect would have been anti-dilutive.
(4)
Participating securities are unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, such as the Company's restricted stock awards, restricted stock units and earned performance-based shares.
Share-based Compensation (Tables)
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used 
During fiscal 2013, 2012 and 2011, the fair value of each stock option was estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:
 
 
2013
 
2012
 
2011
Expected term (in years)(1)
 
6.08

 
6.02

 
5.16

Risk-free rate of return(2)
 
0.8
%
 
1.2
%
 
1.2
%
Expected volatility(3)
 
29.3
%
 
34.9
%
 
33.4
%
Expected dividend yield(4)
 
0.9
%
 
0.9
%
 
0.8
%
Fair value per option granted
 
$
39.03

 
$
29.65

 
$
27.50


(1) 
Based on a set of peer companies that management believes is generally comparable to Visa.
(2) 
Based upon the zero coupon U.S. treasury bond rate over the expected term of the awards.
(3) 
Based on the average of the Company’s implied and historical volatility. As the Company’s publicly-traded stock history is relatively short, historical volatility relies in part on the historical volatility of a group of peer companies that management believes is generally comparable to Visa. The relative weighting between Visa historical volatility and the historical volatility of the peer companies is based on the percentage of years Visa stock price information has been available since its initial public offering compared to the expected term. The expected volatilities ranged from 27% to 29% in fiscal 2013.
(4) 
Based on the Company’s annual dividend rate on the date of grant.
Schedule of Share-based Compensation, Options Activity 
The following table summarizes the Company’s option activity for fiscal 2013:
 
Options
 
Weighted-
Average
Exercise Price
Per Share
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
Outstanding at October 1, 2012
5,185,675

 
$
59.46

 
 
 
 
Granted
579,318

 
$
147.37

 
 
 
 
Forfeited
(51,766
)
 
$
109.35

 
 
 
 
Exercised
(1,796,021
)
 
$
58.56

 
 
 
 
Outstanding at September 30, 2013
3,917,206

 
$
72.21

 
5.7
 
$466
Options exercisable at September 30, 2013
2,973,421

 
$
57.74

 
4.8
 
$397
Options exercisable and expected to be vested at September 30, 2013(2)
3,822,828

 
$
71.08

 
5.6
 
$459
(1) 
Calculated using the closing stock price on the last trading day of fiscal 2013 of $191.10, less the option exercise price, multiplied by the number of instruments.
(2) 
Applies a forfeiture rate to unvested options outstanding at September 30, 2013 to estimate the number expected to vest in the future.
Restricted Share Activity Disclosure 
The following table summarizes the Company's RSA and RSU activity for fiscal 2013:
 
Restricted Stock
 
Weighted-
Average
Grant Date
Fair Value
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
 
Awards
 
Units
 
RSA
 
RSU
 
RSA
 
RSU
 
RSA
 
RSU
Outstanding at October 1, 2012
1,736,989

 
637,645

 
$
88.77

 
$
91.17

 
 
 
 
 
 
 
 
Granted
895,659

 
329,322

 
$
147.18

 
$
146.18

 
 
 
 
 
 
 
 
Vested
(834,269
)
 
(289,821
)
 
$
87.02

 
$
88.22

 
 
 
 
 
 
 
 
Forfeited
(100,398
)
 
(27,464
)
 
$
109.62

 
$
112.27

 
 
 
 
 
 
 
 
Outstanding at September 30, 2013
1,697,981

 
649,682

 
$
119.20

 
$
119.49

 
1.5
 
1.3
 
$324
 
$124
(1) 
Calculated by multiplying the closing stock price on the last trading day of fiscal 2013 of $191.10 by the number of instruments.
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award 
The following table summarizes the maximum number of performance-based shares which could be earned and related activity for fiscal 2013:
 
Shares
 
Weighted-
Average
Grant Date
Fair Value
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
Outstanding at October 1, 2012
526,227

 
$
88.56

 
 
 
 
Granted(2)
230,518

 
$
164.14

 
 
 
 
Vested and earned
(271,418
)
 
$
85.87

 
 
 
 
Unearned
(9,928
)
 
$
85.05

 
 
 
 
Forfeited
(15,500
)
 
$
129.36

 
 
 
 
Outstanding at September 30, 2013
459,899

 
$
126.24

 
1.0
 
$88
(1) 
Calculated by multiplying the closing stock price on the last trading day of fiscal 2013 of $191.10 by the number of instruments.
(2) 
Represents the maximum number of performance-based shares which could be earned.
F
Commitments and Contingencies (Tables)
Commitments Disclosure 
Future minimum payments on leases, and marketing and sponsorship agreements per fiscal year, at September 30, 2013, are as follows:
(in millions)
2014
 
2015
 
2016
 
2017
 
2018
 
Thereafter
 
Total
Operating leases
$
100

 
$
77

 
$
43

 
$
35

 
$
20

 
$
82

 
$
357

Marketing and sponsorships
116

 
117

 
61

 
54

 
54

 
178

 
580

Total
$
216

 
$
194

 
$
104

 
$
89

 
$
74

 
$
260

 
$
937

Expected Reduction of Revenue for Volumn and Support Incentive Agreements 
The table below sets forth the expected future reduction of revenue per fiscal year for client incentive agreements in effect at September 30, 2013: 
(in millions)
2014
 
2015
 
2016
 
2017
 
2018
 
Thereafter
 
Total
Client incentives
$
2,450

 
$
2,206

 
$
1,802

 
$
1,429

 
$
987

 
$
1,447

 
$
10,321

Income Taxes (Tables)
Schedule of U.S. and non-U.S. components of income before income tax expense/(benefit) 
The Company’s income before taxes by fiscal year consisted of the following:
 
2013
 
2012
 
2011
 
(in millions)
U.S.
$
5,992

 
$
1,030

 
$
4,650

Non-U.S.
1,265

 
1,177

 
1,006

Total income before taxes and non-controlling interest
$
7,257

 
$
2,207

 
$
5,656

Comprehensive Income Tax (Expense) Benefit Components Table 
Income tax provision by fiscal year consisted of the following:
 
2013
 
2012
 
2011
 
(in millions)
Current:
 
 
 
 
 
U.S. federal
$
568

 
$
1,376

 
$
1,365

State and local
(58
)
 
165

 
311

Non-U.S.
239

 
214

 
168

Total current taxes
749

 
1,755

 
1,844

Deferred:
 
 
 
 
 
U.S. federal
1,401

 
(1,276
)
 
160

State and local
114

 
(415
)
 
(2
)
Non-U.S.
13

 
1

 
8

Total deferred taxes
1,528

 
(1,690
)
 
166

Total income tax provision
$
2,277

 
$
65

 
$
2,010

Components of Deferred Tax Assets and Liabilities 
The tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities at September 30, 2013 and 2012, are presented below:
 
2013
 
2012
 
(in millions)
Deferred Tax Assets:
 
 
 
Accrued compensation and benefits
$
154

 
$
103

Comprehensive (income) loss
(8
)
 
102

Investments in joint ventures
14

 
11

Accrued litigation obligation
1

 
1,654

Client incentives
226

 
227

Net operating loss carryforward
31

 
33

Tax credits
22

 
23

Federal benefit of state taxes
176

 
90

Federal benefit of foreign taxes
13

 
16

Other
108

 
92

Valuation allowance
(25
)
 
(13
)
Deferred tax assets
712

 
2,338

Deferred Tax Liabilities:
 
 
 
Property, equipment and technology, net
(310
)
 
(288
)
Intangible assets
(4,003
)
 
(4,027
)
Foreign taxes
(55
)
 
(44
)
Other
(12
)
 
(10
)
Deferred tax liabilities
(4,380
)
 
(4,369
)
Net deferred tax liabilities
$
(3,668
)
 
$
(2,031
)
Deferred Tax Assets and Liabilities 
Total net deferred tax assets and liabilities are included in the Company’s consolidated balance sheets as follows:
 
September 30,
2013
 
September 30,
2012
 
(in millions)
Current deferred tax assets
$
481

 
$
2,027

Non-current deferred tax liabilities
(4,149
)
 
(4,058
)
Net deferred tax liabilities
$
(3,668
)
 
$
(2,031
)
Reconciliation of the US Statutory Federal Tax Rate 
The income tax provision differs from the amount of income tax determined by applying the applicable U.S. federal statutory rate of 35% to pretax income, as a result of the following:
 
 
For the Years Ended September 30,
 
2013
 
2012
 
2011
 
Dollars
 
Percent
 
Dollars
 
Percent
 
Dollars
 
Percent
 
(in millions, except percentages)
U.S. federal income tax at statutory rate
$
2,540

 
35
 %
 
$
772

 
35
 %
 
$
1,980

 
35
 %
State income taxes, net of federal benefit
42

 
1
 %
 
36

 
2
 %
 
203

 
4
 %
Non-U.S. tax effect, net of federal benefit
(328
)
 
(5
)%
 
(257
)
 
(12
)%
 
(150
)
 
(2
)%
Reversal of tax reserves related to the deductibility of covered litigation expense
—

 
—
 %
 
(299
)
 
(14
)%
 
—

 
—
 %
Remeasurement of deferred taxes due to:
 
 
 
 
 
 
 
 
 
 
 
California state apportionment rule changes
—

 
—
 %
 
(208
)
 
(9
)%
 
—

 
—
 %
Other state apportionment changes
(6
)
 
—
 %
 
11

 
1
 %
 
(3
)
 
—
 %
Revaluation of Visa Europe put option
—

 
—
 %
 
—

 
—
 %
 
(43
)
 
(1
)%
Other, net
29

 
—
 %
 
10

 
—
 %
 
23

 
—
 %
Income tax provision
$
2,277

 
31
 %
 
$
65

 
3
 %
 
$
2,010

 
36
 %
Unrecognized Tax Benefits Reconciliation, Table 
A reconciliation of beginning and ending unrecognized tax benefits by fiscal year is as follows: 
 
2013
 
2012
 
(in millions)
Beginning balance at October 1
$
679

 
$
850

Increases of unrecognized tax benefits related to prior years
335

 
186

Decreases of unrecognized tax benefits related to prior years
(133
)
 
(445
)
Increases of unrecognized tax benefits related to current year
144

 
89

Reductions related to lapsing statute of limitations
(2
)
 
(1
)
Ending balance at September 30
$
1,023

 
$
679

Legal Matters (Tables)
Schedule of Loss Contingencies by Contingency
The following table summarizes the activity related to accrued litigation.
 
Fiscal 2013
 
Fiscal 2012
 
(in millions)
Balance at October 1
$
4,386

 
$
425

Provision for unsettled legal matters
3

 
4,100

Interest accretion on settled matters
—

 
1

Payments on unsettled matters(1)
(4,033
)
 
—

Payments on settled matters
(351
)
 
(140
)
Balance at September 30
$
5

 
$
4,386

(1) 
On December 10, 2012, the Company paid approximately $4.0 billion from the litigation escrow account into a settlement fund established pursuant to the definitive class settlement agreement in the interchange multidistrict litigation. The settlement with the class plaintiffs is subject to final court approval, which the Company cannot assure will be received, and to the adjudication of any appeals. See further discussion below.
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Accounting Policies [Abstract]
 
 
 
Other-than-temporary impairment of available-for-sale securities
$ 0 
$ 4 
$ 0 
Expected average employee future service period for United States plans (in years)
8 years 
 
 
Building
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Estimated useful life
40 years 
 
 
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Acquired long-lived intangible assets useful life
1 year 
 
 
Minimum |
Furniture and Fixtures
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Estimated useful life
2 years 
 
 
Minimum |
Building Improvements
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Estimated useful life
3 years 
 
 
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Acquired long-lived intangible assets useful life
15 years 
 
 
Maximum |
Furniture and Fixtures
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Estimated useful life
7 years 
 
 
Maximum |
Building Improvements
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Estimated useful life
40 years 
 
 
Visa Europe - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
European Activities [Abstract]
 
 
 
Maximum number of days within which the Company is required to purchase the shares of Visa Europe put option
285 days 
 
 
Put option, fair value
$ 145 1
$ 145 1
 
Probability of exercise by Visa Europe
40.00% 
40.00% 
 
Fair value adjustment for the Visa Europe put option
0 
0 
(122)
P/E differential at the time of exercise
190.00% 
 
 
License fee (per year payable quarterly except for year ended September 30, 2008)
$ 143 
$ 143 
$ 143 
Changes in the Escrow Account (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Escrow Account [Roll Forward]
 
 
Litigation Escrow Account Balance, Beginning of Period
$ 4,432 
$ 2,857 
Payments to Settlement Funds
4,400 
 
Deposits into litigation escrow account
   
1,715 
Litigation Escrow Account Balance, End of Period
49 
4,432 
Class Plaintiffs
 
 
Escrow Account [Roll Forward]
 
 
Payments to Settlement Funds
(4,033)1
 
Individual Plaintiffs
 
 
Escrow Account [Roll Forward]
 
 
Payments to Settlement Funds
(350)1
 
American Express [Member]
 
 
Escrow Account [Roll Forward]
 
 
Payments to Settlement Funds
 
$ (140)
Fair Value Measurements and Investments - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2011
Companhia Brasileira de Solucoes e Servicos [Member]
Sep. 30, 2013
Earn out related to PlaySpan acquisition
Fair Value, Measurements, Recurring
Level 3
Sep. 30, 2012
Earn out related to PlaySpan acquisition
Fair Value, Measurements, Recurring
Level 3
Mar. 2, 2011
Earn out related to PlaySpan acquisition
Pay Span Inc
Fair Value, Measurements, Recurring
Level 3
Investment [Line Items]
 
 
 
 
 
 
 
Payment from litigation escrow account-Retrospective Responsibility Plan
$ (4,383)
$ (140)
$ (280)
 
 
 
 
Put option, fair value
145 1
145 1
 
 
0 
12 
 
Fair value of earn-put provision
 
 
 
 
 
 
24 
Non-marketable equity securities, recognized losses due to impairment
15 
2 
0 
 
 
 
 
Non-marketable equity investments
30 
86 
 
 
 
 
 
Equity method investments reclassified as available-for-sale, carrying value
12 
 
 
 
 
 
 
Available-for-sale securities, previously classified as equity method investments, fair value
99 
 
 
 
 
 
 
Available-for-sale securities, previously classified as equity method investments, unrealized gains
87 
 
 
 
 
 
 
Trading assets, mutual fund investments related to various employee compensation plans
75 
66 
 
 
 
 
 
Long-term available-for-sale investment securities
2,760 
3,283 
 
 
 
 
 
Gain on other investments from the sale of equity interest in Visa Vale, pre-tax gain
 
 
 
$ 85 
 
 
 
Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Investment securities
 
 
Available-for-sale securities
$ 4,754 
$ 3,960 
Accrued liabilities
 
 
Visa Europe put option
145 1
145 1
Fair Value, Measurements, Recurring |
Level 1
 
 
Prepaid and other current assets
 
 
Fair value, total assets
2,920 
6,810 
Accrued liabilities
 
 
Fair value, total liabilities
0 
0 
Fair Value, Measurements, Recurring |
Level 1 |
Money market funds
 
 
Cash equivalents and restricted cash
 
 
Cash equivalents and restricted cash
1,071 
5,676 
Fair Value, Measurements, Recurring |
Level 1 |
Equity securities
 
 
Investment securities
 
 
Trading securities
75 
66 
Available-for-sale securities
101 
2 
Fair Value, Measurements, Recurring |
Level 1 |
US Treasury securities
 
 
Investment securities
 
 
Available-for-sale securities
1,673 
1,066 
Fair Value, Measurements, Recurring |
Level 2
 
 
Prepaid and other current assets
 
 
Fair value, total assets
3,047 
2,990 
Accrued liabilities
 
 
Fair value, total liabilities
15 
11 
Fair Value, Measurements, Recurring |
Level 2 |
Foreign exchange derivative instruments
 
 
Accrued liabilities
 
 
Foreign exchange derivative instruments
15 
11 
Fair Value, Measurements, Recurring |
Level 2 |
Commercial Paper
 
 
Cash equivalents and restricted cash
 
 
Cash equivalents and restricted cash
51 
93 
Fair Value, Measurements, Recurring |
Level 2 |
U.S. government-sponsored agency debt securities
 
 
Investment securities
 
 
Available-for-sale securities
2,704 
2,821 
Fair Value, Measurements, Recurring |
Level 2 |
Corporate debt securities
 
 
Investment securities
 
 
Available-for-sale securities
269 
63 
Fair Value, Measurements, Recurring |
Level 2 |
Foreign exchange derivative instruments
 
 
Prepaid and other current assets
 
 
Foreign exchange derivative instruments
23 
13 
Fair Value, Measurements, Recurring |
Level 3
 
 
Prepaid and other current assets
 
 
Fair value, total assets
7 
7 
Accrued liabilities
 
 
Fair value, total liabilities
145 
157 
Fair Value, Measurements, Recurring |
Level 3 |
Visa Europe put option
 
 
Accrued liabilities
 
 
Visa Europe put option
 
145 
Fair Value, Measurements, Recurring |
Level 3 |
Earn out related to PlaySpan acquisition
 
 
Accrued liabilities
 
 
Visa Europe put option
0 
12 
Fair Value, Measurements, Recurring |
Level 3 |
Auction Rate Securities
 
 
Investment securities
 
 
Available-for-sale securities
$ 7 
$ 7 
Amortized Cost, Unrealized Gains and Losses, and Fair Value of Available-for-sale Securities (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
$ 4,662 
$ 3,957 
Available-for-sale Securities, Gross Unrealized Gain
93 
4 
Available-for-sale Securities, Gross Unrealized Loss
(1)
(1)
Available-For-Sale Fair Value
4,754 
3,960 
Less: current portion of available-for-sale investment securities
(1,994)
(677)
Long-term available-for-sale investment securities
2,760 
3,283 
US Government-sponsored agency debt securities |
Debt and Equity Securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
2,701 
2,818 
Available-for-sale Securities, Gross Unrealized Gain
3 
3 
Available-for-sale Securities, Gross Unrealized Loss
   
   
Available-For-Sale Fair Value
2,704 
2,821 
US Treasury securities |
Debt and Equity Securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
1,671 
1,065 
Available-for-sale Securities, Gross Unrealized Gain
2 
1 
Available-for-sale Securities, Gross Unrealized Loss
   
   
Available-For-Sale Fair Value
1,673 
1,066 
Equity securities |
Debt and Equity Securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
14 
4 
Available-for-sale Securities, Gross Unrealized Gain
88 
   
Available-for-sale Securities, Gross Unrealized Loss
(1)
(1)
Available-For-Sale Fair Value
101 
3 
Corporate debt securities |
Debt and Equity Securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
269 
63 
Available-for-sale Securities, Gross Unrealized Gain
   
   
Available-for-sale Securities, Gross Unrealized Loss
   
   
Available-For-Sale Fair Value
269 
63 
Auction rate securities |
Debt and Equity Securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
7 
7 
Available-for-sale Securities, Gross Unrealized Gain
   
   
Available-for-sale Securities, Gross Unrealized Loss
   
   
Available-For-Sale Fair Value
$ 7 
$ 7 
Contractual Maturity of Available-for-sale Debt Securities (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Amortized Cost
 
Due within one year
$ 1,989 
Due after 1 year through 5 years
2,652 
Due after 5 years through 10 years
   
Due after 10 years
7 
Total
4,648 
Fair Value
 
Due within one year
1,992 
Due after 1 year through 5 years
2,654 
Due after 5 years through 10 years
   
Due after 10 years
7 
Total
$ 4,653 
Investment Income, Net (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Fair Value Measurements and Investments [Abstract]
 
 
 
Interest and dividend income on cash and investments
$ 27 
$ 17 
$ 16 
Gain on other investments
5 
17 
92 
Investment securities, trading:
 
 
 
Unrealized gains (losses) , net
4 
9 
(5)
Realized gains (losses), net
2 
(1)
1 
Investment securities, available-for-sale:
 
 
 
Realized gains (losses), net
(1)
   
4 
Other-than-temporary impairment on investments
(15)
(6)
   
Investment income
$ 22 
$ 36 
$ 108 
Prepaid Expenses and Other Current Assets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Prepaid Expenses and Other Assets [Abstract]
 
 
Prepaid expenses and maintenance
$ 111 
$ 69 
Foreign exchange derivative instruments—(See Note 12—Derivative Financial Instruments)
23 
13 
Other
53 
40 
Total
$ 187 
$ 122 
Other Non-Current Assets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Prepaid Expenses and Other Assets [Abstract]
 
 
Non-current income tax receivable—(See Note 19—Income Taxes)
$ 253 
    
Pension asset--(See Note 10--Pension, Postretirement and Other Benefits)
192 
23 
Other investments - (See Note 4-Fair Value Measurements and Investments)
30 
86 
Long-term prepaid expenses and other
46 
42 
Total
$ 521 
$ 151 
Property, Equipment and Technology, Net (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
$ 3,439 
$ 3,081 
Accumulated depreciation and amortization
(1,707)
(1,447)
Property, equipment and technology, net
1,732 
1,634 
Land
 
 
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
71 
71 
Buildings and building improvements
 
 
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
766 
751 
Furniture, equipment and leasehold improvements
 
 
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
983 
837 
Construction-in-progress
 
 
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
74 
69 
Technology
 
 
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
$ 1,545 
$ 1,353 
Property, Equipment and Technology, Net - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Finite-Lived Intangible Assets [Line Items]
 
 
 
Technology, accumulated amortization
$ 959 
$ 812 
 
Depreciation and amortization
397 
333 
288 
Depreciation and amortization, amortization expense on technology
69 
68 
63 
Property, Equipment and Technology
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Depreciation and amortization
328 
265 
225 
Technology and Software
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Depreciation and amortization, amortization expense on technology
$ 173 
$ 132 
$ 102 
Estimated Future Amortization Expense on Technology Placed in Service (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Finite-Lived Intangible Assets [Line Items]
 
2014
$ 66 
2015
62 
2016
49 
2017
47 
2018 and thereafter
244 
Total
468 
Technology and Software
 
Finite-Lived Intangible Assets [Line Items]
 
2014
175 
2015
162 
2016
129 
2017
85 
2018 and thereafter
35 
Total
$ 586 
Intangible Assets, Net - Additional Information (Detail) (USD $)
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Intangible Assets, Net (Excluding Goodwill) [Abstract]
 
 
 
Customer relationships
$ 6,800,000,000 
 
 
Tradename
2,600,000,000 
 
 
Visa Europe franchise right
1,500,000,000 
 
 
Amortization expense related to finite-lived intangible assets
$ 69,000,000 
$ 68,000,000 
$ 63,000,000 
Estimated Future Amortization Expense on Finite-Lived Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Intangible Assets, Net (Excluding Goodwill) [Abstract]
 
2014
$ 66 
2015
62 
2016
49 
2017
47 
2018 and thereafter
244 
Total
$ 468 
Accrued Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Accrued and Other Liabilities [Abstract]
 
 
Accrued operating expenses
$ 182 
$ 194 
Visa Europe put option-(See Note 2-Visa Europe)
145 1
145 1
Deferred revenue
60 
59 
Accrued marketing and product expenses
27 
22 
Accrued income taxes-(See Note 19-Income Taxes)
64 
58 
Other
135 
106 
Total
$ 613 
$ 584 
Other Long-term Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Accrued and Other Liabilities [Abstract]
 
 
Accrued income taxes-(See Note 19-Income Taxes)
$ 453 1
$ 171 1
Employee benefits
86 
93 
Other
63 
107 
Total
$ 602 
$ 371 
Maximum number of days within which the Company is required to purchase the shares of Visa Europe put option
285 days 
 
Debt - Additional Information (Detail) (USD $)
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Revolving Credit Facility
 
 
Debt Instrument [Line Items]
 
 
Credit Facility Maximum Borrowing Capacity
$ 3,000,000,000 
$ 3,000,000,000 
Credit Facility Amount Outanding
0 
 
Revolving Credit Facility |
Minimum
 
 
Debt Instrument [Line Items]
 
 
Credit Facility Interest Rate During Period
0.00% 
 
Revolving Credit Facility |
Maximum
 
 
Debt Instrument [Line Items]
 
 
Credit Facility Interest Rate During Period
0.75% 
 
Credit Facility Commitment Fee Percentage
0.05% 
 
Commercial Paper
 
 
Debt Instrument [Line Items]
 
 
Commercial Paper Program, Amount Available
3,000,000,000 
500,000,000 
Commercial Paper Program, Maturity Period
P397D 
 
Commercial Paper Program, Amount Outstanding
$ 0 
 
Pension, Postretirement and Other Benefits - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Cash balance formula contributions, rate of eligible compensation
6.00% 
 
 
Assumed annual rate of future increases in health benefits for the other postretirement benefits plan for fiscal 2011
9.00% 
 
 
Assumed annual rate of future decreases in health benefits for the other postretirement benefits plan by 2017
5.00% 
 
 
Increasing or decreasing the healthcare cost trend by one per cent would increase decrease the postretirement accumulated plan benefit obligation by less than
$ 1 
 
 
Target allocation for plan assets, other
7.00% 
 
 
Defined contribution plan, personnel costs
$ 44 
$ 37 
$ 34 
Equity securities
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Target allocation for plan assets, equity securities, minimum
50.00% 
 
 
Target allocation for plan assets, equity securities, maximum
80.00% 
 
 
Plan asset allocation, equity securities
71.00% 
 
 
Fixed income securities
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Target allocation for plan assets, equity securities, minimum
25.00% 
 
 
Target allocation for plan assets, equity securities, maximum
35.00% 
 
 
Plan asset allocation, equity securities
26.00% 
 
 
Other
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Plan asset allocation, equity securities
3.00% 
 
 
Change in Projected Benefit Obligation/Accumulated Postretirement Benefit Obligation (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Recognized in Consolidated Balance Sheets:
 
 
 
Noncurrent asset
$ (192)
$ (23)
 
Pension Benefits
 
 
 
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
 
Benefit obligation-beginning of fiscal year
990 
839 
 
Service cost
43 
38 
41 
Interest cost
35 
40 
38 
Actuarial (gain) loss
(127)
132 
 
Benefit payments
(44)
(60)
 
Settlements
0 
1 
 
Benefit obligation-end of fiscal year
897 
990 
839 
Accumulated benefit obligation
892 
982 
 
Change in Plan Assets:
 
 
 
Fair value of plan assets-beginning of fiscal year
973 
783 
 
Actual return on plan assets
126 
166 
 
Company contribution
0 
84 
 
Benefit payments
(44)
(60)
 
Fair value of plan assets-end of fiscal year
1,055 
973 
783 
Funded status at end of fiscal year
158 
(17)
 
Recognized in Consolidated Balance Sheets:
 
 
 
Noncurrent asset
(192)
(23)
 
Current liability
(8)
(8)
 
Noncurrent liability
(26)
(32)
 
Funded status at end of fiscal year
158 
(17)
 
Other Postretirement Benefits
 
 
 
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
 
Benefit obligation-beginning of fiscal year
32 
38 
 
Service cost
0 
0 
0 
Interest cost
1 
1 
1 
Actuarial (gain) loss
(4)
(3)
 
Benefit payments
(4)
(4)
 
Settlements
0 
0 
 
Benefit obligation-end of fiscal year
25 
32 
38 
Change in Plan Assets:
 
 
 
Fair value of plan assets-beginning of fiscal year
0 
0 
 
Actual return on plan assets
0 
0 
 
Company contribution
4 
4 
 
Benefit payments
(4)
(4)
 
Fair value of plan assets-end of fiscal year
0 
0 
0 
Funded status at end of fiscal year
(25)
(32)
 
Recognized in Consolidated Balance Sheets:
 
 
 
Noncurrent asset
0 
0 
 
Current liability
(4)
(4)
 
Noncurrent liability
(21)
(28)
 
Funded status at end of fiscal year
$ (25)
$ (32)
 
Amounts Recognized in Accumulated Comprehensive Income Before Tax (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Pension Benefits
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Net actuarial loss (gain)
$ 108 
$ 328 
Prior service credit
(23)
(33)
Total
85 
295 
Other Postretirement Benefits
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Net actuarial loss (gain)
(6)
(3)
Prior service credit
(11)
(14)
Total
$ (17)
$ (17)
Amounts from Accumulated Other Comprehensive Income to be Amortized into Net Periodic Benefit Cost (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Pension Benefits
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Actuarial loss (gain)
$ 2 
Prior service credit
(9)
Total
(7)
Other Postretirement Benefits
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Actuarial loss (gain)
(1)
Prior service credit
(3)
Total
$ (4)
Benefit Obligation and Fair Value of Plan Assets with Obligations in Excess of Plan Assets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Accumulated benefit obligation in excess of plan assets
 
 
Accumulated benefit obligation, end of year
$ (33)
$ (39)
Fair value of plan assets, end of year
0 
0 
Projected benefit obligation in excess of plan assets
 
 
Benefit obligation, end of year
(34)
(40)
Fair value of plan assets, end of year
$ 0 
$ 0 
Components of Net Periodic Benefit Cost (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Pension Benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Service cost
$ 43 
$ 38 
$ 41 
Interest cost
35 
40 
38 
Expected return on assets
(61)
(55)
(54)
Prior service credit
(9)
(9)
(9)
Actuarial loss (gain)
28 
33 
19 
Net benefit cost
36 
47 
35 
Settlement loss
0 
3 
2 
Total net periodic benefit cost
36 
50 
37 
Other Postretirement Benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Service cost
0 
0 
0 
Interest cost
1 
1 
1 
Expected return on assets
0 
0 
0 
Prior service credit
(3)
(3)
(3)
Actuarial loss (gain)
(1)
0 
(1)
Net benefit cost
(3)
(2)
(3)
Settlement loss
0 
0 
 
Total net periodic benefit cost
$ (3)
$ (2)
$ (3)
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Pension benefits
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Current year actuarial (gain) loss
$ (191)
$ 21 
Amortization of actuarial (loss) gain
(28)
(36)
Amortization of prior service credit/(cost)
9 
9 
Total recognized in other comprehensive income
(210)
(6)
Total recognized in net periodic benefit cost and other comprehensive income
(174)
44 
Other postretirement benefits
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Current year actuarial (gain) loss
(4)
(3)
Amortization of actuarial (loss) gain
1 
0 
Amortization of prior service credit/(cost)
3 
3 
Total recognized in other comprehensive income
0 
0 
Total recognized in net periodic benefit cost and other comprehensive income
$ (3)
$ (2)
Weighted Average Actuarial Assumptions (Detail)
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Expected long-term rate of return on plan assets
7.00% 1
7.50% 1
 
Rate of increase in compensation levels for:
 
 
 
Benefit obligation
4.50% 
4.50% 
4.50% 
Net periodic benefit cost
4.50% 
4.50% 
4.50% 
Pension Benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Discount rate for benefit obligation
4.81% 2
3.85% 2
4.70% 2
Discount rate for net periodic benefit cost
3.85% 
4.70% 
5.25% 
Other Postretirement Benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Discount rate for benefit obligation
2.76% 2
2.21% 2
3.39% 2
Discount rate for net periodic benefit cost
2.21% 
3.39% 
3.45% 
Plan's Investments at Fair Value (Detail) (Fair Value, Measurements, Recurring, USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Level 1
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
$ 777 
$ 321 
Level 1 |
Cash equivalents
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
26 
79 
Level 1 |
Equity securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
751 
242 
Level 2
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
255 
627 
Level 2 |
Collective investment funds
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
0 
391 
Level 2 |
Corporate debt securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
106 
115 
Level 2 |
Debt securities of U.S. treasury and federal agencies
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
149 
121 
Level 3
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
23 
25 
Level 3 |
Asset-backed securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
23 
25 
Total
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
1,055 
973 
Total |
Cash equivalents
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
26 
79 
Total |
Collective investment funds
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
0 
391 
Total |
Corporate debt securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
106 
115 
Total |
Debt securities of U.S. treasury and federal agencies
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
149 
121 
Total |
Asset-backed securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
23 
25 
Total |
Equity securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
$ 751 
$ 242 
Cash Flows - Actual Employer Contributions (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Pension Benefits
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Actual employer contributions
$ 0 
$ 84 
Expected employer contributions
 
 
Expected employer contributions
8 
 
Expected benefit payments
 
 
Expected benefit payments 2014
116 
 
Expected benefit payments 2015
105 
 
Expected benefit payments 2016
108 
 
Expected benefit payments 2017
100 
 
Expected benefit payments 2018
96 
 
Expected benefit payments 2019-2023
413 
 
Other Postretirement Benefits
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Actual employer contributions
4 
4 
Expected employer contributions
 
 
Expected employer contributions
4 
 
Expected benefit payments
 
 
Expected benefit payments 2014
4 
 
Expected benefit payments 2015
4 
 
Expected benefit payments 2016
3 
 
Expected benefit payments 2017
3 
 
Expected benefit payments 2018
3 
 
Expected benefit payments 2019-2023
$ 10 
 
Settlement Guarantee Management - Additional Information (Detail) (USD $)
Sep. 30, 2013
Sep. 30, 2012
Settlement Guarantee Management [Abstract]
 
 
Estimated maximum settlement exposure
$ 53,800,000,000 
$ 49,300,000,000 
Covered settlement exposure
3,000,000,000 
3,500,000,000 
Estimated probability-weighted value of the guarantee
$ 1,000,000 
 
Collateral (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Settlement Guarantee Management [Abstract]
 
 
Cash equivalents
$ 866 
$ 823 
Pledged securities at market value
256 
307 
Letters of credit
1,191 
1,084 
Guarantees
1,411 
2,022 
Total
$ 3,724 
$ 4,236 
Derivative Financial Instruments - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Derivative [Line Items]
 
 
 
Cash flow hedges in an asset position
$ 23 
 
 
Cash flow hedges in a liability position
13 
 
 
Reduction in earnings from excluded forward points and ineffectiveness
14 
16 
20 
Expected amount of accumulated other comprehensive income (loss) expected to be reclassified
29 
 
 
Foreign exchange derivative instruments |
Cash Flow Hedging
 
 
 
Derivative [Line Items]
 
 
 
The aggregate notional amount of the Company's foreign currency forward contracts outstanding
1,100 
690 
 
Prepaid Expense and Other Assets Current
 
 
 
Derivative [Line Items]
 
 
 
Collateral posted with counterparties
4 
 
 
Accrued Liabilities
 
 
 
Derivative [Line Items]
 
 
 
Collateral received with counterparties
$ 14 
 
 
Enterprise-wide Disclosures and Concentration of Business - Additional Information (Detail)
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Concentration Risk [Line Items]
 
 
 
Revenues from the largest customers out of total operating revenues is less than
10.00% 
10.00% 
10.00% 
Geographic Concentration Risk |
Sales Revenue, Services, Net
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentration Risk, Percentage
54.00% 
55.00% 
56.00% 
Long-Lived Net Property, Equipment and Technology Assets Classified by Major Geographic Area (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Segment Reporting Information [Line Items]
 
 
Property, equipment and technology, net
$ 1,732 
$ 1,634 
United States
 
 
Segment Reporting Information [Line Items]
 
 
Property, equipment and technology, net
1,621 
1,539 
Countries Outside of United States
 
 
Segment Reporting Information [Line Items]
 
 
Property, equipment and technology, net
$ 111 
$ 95 
Stockholders' Equity - Additional Information (Detail) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Jul. 31, 2013
Sep. 30, 2013
Sep. 30, 2012
Oct. 31, 2013
Subsequent Event
Jul. 31, 2012
Deposit into Litigation Escrow
Mar. 31, 2012
Deposit into Litigation Escrow
Dec. 31, 2011
Deposit into Litigation Escrow
Sep. 30, 2013
Class C common stock
Accelerated Share Repurchase Program Aggregate
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
Share repurchase plan, authorized amount
$ 1,500,000,000 
 
 
$ 5,000,000,000 
 
 
 
 
Stock Repurchase Program, Remaining Authorized Repurchase Amount
 
251,000,000 
 
 
 
 
 
 
Deposits into litigation escrow account
 
   
1,715,000,000 
 
150,000,000 
0 
1,565,000,000 
 
Shares of class C common stock released from transfer restrictions, converted to class A common stock
 
 
 
 
 
 
 
125 
Dividends, per share amount declared
 
 
 
$ 0.40 
 
 
 
 
Dividends, paid
 
$ 864,000,000 
 
 
 
 
 
 
Dividends, paid per share
 
$ 0.33 
 
 
 
 
 
 
Number of Shares of Class A Common Shares Outstanding on an As-Converted Basis (Detail)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
conversion_rate
Sep. 30, 2012
Class of Stock [Line Items]
 
 
As-converted Class A Common Stock
638 1
 
Class A common stock
 
 
Class of Stock [Line Items]
 
 
Common stock, shares, outstanding
508 
535 
Conversion Rate Into Class A Common Stock
0 
 
As-converted Class A Common Stock
508 1
 
Class B common stock
 
 
Class of Stock [Line Items]
 
 
Common stock, shares, outstanding
245 
245 
Conversion Rate Into Class A Common Stock
0.4206 
 
As-converted Class A Common Stock
103 1
 
Class C common stock
 
 
Class of Stock [Line Items]
 
 
Common stock, shares, outstanding
27 
31 
Conversion Rate Into Class A Common Stock
1.0000 
 
As-converted Class A Common Stock
27 1
 
Stockholders' Equity Share Repurchases in the Open Market (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Stockholders' Equity Attributable to Parent [Abstract]
 
 
 
Shares repurchased in the open market
33 1
6 1
 
Weighted-average repurchase price per share
$ 0 
$ 0 
 
Total cost
$ 5,365 
$ 710 
$ 2,024 
Stockholders' Equity Effect of Escrow Funding on the Company Repurchaseing its Common Stock (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended 1 Months Ended 12 Months Ended 12 Months Ended 1 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Jul. 31, 2012
Deposit into Litigation Escrow
Mar. 31, 2012
Deposit into Litigation Escrow
Dec. 31, 2011
Deposit into Litigation Escrow
Sep. 30, 2013
Class A common stock
conversion_rate
Jul. 31, 2012
Class A common stock
Deposit into Litigation Escrow
Dec. 31, 2011
Class A common stock
Deposit into Litigation Escrow
Sep. 30, 2013
Class B common stock
conversion_rate
Jul. 31, 2012
Class B common stock
Deposit into Litigation Escrow
Dec. 31, 2011
Class B common stock
Deposit into Litigation Escrow
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Deposits under the retrospective responsibility plan
    
$ 1,715 
$ 150 
$ 0 
$ 1,565 
 
 
 
 
 
 
Weighted-average repurchase price per share
$ 0 
$ 0 
$ 125.50 1
 
$ 101.75 1
 
 
 
 
 
 
Equivalent shares of class A common stock repurchased
 
 
 
 
 
 
1 
15 
 
 
 
Conversion rate after funding of class B common stock to class A common stock
 
 
 
 
 
0 
 
 
0.4206 
0.4206 
0.4254 
As-converted class B common stock outstanding aftetr deposits
638 2
 
 
 
 
508 2
 
 
103 2
103 
104 
Basic and Diluted Earnings Per Share (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Income allocation - Basic
$ 4,980 1
$ 2,144 1
$ 3,650 1
Class A common stock
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Income allocation - Basic
3,959 1
1,664 1
2,638 1
Weighted Average Shares Outstanding - Basic
520 
524 
509 
Earnings per Share - Basic
$ 7.61 2
$ 3.17 2
$ 5.18 2
Income allocation - Diluted
4,980 
2,144 1
3,650 1
Weighted Average Shares Outstanding - Diluted
656 
678 3
707 3
Earnings per Share - Diluted
$ 7.59 2
$ 3.16 2
$ 5.16 2
Class B common stock
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Income allocation - Basic
786 1
343 1
636 1
Weighted Average Shares Outstanding - Basic
245 
245 
245 
Earnings per Share - Basic
$ 3.20 2
$ 1.40 2
$ 2.59 2
Income allocation - Diluted
784 1
341 1
633 1
Weighted Average Shares Outstanding - Diluted
245 
245 
245 
Earnings per Share - Diluted
$ 3.19 2
$ 1.39 2
$ 2.58 2
Class C common stock
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Income allocation - Basic
216 1
130 1
364 1
Weighted Average Shares Outstanding - Basic
28 
41 
70 
Earnings per Share - Basic
$ 7.61 2
$ 3.17 2
$ 5.18 2
Income allocation - Diluted
215 1
129 1
363 1
Weighted Average Shares Outstanding - Diluted
28 
41 
70 
Earnings per Share - Diluted
$ 7.59 2
$ 3.16 2
$ 5.16 2
Participating Securities
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Income allocation - Basic
19 1 4
7 1 4
12 1 4
Income allocation - Diluted
$ 19 1 4
$ 7 1 4
$ 12 1 4
Basic and Diluted Earnings Per Share (Parenthetical) (Detail)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Dilutive shares of outstanding stock awards included in computation of weighted-average dilutive shares outstanding
2 
3 
3 
Stock options excluded from computation of average dilutive shares outstanding
 
 
2 
Maximum
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Stock options excluded from computation of average dilutive shares outstanding
1 
1 
 
Class B common stock
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Weighted average numbers of shares of class B common stock outstanding on an as-converted basis used in the allocation of net income
103 
108 
123 
Share-based Compensation - Additional Information (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Vesting period from the date of grant
10 years 
 
 
Share-based compensation expense
$ 179 
$ 147 
$ 154 
Total intrinsic value from options exercised
176 
247 
77 
Tax benefit realized from options exercised
59 
86 
28 
Unrecognized compensation cost
15 
 
 
Total unrecognized compensation cost related to non-vested options expected to be recognized over a weighted average period (in years)
1 year 2 months 12 days 
 
 
Total fair value of RSAs and RSUs vested
98 
81 
55 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term
5 years 8 months 12 days 
 
 
Employee Stock Option
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Vesting period from the date of grant
3 years 
 
 
Restricted Stock Awards
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Unrecognized compensation cost
117 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value
$ 147.18 
$ 96.39 
$ 79.80 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term
1 year 6 months 
 
 
Restricted Stock Units
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Unrecognized compensation cost
38 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value
$ 146.18 
$ 96.97 
$ 79.97 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term
1 year 3 months 18 days 
 
 
Performance Based Shares
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Unrecognized compensation cost
$ 15 
 
 
Weighted average grant date fair value per share
$ 164.14 
$ 97.84 
$ 85.05 
Equity Incentive Compensation Plan, 2007 [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Maximum number of Class A Common Stock authorized for issuance under the 2007 Equity Incentive Compensation Plan ("the "EIP")
59 
 
 
Assumptions Used to Estimate the Fair Value of Each Stock Option on the Date of Grant Using a Black-Scholes Option Pricing Model (Parenthetical) (Detail)
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected volatility
29.30% 1
34.90% 1
33.40% 1
Minimum
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected volatility
27.00% 
 
 
Maximum
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected volatility
29.00% 
 
 
Summary of Option Activity (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Options
 
Beginning balance
5,185,675 
Granted
579,318 
Forfeited/expired
(51,766)
Exercised
(1,796,021)
Ending balance
3,917,206 
Options exercisable at September 30, 2012
2,973,421 
Options exercisable and expected to be vested at September 30, 2012
3,822,828 1
Weighted average price per share
 
Beginning balance
$ 59.46 
Granted
$ 147.37 
Forfeited/expired
$ 109.35 
Exercised
$ 58.56 
Ending balance
$ 72.21 
Options exercisable at September 30, 2013
$ 57.74 
Options exercisable and expected to be vested at September 30, 2013
$ 71.08 1
Weighted-Average Remaining Contractual Term
 
Outstanding at September 30, 2013
5 years 8 months 12 days 
Options exercisable at September 30, 2013
4 years 9 months 18 days 
Options exercisable and expected to be vested at September 30, 2013
5 years 7 months 6 days 1
Aggregate Intrinsic Value
 
Outstanding at September 30, 2013
$ 466 
Options exercisable at September 30, 2013
397 
Options exercisable and expected to be vested at September 30, 2013
$ 459 1
Summary of Option Activity (Parenthetical) (Detail)
Sep. 30, 2013
Share-based Compensation [Abstract]
 
Stock price used to calculate aggregate intrinsic value
$ 191.1 
Summary of RSA and RSU Activity (Detail) (USD $)
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Weighted-Average Remaining Contactual Term
 
 
 
Outstanding at September 30, 2013
5 years 8 months 12 days 
 
 
Restricted Stock Awards
 
 
 
Restricted stock
 
 
 
Beginning balance
1,736,989 
 
 
Granted
895,659 
 
 
Vested
(834,269)
 
 
Forfeited/expired
(100,398)
 
 
Ending balance
1,697,981 
1,736,989 
 
Weighted-Average Grant Date Fair Value
 
 
 
Beginning balance
$ 88.77 
 
 
Granted
$ 147.18 
$ 96.39 
$ 79.80 
Vested
$ 87.02 
 
 
Forfeited/expired
$ 109.62 
 
 
Ending balance
$ 119.20 
$ 88.77 
 
Weighted-Average Remaining Contactual Term
 
 
 
Outstanding at September 30, 2013
1 year 6 months 
 
 
Aggregate Intrinsic Value
 
 
 
Outstanding at September 30, 2013
$ 324,000,000 
 
 
Restricted Stock Units
 
 
 
Restricted stock
 
 
 
Beginning balance
637,645 
 
 
Granted
329,322 
 
 
Vested
(289,821)
 
 
Forfeited/expired
(27,464)
 
 
Ending balance
649,682 
637,645 
 
Weighted-Average Grant Date Fair Value
 
 
 
Beginning balance
$ 91.17 
 
 
Granted
$ 146.18 
$ 96.97 
$ 79.97 
Vested
$ 88.22 
 
 
Forfeited/expired
$ 112.27 
 
 
Ending balance
$ 119.49 
$ 91.17 
 
Weighted-Average Remaining Contactual Term
 
 
 
Outstanding at September 30, 2013
1 year 3 months 18 days 
 
 
Aggregate Intrinsic Value
 
 
 
Outstanding at September 30, 2013
$ 124,000,000 
 
 
Summary of RSA and RSU Activity (Parenthetical) (Detail)
Sep. 30, 2013
Share-based Compensation [Abstract]
 
Stock price used to calculate aggregate intrinsic value
$ 191.1 
Summary of Performance-based Shares Activity (Detail) (USD $)
12 Months Ended
Sep. 30, 2013
Weighted- Average Remaining Contractual Term
 
Outstanding at September 30, 2013
5 years 8 months 12 days 
Performance Awards
 
Shares
 
Beginning balance
(526,227)
Granted
230,518 1
Vested
(271,418)
Unearned
9,928 
Forfeited/expired
(15,500)
Ending balance
(459,899)
Weighted- Average Grant Date Fair Value
 
Beginning balance
$ 88.56 
Granted
$ 164.14 1
Vested
$ 85.87 
Unearned
$ 85.05 
Forfeited/expired
$ 129.36 
Ending balance
$ 126.24 
Weighted- Average Remaining Contractual Term
 
Outstanding at September 30, 2013
1 year 
Aggregate Intrinsic Value
 
Outstanding at September 30, 2013
$ 88,000,000 2
Summary of Performance-based Shares Activity (Parenthetical) (Detail)
Sep. 30, 2013
Share-based Compensation [Abstract]
 
Stock price used to calculate aggregate intrinsic value
$ 191.1 
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Rent expense incurred
$ 94 
$ 89 
$ 76 
Future Minimum Payments on Leases and Marketing and Sponsorship Agreements (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
 
Operating leases, 2014
$ 100 
Operating leases, 2015
77 
Operating leases, 2016
43 
Operating leases, 2017
35 
Operating leases, 2018
20 
Operating leases, Thereafter
82 
Operating leases
357 
Marketing and sponsorships, 2014
116 
Marketing and sponsorships, 2015
117 
Marketing and sponsorships, 2016
61 
Marketing and sponsorships, 2017
54 
Marketing and sponsorships, 2018
54 
Marketing and sponsorships, Thereafter
178 
Marketing and sponsorships
580 
Total, 2014
216 
Total, 2015
194 
Total, 2016
104 
Total, 2017
89 
Total, 2018
74 
Total, Thereafter
260 
Total
$ 937 
Expected Reduction of Revenue for Volume and Support Incentive Agreements (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
 
Client incentives, 2014
$ 2,450 
Client incentives, 2015
2,206 
Client incentives, 2016
1,802 
Client incentives, 2017
1,429 
Client incentives, 2018
987 
Client incentives, Thereafter
1,447 
Client incentives
$ 10,321 
Related Parties - Additional Information (Detail) (Director, USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2011
Director
 
Related Party Transaction [Line Items]
 
Total operating revenues from related parties
$ 172 
Income Taxes - Additional Information (Detail) (USD $)
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Tax Credit Carryforward [Line Items]
 
 
 
Decrease in deferred tax assets reflecting the current tax deduction related to payments made in connection with the covered litigation
$ 1,600,000,000 
 
 
US income before taxes
5,992,000,000 
1,030,000,000 
4,650,000,000 
U.S. federal statutory rate
35.00% 
35.00% 
35.00% 
Loss Contingency, Loss in Period
3,000,000 
4,100,000,000 
7,000,000 
Income Taxes Receivable
253,000,000 
   
 
Income taxes receivable included in prepaid and other current assets
142,000,000 
179,000,000 
 
Income taxes payable included in accrued taxes as part of accrued liabilities
64,000,000 
58,000,000 
 
Accrued income taxes included in other long-term liabilities
453,000,000 1
171,000,000 1
 
Cumulative undistributed earnings of the Company's international subsidiaries intended to be reinvested indefinitely outside the U.S
3,800,000,000 
 
 
Decreased Singapore tax as a result of the tax incentive agreement
(158,000,000)
(130,000,000)
(111,000,000)
Benefit of the tax incentive agreement on diluted net income per share
$ 0.24 
$ 0.19 
$ 0.16 
Total unrecognized tax benefits exclusive of interest and penalties
1,023,000,000 
679,000,000 
850,000,000 
Unrecognized tax benefits, if recognized, would reduce the effective tax rate in a future period
801,000,000 
537,000,000 
 
Interest expense included in interest expense and administrative and other
9,000,000 
45,000,000 
7,000,000 
Reversal of penalties upon the effective settlement of uncertainties surrounding the timing of certain deductions
4,000,000 
1,000,000 
2,000,000 
Accrued interest related to uncertain tax positions in other long term liabilities
29,000,000 
20,000,000 
 
Accrued penalties related to uncertain tax positions in other long term liabilities
3,000,000 
7,000,000 
 
Non United States Customers
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
US income before taxes
2,000,000,000 
1,600,000,000 
1,300,000,000 
Federal
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
Research and development tax credit carryforwards
2,000,000 
 
 
Alternative minimum tax credits
1,000,000 
 
 
State and Local Jurisdiction
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
Net operating loss carryforwards
56,000,000 
 
 
Research and development tax credit carryforwards
21,000,000 
 
 
Foreign Country
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
Net operating loss carryforwards
$ 115,000,000 
 
 
Income Before Taxes by Fiscal Year (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Income Tax Disclosure [Abstract]
 
 
 
U.S.
$ 5,992 
$ 1,030 
$ 4,650 
Non-U.S.
1,265 
1,177 
1,006 
Income before income taxes
$ 7,257 
$ 2,207 
$ 5,656 
Income Tax Expense by Fiscal Year (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Current:
 
 
 
U.S. federal
$ 568 
$ 1,376 
$ 1,365 
State and local
(58)
165 
311 
Non-U.S.
239 
214 
168 
Total current taxes
749 
1,755 
1,844 
Deferred:
 
 
 
U.S. federal
1,401 
(1,276)
160 
State and local
114 
(415)
(2)
Non-U.S.
13 
1 
8 
Total deferred taxes
1,528 
(1,690)
166 
Income tax provision
$ 2,277 
$ 65 
$ 2,010 
Tax Effect of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Deferred Tax Assets
 
 
Accrued compensation and benefits
$ 154 
$ 103 
Comprehensive income
(8)
102 
Investments in joint ventures
14 
11 
Accrued litigation obligation
1 
1,654 
Volume and support incentives
226 
227 
Net operating loss carryforward
31 
33 
Tax credits
22 
23 
Federal benefit of state taxes
176 
90 
Federal benefit of foreign taxes
13 
16 
Other
108 
92 
Deferred Tax Assets, Valuation Allowance
25 
13 
Deferred tax assets
712 
2,338 
Deferred Tax Liabilities
 
 
Property, equipment and technology, net
(310)
(288)
Intangible assets
(4,003)
(4,027)
Foreign taxes
(55)
(44)
Other
(12)
(10)
Deferred tax liabilities
(4,380)
(4,369)
Net deferred tax (liabilities) assets
$ (3,668)
$ (2,031)
Net Deferred Tax Assets and Liabilities Included in the Consolidated Balance Sheets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Sep. 30, 2012
Tax Credit Carryforward [Line Items]
 
 
Deferred Tax Assets, Valuation Allowance
$ (25)
$ (13)
Current deferred tax assets
481 
2,027 
Non current deferred tax liabilities
(4,149)
(4,058)
Net deferred tax (liabilities) assets
(3,668)
(2,031)
Federal
 
 
Tax Credit Carryforward [Line Items]
 
 
Research and development tax credit carryforwards
2 
 
Foreign Country
 
 
Tax Credit Carryforward [Line Items]
 
 
Net operating loss carryforwards
$ 115 
 
Information that Causes the Income Tax Expense to Differ from the Amount of Income Tax Determined by Applying the Applicable U.S. Federal Statutory Rate of 35% to Pretax Income (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Income Tax Disclosure [Abstract]
 
 
 
U.S. federal income tax at statutory rate
$ 2,540 
$ 772 
$ 1,980 
State income taxes, net of federal benefit
42 
36 
203 
Non-U.S. tax effect, net of federal benefit
(328)
(257)
(150)
Reversal of tax reserves related to the deductibility of covered litigation expense
0 
(299)
 
Remeasurement of deferred taxes due to California state apportionment rule changes, amount
0 
(208)
 
Remeasurement of deferred taxes due to other state apportionment changes, amount
(6)
11 
(3)
Revaluation of Visa Europe put option
0 
0 
43 
Other, net
29 
10 
23 
Income tax provision
$ 2,277 
$ 65 
$ 2,010 
U.S. federal income tax at statutory rate
35.00% 
35.00% 
35.00% 
State income taxes, net of federal benefit
1.00% 
2.00% 
4.00% 
Non-U.S. tax effect, net of federal benefit
(5.00%)
(12.00%)
(2.00%)
Reversal of tax reserves related to the deductibility of covered litigation expense
0.00% 
(14.00%)
 
Remeasurement of deferred taxes due to California state apportionment rule changes, percent
0.00% 
(9.00%)
 
Remeasurement of deferred taxes due to other state apportionment changes, percent
0.00% 
1.00% 
 
Revaluation of Visa Europe put option
0.00% 
0.00% 
(1.00%)
Other, net
0.00% 
0.00% 
0.00% 
Income tax expense
31.00% 
3.00% 
36.00% 
Reconciliation of Beginning and Ending Unrecognized Tax Benefits by Fiscal Year (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
Beginning Balance
$ 679 
$ 850 
Increases of unrecognized tax benefits related to prior years
335 
186 
Decreases of unrecognized tax benefits related to prior years
(133)
(445)
Increases of unrecognized tax benefits related to current year
144 
89 
Reductions to unrecognized tax benefits related to lapsing statute of limitations
(2)
(1)
Ending Balance
$ 1,023 
$ 679 
Legal Matters - Additional Information (Detail) (USD $)
0 Months Ended 12 Months Ended 12 Months Ended
Oct. 19, 2012
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2013
Class Plaintiffs
Sep. 30, 2013
Individual Plaintiffs
Sep. 30, 2013
Unsettled
Sep. 30, 2012
Unsettled
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
 
Payments for legal settlements
 
$ 4,400,000,000 
 
 
$ (4,033,000,000)1
$ (350,000,000)1
 
 
Provision for legal matters
 
 
 
 
 
 
3,000,000 
4,100,000,000 
Reserve for covered litigation
 
 
4,400,000,000 
285,000,000 
 
 
 
 
Takedown Money for Class Plaintiffs Settlement
 
$ 1,100,000,000 
 
 
 
 
 
 
Distribution to Class Merchants, Rate Amount
0.10% 
 
 
 
 
 
 
 
Distribution to Class Merchants, Period per Terms
60 days 
 
 
 
 
 
 
 
Consecutive Months of Distribution to Class Merchants
8 months 
 
 
 
 
 
 
 
Legal Matters Legal Matters - Accrued Litigation (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Loss Contingency Accrual [Roll Forward]
 
 
Accrued Litigation, Beginning of Period
$ 4,386 
$ 425 
Interst accretion on settled matters
0 
1 
Accrued Litigation, End of Period
5 
4,386 
Unsettled
 
 
Loss Contingency Accrual [Roll Forward]
 
 
Provision for unsettled legal matters
3 
4,100 
Payments on unsettled and settled matters
(4,033)1
0 1
Settled
 
 
Loss Contingency Accrual [Roll Forward]
 
 
Payments on unsettled and settled matters
$ (351)
$ (140)
Subsequent Events - Additional Information (Detail) (USD $)
In Billions, except Per Share data, unless otherwise specified
1 Months Ended
Jul. 31, 2013
Oct. 31, 2013
Subsequent Event
Subsequent Event [Line Items]
 
 
Share repurchase plan, authorized amount
$ 1.5 
$ 5.0 
Dividends, per share amount declared
 
$ 0.40