Document and Entity Information

3 Months Ended

Dec. 31, 2012

Feb. 1, 2013

Class A

Feb. 1, 2013

Class B

Feb. 1, 2013

Class C

Entity Registrant Name

VISA INC.

Entity Central Index Key

0001403161

Current Fiscal Year End Date

--09-30

Entity Filer Category

Large Accelerated Filer

Document Type

10-Q

Document Period End Date

Dec. 31, 2012

Document Fiscal Year Focus

2013

Document Fiscal Period Focus

Q1

Amendment Flag

false

Entity Common Stock, Shares Outstanding

529,383,861

245,513,385

28,513,839

CONSOLIDATED BALANCE SHEETS (USD $)

In Millions, unless otherwise specified

Dec. 31, 2012

Sep. 30, 2012

Assets

Cash and cash equivalents

$ 1,334

$ 2,074

Restricted cash—litigation escrow (Note 2)

49

4,432

Investment securities

Trading

74

66

Available-for-sale

1,377

677

Income tax receivable

1,341

179

Settlement receivable

859

454

Accounts receivable

801

723

Customer collateral (Note 5)

819

823

Current portion of client incentives

168

209

Deferred tax assets

389

2,027

Prepaid expenses and other current assets

176

122

Total current assets

7,387

11,786

Investment securities, available-for-sale

3,401

3,283

Client incentives

40

58

Property, equipment and technology, net

1,641

1,634

Other assets

306

151

Intangible assets, net

11,403

11,420

Goodwill

11,681

Total assets

35,859

40,013

Liabilities

Accounts payable

114

152

Settlement payable

1,072

719

Customer collateral (Note 5)

819

823

Accrued compensation and benefits

288

460

Client incentives

871

830

Accrued liabilities

578

584

Accrued litigation (Note 10)

5

4,386

Total current liabilities

3,747

7,954

Deferred tax liabilities

4,057

4,058

Other liabilities

467

371

Total liabilities

8,271

12,383

Equity

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

Additional paid-in capital

19,728

19,992

Accumulated income

7,997

7,809

Accumulated other comprehensive income (loss), net

Investment securities, available-for-sale

34

3

Defined benefit pension and other postretirement plans

(184)

(186)

Derivative instruments classified as cash flow hedges

14

13

Foreign currency translation adjustments

(1)

Total accumulated other comprehensive loss, net

(137)

(171)

Total equity

27,588

27,630

Total liabilities and equity

35,859

40,013

Class A common stock

Equity

Common stock

Class B common stock

Equity

Common stock

Class C common stock

Equity

Common stock

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)

In Millions, except Per Share data, unless otherwise specified

Dec. 31, 2012

Sep. 30, 2012

Preferred Stock

Preferred stock, par value

$ 0.0001

Preferred stock, shares authorized

25

Preferred stock, shares issued

0

Class A common stock

Common stock, par value

$ 0.0001

Common stock, shares authorized

2,001,622

Common stock, shares issued

530

535

Common stock, shares outstanding

530

535

Class B common stock

Common stock, par value

$ 0.0001

Common stock, shares authorized

622

Common stock, shares issued

245

Common stock, shares outstanding

245

Class C common stock

Common stock, par value

$ 0.0001

Common stock, shares authorized

1,097

Common stock, shares issued

29

31

Common stock, shares outstanding

29

31

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

Dec. 31, 2012

Dec. 31, 2011

Operating Revenues

Service revenues

$ 1,300

$ 1,151

Data processing revenues

1,115

951

International transaction revenues

805

748

Other revenues

179

178

Client incentives

(553)

(481)

Total operating revenues

2,846

2,547

Operating Expenses

Personnel

454

389

Marketing

193

190

Network and processing

110

98

Professional fees

88

70

Depreciation and amortization

92

80

General and administrative

106

102

Litigation provision (Note 10)

3

Total operating expenses

1,046

929

Operating income

1,800

1,618

Non-operating income (expense)

1

(1)

Income before income taxes

1,801

1,617

Income tax provision

508

590

Net income including non-controlling interest

1,293

1,027

Loss attributable to non-controlling interest

2

Net income attributable to Visa Inc.

$ 1,293 ¹ ²

$ 1,029 ¹ ²

Class A common stock

Earnings Per Share

Basic earnings per share (Note 7)

$ 1.94 ¹

$ 1.50 ¹

Basic weighted-average shares outstanding (Note 7)

531 ¹

520 ¹

Diluted earnings per share (Note 7)

$ 1.93 ¹

$ 1.49 ¹

Diluted weighted-average shares outstanding (Note 7)

669 ¹ ³

690 ¹ ³

Class B common stock

Earnings Per Share

Basic earnings per share (Note 7)

$ 0.82 ¹

$ 0.73 ¹

Basic weighted-average shares outstanding (Note 7)

245 ¹

Diluted earnings per share (Note 7)

$ 0.81 ¹

$ 0.73 ¹

Diluted weighted-average shares outstanding (Note 7)

245 ¹

Class C common stock

Earnings Per Share

Basic earnings per share (Note 7)

$ 1.94 ¹

$ 1.50 ¹

Basic weighted-average shares outstanding (Note 7)

30 ¹

46 ¹

Diluted earnings per share (Note 7)

$ 1.93 ¹

$ 1.49 ¹

Diluted weighted-average shares outstanding (Note 7)

30 ¹

46 ¹

[1] Figures in the table may not recalculate exactly due to rounding. Earnings per share 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 and 119 million for the three months ended December 31, 2012 and 2011, respectively.

[3] Weighted-average diluted shares outstanding is calculated on an as-converted basis, and includes incremental common stock equivalents, as calculated under the treasury stock method. The computation includes 2 million and 3 million common stock equivalents for the three months ended December 31, 2012 and 2011, respectively, because their effect would have been dilutive, and excludes 1 million common stock equivalents for the three months ended December 31, 2012 and 2011, because their effect would have been anti-dilutive.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2012

Dec. 31, 2011

Net income including non-controlling interest

$ 1,293

$ 1,027

Investment securities, available-for-sale

Net unrealized gain

48

1

Income tax effect

(17)

Defined benefit pension and other postretirement plans

3

5

Income tax effect

(1)

(2)

Derivative instruments classified as cash flow hedges

Net unrealized gain (loss)

9

(7)

Income tax effect

1

Reclassification adjustment for net (gain) loss realized in net income including non-controlling interest

(11)

6

Income tax effect

3

0

Other comprehensive income, net of tax

34

4

Comprehensive income including non-controlling interest

1,327

1,031

Comprehensive loss attributable to non-controlling interest

2

Comprehensive income attributable to Visa Inc.

$ 1,327

$ 1,033

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $)

In Millions, unless otherwise specified

Total

USD ($)

Class A common stock

Class B common stock

Class C common stock

Additional Paid In Capital

USD ($)

Accumulated Income (Deficit)

USD ($)

Accumulated Other Comprehensive (Loss) Income

USD ($)

Beginning Balance at Sep. 30, 2012

$ 27,630

$ 19,992

$ 7,809

$ (171)

Beginning Balance (in shares) at Sep. 30, 2012

535

245

31

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

Net income attributable to Visa Inc.

1,293 ¹ ²

1,293

Other comprehensive income, net of tax

34

Comprehensive income including non-controlling interest

1,327

Issuance of restricted stock awards

1

Conversion of class C common stock upon sale into public market (Note 6)

2

(2)

Share-based compensation

48

Excess tax benefit for share-based compensation

50

Cash proceeds from exercise of stock options

1

Cash proceeds from exercise of stock options

70

Restricted stock and performance shares settled in cash for taxes(1)³

(64)

Cash dividends declared and paid, at a quarterly amount of $0.33 per as-converted share (Note 6)

(220)

Repurchase of class A common stock (Note 6)

(9)⁴

(9)

Repurchase of class A common stock (Note 6)

(1,253)

(368)

(885)

Ending Balance at Dec. 31, 2012

$ 27,588

$ 19,728

$ 7,997

$ (137)

Ending Balance (in shares) at Dec. 31, 2012

530

245

29

[1] Figures in the table may not recalculate exactly due to rounding. Earnings per share 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 and 119 million for the three months ended December 31, 2012 and 2011, respectively.

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

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

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

3 Months Ended

Dec. 31, 2012

Class A common stock

Maximum [Member]

Restricted stock instruments settled in cash for taxes shares

1,000,000

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2012

Dec. 31, 2011

Operating Activities

Net income including non-controlling interest

$ 1,293

$ 1,027

Adjustments to reconcile net income including non-controlling interest to net cash provided by (used in) operating activities:

Amortization of client incentives

553

481

Share-based compensation

48

38

Excess tax benefit for share-based compensation

(50)

(18)

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

92

80

Deferred income taxes

1,622

34

Other

12

(37)

Change in operating assets and liabilities:

Income tax receivable

(1,162)

112

Settlement receivable

(405)

(97)

Accounts receivable

(78)

(69)

Client incentives

(453)

(343)

Other assets

(228)

2

Accounts payable

1

(82)

Settlement payable

353

(23)

Accrued and other liabilities

(38)

251

Accrued litigation (Note 10)

(4,384)

(70)

Net cash (used in) provided by operating activities

(2,824)

1,286

Investing Activities

Purchases of property, equipment, technology and intangible assets

(100)

(101)

Proceeds from disposal of property, equipment and technology

2

Investment securities, available-for-sale:

Purchases

(1,184)

(933)

Proceeds from sales and maturities

418

1,224

Net distributions from other investments

1

2

Net cash (used in) provided by investing activities

(865)

194

Financing Activities

Repurchase of class A common stock (Note 6)

(1,253)

(75)

Dividends paid (Note 6)

(220)

(152)

Deposits into litigation escrow account—retrospective responsibility plan

(1,565)

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

4,383

70

Cash proceeds from exercise of stock options

70

44

Restricted stock and performance shares settled in cash for taxes

(64)

Excess tax benefit for share-based compensation

50

18

Payment for earn-out related to PlaySpan acquisition

(12)

Principal payments on capital lease obligations

(5)

Net cash provided by (used in) financing activities

2,949

(1,665)

Decrease in cash and cash equivalents

(740)

(185)

Cash and cash equivalents at beginning of year

2,074

2,127

Cash and cash equivalents at end of period

1,334

1,942

Supplemental Disclosure of Cash Flow Information

Income taxes paid, net of refunds

45

57

Amounts included in accounts payable and accrued and other liabilities related to purchases of property, equipment, technology and intangible assets

$ 33

$ 42

Summary of Significant Accounting Policies

Note 1—Summary of Significant Accounting Policies

Organization. Visa Inc. (“Visa” or the “Company”) is a global payments technology company that connects consumers, businesses, financial institutions and governments around the world to fast, secure and reliable electronic payments. Visa and its wholly-owned consolidated subsidiaries, including Visa U.S.A. Inc. (“Visa U.S.A.”), Visa International Service Association (“Visa International”), Visa Worldwide Pte. Limited (“VWPL”), Visa Canada Corporation (“Visa Canada”), Inovant LLC (“Inovant”), and CyberSource Corporation (“CyberSource”), operate one of the world’s most advanced processing networks. The Company provides its clients with payment processing platforms that encompass consumer credit, debit, prepaid and commercial payments, and facilitates global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities. The Company is not a bank and does not issue cards, extend credit, or collect, assess or set cardholder fees or interest charges.

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

Beginning with this fiscal quarter, 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 (expense). All prior period information has been reclassified to conform to current period presentation.

The accompanying unaudited consolidated financial statements are presented in accordance with the U.S. Securities and Exchange Commission (“SEC”) requirements for Quarterly Reports on Form 10-Q and, consequently, do not include all of the annual disclosures required by U.S. GAAP. Reference should be made to the Visa Annual Report on Form 10-K for the year ended September 30, 2012, for additional disclosures, including a summary of the Company’s significant accounting policies.

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

Recently issued and adopted accounting pronouncements. In June 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("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 defers the requirement to present components of reclassifications out of accumulated other comprehensive income on the face of the income statement. All other components of ASU 2011-05 were adopted effective October 1, 2012. The 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 present components of reclassifications out of accumulated other comprehensive income on the face of the income statement. The standard is effective in the second quarter of fiscal 2013, and is not expected to have a material impact on the consolidated financial statements.

In July 2012, the FASB issued 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. The adoption did not have a material impact on the consolidated financial statements.

Retrospective Responsibility Plan

Note 2—Retrospective Responsibility Plan

Under the terms of the retrospective responsibility plan, the Company maintains an escrow account from which settlements of, or judgments in, the covered litigation are paid. See Note 10—Legal Matters.

The following table sets forth changes in the litigation escrow account.



	(in millions)
Balance at October 1, 2012	$	4,432
Payments to settlement funds⁽¹⁾
Class plaintiffs	(4,033		)
Individual plaintiffs	(350		)
Balance at December 31, 2012	$	49


⁽¹⁾	These payments are associated with the Multidistrict Litigation Proceedings. 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 10—Legal Matters.

The accrual related to the covered litigation could be either higher or lower than the litigation escrow account balance. The Company did not record an additional accrual for the covered litigation during the three months ended December 31, 2012

Fair Value Measurements

Note 3—Fair Value Measurements and Investments

Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis.



	Fair Value Measurements Using Inputs Considered as
	Level 1				Level 2				Level 3
	December 31, 2012		September 30, 2012		December 31, 2012		September 30, 2012		December 31, 2012		September 30, 2012
	(in millions)
Assets
Cash equivalents and restricted cash
Money market funds	$	435	$	5,676
Commercial paper					$	96	$	93
Investment securities, Trading
Equity securities	74		66
Investment securities, available-for-sale
U.S. government-sponsored debt securities					2,963		2,821
U.S. Treasury securities	1,539		1,066
Equity securities	62		2
Corporate debt securities					207		63
Auction rate securities									$	7	$	7
Prepaid and other current assets
Foreign exchange derivative instruments					16		13
Total	$	2,110	$	6,810	$	3,282	$	2,990	$	7	$	7
Liabilities
Accrued liabilities
Visa Europe put option									$	145	$	145
Earn-out related to PlaySpan acquisition									—		12
Foreign exchange derivative instruments					$	12	$	11
Total	$	—	$	—	$	12	$	11	$	145	$	157

There were no significant transfers between Level 1 and Level 2 assets during the three months ended December 31, 2012 and 2011.

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 significant decrease in the Company's Level 1 assets reflects payments from the litigation escrow account totaling $4.4 billion in connection with the covered litigation. See Note 2—Retrospective Responsibility Plan and Note 10—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 assets. The pricing data obtained from outside sources is reviewed internally for reasonableness, compared against benchmark quotes from additional pricing sources and 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 with observable market data. There were no substantive changes to the valuation techniques and related inputs used to measure fair value during the three months ended December 31, 2012.

Level 3 assets and liabilities measured at fair value on a recurring basis. Auction rate securities are classified as Level 3 due to a lack of trading in active markets and a lack of observable inputs in measuring fair value. There were no substantive changes to the valuation techniques and related inputs used to measure fair value during the three months ended December 31, 2012.

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

The fair value of the put option represents the value of Visa Europe’s option, which under certain conditions could obligate the Company to purchase its member equity interest for an amount above fair value. While the put option is in fact non-transferable, its fair value represents the Company’s estimate of the amount the Company would be required to pay a third-party market participant to transfer the potential obligation in an orderly transaction at the measurement date. The valuation of the put option therefore requires substantial judgment. The most subjective 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.” The liability is classified within Level 3, as the assumed probability that Visa Europe will elect to exercise its option, the estimated P/E differential, and other inputs used to value the put option are unobservable. At December 31, 2012 and September 30, 2012, the Company determined the fair value of the put option to be $145 million. While $145 million represents the fair value of the put option at December 31, 2012, it 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. During the three months ended December 31, 2012, there were no changes to the valuation methodology used to estimate the fair value of the put option. At December 31, 2012, the key unobservable inputs include a 40% probability of exercise by Visa Europe at some point in the future and an estimated P/E differential of 1.9x. At December 31, 2012, our spot P/E was 17.9x and there was a differential of 0.5x between this ratio and the estimated spot ratio applicable to Visa Europe. These ratios are for reference only and are not necessarily indicative of the ratio or differential that could be applicable if the put option were exercised at any point in the future. The use of an assumed probability of exercise that is 5% higher than the Company's estimate would have resulted in an increase of approximately $18 million in the value of the put option. An increase of 1.0x in the assumed P/E differential would have resulted in an increase of approximately $84 million in the value of the put option.

The put option is exercisable at any time at the sole discretion of Visa Europe. As such, the put option liability is included in accrued liabilities on the Company's consolidated balance sheet at December 31, 2012. 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. Any non-cash changes in fair value are recorded in non-operating income (expense) on the consolidated statements of operations.

Earn-out related to PlaySpan acquisition. The fair value of the earn-out liability was reduced to zero at December 31, 2012, reflecting payments made in full upon achievement of certain revenue targets and other milestones.

A separate roll-forward of Level 3 assets and liabilities measured at fair value on a recurring basis is not presented as the primary activities during the three months ended December 31, 2012 and 2011 were already discussed above.

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

Non-marketable equity investments and investments accounted for under the equity method. These investments are classified as Level 3 due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment. When certain events or circumstances indicate that impairment may exist, the Company revalues the investments using various assumptions, including the financial metrics and ratios of comparable public companies. There were no events or circumstances that indicated these investments became impaired during the three months ended December 31, 2012 or 2011. At December 31, 2012, and September 30, 2012, these investments totaled $73 million and $86 million, respectively. These assets are classified in other assets on the consolidated balance sheets.

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 December 31, 2012 was $59 million, resulting in the recognition of a pre-tax unrealized gain of $47 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, reacquired rights, reseller relationships and tradenames, all of which were obtained through acquisitions.

If the Company is required to perform a quantitative assessment for impairment testing of goodwill and indefinite-lived intangible assets, the fair values are generally estimated by using an income approach. As the assumptions employed to measure these assets on a non-recurring basis are based on management's judgment using internal and external data, these fair value determinations are classified as Level 3 in the fair value hierarchy. There were no events or circumstances that indicated these assets became impaired during the three months ended December 31, 2012 or 2011.

Other Financial Instruments Not Measured at Fair Value

The following financial instruments are not measured at fair value on the Company's consolidated balance sheet at December 31, 2012, but require disclosure of their fair values, including settlement receivable and payable, and customer collateral. The estimated fair value of such instruments at December 31, 2012, approximates their carrying value due to their generally short maturities. If measured at fair value in the financial statements, these financial instruments would be classified as Level 2 in the fair value hierarchy.

Investments

Available-for-sale investment securities

The Company had $52 million in gross unrealized gains at December 31, 2012. The unrealized gains were primarily related to the reclassification of the Company's equity investment discussed above. There were $4 million gross unrealized gains and $1 million gross unrealized losses at September 30, 2012. A majority of the Company's available-for-sale investment securities with stated maturities are due within one to five years.

Pension and Other Postretirement Benefits

Note 4—Pension and Other Postretirement Benefits

The Company sponsors various qualified and non-qualified defined benefit pension and other postretirement benefit plans that provide for retirement and medical benefits for substantially all employees residing in the United States.

The components of net periodic benefit cost are as follows:



	Pension Benefits						Other Postretirement Benefits
	Three months ended December 31,
	2012			2011			2012			2011
	(in millions)
Service cost	$	10		$	10		$	—		$	—
Interest cost	9			10			—			—
Expected return on assets	(16		)	(14		)	—			—
Amortization of:
Prior service credit	(2		)	(2		)	(1		)	(1		)
Actuarial loss	7			8			—			—
Total net periodic benefit cost	$	8		$	12		$	(1	)	$	(1	)

Settlement Guarantee Management

Note 5—Settlement Guarantee Management

The indemnification for settlement losses that Visa provides to its clients creates settlement risk for the Company due to the difference in timing between the date of a payment transaction and the date of subsequent settlement. The Company’s settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time. The Company requires certain clients that do not meet its credit standards to post collateral to offset potential loss from their estimated unsettled transactions. The Company’s estimated maximum settlement exposure was $49.9 billion at December 31, 2012, compared to $49.3 billion at September 30, 2012. Of these settlement exposure amounts, $3.5 billion at December 31, 2012 and September 30, 2012, were covered by collateral.

The Company maintained collateral as follows:



	December 31, 2012		September 30, 2012
	(in millions)
Cash equivalents	$	819	$	823
Pledged securities at market value	300		307
Letters of credit	999		1,084
Guarantees	2,004		2,022
Total	$	4,122	$	4,236

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

The fair value of the settlement risk guarantee is estimated based on a proprietary probability-weighted model and was approximately $1 million at December 31, 2012 and September 30, 2012. These amounts are reflected in accrued liabilities on the consolidated balance sheets.

Stockholders' Equity

Note 6—Stockholders' Equity

The number of shares of each class and the number of shares of class A common stock on an as-converted basis at December 31, 2012, 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	530	—	530
Class B common stock	245	0.4206	103
Class C common stock	29	1.0000	29
Total			662


⁽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 for the three months ended:



(in millions, except per share data)	December 31, 2012
Shares repurchased in the open market ⁽¹⁾	9
Weighted-average repurchase price per share	$	145.40
Total cost	$	1,253


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

At December 31, 2012, the Company had $1.1 billion of remaining funds authorized by the board of directors available for share repurchase. In January 2013, the Company's board of directors authorized an additional $1.8 billion share repurchase program to be in effect through January 2014.

Class B common stock. Under the Company’s amended and restated certificate of incorporation, shares of class B common stock are subject to transfer restrictions until the date on which all of the covered litigation has been finally resolved. See Note 10—Legal Matters.

Class C common stock. During the three months ended December 31, 2012, 2 million shares were converted from class C to class A common stock upon their sale into the public market.

Dividends. On January 30, 2013, the Company’s board of directors declared a dividend in the amount of $0.33 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 March 5, 2013, to all holders of record of the Company's class A, class B and class C common stock as of February 15, 2013. The Company paid $220 million in dividends during the three months ended December 31, 2012.

Earnings Per Share

Note 7—Earnings Per Share

The following table presents basic and diluted earnings per share for the three months ended December 31, 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	$	1,031	531	$	1.94	$	1,293	669	⁽³⁾	$	1.93
Class B common stock	200		245	0.82		200		245		0.81
Class C common stock	57		30	1.94		57		30		1.93
Participating securities⁽⁴⁾	5		Not presented	Not presented		5		Not presented		Not presented
Net income attributable to Visa Inc.	$	1,293

The following table presents basic and diluted earnings per share for the three months ended December 31, 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	$	778	520	$	1.50	$	1,029	690	⁽³⁾	$	1.49
Class B common stock	179		245	0.73		178		245		0.73
Class C common stock	69		46	1.50		68		46		1.49
Participating securities⁽⁴⁾	3		Not presented	Not presented		3		Not presented		Not presented
Net income attributable to Visa Inc.	$	1,029


⁽¹⁾	Figures in the table may not recalculate exactly due to rounding. Earnings per share 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 and 119 million for the three months ended December 31, 2012 and 2011, respectively.

⁽³⁾

Weighted-average diluted shares outstanding is calculated on an as-converted basis, and includes incremental common stock equivalents, as calculated under the treasury stock method. The computation includes 2 million and 3 million common stock equivalents for the three months ended December 31, 2012 and 2011, respectively, because their effect would have been dilutive, and excludes 1 million common stock equivalents for the three months ended December 31, 2012 and 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

Note 8—Share-based Compensation

The Company granted the following equity awards to employees and non-employee directors under the 2007 Equity Incentive Compensation Plan during the three months ended December 31, 2012:



	Granted	Weighted-Average Grant Date Fair Value		Weighted-Average Exercise Price
Non-qualified stock options	544,923	$	38.77	$	145.65
Restricted stock awards ("RSAs")	844,907	145.65
Restricted stock units ("RSUs")	324,673	145.65
Performance-based shares	230,518	164.14

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

Income Taxes

Note 9—Income Taxes

The effective income tax rates were 28% and 36% for the three months ended December 31, 2012 and 2011, respectively. The effective tax rate for the three months ended December 31, 2012 was lower than the effective tax rate in the same period in fiscal 2012 primarily due to:


•	a $76 million tax benefit recognized in the quarter ended December 31, 2012, as a result of new guidance issued by the state of California regarding apportionment rules for years prior to fiscal 2012; and


•	an overall decrease in the state tax rate as a result of changes in California apportionment rules adopted in the second quarter of fiscal 2012.

During the three months ended December 31, 2012, the Company's unrecognized tax benefits decreased by $117 million, $76 million of which reduced the effective tax rate for the current fiscal quarter. The decrease is attributable to the above-mentioned decrease in California apportionment for years prior to fiscal 2012. During the three months ended December 31, 2011, the Company's unrecognized tax benefits increased by $18 million, all of which would affect the effective tax rate if recognized. The Company accrued an insignificant amount of interest and penalties related to uncertain tax positions in the three months ended December 31, 2012, and accrued $8 million of interest in the three months ended December 31, 2011.

The Company reclassified $1.6 billion from deferred tax assets to income tax receivable in the current fiscal quarter to reflect the current tax deduction related to payments totaling $4.4 billion made in connection with the covered litigation. See Note 2—Retrospective Responsibility Plan and Note 10—Legal Matters.

Legal Matters

Note 10—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 amounts 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.

For the quarter ended December 31, 2012, the Company recorded a litigation provision of $3 million. There was no significant provision activity for the three months ended December 31, 2011. 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 at the balance sheet date.

The following table summarizes activity related to accrued litigation.



	2012			2011
	(in millions)
Balance at October 1	$	4,386		$	425
Provision for unsettled matters	3			—
Interest accretion on settled matters	—			1
Payment on unsettled matters⁽¹⁾	(4,033		)	—
Payment on settled matters	(351		)	(70		)
Balance at December 31	$	5		$	356

⁽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 Multidistrict Litigation Proceedings. 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 2—Retrospective Responsibility Plan. An accrual for the covered litigation and a charge to the litigation provision are recorded when loss is deemed to be probable and reasonably estimable. In making this determination, the Company evaluates available information, including but not limited to actions taken by the litigation committee.

The Attridge Litigation. The parties in the Credit/Debit Card Tying Cases subsequently agreed upon a revised written settlement agreement, which was submitted to the court for preliminary approval on August 20, 2012 and executed as of September 6, 2012. The court entered an order preliminarily approving the settlement on November 20, 2012. On January 9, 2013, in light of the proceedings in the Credit/Debit Card Tying Cases, the Attridge case was stayed until April 19, 2013.

The Interchange Litigation

Multidistrict Litigation Proceedings (MDL). The district court entered the preliminary approval order 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. Objectors also moved to stay the preliminary approval order in the district court and moved for expedited briefing in the court of appeals. 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 17, 2012, certain objectors filed a motion asking the court of appeals to reconsider its decision, which was denied on January 31, 2013. On January 15, 2013, the district court denied as moot objectors' request to stay the preliminary approval order.

On December 10, 2012, Visa paid approximately $4.0 billion from the litigation escrow account into a settlement fund established pursuant to the definitive class settlement agreement. See Note 2—Retrospective Responsibility Plan.

Other Litigation

“Indirect Purchaser” Actions. In the Credit/Debit Card Tying Cases, the court entered an order preliminarily approving the settlement on November 20, 2012.

Canadian Competition Proceedings

Merchant Litigation. In the Watson case, the plaintiff's reply materials in support of class certification were received on November 30, 2012.

On December 14, 2012, the Watson plaintiff's counsel filed another merchant class action in Alberta (Marconies Hair Club and Laser Center Inc.) which effectively mirrors the Watson case.

Dynamic Currency Conversion (DCC). On February 4, 2013, 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 violated Australian competition law. 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 fine. The potential amount of any fine cannot be estimated at this time.

Subsequent Events Subsequent Events

Subsequent Events

Note 11—Subsequent Event

On January 31, 2013, the Company entered into a 364-day, unsecured $3.0 billion revolving credit facility (the “Credit Facility”). The Credit Facility, which expires on January 30, 2014, replaced the Company's prior $3.0 billion credit facility, which was to expire on February 15, 2013. The Credit Facility contains covenants and events of default customary for facilities of this type.

Summary of Significant Accounting Policies (Policies)

Organization

Organization. Visa Inc. (“Visa” or the “Company”) is a global payments technology company that connects consumers, businesses, financial institutions and governments around the world to fast, secure and reliable electronic payments. Visa and its wholly-owned consolidated subsidiaries, including Visa U.S.A. Inc. (“Visa U.S.A.”), Visa International Service Association (“Visa International”), Visa Worldwide Pte. Limited (“VWPL”), Visa Canada Corporation (“Visa Canada”), Inovant LLC (“Inovant”), and CyberSource Corporation (“CyberSource”), operate one of the world’s most advanced processing networks. The Company provides its clients with payment processing platforms that encompass consumer credit, debit, prepaid and commercial payments, and facilitates global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities. The Company is not a bank and does not issue cards, extend credit, or collect, assess or set cardholder fees or interest charges.

Consolidation and basis of presentation

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

Beginning with this fiscal quarter, 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 (expense). All prior period information has been reclassified to conform to current period presentation.

The accompanying unaudited consolidated financial statements are presented in accordance with the U.S. Securities and Exchange Commission (“SEC”) requirements for Quarterly Reports on Form 10-Q and, consequently, do not include all of the annual disclosures required by U.S. GAAP. Reference should be made to the Visa Annual Report on Form 10-K for the year ended September 30, 2012, for additional disclosures, including a summary of the Company’s significant accounting policies.

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

Recently adopted accounting pronouncements

Recently issued and adopted accounting pronouncements. In June 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("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 defers the requirement to present components of reclassifications out of accumulated other comprehensive income on the face of the income statement. All other components of ASU 2011-05 were adopted effective October 1, 2012. The 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 present components of reclassifications out of accumulated other comprehensive income on the face of the income statement. The standard is effective in the second quarter of fiscal 2013, and is not expected to have a material impact on the consolidated financial statements.

In July 2012, the FASB issued 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. The adoption did not 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 changes in the litigation escrow account.



	(in millions)
Balance at October 1, 2012	$	4,432
Payments to settlement funds⁽¹⁾
Class plaintiffs	(4,033		)
Individual plaintiffs	(350		)
Balance at December 31, 2012	$	49


⁽¹⁾	These payments are associated with the Multidistrict Litigation Proceedings. 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 10—Legal Matters.

Fair Value Measurements (Tables)

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

Assets and Liabilities Measured at Fair Value on a Recurring Basis.



	Fair Value Measurements Using Inputs Considered as
	Level 1				Level 2				Level 3
	December 31, 2012		September 30, 2012		December 31, 2012		September 30, 2012		December 31, 2012		September 30, 2012
	(in millions)
Assets
Cash equivalents and restricted cash
Money market funds	$	435	$	5,676
Commercial paper					$	96	$	93
Investment securities, Trading
Equity securities	74		66
Investment securities, available-for-sale
U.S. government-sponsored debt securities					2,963		2,821
U.S. Treasury securities	1,539		1,066
Equity securities	62		2
Corporate debt securities					207		63
Auction rate securities									$	7	$	7
Prepaid and other current assets
Foreign exchange derivative instruments					16		13
Total	$	2,110	$	6,810	$	3,282	$	2,990	$	7	$	7
Liabilities
Accrued liabilities
Visa Europe put option									$	145	$	145
Earn-out related to PlaySpan acquisition									—		12
Foreign exchange derivative instruments					$	12	$	11
Total	$	—	$	—	$	12	$	11	$	145	$	157

Pension and Other Postretirement Benefits (Tables)

Schedule of Defined Benefit Plans Disclosures

The components of net periodic benefit cost are as follows:



	Pension Benefits						Other Postretirement Benefits
	Three months ended December 31,
	2012			2011			2012			2011
	(in millions)
Service cost	$	10		$	10		$	—		$	—
Interest cost	9			10			—			—
Expected return on assets	(16		)	(14		)	—			—
Amortization of:
Prior service credit	(2		)	(2		)	(1		)	(1		)
Actuarial loss	7			8			—			—
Total net periodic benefit cost	$	8		$	12		$	(1	)	$	(1	)

Settlement Guarantee Management (Tables)

Schedule of Customer Collateral

The Company maintained collateral as follows:



	December 31, 2012		September 30, 2012
	(in millions)
Cash equivalents	$	819	$	823
Pledged securities at market value	300		307
Letters of credit	999		1,084
Guarantees	2,004		2,022
Total	$	4,122	$	4,236

Stockholders' Equity (Tables)

Schedule of Stock by Class

The number of shares of each class and the number of shares of class A common stock on an as-converted basis at December 31, 2012, 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	530	—	530
Class B common stock	245	0.4206	103
Class C common stock	29	1.0000	29
Total			662


⁽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.

Share Repurchase Program Disclosure

The following table presents share repurchases in the open market for the three months ended:



(in millions, except per share data)	December 31, 2012
Shares repurchased in the open market ⁽¹⁾	9
Weighted-average repurchase price per share	$	145.40
Total cost	$	1,253


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

Earnings Per Share (Tables)

Schedule of Earnings Per Share, Basic and Diluted

The following table presents basic and diluted earnings per share for the three months ended December 31, 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	$	1,031	531	$	1.94	$	1,293	669	⁽³⁾	$	1.93
Class B common stock	200		245	0.82		200		245		0.81
Class C common stock	57		30	1.94		57		30		1.93
Participating securities⁽⁴⁾	5		Not presented	Not presented		5		Not presented		Not presented
Net income attributable to Visa Inc.	$	1,293

The following table presents basic and diluted earnings per share for the three months ended December 31, 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	$	778	520	$	1.50	$	1,029	690	⁽³⁾	$	1.49
Class B common stock	179		245	0.73		178		245		0.73
Class C common stock	69		46	1.50		68		46		1.49
Participating securities⁽⁴⁾	3		Not presented	Not presented		3		Not presented		Not presented
Net income attributable to Visa Inc.	$	1,029


⁽¹⁾	Figures in the table may not recalculate exactly due to rounding. Earnings per share 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 and 119 million for the three months ended December 31, 2012 and 2011, respectively.

⁽³⁾

Weighted-average diluted shares outstanding is calculated on an as-converted basis, and includes incremental common stock equivalents, as calculated under the treasury stock method. The computation includes 2 million and 3 million common stock equivalents for the three months ended December 31, 2012 and 2011, respectively, because their effect would have been dilutive, and excludes 1 million common stock equivalents for the three months ended December 31, 2012 and 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)

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

The Company granted the following equity awards to employees and non-employee directors under the 2007 Equity Incentive Compensation Plan during the three months ended December 31, 2012:



	Granted	Weighted-Average Grant Date Fair Value		Weighted-Average Exercise Price
Non-qualified stock options	544,923	$	38.77	$	145.65
Restricted stock awards ("RSAs")	844,907	145.65
Restricted stock units ("RSUs")	324,673	145.65
Performance-based shares	230,518	164.14

Legal Matters (Tables)

Schedule of Loss Contingencies by Contingency

The following table summarizes activity related to accrued litigation.



	2012			2011
	(in millions)
Balance at October 1	$	4,386		$	425
Provision for unsettled matters	3			—
Interest accretion on settled matters	—			1
Payment on unsettled matters⁽¹⁾	(4,033		)	—
Payment on settled matters	(351		)	(70		)
Balance at December 31	$	5		$	356

⁽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 Multidistrict Litigation Proceedings. 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.

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

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2012

Sep. 30, 2012

Dec. 31, 2012

Class plaintiffs

Dec. 31, 2012

Individual plaintiffs

Escrow Account [Roll Forward]

Balance at October 1, 2012

$ 49

$ 4,432

Payments to settlement funds(1)

4,033 ¹

350 ¹

Balance at December 31, 2012

$ 49

$ 4,432

[1] These payments are associated with the Multidistrict Litigation Proceedings. 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 10—Legal Matters.

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

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2012

Sep. 30, 2012

Fair Value, Measurement Inputs, Disclosure [Line Items]

Probability of exercise by Visa Europe

40.00%

P/E differential at the time of exercise

1.9x

P/E differential at the time of exercise, ratio

190.00%

Spot price to earnings

17.9x

Spot price to earnings, ratio

1,740.00%

Incremental price to earnings differential compared to estimate

0.5x

Incremental price to earnings differential compared to estimate, ratio

180.00%

Incremental probability of exercise by Visa Europe

5.00%

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

$ 18

Incremental P/E differential at time of exercise, ratio

100.00%

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

84

Equity method investments, reclassified as available-for-sale securities, carrying value

12

Available-for-sale securities, previously classified as equity method Investments, fair value disclosure

59

Available-for-sale securities, previously classified as equity method investments, gross unrealized gains

47

Available-for-sale securities, gross unrealized gains

52

4

Available-for-sale securities, gross unrealized losses

1

Fair Value, Measurements, Recurring

Fair Value, Measurement Inputs, Disclosure [Line Items]

Put option, fair value

145

Level 3 |
Fair Value, Measurements, Recurring |
Liability

Fair Value, Measurement Inputs, Disclosure [Line Items]

Contingent Payments Fair Value Disclosure

0

12

Non Marketable Equity Investments

Fair Value, Measurement Inputs, Disclosure [Line Items]

Non-marketable equity investments

$ 73

$ 86

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

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2012

Fair Value, Measurements, Recurring

Sep. 30, 2012

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 1

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 1

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 1

U.S. Treasury securities

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 1

U.S. Treasury securities

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 1

Equity securities

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 1

Equity securities

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 1

Money market funds

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 1

Money market funds

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 2

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 2

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 2

U.S. government-sponsored agency debt securities

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 2

U.S. government-sponsored agency debt securities

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 2

Corporate debt securities

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 2

Corporate debt securities

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 2

Foreign exchange contract

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 2

Foreign exchange contract

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 2

Commercial paper

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 2

Commercial paper

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 3

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 3

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 3

Auction rate securities

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 3

Auction rate securities

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 3

Visa Europe put option

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 3

Visa Europe put option

Fair Value, Measurements, Recurring

Dec. 31, 2012

Level 3

Earn-out related to PlaySpan acquisition

Fair Value, Measurements, Recurring

Sep. 30, 2012

Level 3

Earn-out related to PlaySpan acquisition

Fair Value, Measurements, Recurring

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

Payment from litigation escrow account-Retrospective Responsibility Plan

$ (4,383)

$ (70)

Cash equivalents and restricted cash

435

5,676

96

93

Investment securities

Trading securities

74

66

Available-for-sale securities

1,539

1,066

62

2

2,963

2,821

207

63

7

Prepaid and other current assets

Foreign exchange derivative instruments

16

13

Fair value, total assets

2,110

6,810

3,282

2,990

7

Accrued liabilities

Visa Europe put option

145

Earn-out related to PlaySpan acquisition

0

12

Foreign exchange derivative instruments

12

11

Fair value, total liabilities

$ 0

$ 12

$ 11

$ 145

$ 157

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

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2012

Dec. 31, 2011

Pension Benefits

Defined Benefit Plan Disclosure [Line Items]

Service cost

$ 10

Interest cost

9

10

Expected return on assets

(16)

(14)

Amortization of:

Prior service credit

(2)

Actuarial loss

7

8

Total net periodic benefit cost

8

12