Document and Entity Information

6 Months Ended

Mar. 31, 2013

Apr. 26, 2013

Class A

Apr. 26, 2013

Class B

Apr. 26, 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

Mar. 31, 2013

Document Fiscal Year Focus

2013

Document Fiscal Period Focus

Q2

Amendment Flag

false

Entity Common Stock, Shares Outstanding

517,954,609

245,513,385

28,531,541

CONSOLIDATED BALANCE SHEETS (USD $)

In Millions, unless otherwise specified

Mar. 31, 2013

Sep. 30, 2012

Assets

Cash and cash equivalents

$ 1,377

$ 2,074

Restricted cash—litigation escrow (Note 2)

49

4,432

Investment securities

Trading

72

66

Available-for-sale

1,270

677

Income tax receivable

1,163

179

Settlement receivable

488

454

Accounts receivable

802

723

Customer collateral (Note 6)

846

823

Current portion of client incentives

215

209

Deferred tax assets

421

2,027

Prepaid expenses and other current assets

211

122

Total current assets

6,914

11,786

Investment securities, available-for-sale

2,974

3,283

Client incentives

100

58

Property, equipment and technology, net

1,674

1,634

Other assets

331

151

Intangible assets, net

11,385

11,420

Goodwill

11,681

Total assets

35,059

40,013

Liabilities

Accounts payable

118

152

Settlement payable

722

719

Customer collateral (Note 6)

846

823

Accrued compensation and benefits

358

460

Client incentives

890

830

Accrued liabilities

599

584

Accrued litigation (Note 11)

6

4,386

Total current liabilities

3,539

7,954

Deferred tax liabilities

4,046

4,058

Other liabilities

579

371

Total liabilities

8,164

12,383

Equity

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

Additional paid-in capital

19,305

19,992

Accumulated income

7,723

7,809

Accumulated other comprehensive income (loss), net

Investment securities, available-for-sale

35

3

Defined benefit pension and other postretirement plans

(183)

(186)

Derivative instruments classified as cash flow hedges

16

13

Foreign currency translation adjustments

(1)

Total accumulated other comprehensive loss, net

(133)

(171)

Total equity

26,895

27,630

Total liabilities and equity

35,059

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

Mar. 31, 2013

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

519

535

Common stock, shares outstanding

519

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

6 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Mar. 31, 2013

Mar. 31, 2012

Operating Revenues

Service revenues

$ 1,369

$ 1,241

$ 2,669

$ 2,392

Data processing revenues

1,150

922

2,265

1,873

International transaction revenues

831

733

1,636

1,481

Other revenues

175

179

354

357

Client incentives

(567)

(497)

(1,120)

(978)

Total operating revenues

2,958

2,578

5,804

5,125

Operating Expenses

Personnel

486

431

940

820

Marketing

195

170

388

360

Network and processing

119

103

229

201

Professional fees

91

82

179

152

Depreciation and amortization

98

80

190

160

General and administrative

108

106

214

208

Litigation provision (Note 11)

1

4

Total operating expenses

1,098

972

2,144

1,901

Operating income

1,860

1,606

3,660

3,224

Non-operating (expense) income

(3)

3

(2)

2

Income before income taxes

1,857

1,609

3,658

3,226

Income tax provision

587

317

1,095

907

Net income including non-controlling interest

1,270

1,292

2,563

2,319

Loss attributable to non-controlling interest

2

Net income attributable to Visa Inc.

$ 1,270 ¹ ²

$ 1,292 ¹ ²

$ 2,563

$ 2,321

Class A common stock

Earnings Per Share

Basic earnings per share (Note 8)

$ 1.93 ²

$ 1.92 ²

$ 3.87 ²

$ 3.41 ²

Basic weighted-average shares outstanding (Note 8)

524 ²

528 ²

522 ²

Diluted earnings per share (Note 8)

$ 1.92 ²

$ 1.91 ²

$ 3.86 ²

$ 3.40 ²

Diluted weighted-average shares outstanding (Note 8)

660 ² ³

676 ² ³

665 ² ³

683 ² ³

Class B common stock

Earnings Per Share

Basic earnings per share (Note 8)

$ 0.81 ²

$ 0.82 ²

$ 1.63 ²

$ 1.56 ²

Basic weighted-average shares outstanding (Note 8)

245 ²

Diluted earnings per share (Note 8)

$ 0.81 ²

$ 1.62 ²

$ 1.55 ²

Diluted weighted-average shares outstanding (Note 8)

245 ²

Class C common stock

Earnings Per Share

Basic earnings per share (Note 8)

$ 1.93 ²

$ 1.92 ²

$ 3.87 ²

$ 3.41 ²

Basic weighted-average shares outstanding (Note 8)

28 ²

42 ²

29 ²

44 ²

Diluted earnings per share (Note 8)

$ 1.92 ²

$ 1.91 ²

$ 3.86 ²

$ 3.40 ²

Diluted weighted-average shares outstanding (Note 8)

28 ²

42 ²

29 ²

44 ²

[1] 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 for the three and six months ended March 31, 2013, and 104 million and 112 million for the three and six months ended March 31, 2012, respectively.

[2] 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.

[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 the three and six months ended March 31, 2013, and 3 million for the three and six months ended March 31, 2012, because their effect would have been dilutive. The computation excludes less than 1 million common stock equivalents for the three and six months ended March 31, 2013 and 2012, because their effect would have been anti-dilutive.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Mar. 31, 2013

Mar. 31, 2012

Net income including non-controlling interest

$ 1,270

$ 1,292

$ 2,563

$ 2,319

Investment securities, available-for-sale

Net unrealized gain

2

6

50

7

Income tax effect

(2)

(17)

(2)

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

(1)

0

Income tax effect

Defined benefit pension and other postretirement plans

2

(13)

5

(8)

Income tax effect

(1)

2

(2)

Derivative instruments classified as cash flow hedges

Net unrealized gain (loss)

6

(5)

15

(12)

Income tax effect

5

0

6

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

(6)

(2)

(17)

4

Income tax effect

2

1

5

1

Foreign currency translation adjustments

4

Other comprehensive income (loss), net of tax

4

(4)

38

Comprehensive income including non-controlling interest

1,274

1,288

2,601

2,319

Comprehensive loss attributable to non-controlling interest

0

2

Comprehensive income attributable to Visa Inc.

$ 1,274

$ 1,288

$ 2,601

$ 2,321

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.

2,563

Other comprehensive income, net of tax

38

Comprehensive income including non-controlling interest

2,601

Issuance of restricted stock awards (in shares)

1

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

2

(2)

Share-based compensation

98

Excess tax benefit for share-based compensation

56

Cash proceeds from exercise of stock options (in shares)

1

Cash proceeds from exercise of stock options

84

Restricted stock instruments settled in cash for taxes shares (in shares)¹

0

Restricted stock and performance shares settled in cash for taxes(1)²

(64)

Cash dividends declared and paid, at a quarterly amount of $0.33 per as-converted share (Note 7)

(437)

Repurchase of class A common stock (Note 7) (in shares)

(20)³

(20)

Repurchase of class A common stock (Note 7)

(3,073)

(861)

(2,212)

Ending Balance at Mar. 31, 2013

$ 26,895

$ 19,305

$ 7,723

$ (133)

Ending Balance (in shares) at Mar. 31, 2013

519

245

29

[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.

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

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

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

In Millions, except Per Share data, unless otherwise specified

6 Months Ended

Mar. 31, 2013

Class A common stock

Maximum

Restricted stock instruments settled in cash for taxes shares (in shares)

1

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)

In Millions, unless otherwise specified

6 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Operating Activities

Net income including non-controlling interest

$ 2,563

$ 2,319

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

Amortization of client incentives

1,120

978

Share-based compensation

98

76

Excess tax benefit for share-based compensation

(56)

(27)

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

190

160

Deferred income taxes

1,580

(200)

Other

35

(36)

Change in operating assets and liabilities:

Income tax receivable

(984)

(30)

Settlement receivable

(34)

(96)

Accounts receivable

(79)

(95)

Client incentives

(1,108)

(724)

Other assets

(327)

(2)

Accounts payable

(15)

(94)

Settlement payable

3

253

Accrued and other liabilities

218

41

Accrued litigation

(4,384)

(140)

Net cash (used in) provided by operating activities

(1,180)

2,383

Investing Activities

Purchases of property, equipment, technology and intangible assets

(211)

(162)

Proceeds from disposal of property, equipment and technology

2

Investment securities, available-for-sale:

Purchases

(1,854)

(2,140)

Proceeds from sales and maturities

1,616

1,530

Net cash used in investing activities

(449)

(770)

Financing Activities

Repurchase of class A common stock (Note 7)

(3,073)

(75)

Dividends paid (Note 7)

(437)

(300)

Deposits into litigation escrow account—retrospective responsibility plan

1,565

Payments from litigation escrow account—retrospective responsibility plan

4,383

140

Cash proceeds from exercise of stock options

84

77

Restricted stock and performance shares settled in cash for taxes

(64)

Excess tax benefit for share-based compensation

56

27

Payment for earn-out related to PlaySpan acquisition

(12)

Principal payments on capital lease obligations

(5)

(6)

Net cash provided by (used in) financing activities

932

(1,702)

Effect of Exchange Rate on Cash and Cash Equivalents

4

Decrease in cash and cash equivalents

(697)

(85)

Cash and cash equivalents at beginning of year

2,074

2,127

Cash and cash equivalents at end of period

1,377

2,042

Supplemental Disclosure of Cash Flow Information

Income taxes paid, net of refunds

421

1,071

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

$ 41

$ 52

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, Visa Canada Corporation, Inovant LLC, 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. All significant intercompany accounts and transactions are eliminated in consolidation.

Beginning with the first quarter of fiscal 2013, 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 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 periods 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 deferred the requirement to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income. 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 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 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, and applied the new guidance in its annual impairment review of indefinite-lived intangible assets as of February 1, 2013. See Note 3—Fair Value Measurements and Investments. The adoption did not 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.

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 11—Legal Matters.

The following table summarizes activity related to 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 March 31, 2013	$	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 11—Legal Matters.

The accrual related to the covered litigation could be either higher or lower than the litigation escrow account balance. The Company did not record an additional accrual for the covered litigation during the six months ended March 31, 2013.

Fair Value Measurements and Investments

Note 3—Fair Value Measurements and Investments

Fair Value Measurements

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



	Fair Value Measurements Using Inputs Considered as
	Level 1				Level 2				Level 3
	March 31, 2013		September 30, 2012		March 31, 2013		September 30, 2012		March 31, 2013		September 30, 2012
	(in millions)
Assets
Cash equivalents and restricted cash
Money market funds	$	477	$	5,676
Commercial paper					$	34	$	93
Investment securities, trading
Equity securities	72		66
Investment securities, available-for-sale
U.S. government-sponsored debt securities					2,737		2,821
U.S. Treasury securities	1,075		1,066
Equity securities	63		2
Corporate debt securities					362		63
Auction rate securities									$	7	$	7
Prepaid and other current assets
Foreign exchange derivative instruments					18		13
Total	$	1,687	$	6,810	$	3,151	$	2,990	$	7	$	7
Liabilities
Accrued liabilities
Visa Europe put option									$	145	$	145
Earn-out related to PlaySpan acquisition									—		12
Foreign exchange derivative instruments					$	17	$	11
Total	$	—	$	—	$	17	$	11	$	145	$	157

There were no significant transfers between Level 1 and Level 2 assets during the six months ended March 31, 2013 and 2012.

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 primarily 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 11—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 additional pricing sources then confirmed or revised accordingly. Commercial paper and foreign exchange derivative instruments are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. There were no substantive changes to the valuation techniques and related inputs used to measure fair value during the six months ended March 31, 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 the six months ended March 31, 2013.

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 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 March 31, 2013 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 March 31, 2013, 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 six months ended March 31, 2013, there were no changes to the valuation methodology used to estimate the fair value of the put option. At March 31, 2013, 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 March 31, 2013, our spot P/E was 20x and there was a differential of 2.4x 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 March 31, 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. Any non-cash changes in fair value are recorded in non-operating income on the consolidated statements of operations.

Earn-out related to PlaySpan acquisition. The fair value of the earn-out liability was reduced to zero, reflecting payments made in full during the quarter ended December 31, 2012, upon achieving 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 six months ended March 31, 2013 and 2012 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. The Company recognized a $15 million other-than-temporary impairment loss during the six months ended March 31, 2013. There were no impairment charges recorded during the six months ended March 31, 2012. At March 31, 2013, and September 30, 2012, these investments totaled $56 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 March 31, 2013 was $60 million, resulting in the recognition of a pre-tax unrealized gain of $48 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. 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 March 31, 2013.

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 March 31, 2013, but require disclosure of their fair values: settlement receivable and payable, and customer collateral. The estimated fair value of such instruments at March 31, 2013, 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 $54 million in gross unrealized gains and $1 million in gross unrealized losses at March 31, 2013. 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.

Debt

Note 4—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 either program during the six months ended March 31, 2013.

Credit facility. On January 31, 2013, the Company entered into an unsecured $3.0 billion revolving credit facility (the “Credit Facility”). The 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 Credit Facility contains covenants and events of default customary for facilities of this type. The participating lenders in the 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. This 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, which will fluctuate 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 either facility and the Company was in compliance with all related covenants during the six months ended March 31, 2013.

Pension and Other Postretirement Benefits

Note 5—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 March 31,						Six Months Ended March 31,						Three Months Ended March 31,					Six Months Ended March 31,
	2013			2012			2013			2012			2013		2012			2013			2012
	(in millions)
Service cost	$	12		$	9		$	22		$	19		$	—	$	—		$	—		$	—
Interest cost	9			10			18			20			—		1			—			1
Expected return on assets	(15		)	(13		)	(31		)	(27		)	—		—			—			—
Amortization of:
Prior service credit	(3		)	(3		)	(5		)	(5		)	—		(1		)	(1		)	(2		)
Actuarial loss	7			8			14			16			—		—			—			—
Total net periodic benefit cost	$	10		$	11		$	18		$	23		$	—	$	—		$	(1	)	$	(1	)

Settlement Guarantee Management

Note 6—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 exposure to settlement losses through our settlement indemnification is accounted for as a settlement risk guarantee. The Company’s settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time. The Company requires certain 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 $53.0 billion at March 31, 2013, compared to $49.3 billion at September 30, 2012. Of these settlement exposure amounts, $3.5 billion at March 31, 2013 and September 30, 2012, were covered by collateral.

The Company maintained collateral as follows:



	March 31, 2013		September 30, 2012
	(in millions)
Cash equivalents	$	846	$	823
Pledged securities at market value	260		307
Letters of credit	1,091		1,084
Guarantees	1,940		2,022
Total	$	4,137	$	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 March 31, 2013 and September 30, 2012. These amounts are reflected in accrued liabilities on the consolidated balance sheets.

Stockholders' Equity

Note 7—Stockholders' Equity

The number of shares of each class and the number of shares of class A common stock on an as-converted basis at March 31, 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	519	—	519
Class B common stock	245	0.4206	103
Class C common stock	29	1.0000	29
Total			651


⁽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.



(in millions, except per share data)	Three Months Ended March 31, 2013		Six Months Ended March 31, 2013
Shares repurchased in the open market ⁽¹⁾	12		20
Weighted-average repurchase price per share	$	157.24	$	152.19
Total cost	$	1,820	$	3,073


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

At March 31, 2013, the Company had $1.0 billion of remaining funds available for share repurchase authorized by the board of directors. The authorization will be in effect through January 2014.

Dividends. On April 23, 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 June 4, 2013, to all holders of record of the Company's class A, class B and class C common stock as of May 17, 2013. The Company paid $437 million in dividends during the six months ended March 31, 2013.

Earnings Per Share

Note 8—Earnings Per Share

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



	Basic Earnings Per Share					Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)	Earnings per Share = (A)/(B)		Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)		Earnings per Share = (A)/(B)
Class A common stock	$	1,011	524	$	1.93	$	1,270	660	⁽³⁾	$	1.92
Class B common stock	199		245	0.81		199		245		0.81
Class C common stock	55		28	1.93		55		28		1.92
Participating securities⁽⁴⁾	5		Not presented	Not presented		5		Not presented		Not presented
Net income attributable to Visa Inc.	$	1,270

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



	Basic Earnings Per Share					Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)	Earnings per Share = (A)/(B)		Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)		Earnings per Share = (A)/(B)
Class A common stock	$	2,041	528	$	3.87	$	2,563	665	⁽³⁾	$	3.86
Class B common stock	399		245	1.63		398		245		1.62
Class C common stock	113		29	3.87		112		29		3.86
Participating securities⁽⁴⁾	10		Not presented	Not presented		10		Not presented		Not presented
Net income attributable to Visa Inc.	$	2,563

The following table presents earnings per share for the three months ended March 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	$	1,006	524	$	1.92	$	1,292	676	⁽³⁾	$	1.91
Class B common stock	200		245	0.82		200		245		0.81
Class C common stock	81		42	1.92		80		42		1.91
Participating securities⁽⁴⁾	5		Not presented	Not presented		5		Not presented		Not presented
Net income attributable to Visa Inc.	$	1,292

The following table presents earnings per share for the six months ended March 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	$	1,780	522	$	3.41	$	2,321	683	⁽³⁾	$	3.40
Class B common stock	382		245	1.56		381		245		1.55
Class C common stock	151		44	3.41		150		44		3.40
Participating securities⁽⁴⁾	8		Not presented	Not presented		8		Not presented		Not presented
Net income attributable to Visa Inc.	$	2,321


⁽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 for the three and six months ended March 31, 2013, and 104 million and 112 million for the three and six months ended March 31, 2012, 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 the three and six months ended March 31, 2013, and 3 million for the three and six months ended March 31, 2012, because their effect would have been dilutive. The computation excludes less than 1 million common stock equivalents for the three and six months ended March 31, 2013 and 2012, because their effect would have been anti-dilutive.


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

Share-based Compensation

Note 9—Share-based Compensation

The Company granted the following equity awards to employees and non-employee directors under the 2007 Equity Incentive Compensation Plan during the six months ended March 31, 2013:



	Granted	Weighted-Average Grant Date Fair Value		Weighted-Average Exercise Price
Non-qualified stock options	553,034	$	38.79	$	145.81
Restricted stock awards ("RSAs")	863,383	145.89
Restricted stock units ("RSUs")	325,232	145.67
Performance-based shares⁽¹⁾	230,518	164.14


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

The Company’s non-qualified stock options, RSAs and RSUs, are equity awards with service-only conditions and are accordingly expensed on a straight-line basis over the vesting period. 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 10—Income Taxes

The effective income tax rates were 32% and 30% for the three and six months ended March 31, 2013, respectively, and 20% and 28% for the three and six months ended March 31, 2012, respectively. The effective tax rates for the three and six months ended March 31, 2013, differ from the effective tax rates in the same periods in fiscal 2012 due mainly to:


•	certain foreign tax credit benefits related to prior years recognized in the second quarter of fiscal 2013;


•	a $76 million tax benefit recognized in the first quarter of fiscal 2013, as a result of new guidance issued by the state of California regarding apportionment rules for years prior to fiscal 2012; and


•	the absence of a one-time, non-cash benefit of $208 million from the remeasurement of existing net deferred tax liabilities recorded in the second quarter of fiscal 2012 as a result of the California state apportionment rule changes adopted during that quarter.

During the three and six months ended March 31, 2013, the Company's gross unrecognized tax benefits increased by $338 million and $221 million, respectively, $247 million and $171 million of which, respectively, would favorably impact our effective income tax rate if recognized. The increase in gross unrecognized tax benefits is primarily due to changes in judgments and estimates related to various state tax positions across several jurisdictions. During the three and six months ended March 31, 2013, the Company accrued $3 million and $5 million of interest, respectively, and $1 million and $2 million of penalties, respectively, related to uncertain tax positions. During the three and six months ended March 31, 2012, the Company accrued $7 million and $14 million of interest, respectively, and no penalties related to uncertain tax positions.

The Company reclassified $1.6 billion from deferred tax assets to income tax receivable in the first quarter of the current fiscal year 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 11—Legal Matters. The income tax receivable will be applied to reduce income taxes payable throughout fiscal 2013.

Legal Matters

Note 11—Legal Matters

The Company is party to various legal and regulatory proceedings. Some of these proceedings involve complex claims that are subject to substantial uncertainties and unascertainable damages. Accordingly, except as disclosed, the Company has not established reserves or ranges of possible loss related to these proceedings, as at this time in the proceedings, the matters do not relate to a probable loss and/or 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.

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.



	Fiscal 2013			Fiscal 2012
	(in millions)
Balance at October 1	$	4,386		$	425
Provision for unsettled matters	4			—
Interest accretion on settled matters	—			1
Payment on unsettled matters⁽¹⁾	(4,033		)	—
Payment on settled matters	(351		)	(140		)
Balance at March 31	$	6		$	286

⁽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 April 11, 2013, the settlement in the Credit/Debit Tying Cases was granted final approval. On April 25, 2013, in light of the proceedings in the Credit/Debit Card Tying Cases, the Attridge case was stayed until September 20, 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.

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. On April 11, 2013, the court entered an order finally approving the settlement and entered judgment.

European Interchange Proceedings

European Commission. On March 8, 2013, Visa Inc. and Visa International received a redacted copy of the supplementary Statement of Objections (“SSO”) that was previously announced by the European Commission (“EC”) on July 31, 2012. On April 24, 2013, Visa Inc. and Visa International received a less redacted version of the SSO from the EC, but to date have not received a complete copy of the SSO without redactions. The SSO alleges a breach of Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the European Economic Area Agreement. Among other things, the SSO asserts claims jointly against Visa Europe, Visa Inc., and Visa International, objecting to: (1) the level of domestic credit interchange, primarily in the following eight European Economic Area member states: Ireland, Luxembourg, Sweden, Italy, Malta, Netherlands, Belgium, and Hungary; (2) the level of cross-border credit interchange for transactions at European merchants with respect to cards issued both in Europe and outside of Europe, and seeking the substantial reduction of both domestic and such cross-border credit interchange; (3) Visa Europe's rule prohibiting cross-border acquiring; and (4) other point-of-sale rules, such as the “Honor All Cards” and “no-surcharge” rules. The SSO also announces the EC's intention to impose fines. The potential amount of any fine resulting from the action could be substantial but cannot be estimated at this time. Visa Europe is obligated to indemnify Visa Inc. and Visa International in connection with this proceeding, in our opinion, including payment of any fines that may be imposed. However, on April 4, 2013, Visa Europe expressed an "initial" view that it is not obligated to indemnify Visa Inc. or Visa International for any claim in the SSO. Visa Inc. continues to firmly believe that Visa Europe is obligated to indemnify for all claims contained in the SSO, and has been in discussions with Visa Europe to resolve this issue.

Threatened Merchant Litigation. On March 22, 2013, Visa Inc. learned that counsel for private merchant plaintiffs have threatened to file litigation against Visa Europe, Visa Inc., and Visa International with respect to interchange rates in Europe. While the amount of interchange being challenged could be substantial, the full scope of the claims is not known at this time. On March 28, 2013, Visa Europe, Visa Inc., Visa International and the plaintiffs entered into (1) a standstill agreement, which tolled any limitation periods that would have been applicable to the claims which had not yet expired; and (2) a costs agreement, which preserved the then-current recoverability rules in the United Kingdom which changed on April 1, 2013. Visa Europe is obligated to indemnify Visa Inc. and Visa International in connection with this proceeding, in our opinion, and Visa Europe has agreed to bear certain costs contemplated by the standstill agreement. However, on April 4, 2013, Visa Europe expressed an "initial" view that they are not obligated to indemnify Visa Inc. or Visa International for claims included within this threatened litigation. Visa Inc. continues to firmly believe that Visa Europe is obligated to indemnify for these claims, and has been in discussions with Visa Europe to resolve this issue.

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. The class certification hearing commenced on April 22, 2013.

On December 3, 2012, plaintiff's counsel in the 1023926 Alberta Ltd. action filed an application for certification of a class action. On December 14, 2012, the Watson plaintiff's counsel filed another merchant class action in Alberta (Macaronies Hair Club and Laser Centre Inc.), which effectively mirrors the claims in the Watson case.

On January 4, 2013, plaintiff's counsel in the Canada Rent A Heater (2000) Ltd. action (now titled Crown and Hand Pub Ltd.) filed an application for certification of a class action. On January 23, 2013, the Watson plaintiff's counsel filed another action in Saskatchewan (Hello Baby Equipment Inc.), which effectively mirrors the claims in 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.

U.S. ATM Access Fee Litigation

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.

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.

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, Visa Canada Corporation, Inovant LLC, 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. All significant intercompany accounts and transactions are eliminated in consolidation.

Beginning with the first quarter of fiscal 2013, 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 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 periods 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 deferred the requirement to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income. 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 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, and applied the new guidance in its annual impairment review of indefinite-lived intangible assets as of February 1, 2013. See Note 3—Fair Value Measurements and Investments. 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 summarizes activity related to 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 March 31, 2013	$	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 11—Legal Matters.

Fair Value Measurements and Investments (Tables)

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

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



	Fair Value Measurements Using Inputs Considered as
	Level 1				Level 2				Level 3
	March 31, 2013		September 30, 2012		March 31, 2013		September 30, 2012		March 31, 2013		September 30, 2012
	(in millions)
Assets
Cash equivalents and restricted cash
Money market funds	$	477	$	5,676
Commercial paper					$	34	$	93
Investment securities, trading
Equity securities	72		66
Investment securities, available-for-sale
U.S. government-sponsored debt securities					2,737		2,821
U.S. Treasury securities	1,075		1,066
Equity securities	63		2
Corporate debt securities					362		63
Auction rate securities									$	7	$	7
Prepaid and other current assets
Foreign exchange derivative instruments					18		13
Total	$	1,687	$	6,810	$	3,151	$	2,990	$	7	$	7
Liabilities
Accrued liabilities
Visa Europe put option									$	145	$	145
Earn-out related to PlaySpan acquisition									—		12
Foreign exchange derivative instruments					$	17	$	11
Total	$	—	$	—	$	17	$	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 March 31,						Six Months Ended March 31,						Three Months Ended March 31,					Six Months Ended March 31,
	2013			2012			2013			2012			2013		2012			2013			2012
	(in millions)
Service cost	$	12		$	9		$	22		$	19		$	—	$	—		$	—		$	—
Interest cost	9			10			18			20			—		1			—			1
Expected return on assets	(15		)	(13		)	(31		)	(27		)	—		—			—			—
Amortization of:
Prior service credit	(3		)	(3		)	(5		)	(5		)	—		(1		)	(1		)	(2		)
Actuarial loss	7			8			14			16			—		—			—			—
Total net periodic benefit cost	$	10		$	11		$	18		$	23		$	—	$	—		$	(1	)	$	(1	)

Settlement Guarantee Management (Tables)

Schedule of Customer Collateral

The Company maintained collateral as follows:



	March 31, 2013		September 30, 2012
	(in millions)
Cash equivalents	$	846	$	823
Pledged securities at market value	260		307
Letters of credit	1,091		1,084
Guarantees	1,940		2,022
Total	$	4,137	$	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 March 31, 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	519	—	519
Class B common stock	245	0.4206	103
Class C common stock	29	1.0000	29
Total			651


⁽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.



(in millions, except per share data)	Three Months Ended March 31, 2013		Six Months Ended March 31, 2013
Shares repurchased in the open market ⁽¹⁾	12		20
Weighted-average repurchase price per share	$	157.24	$	152.19
Total cost	$	1,820	$	3,073


⁽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 earnings per share for the three months ended March 31, 2013.⁽¹⁾



	Basic Earnings Per Share					Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)	Earnings per Share = (A)/(B)		Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)		Earnings per Share = (A)/(B)
Class A common stock	$	1,011	524	$	1.93	$	1,270	660	⁽³⁾	$	1.92
Class B common stock	199		245	0.81		199		245		0.81
Class C common stock	55		28	1.93		55		28		1.92
Participating securities⁽⁴⁾	5		Not presented	Not presented		5		Not presented		Not presented
Net income attributable to Visa Inc.	$	1,270

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



	Basic Earnings Per Share					Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)	Earnings per Share = (A)/(B)		Income Allocation (A)⁽²⁾		Weighted- Average Shares Outstanding (B)		Earnings per Share = (A)/(B)
Class A common stock	$	2,041	528	$	3.87	$	2,563	665	⁽³⁾	$	3.86
Class B common stock	399		245	1.63		398		245		1.62
Class C common stock	113		29	3.87		112		29		3.86
Participating securities⁽⁴⁾	10		Not presented	Not presented		10		Not presented		Not presented
Net income attributable to Visa Inc.	$	2,563

The following table presents earnings per share for the three months ended March 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	$	1,006	524	$	1.92	$	1,292	676	⁽³⁾	$	1.91
Class B common stock	200		245	0.82		200		245		0.81
Class C common stock	81		42	1.92		80		42		1.91
Participating securities⁽⁴⁾	5		Not presented	Not presented		5		Not presented		Not presented
Net income attributable to Visa Inc.	$	1,292

The following table presents earnings per share for the six months ended March 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	$	1,780	522	$	3.41	$	2,321	683	⁽³⁾	$	3.40
Class B common stock	382		245	1.56		381		245		1.55
Class C common stock	151		44	3.41		150		44		3.40
Participating securities⁽⁴⁾	8		Not presented	Not presented		8		Not presented		Not presented
Net income attributable to Visa Inc.	$	2,321


⁽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 for the three and six months ended March 31, 2013, and 104 million and 112 million for the three and six months ended March 31, 2012, 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 the three and six months ended March 31, 2013, and 3 million for the three and six months ended March 31, 2012, because their effect would have been dilutive. The computation excludes less than 1 million common stock equivalents for the three and six months ended March 31, 2013 and 2012, 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 six months ended March 31, 2013:



	Granted	Weighted-Average Grant Date Fair Value		Weighted-Average Exercise Price
Non-qualified stock options	553,034	$	38.79	$	145.81
Restricted stock awards ("RSAs")	863,383	145.89
Restricted stock units ("RSUs")	325,232	145.67
Performance-based shares⁽¹⁾	230,518	164.14


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

Legal Matters (Tables)

Schedule of Loss Contingencies by Contingency

The following table summarizes activity related to accrued litigation.



	Fiscal 2013			Fiscal 2012
	(in millions)
Balance at October 1	$	4,386		$	425
Provision for unsettled matters	4			—
Interest accretion on settled matters	—			1
Payment on unsettled matters⁽¹⁾	(4,033		)	—
Payment on settled matters	(351		)	(140		)
Balance at March 31	$	6		$	286

⁽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

6 Months Ended

Mar. 31, 2013

Sep. 30, 2012

Mar. 31, 2013

Class plaintiffs

Mar. 31, 2013

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 March 31, 2013

$ 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 11—Legal Matters.

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

In Millions, unless otherwise specified

6 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Sep. 30, 2012

Fair Value, Measurement Inputs, Disclosure [Line Items]

Payments from litigation escrow account-Retrospective Responsibility Plan

$ 4,383

$ 140

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

20x

Spot price to earnings, ratio

2,000.00%

Incremental price to earnings differential compared to estimate

2.4x

Incremental price to earnings differential compared to estimate, ratio

240.00%

Incremental probability of exercise by Visa Europe

5.00%

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

18

Incremental Assumed Price to Earnings Differential at Time of Exercise

1.0x

Incremental P/E differential at time of exercise, ratio

100.00%

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

84

Other than Temporary Impairment Losses, Investments

15

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

60

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

48

Available-for-sale securities, gross unrealized gains

54

4

Available-for-sale securities, gross unrealized losses

1

Fair Value, Measurements, Recurring

Fair Value, Measurement Inputs, Disclosure [Line Items]

Visa Europe put option

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

$ 56

$ 86

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

In Millions, unless otherwise specified

Mar. 31, 2013

Sep. 30, 2012

Accrued liabilities

Visa Europe put option

$ 145

Level 1

Prepaid and other current assets

Fair value, total assets

1,687

6,810

Accrued liabilities

Fair value, total liabilities

0

Level 1 |
U.S. Treasury securities

Investment securities, trading

Available-for-sale securities

1,075

1,066

Level 1 |
Equity securities

Investment securities, trading

Trading securities

72

66

Available-for-sale securities

63

2

Level 1 |
Money market funds

Cash equivalents and restricted cash

477

5,676

Level 2

Prepaid and other current assets

Fair value, total assets

3,151

2,990

Accrued liabilities

Fair value, total liabilities

17

11

Level 2 |
U.S. government-sponsored debt securities

Investment securities, trading

Available-for-sale securities

2,737

2,821

Level 2 |
Corporate debt securities

Investment securities, trading

Available-for-sale securities

362

63

Level 2 |
Foreign exchange derivative instruments

Prepaid and other current assets

Foreign exchange derivative instruments

18

13

Accrued liabilities

Foreign exchange derivative instruments

17

11

Level 2 |
Commercial paper

Cash equivalents and restricted cash

34

93

Level 3

Prepaid and other current assets

Fair value, total assets

7

Accrued liabilities

Fair value, total liabilities

145

157

Level 3 |
Auction rate securities

Investment securities, trading

Available-for-sale securities

7

Level 3 |
Visa Europe put option

Accrued liabilities

Visa Europe put option

145

Level 3 |
Earn-out related to PlaySpan acquisition

Accrued liabilities

Earn-out related to PlaySpan acquisition

$ 0

$ 12

Debt (Details) (USD $)

3 Months Ended

12 Months Ended

Mar. 31, 2013

Revolving Credit Facility

Jan. 31, 2013

Revolving Credit Facility

Sep. 30, 2012

Revolving Credit Facility

Mar. 31, 2013

Revolving Credit Facility

Minimum

Mar. 31, 2013

Revolving Credit Facility

Maximum

Feb. 9, 2014

Commercial paper

Feb. 7, 2013

Commercial paper

Feb. 6, 2013

Commercial paper

Debt Instrument [Line Items]

Commercial Paper Program, Amount

$ 3,000,000,000

$ 500,000,000

Commercial Paper Program, Maturity Period

397 days

Credit Facility Maximum Borrowing Capacity

$ 3,000,000,000

Credit Facility Interest Rate During Period

0.00%

0.75%

Credit Facility Commitment Fee Percentage

0.05%

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

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Mar. 31, 2013

Mar. 31, 2012

Pension Benefits

Defined Benefit Plan Disclosure [Line Items]

Service cost

$ 12

$ 9

$ 22

$ 19

Interest cost

9

10

18

20

Expected return on assets

(15)

(13)

(31)

(27)

Amortization of:

Prior service credit

(3)

(5)

Actuarial loss

7

8

14

16

Total net periodic benefit cost

10

11

18

23