VISA INC., 10-K filed on 11/21/2014
Annual Report
Document and Entity Information Document (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Mar. 31, 2014
Nov. 14, 2014
Class A common stock
Nov. 14, 2014
Class B common stock
Nov. 14, 2014
Class C common stock
Entity Information [Line Items]
 
 
 
 
 
Entity Registrant Name
VISA INC. 
 
 
 
 
Entity Central Index Key
0001403161 
 
 
 
 
Current Fiscal Year End Date
--09-30 
 
 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
 
 
Document Type
10-K 
 
 
 
 
Document Period End Date
Sep. 30, 2014 
 
 
 
 
Document Fiscal Year Focus
2014 
 
 
 
 
Document Fiscal Period Focus
FY 
 
 
 
 
Amendment Flag
false 
 
 
 
 
Entity Common Stock, Shares Outstanding
 
 
493,201,965 
245,513,385 
23,876,238 
Entity Well-known Seasoned Issuer
Yes 
 
 
 
 
Entity Voluntary Filers
No 
 
 
 
 
Entity Current Reporting Status
Yes 
 
 
 
 
Entity Public Float
 
$ 107,600 
 
 
 
CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Assets
 
 
Cash and cash equivalents
$ 1,971 
$ 2,186 
Restricted cash—litigation escrow (Note 3)
1,498 
49 
Investment securities (Note 4):
 
 
Trading
69 
75 
Available-for-sale
1,910 
1,994 
Income tax receivable (Note 19)
91 
142 
Settlement receivable
786 
799 
Accounts receivable
822 
761 
Customer collateral (Note 11)
961 
866 
Current portion of client incentives
210 
282 
Deferred tax assets (Note 19)
1,028 
481 
Prepaid expenses and other current assets (Note 5)
216 
187 
Total current assets
9,562 
7,822 
Investment securities, available-for-sale (Note 4)
3,015 
2,760 
Client incentives
81 
89 
Property, equipment and technology, net (Note 6)
1,892 
1,732 
Other assets (Note 5)
855 
521 
Intangible assets, net (Note 7)
11,411 
11,351 
Goodwill (Note 7)
11,753 
11,681 
Total assets
38,569 
35,956 
Liabilities
 
 
Accounts payable
147 
184 
Settlement payable
1,332 
1,225 
Customer collateral (Note 11)
961 
866 
Accrued compensation and benefits
450 
523 
Client incentives
1,036 
919 
Accrued liabilities (Note 8)
624 
613 
Accrued litigation (Note 20)
1,456 
5 
Total current liabilities
6,006 
4,335 
Deferred tax liabilities (Note 19)
4,145 
4,149 
Other liabilities (Note 8)
1,005 
602 
Total liabilities
11,156 
9,086 
Commitments and contingencies (Note 17)
   
   
Equity
 
 
Additional paid-in capital
18,299 
18,875 
Accumulated income
9,131 
7,974 
Accumulated other comprehensive (loss) income, net:
 
 
Investment securities, available-for-sale
31 
59 
Defined benefit pension and other postretirement plans
(84)
(60)
Derivative instruments classified as cash flow hedges
38 
23 
Foreign currency translation adjustments
(2)
(1)
Total accumulated other comprehensive (loss) income, net
(17)
21 
Total equity
27,413 
26,870 
Total liabilities and equity
38,569 
35,956 
Preferred stock
 
 
Equity
 
 
Preferred stock, $0.0001 par value, 25 shares authorized and none issued
0 
0 
Class A common stock
 
 
Equity
 
 
Common stock (Note 14)
0 
0 
Class B common stock
 
 
Equity
 
 
Common stock (Note 14)
0 
0 
Class C common stock
 
 
Equity
 
 
Common stock (Note 14)
$ 0 
$ 0 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Per Share data, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Preferred stock
 
 
Preferred stock, par value
$ 0.0001 
$ 0.0001 
Preferred stock, shares authorized
25 
25 
Preferred stock, shares issued
0 
0 
Class A common stock
 
 
Common stock, par value
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
2,001,622 
2,001,622 
Common stock, shares, issued
495 
508 
Common stock, shares, outstanding
495 
508 
Class B common stock
 
 
Common stock, par value
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
622 
622 
Common stock, shares, issued
245 
245 
Common stock, shares, outstanding
245 
245 
Class C common stock
 
 
Common stock, par value
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
1,097 
1,097 
Common stock, shares, issued
22 
27 
Common stock, shares, outstanding
22 
27 
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Operating Revenues
 
 
 
Service revenues
$ 5,797 
$ 5,352 
$ 4,872 
Data processing revenues
5,167 
4,642 
3,975 
International transaction revenues
3,560 
3,389 
3,025 
Other revenues
770 
716 
704 
Client incentives
(2,592)
(2,321)
(2,155)
Total operating revenues
12,702 
11,778 
10,421 
Operating Expenses
 
 
 
Personnel
1,875 
1,932 
1,726 
Marketing
900 
876 
873 
Network and processing
507 
468 
414 
Professional fees
328 
412 
385 
Depreciation and amortization
435 
397 
333 
General and administrative
507 
451 
451 
Litigation provision (Note 20)
453 
3 
4,100 
Total operating expenses
5,005 
4,539 
8,282 
Operating income
7,697 
7,239 
2,139 
Non-operating income
27 
18 
68 
Income before income taxes
7,724 
7,257 
2,207 
Income tax provision (Note 19)
2,286 
2,277 
65 
Net income including non-controlling interest
5,438 
4,980 
2,142 
Loss attributable to non-controlling interest
0 
0 
2 
Net income attributable to Visa Inc.
5,438 1
4,980 1
2,144 1
Class A common stock
 
 
 
Operating Expenses
 
 
 
Net income attributable to Visa Inc.
4,307 1
3,959 1
1,664 1
Earnings Per Share [Abstract]
 
 
 
Basic earnings per share (Note 15)
$ 8.65 2
$ 7.61 2
$ 3.17 2
Basic weighted-average shares outstanding (Note 15)
498 
520 
524 
Diluted earnings per share (Note 15)
$ 8.62 2
$ 7.59 2
$ 3.16 2
Diluted weighted-average shares outstanding (Note 15)
631 
656 3
678 3
Class B common stock
 
 
 
Operating Expenses
 
 
 
Net income attributable to Visa Inc.
892 1
786 1
343 1
Earnings Per Share [Abstract]
 
 
 
Basic earnings per share (Note 15)
$ 3.63 2
$ 3.20 2
$ 1.40 2
Basic weighted-average shares outstanding (Note 15)
245 
245 
245 
Diluted earnings per share (Note 15)
$ 3.62 2
$ 3.19 2
$ 1.39 2
Diluted weighted-average shares outstanding (Note 15)
245 
245 
245 
Class C common stock
 
 
 
Operating Expenses
 
 
 
Net income attributable to Visa Inc.
$ 222 1
$ 216 1
$ 130 1
Earnings Per Share [Abstract]
 
 
 
Basic earnings per share (Note 15)
$ 8.65 2
$ 7.61 2
$ 3.17 2
Basic weighted-average shares outstanding (Note 15)
26 
28 
41 
Diluted earnings per share (Note 15)
$ 8.62 2
$ 7.59 2
$ 3.16 2
Diluted weighted-average shares outstanding (Note 15)
26 
28 
41 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Net income including non-controlling interest
$ 5,438 
$ 4,980 
$ 2,142 
Investment securities, available-for-sale:
 
 
 
Net unrealized (loss) gain
(44)
88 
4 
Income tax effect
17 
(33)
(1)
Reclassification adjustment for net (gain) loss realized in net income including non-controlling interest
(1)
1 
0 
Income tax effect
0 
0 
0 
Defined benefit pension and other postretirement plans:
   
   
   
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, before Tax
(27)
187 
(23)
Income tax effect
8 
(70)
9 
Other Comprehensive (Income) Loss, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), before Tax
(8)
16 
23 
Other Comprehensive (Income) Loss, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), Tax
3 
(7)
(9)
Derivative instruments classified as cash flow hedges:
 
 
 
Net unrealized gain
65 
39 
3 
Income tax effect
(13)
(6)
(1)
Reclassification adjustment for net gain realized in net income including non-controlling interest
(46)
(29)
(14)
Income tax effect
9 
6 
7 
Foreign currency translation adjustments
(1)
0 
7 
Other comprehensive (loss) income, net of tax
(38)
192 
5 
Comprehensive income including non-controlling interest
5,400 
5,172 
2,147 
Comprehensive loss attributable to non-controlling interest
0 
0 
2 
Comprehensive income attributable to Visa Inc.
$ 5,400 
$ 5,172 
$ 2,149 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $)
In Millions, except Share data
Total
USD ($)
Common Stock Class A
USD ($)
Common Stock Class B
USD ($)
Common Stock Class C
USD ($)
Additional Paid-In Capital
USD ($)
Accumulated Income
USD ($)
Accumulated Other Comprehensive Income (Loss)
USD ($)
Non- Controlling Interest
USD ($)
Common Stock [Member]
Common Stock Class A
Common Stock [Member]
Common Stock Class B
Common Stock [Member]
Common Stock Class C
Beginning Balance at Sep. 30, 2011
$ 26,437 
 
 
 
$ 19,907 
$ 6,706 
$ (176)
$ 0 
 
 
 
Beginning Balance (in shares) at Sep. 30, 2011
 
 
 
 
 
 
 
 
520,000,000 
245,000,000 
47,000,000 
Net income attributable to Visa Inc.
2,144 1
1,664 1
343 1
130 1
 
2,144 
 
 
 
 
 
Loss attributable to non-controlling interest
(2)
 
 
 
 
 
 
(2)
 
 
 
Other comprehensive income, net of tax
5 
 
 
 
 
 
5 
 
 
 
 
Comprehensive income including noncontrolling interest
2,147 
 
 
 
 
 
 
 
 
 
 
Issuance of restricted share awards (in shares)
 
 
 
 
 
 
 
 
1,000,000 
 
 
Conversion of class C common stock upon sale into public market (in shares)
 
 
 
 
 
 
 
 
16,000,000 
 
(16,000,000)
Share-based compensation (Note 16)
147 
 
 
 
147 
 
 
 
 
 
 
Excess tax benefit for share-based compensation
71 
 
 
 
71 
 
 
 
 
 
 
Cash proceeds from exercise of stock options (in shares)
 
 
 
 
 
 
 
 
4,000,000 
 
 
Cash proceeds from exercise of stock options
174 
 
 
 
174 
 
 
 
 
 
 
Restricted stock instruments settled in cash for taxes (in shares)2
 
 
 
 
 
 
 
 
0 
 
 
Restricted stock instruments settled in cash for taxes2
(40)
 
 
 
(40)
 
 
 
 
 
 
Cash dividends declared and paid, at a quarterly amount of $0.33 in 2013, $0.22 in 2012, and $0.15 in 2011 per as-converted share
(595)
 
 
 
 
(595)
 
 
 
 
 
Repurchase of class A common stock (in shares)
 
 
 
 
 
 
 
 
(6,000,000)
 
 
Repurchase of class A common stock
(710)
 
 
 
(264)
(446)
 
 
 
 
 
Purchase of non-controlling interest
(1)
 
 
 
(3)
 
 
2 
 
 
 
Ending Balance at Sep. 30, 2012
27,630 
 
 
 
19,992 
7,809 
(171)
0 
 
 
 
Ending Balance (in shares) at Sep. 30, 2012
 
 
 
 
 
 
 
 
535,000,000 
245,000,000 
31,000,000 
Net income attributable to Visa Inc.
4,980 1
3,959 1
786 1
216 1
 
4,980 
 
 
 
 
 
Loss attributable to non-controlling interest
0 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income, net of tax
192 
 
 
 
 
 
192 
 
 
 
 
Comprehensive income including noncontrolling interest
5,172 
 
 
 
 
 
 
 
 
 
 
Issuance of restricted share awards (in shares)
 
 
 
 
 
 
 
 
1,000,000 
 
 
Conversion of class C common stock upon sale into public market (in shares)
 
 
 
 
 
 
 
 
4,000,000 
 
(4,000,000)
Share-based compensation (Note 16)
179 
 
 
 
179 
 
 
 
 
 
 
Excess tax benefit for share-based compensation
74 
 
 
 
74 
 
 
 
 
 
 
Cash proceeds from exercise of stock options (in shares)
 
 
 
 
 
 
 
 
1,000,000 
 
 
Cash proceeds from exercise of stock options
108 
 
 
 
108 
 
 
 
 
 
 
Restricted stock instruments settled in cash for taxes (in shares)2
 
 
 
 
 
 
 
 
0 
 
 
Restricted stock instruments settled in cash for taxes2
(64)
 
 
 
(64)
 
 
 
 
 
 
Cash dividends declared and paid, at a quarterly amount of $0.33 in 2013, $0.22 in 2012, and $0.15 in 2011 per as-converted share
(864)
 
 
 
 
(864)
 
 
 
 
 
Repurchase of class A common stock (in shares)
(33,000,000)3
 
 
 
 
 
 
 
(33,000,000)
 
 
Repurchase of class A common stock
(5,365)
 
 
 
(1,414)
(3,951)
 
 
 
 
 
Ending Balance at Sep. 30, 2013
26,870 
 
 
 
18,875 
7,974 
21 
0 
 
 
 
Ending Balance (in shares) at Sep. 30, 2013
 
 
 
 
 
 
 
 
508,000,000 
245,000,000 
27,000,000 
Net income attributable to Visa Inc.
5,438 1
4,307 1
892 1
222 1
 
5,438 
 
 
 
 
 
Loss attributable to non-controlling interest
0 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income, net of tax
(38)
 
 
 
 
 
(38)
 
 
 
 
Comprehensive income including noncontrolling interest
5,400 
 
 
 
 
 
 
 
 
 
 
Issuance of restricted share awards (in shares)
 
 
 
 
 
 
 
 
1,000,000 
 
 
Conversion of class C common stock upon sale into public market (in shares)
 
 
 
 
 
 
 
 
5,000,000 
 
(5,000,000)
Share-based compensation (Note 16)
172 
 
 
 
172 
 
 
 
 
 
 
Excess tax benefit for share-based compensation
90 
 
 
 
90 
 
 
 
 
 
 
Cash proceeds from exercise of stock options (in shares)
1,323,544 
 
 
 
 
 
 
 
1,000,000 
 
 
Cash proceeds from exercise of stock options
91 
 
 
 
91 
 
 
 
 
 
 
Restricted stock instruments settled in cash for taxes (in shares)2
 
 
 
 
 
 
 
 
0 
 
 
Restricted stock instruments settled in cash for taxes2
(86)
 
 
 
(86)
 
 
 
 
 
 
Cash dividends declared and paid, at a quarterly amount of $0.33 in 2013, $0.22 in 2012, and $0.15 in 2011 per as-converted share
(1,006)
 
 
 
 
(1,006)
 
 
 
 
 
Repurchase of class A common stock (in shares)
(20,000,000)3
(22,000,000)
 
 
 
 
 
 
(20,000,000)
 
 
Repurchase of class A common stock
(4,118)
(4,118)
 
 
(843)
(3,275)
 
 
 
 
 
Ending Balance at Sep. 30, 2014
$ 27,413 
 
 
 
$ 18,299 
$ 9,131 
$ (17)
$ 0 
 
 
 
Ending Balance (in shares) at Sep. 30, 2014
 
 
 
 
 
 
 
 
495,000,000 
245,000,000 
22,000,000 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Cash dividends declared and paid, quarterly, per as-converted share
$ 0.40 
$ 0.33 
$ 0.22 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Operating Activities
 
 
 
Net income including non-controlling interest
$ 5,438 
$ 4,980 
$ 2,142 
Adjustments to reconcile net income including non-controlling interest to net cash provided by (used in) operating activities:
 
 
 
Amortization of client incentives
2,592 
2,321 
2,155 
Share-based compensation
172 
179 
147 
Excess tax benefit for share-based compensation
(90)
(74)
(71)
Depreciation and amortization of property, equipment, technology and intangible assets
435 
397 
333 
Deferred income taxes
(580)
1,527 
(1,690)
Litigation provision (Note 20)
453 
3 
4,101 
Other
37 
50 
(8)
Change in operating assets and liabilities:
 
 
 
Income tax receivable
51 
37 
(67)
Settlement receivable
13 
(345)
(42)
Accounts receivable
(53)
(38)
(161)
Client incentives
(2,395)
(2,336)
(1,757)
Other assets
(430)
(543)
41 
Accounts payable
(56)
40 
(17)
Settlement payable
107 
506 
270 
Accrued and other liabilities
513 
702 
(227)
Accrued litigation (Note 20)
998 
(4,384)
(140)
Net cash provided by operating activities
7,205 
3,022 
5,009 
Investing Activities
 
 
 
Purchases of property, equipment, technology and intangible assets
(553)
(471)
(376)
Proceeds from disposal of property, equipment and technology
0 
0 
2 
Investment securities, available-for-sale:
 
 
 
Purchases
(2,572)
(3,164)
(4,140)
Proceeds from maturities and sales
2,342 
2,440 
2,093 
Acquisitions, net of cash received
(149)
0 
(3)
Purchases of / contributions to other investments
(9)
(3)
(12)
Proceeds / distributions from other investments
0 
34 
22 
Net cash used in investing activities
(941)
(1,164)
(2,414)
Financing Activities
 
 
 
Repurchase of class A common stock (Note 14)
(4,118)
(5,365)
(710)
Dividends paid (Note 14)
(1,006)
(864)
(595)
Deposits into litigation escrow account—retrospective responsibility plan (Note 3)
(450)
0 
(1,715)
(Return to) payments from litigation escrow account—retrospective responsibility plan (Note 3)
(999)
4,383 
140 
Cash proceeds from exercise of stock options
91 
108 
174 
Restricted stock and performance-based shares settled in cash for taxes
(86)
(64)
0 
Excess tax benefit for share-based compensation
90 
74 
71 
Payments for earn-out related to PlaySpan acquisition
0 
(12)
(14)
Principal payments on capital lease obligations
0 
(6)
(6)
Net cash used in financing activities
(6,478)
(1,746)
(2,655)
Effect of exchange rate changes on cash and cash equivalents
(1)
0 
7 
(Decrease) increase in cash and cash equivalents
(215)
112 
(53)
Cash and cash equivalents at beginning of year
2,186 
2,074 
2,127 
Cash and cash equivalents at end of year
1,971 
2,186 
2,074 
Supplemental Disclosure
 
 
 
Income taxes paid, net of refunds
2,656 
595 
2,057 
Non-cash accruals related to purchases of property, equipment, technology and intangible assets
$ 62 
$ 46 
$ 67 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Note 1—Summary of Significant Accounting Policies
Organization. In a series of transactions from October 1 to October 3, 2007, Visa Inc. ("Visa" or the "Company") undertook a reorganization in which Visa U.S.A. Inc. ("Visa U.S.A."), Visa International Service Association ("Visa International"), Visa Canada Corporation ("Visa Canada") and Inovant LLC ("Inovant") became direct or indirect subsidiaries of Visa and established the retrospective responsibility plan (the "October 2007 reorganization" or "reorganization"). See Note 3—Retrospective Responsibility Plan. The reorganization was reflected as a single transaction on October 1, 2007 using the purchase method of accounting with Visa U.S.A. as the accounting acquirer. Visa Europe Limited ("Visa Europe") did not become a subsidiary of Visa Inc., but rather remained owned and governed by its European member financial institutions. See Note 2—Visa Europe.
Visa is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. Visa and its wholly-owned consolidated subsidiaries, including Visa U.S.A., Visa International, Visa Worldwide Pte. Limited (“VWPL”), Visa Canada, Inovant and CyberSource Corporation (“CyberSource”), operate one of the world's most advanced processing networks — VisaNet — which facilitates authorization, clearing and settlement of payment transactions worldwide. VisaNet also offers fraud protection for account holders and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for account holders on Visa-branded cards and payment products. In most cases, account holder and merchant relationships belong to, and are managed by, Visa's financial institution clients. Visa provides a wide variety of payment solutions that support payment products that issuers can offer to their account holders: pay now with debit, pay ahead with prepaid or pay later with credit products. These services facilitate transactions on Visa's network among account holders, merchants, financial institutions and governments in mature and emerging markets globally.
Consolidation and basis of presentation. The consolidated financial statements include the accounts of Visa and its consolidated entities and are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company consolidates its majority-owned and controlled entities, including variable interest entities (“VIEs”) for which the Company is the primary beneficiary. The Company's investments in VIEs have not been material to its consolidated financial statements as of and for the periods presented. All significant intercompany accounts and transactions are eliminated in consolidation.
Beginning in fiscal 2013, current income tax receivable is presented separately on the consolidated balance sheets. Previously, it had been included in the prepaid expenses and other current assets line. The Company also combined the interest income (expense), investment income and other lines on the consolidated statements of operations into one line entitled, "Non-operating income." All prior period information has been reclassified to conform to current period presentation.
The Company's activities are interrelated, and each activity is dependent upon and supportive of the other. All significant operating decisions are based on analysis of Visa as a single global business. Accordingly, the Company has one reportable segment, Payment Services.
Use of estimates. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Future actual results could differ materially from these estimates. The use of estimates in specific accounting policies is described further below as appropriate.
Cash and cash equivalents. Cash and cash equivalents include cash and certain highly liquid investments with original maturities of 90 days or less from the date of purchase. Cash equivalents are primarily recorded at cost, which approximates fair value due to their generally short maturities.
Restricted cash—litigation escrow. The Company maintains an escrow account from which monetary liabilities from settlements of, or judgments in, the covered litigation are paid. See Note 3—Retrospective Responsibility Plan and Note 20—Legal Matters for a discussion of the covered litigation. The escrow funds are held in money market investments, together with the interest earned, less applicable taxes payable, and classified as restricted cash on the consolidated balance sheets. Interest earned on escrow funds is included in non-operating income on the consolidated statements of operations.
Investments and fair value. The Company measures certain assets and liabilities at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are reported under a three-level valuation hierarchy. See Note 4—Fair Value Measurements and Investments. The classification of the Company’s financial assets and liabilities within the hierarchy is as follows:
Level 1—Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 assets include money market funds, publicly-traded equity securities and U.S. Treasury securities.
Level 2—Inputs to the valuation methodology can include: (1) quoted prices in active markets for similar (not identical) assets or liabilities; (2) quoted prices for identical or similar assets in non-active markets; (3) inputs other than quoted prices that are observable for the asset or liability; or (4) inputs that are derived principally from or corroborated by observable market data. The Company's Level 2 assets and liabilities include commercial paper, U.S. government-sponsored debt securities, corporate debt securities and foreign exchange derivative instruments.
Level 3—Inputs to the valuation methodology are unobservable and cannot be corroborated by observable market data. The Company's Level 3 assets and liabilities include auction rate securities and the Visa Europe put option.
Trading investment securities include mutual fund equity security investments related to various employee compensation and benefit plans. Trading activity in these investments is at the direction of the Company's employees. These investments are held in a trust and are not available for the Company's operational or liquidity needs. Interest and dividend income and changes in fair value are recorded in non-operating income, and offset in personnel expense on the consolidated statements of operations.
Available-for-sale investment securities include investments in debt and equity securities. These securities are recorded at cost at the time of purchase and are carried at fair value. The Company considers these securities to be available-for-sale to meet working capital and liquidity needs. Investments with original maturities of greater than 90 days and stated maturities of less than one year from the balance sheet date, or investments that the Company intends to sell within one year, are classified as current assets, while all other securities are classified as non-current assets. The majority of these investments are classified as non-current as they have stated maturities of more than one year from the balance sheet date. However, these investments are generally available to meet short-term liquidity needs. Unrealized gains and losses are reported in accumulated other comprehensive income or loss on the consolidated balance sheets until realized. The specific identification method is used to calculate realized gain or loss on the sale of marketable securities, which is recorded in non-operating income on the consolidated statements of operations. Dividend and interest income are recognized when earned and are included in non-operating income on the consolidated statements of operations.
The Company evaluates its debt and equity securities for other-than-temporary impairment, or OTTI, on an ongoing basis. When there has been a decline in fair value of a debt or equity security below the amortized cost basis, the Company recognizes OTTI if: (1) it has the intent to sell the security; (2) it is more likely than not that it will be required to sell the security before recovery of the amortized cost basis; or (3) it does not expect to recover the entire amortized cost basis of the security. The Company has not presented required separate disclosures because its gross unrealized loss positions in debt or equity securities for the periods presented are not material.
The Company applies the equity method of accounting for investments in other entities when it holds between 20% and 50% ownership in the entity or when it exercises significant influence. Under the equity method, the Company’s share of each entity’s profit or loss is reflected in non-operating income on the consolidated statements of operations. The equity method of accounting is also used for flow-through entities such as limited partnerships and limited liability companies when the investment ownership percentage is equal to or greater than 5% of outstanding ownership interests, regardless of whether the Company has significant influence over the investees.
The Company applies the cost method of accounting for investments in other entities when it holds less than 20% ownership in the entity and does not exercise significant influence, or for flow-through entities when the investment ownership is less than 5% and the Company does not exercise significant influence. These investments consist of equity holdings in non-public companies and are recorded in other assets on the consolidated balance sheets.
The Company regularly reviews investments accounted for under the cost and equity methods for possible impairment, which generally involves an analysis of the facts and changes in circumstances influencing the investment, expectations of the entity’s cash flows and capital needs, and the viability of its business model.
Financial instruments. The Company considers the following to be financial instruments: cash and cash equivalents, restricted cash-litigation escrow, trading and available-for-sale investment securities, settlement receivable and payable, customer collateral, non-marketable equity investments, settlement risk guarantee, derivative instruments, and the Visa Europe put option. See Note 4—Fair Value Measurements and Investments.
Settlement receivable and payable. The Company operates systems for authorizing, clearing and settling payment transactions worldwide. U.S. dollar settlements with the Company's financial institution clients are typically settled within the same day and do not result in a receivable or payable balance, while settlement currencies other than the U.S. dollar generally remain outstanding for one to two business days, resulting in amounts due from and to clients. These amounts are presented as settlement receivable and settlement payable on the consolidated balance sheets.
Customer collateral. The Company holds cash deposits and other non-cash assets from certain clients in order to ensure their performance of settlement obligations arising from Visa-branded cards and payment products processed in accordance with the Company's operating regulations. The cash collateral assets are restricted and fully offset by corresponding liabilities and both balances are presented on the consolidated balance sheets. Non-cash collateral assets are held on behalf of the Company by a third party and are not recorded on the consolidated balance sheets. See Note 11—Settlement Guarantee Management.
Client incentives. The Company enters into long-term contracts with financial institution clients and other business partners for various programs designed to build payments volume, increase Visa-branded card and product acceptance and win merchant routing transactions over Visa's network. These incentives are primarily accounted for as reductions to operating revenues or as operating expenses if a separate identifiable benefit at fair value can be established. The Company generally capitalizes advance incentive payments under these agreements if select criteria are met. The capitalization criteria include the existence of future economic benefits to Visa, the existence of legally enforceable recoverability language (e.g., early termination clauses), management's ability and intent to enforce the recoverability language and the ability to generate future earnings from the agreement in excess of amounts deferred. Capitalized amounts are amortized over the shorter of the period of contractual recoverability or the corresponding period of economic benefit. Incentives not yet paid are accrued systematically and rationally based on management's estimate of each client's performance. These accruals are regularly reviewed and estimates of performance are adjusted, as appropriate, based on changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts. See Note 17—Commitments and Contingencies.
Property, equipment and technology, net. Property, equipment and technology are recorded at historical cost less accumulated depreciation and amortization, which are computed on a straight-line basis over the asset’s estimated useful life. Depreciation and amortization of technology, furniture, fixtures and equipment are computed over estimated useful lives ranging from 2 to 7 years. Capital leases are amortized over the lease term and leasehold improvements are amortized over the shorter of the useful life of the asset or lease term. Building improvements are depreciated between 3 and 40 years, and buildings are depreciated over 40 years. Improvements that increase functionality of the asset are capitalized and depreciated over the asset’s remaining useful life. Land and construction-in-progress are not depreciated. Fully depreciated assets are retained in property, equipment and technology, net, until removed from service.
Technology includes purchased and internally developed software, including technology assets obtained through acquisitions. Internally developed software represents software primarily used by the VisaNet electronic payments network and CyberSource platform. Internal and external costs incurred during the preliminary project stage are expensed as incurred. Qualifying costs incurred during the application development stage are capitalized. Once the project is substantially complete and ready for its intended use these costs are amortized on a straight-line basis over the technology's estimated useful life. Acquired technology assets are initially recorded at fair value and amortized on a straight-line basis over the estimated useful life.
The Company evaluates the recoverability of long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If the sum of expected undiscounted net future cash flows is less than the carrying amount of an asset or asset group, an impairment loss is recognized to the extent that the carrying amount of the asset or asset group exceeds its fair value. See Note 6—Property, Equipment and Technology, Net.
Leases. The Company enters into operating and capital leases for the use of premises, software and equipment. Rent expense related to operating lease agreements, which may or may not contain lease incentives, is primarily recorded on a straight-line basis over the lease term.
Intangible assets, net. The Company records identifiable intangible assets at fair value on the date of acquisition and evaluates the useful life of each asset.
Finite-lived intangible assets primarily consist of customer relationships, reacquired rights, reseller relationships and tradenames obtained through acquisitions. Finite-lived intangible assets are amortized on a straight-line basis and are tested for recoverability if events or changes in circumstances indicate that their carrying amounts may not be recoverable. These intangibles have useful lives ranging from 3 to 15 years. No events or changes in circumstances indicate that impairment existed as of September 30, 2014. See Note 7—Intangible Assets and Goodwill.
Indefinite-lived intangible assets consist of tradename, customer relationships and the Visa Europe franchise right acquired in the October 2007 reorganization. Intangible assets with indefinite useful lives are not amortized but are evaluated for impairment annually or more frequently if events or changes in circumstances indicate that impairment may exist. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangible assets. The Company assesses each category of indefinite-lived intangible assets for impairment on an aggregate basis, which may require the allocation of cash flows and/or an estimate of fair value to the assets or asset group. Impairment exists if the fair value of the indefinite-lived intangible asset is less than the carrying value. The Company relies on a number of factors when completing impairment assessments, including a review of discounted net future cash flows, business plans and the use of present value techniques.
The Company completed its annual impairment review of indefinite-lived intangible assets as of February 1, 2014, and concluded there was no impairment as of that date. No recent events or changes in circumstances indicate that impairment of the Company's indefinite-lived intangible assets existed as of September 30, 2014.
Goodwill. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not amortized but is evaluated for impairment at the reporting unit level annually as of February 1, or more frequently if events or changes in circumstances indicate that impairment may exist.
The Company evaluated its goodwill for impairment on February 1, 2014, and concluded there was no impairment as of that date. No recent events or changes in circumstances indicate that impairment existed as of September 30, 2014.
Accrued litigation. The Company evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings to which it is a party and records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These judgments are subjective, based on the status of such legal or regulatory proceedings, the merits of the Company's defenses and consultation with corporate and external legal counsel. Actual outcomes of these legal and regulatory proceedings may differ materially from the Company's estimates. The Company expenses legal costs as incurred in professional fees in the consolidated statements of operations. See Note 20—Legal Matters.
Revenue recognition. The Company's operating revenues are comprised principally of service revenues, data processing revenues, international transaction revenues and other revenues, reduced by costs incurred under client incentives arrangements. The Company recognizes revenue, net of sales and other similar taxes, when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.
Service revenues consist of revenues earned for providing financial institution clients with support services for the delivery of Visa-branded payment products and solutions. Current quarter service revenues are primarily assessed using a calculation of current pricing applied to the prior quarter's payments volume. The Company also earns revenues from assessments designed to support ongoing acceptance and volume growth initiatives, which are recognized in the same period the related volume is transacted.
Data processing revenues consist of revenues earned for authorization, clearing, settlement, network access and other maintenance and support services that facilitate transaction and information processing among the Company's clients globally and with Visa Europe. Data processing revenues are also earned for transactions processed by CyberSource's online payment gateway platform. Data processing revenues are recognized in the same period the related transactions occur or services are rendered.
International transaction revenues are earned for cross-border transaction processing and currency conversion activities. Cross-border transactions arise when the country of origin of the issuer is different from that of the merchant. International transaction revenues are primarily generated by cross-border payments and cash volume.
Other revenues consist mainly of license fees for use of the Visa brand, revenues earned from Visa Europe in connection with the Visa Europe Framework Agreement (see Note 2—Visa Europe), fees from account holder services, licensing and certification and other activities related to the Company's acquired entities. Other revenues also include optional service or product enhancements, such as extended account holder protection and concierge services. Other revenues are recognized in the same period the related transactions occur or services are rendered.
Marketing. The Company expenses costs for the production of advertising as incurred. The cost of media advertising is expensed when the advertising takes place. Sponsorship costs are recognized over the period in which the Company benefits from the sponsorship rights. Promotional items are expensed as incurred, when the related services are received, or when the related event occurs.
Income taxes. The Company's income tax expense consists of two components: current and deferred. Current income tax expense represents taxes paid or payable for the current period. Deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to temporary differences between the financial statement carrying amounts and the respective tax basis of existing assets and liabilities, and operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing whether deferred tax assets are realizable, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. A valuation allowance is recorded for the portions that are not expected to be realized based on the level of historical taxable income, projections of future taxable income over the periods in which the temporary differences are deductible, and qualifying tax planning strategies.
Where interpretation of the tax law may be uncertain, the Company recognizes, measures and discloses income tax uncertainties. The Company accounts for interest expense and penalties related to uncertain tax positions in non-operating income in the consolidated statements of operations. The Company files a consolidated federal income tax return and, in certain states, combined state tax returns. The Company elects to claim foreign tax credits in any given year if such election is beneficial to the Company. See Note 19—Income Taxes.
Pension and other postretirement benefit plans. The Company’s defined benefit pension and other postretirement benefit plans are actuarially evaluated, incorporating various critical assumptions including the discount rate and the expected rate of return on plan assets (for qualified pension plans). The discount rate is based on a "bond duration matching" methodology, which reflects the matching of projected plan obligation cash flows to an average of high-quality corporate bond yield curves whose duration matches the projected cash flows. The expected rate of return on pension plan assets considers the current and expected asset allocation, as well as historical and expected returns on each plan asset class. Any difference between actual and expected plan experience, including asset return experience, in excess of a 10% corridor is recognized in net periodic pension cost over the expected average employee future service period, which is approximately 8 years for plans in the United States. Other assumptions involve demographic factors such as retirement age, mortality, attrition and the rate of compensation increases. The Company evaluates assumptions annually and modifies them as appropriate.
The Company recognizes the funded status of its benefit plans in its consolidated balance sheets as other assets, accrued liabilities and other liabilities. The Company recognizes settlement losses when it settles pension benefit obligations, including making lump-sum cash payments to plan participants in exchange for their rights to receive specified pension benefits, when certain thresholds are met. See Note 10—Pension, Postretirement and Other Benefits.
Foreign currency remeasurement and translation. The Company's functional currency is the U.S. dollar for the majority of its foreign operations. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Resulting foreign currency transaction gains and losses related to conversion and remeasurement are recorded in general and administrative expense in the consolidated statements of operations and were not material for fiscal 2014, 2013 and 2012.
For certain foreign operations, the Company's functional currency may be the local currency in which a foreign subsidiary executes its business transactions. Translation from the local currency to the U.S. dollar is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using an average exchange rate for the period. Resulting translation adjustments are reported as a component of accumulated other comprehensive income or loss on the consolidated balance sheets.
Derivative financial instruments. The Company uses foreign exchange forward derivative contracts to reduce its exposure to foreign currency rate changes on forecasted non-functional currency denominated operational cash flows. Derivatives are carried at fair value on a gross basis in either prepaid and other current assets or accrued liabilities on the consolidated balance sheets. At September 30, 2014, derivatives outstanding mature within 12 months or less. Gains and losses resulting from changes in fair value of derivative instruments are accounted for either in accumulated other comprehensive income or loss on the consolidated balance sheets, or in the consolidated statements of operations (in the corresponding account where revenue or expense is hedged, or to general and administrative for hedge amounts determined to be ineffective) depending on whether they are designated and qualify for hedge accounting. Fair value represents the difference in the value of the derivative instruments at the contractual rate and the value at current market rates, and generally reflects the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date based on broker quotes for the same or similar instruments. The Company does not enter into derivative contracts for speculative or trading purposes. See Note 12—Derivative Financial Instruments.
Guarantees and indemnifications. The Company recognizes an obligation at inception for guarantees and indemnifications that qualify for recognition, regardless of the probability of occurrence. The Company indemnifies its financial institution clients for settlement losses suffered due to the failure of any other client to fund its settlement obligations in accordance with Visa's operating regulations. The estimated fair value of the liability for settlement indemnification is included in accrued liabilities on the consolidated balance sheets and is described in Note 11—Settlement Guarantee Management. The Company indemnifies Visa Europe for claims arising from the Company’s or Visa Europe’s activities that are brought outside of Visa Europe’s region, as described in Note 2—Visa Europe.
Share-based compensation. The Company recognizes share-based compensation cost using the fair value method of accounting. The Company recognizes compensation cost for awards with only service conditions on a straight-line basis over the requisite service period, which is generally the vesting period. Compensation cost for performance and market-condition-based awards is recognized on a graded-vesting basis. The amount is initially estimated based on target performance and is adjusted as appropriate based on management's best estimate throughout the performance period. See Note 16—Share-based Compensation.
Earnings per share. The Company calculates earnings per share using the two-class method to reflect the different rights of each class and series of outstanding common stock. The dilutive effect of incremental common stock equivalents is reflected in diluted earnings per share by application of the treasury stock method. See Note 15—Earnings Per Share.
Recently Issued Accounting Pronouncements
In January 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. The Company adopted the standard effective October 1, 2013. 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 adopted the standard effective October 1, 2013.
Beginning with fiscal 2014, the components related to pension and postretirement benefit plans are presented on
the consolidated statements of comprehensive income. All prior period information has been reclassified to conform
to current period presentation. The adoption did not have a material impact on the consolidated financial
statements.
In February 2013, the FASB issued ASU 2013-04, which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
In March 2013, the FASB issued ASU 2013-05, which clarifies the applicable guidance for the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity, or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
In July 2013, the FASB issued ASU 2013-11, which provides guidance for the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
In May 2014, the FASB issued ASU No. 2014-09, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of goods or services to customers. The ASU will replace existing revenue recognition guidance in U.S. GAAP when it becomes effective. The Company will adopt the standard effective October 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method and is evaluating the full effect of the standard on its ongoing financial reporting.
In June 2014, the FASB issued ASU No. 2014-12, which requires a performance target in stock compensation awards that affects vesting, and is achievable after the requisite service period, be treated as a performance condition. The Company will adopt the standard effective October 1, 2016. The adoption is not expected to have a material impact to the consolidated financial statements.
Visa Europe
Visa Europe
Note 2—Visa Europe
As part of Visa's October 2007 reorganization, Visa Europe exchanged its ownership interest in Visa International and Inovant for Visa common stock, a put-call option agreement and a Framework Agreement, as described below.
Visa Europe put option agreement. The Company granted Visa Europe a perpetual put option, which if exercised, will require Visa to purchase all of the outstanding shares of capital stock of Visa Europe from its members. The Company is required to purchase the shares of Visa Europe no later than 285 days after exercise of the put option. The put option agreement provides a formula for determining the purchase price of the Visa Europe shares, which, subject to certain adjustments, applies Visa Inc.'s forward price-to-earnings multiple, or the P/E ratio (as defined in the option agreement), at the time the option is exercised to Visa Europe's adjusted sustainable income for the forward 12-month period (as defined in the option agreement), or the adjusted sustainable income. The calculation of Visa Europe's adjusted sustainable income under the terms of the put option agreement includes potentially material adjustments for cost synergies and other negotiated items. Upon exercise, the key inputs to this formula, including Visa Europe's adjusted sustainable income, will be the result of negotiation between the Company and Visa Europe. The put option agreement provides an arbitration mechanism in the event that the two parties are unable to agree on the ultimate purchase price.
The fair value of the put option represents the value of Visa Europe's option, which, under certain conditions, could obligate the Company to purchase its member equity interest for an amount above fair value. The fair value of the put option does not represent the actual purchase price that the Company may be required to pay if the option is exercised. Given current economic conditions, the purchase price under the terms of the put option would likely be in excess of $10 billion. While the put option is in fact non-transferable, its fair value represents the Company's estimate of the amount the Company would be required to pay a third-party market participant to transfer the potential obligation in an orderly transaction.
The fair value of the put option is computed by comparing the estimated strike price, under the terms of the put option agreement, to the estimated fair value of Visa Europe. The fair value of Visa Europe is defined as the estimated amount a third-party market participant might pay in an arm's-length transaction under normal business conditions. A probability of exercise assumption is applied to reflect the possibility that Visa Europe will never exercise its option.
The estimated fair value of the put option represents a Level 3 accounting estimate due to a lack of trading in active markets and a lack of observable inputs in measuring fair value. See Note 4—Fair Value Measurements and Investments. The valuation of the put option therefore requires substantial judgment. The most subjective of estimates applied in valuing the put option are the assumed probability that Visa Europe will elect to exercise its option and the estimated differential between the P/E ratio and the P/E ratio applicable to Visa Europe on a standalone basis at the time of exercise, which the Company refers to as the “P/E differential.”
Exercise of the put option is at the sole discretion of Visa Europe (on behalf of the Visa Europe shareholders pursuant to authority granted to Visa Europe, under its Articles of Association). The Company estimates the assumed probability of exercise based on reasonably available information including, but not limited to: (i) Visa Europe's stated intentions; (ii) indications that Visa Europe is preparing to exercise as reflected in its reported financial results; (iii) evaluation of market conditions, including the regulatory environment, that could impact the potential future profitability of Visa Europe; and (iv) qualitative factors applicable to Visa Europe's largest members, which could indicate a change in their need or desire to liquidate their investment holdings. Factors impacting the assumed P/E differential used in the calculation include material changes in the P/E ratio of Visa and those of a group of comparable companies used to estimate the forward price-to-earnings multiple applicable to Visa Europe.
The Company determined the fair value of the put option to be approximately $145 million at September 30, 2014 and 2013. In determining the fair value of the put option on these dates, the Company assumed a 40% probability of exercise by Visa Europe at some point in the future and an estimated long-term P/E differential at the time of exercise of 1.9x. Changes in the fair value of the put option are recorded as non-cash, non-operating income in the Company's consolidated statements of operations.
The put option is exercisable at any time at the sole discretion of Visa Europe. As such, the put option liability is included in accrued liabilities on the Company's consolidated balance sheet at September 30, 2014. Classification in current liabilities is not an indication of management's expectation of exercise and simply reflects the fact that the obligation resulting from the exercise of the instrument could become payable within 12 months.
Visa call option agreement. Visa Europe granted to Visa a perpetual call option under which the Company may be entitled to purchase all of the share capital of Visa Europe. The Company may exercise the call option in the event of certain triggering events. These triggering events involve the performance of Visa Europe measured as an unremediated decline in the number of merchants or ATM's in the Visa Europe region that accepts Visa-branded products. The Company believes the likelihood of these events occurring is remote.
The Framework Agreement. The relationship between Visa and Visa Europe is governed by a Framework Agreement, which provides for trademark and technology licenses and bilateral services as described below.
The Company granted to Visa Europe exclusive, irrevocable and perpetual licenses to use the Visa trademarks and technology intellectual property owned by the Company and certain affiliates within the Visa Europe region for use in the field of financial services, payments, related information technology and information processing services and participation in the Visa system. Visa Europe may sublicense the Visa trademarks and technology intellectual property to its members and other sublicensees under agreed-upon circumstances.
The base fee for these irrevocable and perpetual licenses is recorded in other revenues and was approximately $143 million per year for fiscal 2014, 2013 and 2012. This fee is eligible for adjustment annually based on the annual growth of the gross domestic product of the European Union, although the adjustment can never reduce the annual fee below $143 million. The Company determined through an analysis of the fee rates implied by the economics of the agreement that the base fee, as adjusted in future periods based on the growth of the gross domestic product of the European Union, approximates fair value.
In addition to the licenses, Visa provides Visa Europe with authorization, clearing and settlement services for cross-border transactions involving Visa Europe's region and the rest of the world. Visa Europe must comply with certain agreed-upon global rules governing the interoperability of Visa's systems with the systems of Visa Europe as well as the use and interoperability of the Visa trademarks. The parties will also guarantee the obligations of their respective clients and members to settle transactions, manage certain relationships with sponsors, clients and merchants, and comply with rules relating to the operation of the Visa enterprise. Under the Framework Agreement, the Company indemnifies Visa Europe for claims arising from the Company’s or Visa Europe’s activities that are brought outside of Visa Europe’s region; and Visa Europe likewise indemnifies the Company for such claims brought within Visa Europe’s region. However, Visa Europe has expressed an “initial” view that it is not obligated to indemnify the Company for any claim relating to the European Competition Proceedings, including claims asserted in both the European Commission matter and the U.K. Merchant Litigation. The Company continues to firmly believe that Visa Europe is obligated to indemnify the Company for all such claims. See Note 20—Legal Matters.
The Company has not recorded liabilities associated with these obligations as the fair value of such obligations was determined to be insignificant at September 30, 2014 and 2013, respectively. The Company has determined that the value of services exchanged as a result of these various agreements approximates fair value at September 30, 2014 and 2013, respectively.
Retrospective Responsibility Plan
Retrospective Responsibility Plan
Note 3—Retrospective Responsibility Plan
The Company has established several related mechanisms designed to address potential liability under certain litigation referred to as the “covered litigation." These mechanisms are included in and referred to as the retrospective responsibility plan, or the plan, and consist of a litigation escrow agreement, the conversion feature of the Company's shares of class B common stock, the indemnification obligations of the Visa U.S.A. members, an interchange judgment sharing agreement, a loss sharing agreement, and an omnibus agreement, as amended.
Covered litigation consists of:
•
the Discover Litigation. Discover Financial Services Inc. v. Visa U.S.A. Inc., Case No. 04-CV-07844 (S.D.N.Y) (settled); 
•
the American Express Litigation. American Express Travel Related Services Co., Inc. v. Visa U.S.A. Inc. et al., No. 04-CV-0897 (S.D.N.Y.), which the Company refers to as the American Express litigation (settled); 
•
the Attridge Litigation. Attridge v. Visa U.S.A. Inc. et al., Case No. CGC-04-436920 (Cal. Super.); 
•
the Interchange Multidistrict Litigation. In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 1:05-md-01720-JG-JO (E.D.N.Y.) or MDL 1720, including all cases currently included in MDL 1720, any other case that includes claims for damages relating to the period prior to the Company's IPO that has been or is transferred for coordinated or consolidated pre-trial proceedings at any time to MDL 1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of any court of competent jurisdiction and Kendall v. Visa U.S.A., Inc. et al., Case No. CO4-4276 JSW (N.D. Cal.); and 
•
any claim that challenges the reorganization or the consummation thereof; provided that such claim is transferred for coordinated or consolidated pre-trial proceedings at any time to MDL 1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of any court of competent jurisdiction.
Litigation escrow agreement. In accordance with the litigation escrow agreement, the Company maintains an escrow account, from which monetary liabilities from settlements of, or judgments in, the covered litigation are paid. The amount of the escrow is determined by the board of directors and the Company's litigation committee, all members of which are affiliated with, or act for, certain Visa U.S.A. members. The escrow funds are held in money market investments along with the interest earned, less applicable taxes, and are classified as restricted cash on the consolidated balance sheets.
The following table sets forth the changes in the litigation escrow account:
 
Fiscal 2014
 
Fiscal 2013
 
(in millions)
Balance at October 1
$
49

 
$
4,432

Return of takedown payments from settlement fund into the litigation escrow account
1,056

 
—

Deposits into the litigation escrow account
450

 
—

Payments to opt-out merchants(1)
(57
)
 
—

Payments to class plaintiff settlement fund(1)
—

 
(4,033
)
Payments to individual plaintiff settlement fund(1)
—

 
(350
)
Balance at September 30
$
1,498

 
$
49


(1)
These payments are associated with the interchange multidistrict litigation. The settlement with the class plaintiffs in these proceedings is subject to the adjudication of appeals. See Note 20—Legal Matters.
An accrual for the covered litigation and a change to the litigation provision are recorded when loss is deemed to be probable and reasonably estimable. In making this determination, the Company evaluates available information, including but not limited to recommendations made by the litigation committee. The accrual related to the covered litigation could be either higher or lower than the litigation escrow account balance. The Company recorded an additional $450 million accrual for the covered litigation during fiscal 2014. See Note 20—Legal Matters.
Conversion feature. Under the terms of the plan, when the Company funds the litigation escrow account, the shares of class B common stock are subject to dilution through an adjustment to the conversion rate of the shares of class B common stock to shares of class A common stock. This has the same economic effect on earnings per share as repurchasing the Company's class A common stock, because it reduces the class B conversion rate and consequently the as-converted class A common stock share count. See Note 14—Stockholders' Equity.
Indemnification obligations. To the extent that amounts available under the litigation escrow arrangement and other agreements in the plan are insufficient to fully resolve the covered litigation, the Company will use commercially reasonable efforts to enforce the indemnification obligations of Visa U.S.A.'s members for such excess amount, including but not limited to enforcing indemnification obligations pursuant to Visa U.S.A.'s certificate of incorporation and bylaws and in accordance with their membership agreements.
Interchange judgment sharing agreement. Visa U.S.A. and Visa International have entered into an interchange judgment sharing agreement with certain Visa U.S.A. members that have been named as defendants in the interchange multidistrict litigation, which is described in Note 20—Legal Matters. Under this judgment sharing agreement, Visa U.S.A. members that are signatories will pay their membership proportion of the amount of a final judgment not allocated to the conduct of MasterCard.
Loss sharing agreement. Visa has entered into a loss sharing agreement with Visa U.S.A., Visa International and certain Visa U.S.A. members. The loss sharing agreement provides for the indemnification of Visa U.S.A., Visa International and, in certain circumstances, Visa with respect to: (i) the amount of a final judgment paid by Visa U.S.A. or Visa International in the covered litigation after the operation of the interchange judgment sharing agreement, plus any amounts reimbursable to the interchange judgment sharing agreement signatories; or (ii) the damages portion of a settlement of a covered litigation that is approved as required under Visa U.S.A.'s certificate of incorporation by the vote of Visa U.S.A.'s specified voting members. The several obligation of each bank that is a party to the loss sharing agreement will equal the amount of any final judgment enforceable against Visa U.S.A., Visa International or any other signatory to the interchange judgment sharing agreement, or the amount of any approved settlement of a covered litigation, multiplied by such bank's then-current membership proportion as calculated in accordance with Visa U.S.A.'s certificate of incorporation.
Omnibus agreement. Visa entered into an omnibus agreement with MasterCard and certain Visa U.S.A. members that confirmed and memorialized the signatories’ intentions with respect to the loss sharing agreement, the interchange judgment sharing agreement and other agreements relating to the interchange multidistrict litigation, see Note 20—Legal Matters. Under the omnibus agreement, the monetary portion of any settlement of the interchange multidistrict litigation covered by the omnibus agreement would be divided into a MasterCard portion at 33.3333% and a Visa portion at 66.6667%. In addition, the monetary portion of any judgment assigned to Visa-related claims in accordance with the omnibus agreement would be treated as a Visa portion. Visa would have no liability for the monetary portion of any judgment assigned to MasterCard-related claims in accordance with the omnibus agreement, and if a judgment is not assigned to Visa-related claims or MasterCard-related claims in accordance with the omnibus agreement, then any monetary liability would be divided into a MasterCard portion at 33.3333% and a Visa portion at 66.6667%. The Visa portion of a settlement or judgment covered by the omnibus agreement would be allocated in accordance with specified provisions of the Company's retrospective responsibility plan. The litigation provision on the consolidated statements of operations is not impacted by the execution of the omnibus agreement.
On August 26, 2014, Visa entered into an amendment to the omnibus agreement. The omnibus amendment makes applicable to certain settlements in opt-out cases in the interchange multidistrict litigation the settlement-sharing provisions of the omnibus agreement, pursuant to which the monetary portion of any settlement of the interchange multidistrict litigation covered by the omnibus agreement would be divided into a MasterCard portion at 33.3333% and a Visa portion at 66.6667%. The omnibus amendment also provides that in the event of termination of the class Settlement Agreement, Visa and MasterCard would make mutually acceptable arrangements so that Visa shall have received two-thirds and MasterCard shall have received one-third of the total of (i) the sums paid to defendants as a result of the termination of the Settlement Agreement and (ii) the takedown payments previously made to defendants.
Fair Value Measurements and Investments
Fair Value Measurements and Investments
Note 4—Fair Value Measurements and Investments
Fair Value Measurements
The Company measures certain assets and liabilities at fair value. See Note 1—Summary of Significant Accounting Policies.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
 
Fair Value Measurements at September 30
Using Inputs Considered as
 
Level 1
 
Level 2
 
Level 3
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents and restricted cash:
 
 
 
 
 
 
 
 
 
 
 
Money market funds
$
2,277

 
$
1,071

 
 
 
 
 
 
 
 
Commercial paper
 
 
 
 
$
37

 
$
51

 
 
 
 
Investment securities, trading:
 
 
 
 
 
 
 
 
 
 
 
Equity securities
69

 
75

 
 
 
 
 
 
 
 
Investment securities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
U.S. government-sponsored debt securities
 
 
 
 
2,162

 
2,704

 
 
 
 
U.S. Treasury securities
2,176

 
1,673

 
 
 
 
 
 
 
 
Equity securities
58

 
101

 
 
 
 
 
 
 
 
Corporate debt securities
 
 
 
 
522

 
269

 
 
 
 
Auction rate securities
 
 
 
 
 
 
 
 
$
7

 
$
7

Prepaid and other current assets:
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange derivative instruments
 
 
 
 
40

 
23

 
 
 
 
Total
$
4,580

 
$
2,920

 
$
2,761

 
$
3,047

 
$
7

 
$
7

Liabilities
 
 
 
 
 
 
 
 
 
 
 
Accrued liabilities:
 
 
 
 
 
 
 
 
 
 
 
Visa Europe put option
 
 
 
 
 
 
 
 
$
145

 
$
145

Foreign exchange derivative instruments
 
 
 
 
$
6

 
$
15

 
 
 
 
Total
$
—

 
$
—

 
$
6

 
$
15

 
$
145

 
$
145


There were no significant transfers between Level 1 and Level 2 assets during fiscal 2014.
Level 1 assets measured at fair value on a recurring basis. Money market funds, publicly-traded equity securities and U.S. Treasury securities are classified as Level 1 within the fair value hierarchy, as fair value is based on quoted prices in active markets. The increase in the Company's Level 1 assets primarily reflects the receipt of takedown payments related to the interchange multidistrict litigation, which were deposited into the Company's litigation escrow account. See Note 3—Retrospective Responsibility Plan and Note 20—Legal Matters.
Level 2 assets and liabilities measured at fair value on a recurring basis. The fair value of U.S. government-sponsored debt securities and corporate debt securities, as provided by third-party pricing vendors, is based on quoted prices in active markets for similar, not identical, assets. The pricing data obtained from outside sources is reviewed internally for reasonableness, compared against benchmark quotes from independent pricing sources, then confirmed or revised accordingly. Commercial paper and foreign exchange derivative instruments are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. There were no substantive changes to the valuation techniques and related inputs used to measure fair value during fiscal 2014.
Level 3 assets and liabilities measured at fair value on a recurring basis. Auction rate securities are classified as Level 3 due to a lack of trading in active markets and a lack of observable inputs in measuring fair value. There were no substantive changes to the valuation techniques and related inputs used to measure fair value during fiscal 2014.
Visa Europe put option agreement. The Company has granted Visa Europe a perpetual put option which is carried at fair value in accrued liabilities on the consolidated balance sheets. The fair value of the put option was $145 million at September 30, 2014 and 2013. Changes in fair value are recorded as non-cash, non-operating income in the Company's consolidated statements of operations. See Note 2—Visa Europe. The liability is classified within Level 3 as the assumed probability that Visa Europe will elect to exercise its option and the estimated P/E differential are among several unobservable inputs used to value the put option.
Assets Measured at Fair Value on a Non-recurring Basis
Non-marketable equity investments and investments accounted for under the equity method. These investments are classified as Level 3 due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment. When certain events or circumstances indicate that impairment may exist, the Company revalues the investments using various assumptions, including the financial metrics and ratios of comparable public companies. The Company recognized a $15 million other-than-temporary impairment loss related to these investments during fiscal 2013. There were no significant impairment charges incurred during fiscal 2014 and 2012. At September 30, 2014 and 2013, these investments totaled $35 million and $30 million, respectively. These assets are classified in other assets on the consolidated balance sheets. See Note 5—Prepaid Expenses and Other Assets.
Due to a change in the Company's relationship with one of its investees during fiscal 2013, the Company reclassified equity securities previously accounted for as an equity method investment, with a carrying value of $12 million, to long-term available-for-sale investment securities. The fair value of this investment at September 30, 2014 and 2013 was $53 million and $99 million, respectively.
Non-financial assets and liabilities. Long-lived assets such as goodwill, indefinite-lived intangible assets, finite-lived intangible assets, and property, equipment and technology are considered non-financial assets. The Company does not have any non-financial liabilities measured at fair value on a non-recurring basis. Finite-lived intangible assets primarily consist of customer relationships, tradenames, and reseller relationships, all of which were obtained through acquisitions. See Note 7—Intangible Assets and Goodwill.
If the Company were required to perform a quantitative assessment for impairment testing of goodwill and indefinite-lived intangible assets, the fair values would generally be estimated using an income approach. As the assumptions employed to measure these assets on a non-recurring basis are based on management's judgment using internal and external data, these fair value determinations are classified as Level 3 in the fair value hierarchy. The Company completed its annual impairment review of its indefinite-lived intangible assets and goodwill as of February 1, 2014, and concluded that there was no impairment. No recent events or changes in circumstances indicate that impairment existed at September 30, 2014. See Note 1—Summary of Significant Accounting Policies.
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 September 30, 2014, but require disclosure of their fair values: time deposits recorded in prepaid expenses and other current assets, settlement receivable and payable, and customer collateral. The estimated fair value of such instruments at September 30, 2014, approximates their carrying value due to their generally short maturities. If measured at fair value in the financial statements, these financial instruments would be classified as Level 2 in the fair value hierarchy.
Investments
Trading Investment Securities
Trading investment securities include mutual fund equity security investments related to various employee compensation and benefit plans. Trading activity in these investments is at the direction of the Company's employees. These investments are held in trust and are not available for the Company's operational or liquidity needs. Interest and dividend income and changes in fair value are recorded in non-operating income, and offset in personnel expense on the consolidated statements of operations. As of September 30, 2014 and 2013, trading investment securities totaled $69 million and $75 million, respectively.
Available-for-sale Investment Securities
The amortized cost, unrealized gains and losses and fair value of available-for-sale investment securities are as follows:
 
September 30, 2014
 
September 30, 2013

 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Gains
 
Losses
 
Gains
 
Losses
 
 
(in millions)
U.S. government-sponsored debt securities
$
2,160

 
$
2

 
$
—

 
$
2,162

 
$
2,701

 
$
3

 
$
—

 
$
2,704

U.S. Treasury securities
2,174

 
2

 
—

 
2,176

 
1,671

 
2

 
—

 
1,673

Equity securities
15

 
43

 
—

 
58

 
14

 
88

 
(1
)
 
101

Corporate debt securities
521

 
1

 
—

 
522

 
269

 
—

 
—

 
269

Auction rate securities
7

 
—

 
—

 
7

 
7

 
—

 
—

 
7

Total
$
4,877

 
$
48

 
$
—

 
$
4,925

 
$
4,662

 
$
93

 
$
(1
)
 
$
4,754

Less: current portion of available-for-sale investment securities
 
 
 
 
 
 
(1,910
)
 
 
 
 
 
 
 
(1,994
)
Long-term available-for-sale investment securities
 
 
 
 
 
 
$
3,015

 
 
 
 
 
 
 
$
2,760

The available-for-sale investment securities primarily include U.S. government-sponsored debt securities, U.S. Treasury securities and corporate debt securities. Available-for-sale debt securities are presented below in accordance with their stated maturities. The majority of these investments, $3.0 billion, are classified as non-current, as they have stated maturities of more than one year from the balance sheet date. However, these investments are generally available to meet short-term liquidity needs.
 
Amortized Cost
 
Fair Value
 
(in millions)
September 30, 2014:
 
 
 
Due within one year
$
1,903

 
$
1,905

Due after 1 year through 5 years
2,952

 
2,955

Due after 5 years through 10 years
—

 
—

Due after 10 years
7

 
7

Total
$
4,862

 
$
4,867


Investment Income
Investment income is recorded as non-operating income in the Company's consolidated statements of operations and consisted of the following:
 
For the Years Ended
September 30,
 
2014
 
2013
 
2012
 
(in millions)
Interest and dividend income on cash and investments
$
25

 
$
27

 
$
17

Gain on other investments
8

 
5

 
17

Investment securities, trading:
 
 
 
 
 
Unrealized (losses) gains, net
(2
)
 
4

 
9

Realized gains (losses), net
6

 
2

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

 
(1
)
 
—

Other-than-temporary impairment on investments
(3
)
 
(15
)
 
(6
)
Investment income
$
35

 
$
22

 
$
36

Prepaid Expenses and Other Assets
Prepaid Expenses and Other Assets
Note 5—Prepaid Expenses and Other Assets
Prepaid expenses and other current assets consisted of the following:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Prepaid expenses and maintenance
$
103

 
$
111

Foreign exchange derivative instruments—(See Note 12—Derivative Financial Instruments)
40

 
23

Other
73

 
53

Total
$
216

 
$
187


Other non-current assets consisted of the following:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Non-current income tax receivable—(See Note 19—Income Taxes)(1)
$
597

 
$
253

Pension assets—(See Note 10—Pension, Postretirement and Other Benefits)
164

 
192

Other investments—(See Note 4—Fair Value Measurements and Investments)
35

 
30

Long-term prepaid expenses and other
51

 
46

Non-current deferred tax assets—(See Note 19—Income Taxes)
8

 
—

Total
$
855

 
$
521

(1) 
The increase in non-current income tax receivable is mainly due to a tax benefit related to the deduction for U.S. domestic production activities taken during fiscal 2014.
Property, Equipment and Technology, Net
Property, Equipment and Technology, Net
Note 6—Property, Equipment and Technology, Net
Property, equipment and technology, net, consisted of the following:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Land
$
71

 
$
71

Buildings and building improvements
787

 
766

Furniture, equipment and leasehold improvements
1,197

 
983

Construction-in-progress
76

 
74

Technology
1,784

 
1,545

Total property, equipment and technology
3,915

 
3,439

Accumulated depreciation and amortization
(2,023
)
 
(1,707
)
Property, equipment and technology, net
$
1,892

 
$
1,732


Technology consists of both purchased and internally developed software. Internally developed software primarily represents software utilized by the VisaNet electronic payments network and CyberSource platform. At September 30, 2014 and 2013, accumulated amortization for technology was $1,129 million and $959 million, respectively.
At September 30, 2014, estimated future amortization expense on technology was as follows:
Fiscal
2015
 
2016
 
2017
 
2018
 
2019 and
thereafter
 
Total
 
 (in millions)
Estimated future amortization expense
$
199

 
$
183

 
$
138

 
$
80

 
$
55

 
$
655

Depreciation and amortization expense related to property, equipment and technology was $369 million, $328 million and $265 million for fiscal 2014, 2013 and 2012, respectively. Included in those amounts was amortization expense on technology of $198 million, $173 million and $132 million for fiscal 2014, 2013 and 2012, respectively.
Intangible Assets, Net
Intangible Assets, Net
Note 7—Intangible Assets and Goodwill
At September 30, 2014 and 2013, the Company’s indefinite-lived intangible assets consisted of customer relationships of $6.8 billion, Visa tradename of $2.6 billion and a Visa Europe franchise right of $1.5 billion, all of which were acquired as part of the Company’s October 2007 reorganization. Customer relationships represent the value of relationships with clients outside of the United States, excluding the European Union. Tradenames represent the value of the Visa brand outside of the United States, excluding the European Union. Visa Europe’s franchise right represents the value of the right to franchise the use of the Visa brand, use of Visa technology and access to the overall Visa network in the European Union.
Indefinite-lived and finite-lived intangible assets consisted of the following: 
 
September 30, 2014
 
September 30, 2013
 
Gross
 
Accumulated
Amortization
 
Net
 
Gross
 
Accumulated
Amortization
 
Net
 
(in millions)
Finite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
339

 
$
(162
)
 
$
177

 
$
339

 
$
(125
)
 
$
214

Tradenames
192

 
(54
)
 
138

 
192

 
(41
)
 
151

Reseller relationships
95

 
(48
)
 
47

 
95

 
(36
)
 
59

Other
52

 
(12
)
 
40

 
52

 
(8
)
 
44

Total finite-lived intangible assets
$
678

 
$
(276
)
 
$
402

 
$
678

 
$
(210
)
 
$
468

Indefinite-lived intangible assets
 
 
 
 
11,009

 
 
 
 
 
10,883

Total intangible assets, net
 
 
 
 
$
11,411

 
 
 
 
 
$
11,351


Amortization expense related to finite-lived intangible assets was $66 million, $69 million and $68 million for fiscal 2014, 2013 and 2012, respectively. At September 30, 2014, estimated future amortization expense on finite-lived intangible assets is as follows:
Fiscal
2015
 
2016
 
2017
 
2018
 
2019 and
thereafter
 
Total
 
(in millions)

Estimated future amortization expense
$
62

 
$
49

 
$
47

 
$
41

 
$
203

 
$
402


There was no impairment related to the Company’s indefinite-lived or finite-lived intangible assets during fiscal 2014, 2013 or 2012.
In April 2014, the Company acquired a business in which it previously held a minority interest. Total purchase consideration was approximately $170 million, paid primarily with cash on hand. Total purchase consideration has been allocated to the tangible and identifiable intangible assets and liabilities assumed based on their respective fair values on the acquisition date. Related indefinite-lived intangible assets recorded totaled $126 million. Goodwill of $60 million was recorded to reflect the excess purchase consideration over net assets assumed.
In August 2014, the Company entered into a license agreement with one of its strategic partners. The transaction was accounted for as a business combination. Total consideration under the license agreement was approximately $15 million, of which $12 million was recorded as goodwill.
Accrued and Other Liabilities
Accrued and Other Liabilities
Note 8—Accrued and Other Liabilities
Accrued liabilities consisted of the following:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Accrued operating expenses
$
199

 
$
182

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

 
145

Deferred revenue
82

 
60

Accrued marketing and product expenses
11

 
27

Accrued income taxes—(See Note 19—Income Taxes)
73

 
64

Other
114

 
135

Total
$
624

 
$
613


Other non-current liabilities consisted of the following:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Accrued income taxes—(See Note 19—Income Taxes)(2)
$
855

 
$
453

Employee benefits
92

 
86

Other
58

 
63

Total
$
1,005

 
$
602

(1) 
The put option is exercisable at any time at the sole discretion of Visa Europe with payment required 285 days thereafter. Classification in current liabilities is not an indication of management’s expectation of exercise and simply reflects the fact that the obligation resulting from the exercise of the instrument could become payable within 12 months. The fair value of the put option does not represent the actual purchase price that the Company may be required to pay if the option is exercised, which would likely be in excess of $10 billion.
(2) 
The increase in non-current accrued income taxes is primarily related to an increase in liabilities for uncertain tax positions.
Debt
Debt
Note 9—Debt
Commercial paper program. Visa maintains a commercial paper program to support its working capital requirements and for other general corporate purposes. Under the program, the Company is authorized to issue up to $3.0 billion in outstanding notes, with maturities up to 397 days from the date of issuance. The Company had no outstanding obligations under the program at September 30, 2014.
Credit facility. On January 29, 2014, the Company entered into an unsecured $3.0 billion revolving credit facility (the "Credit Facility"). The Credit Facility, which expires on January 28, 2015, replaced the Company's previous $3.0 billion credit facility, which terminated on January 29, 2014. The Credit Facility contains covenants and events of default customary for facilities of this type. 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. The participating lenders in the Credit Facility include certain holders of the Company's class B and class C common stock, certain of the Company's clients, and their affiliates.
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 0.07%. There were no borrowings under either facility and the Company was in compliance with all related covenants during the year ended and as of September 30, 2014.
Pension, Postretirement and Other Benefits
Pension, Postretirement and Other Benefits
Note 10—Pension, Postretirement and Other Benefits
The Company sponsors various qualified and non-qualified defined benefit pension and other postretirement benefit plans that provide for retirement and medical benefits for substantially all employees residing in the United States. The Company also sponsors other pension benefit plans that provide benefits for internationally-based employees at certain non-U.S. locations, which are not presented below as they are not material. The Company uses a September 30 measurement date for its pension and other postretirement benefit plans.
Defined benefit pension plans. The benefits under the current defined benefit pension plan are earned based on a cash balance formula. An employee’s cash balance account is credited with an amount equal to 6% of eligible compensation plus interest based on 30-year Treasury securities. The funding policy is to contribute annually no less than the minimum required contribution under ERISA. 
Postretirement benefits plan. The postretirement benefits plan provides medical benefits for retirees and dependents who meet minimum age and service requirements. Benefits are provided from retirement date until age 65. Retirees must contribute on a monthly basis for the same coverage that is generally available to active employees and their dependents. The Company’s contributions are funded on a current basis.
Summary of Plan Activities
Change in Benefit Obligation:
 
Pension Benefits
 
Other
Postretirement Benefits
 
September 30,
 
September 30,
 
2014
 
2013
 
2014
 
2013
 
(in millions)
Benefit obligation—beginning of fiscal year
$
897

 
$
990

 
$
25

 
$
32

Service cost
46

 
43

 
—

 
—

Interest cost
42

 
35

 
1

 
1

Actuarial loss (gain)
84

 
(127
)
 
(2
)
 
(4
)
Benefit payments
(83
)
 
(44
)
 
(4
)
 
$
(4
)
Plan amendment
$
(3
)
 
$
—

 
$
—

 
$
—

Benefit obligation—end of fiscal year
$
983

 
$
897

 
$
20

 
$
25

Accumulated benefit obligation
$
977

 
$
892

 
NA

 
NA

Change in Plan Assets:
 
 
 
 
 
 
 
Fair value of plan assets—beginning of fiscal year
$
1,055

 
$
973

 
$
—

 
$
—

Actual return on plan assets
135

 
126

 
—

 
—

Company contribution
10

 
—

 
4

 
4

Benefit payments
(83
)
 
(44
)
 
(4
)
 
(4
)
Fair value of plan assets—end of fiscal year
$
1,117

 
$
1,055

 
$
—

 
$
—

Funded status at end of fiscal year
$
134

 
$
158

 
$
(20
)
 
$
(25
)
Recognized in Consolidated Balance Sheets:
 
 
 
 
 
 
 
Non-current asset
$
164

 
$
192

 
$
—

 
$
—

Current liability
(7
)
 
(8
)
 
(3
)
 
(4
)
Non-current liability
(23
)
 
(26
)
 
(17
)
 
(21
)
Funded status at end of fiscal year
$
134

 
$
158

 
$
(20
)
 
$
(25
)
 
 
 
 
 
 
 
 

Amounts recognized in accumulated other comprehensive income before tax: 
 
Pension Benefits
 
Other
Postretirement Benefits
September 30,
 
September 30,
 
2014
 
2013
 
2014
 
2013
 
(in millions)
Net actuarial loss (gain)
$
121

 
$
108

 
$
(7
)
 
$
(6
)
Prior service credit
(16
)
 
(23
)
 
(8
)
 
(11
)
Total
$
105

 
$
85

 
$
(15
)
 
$
(17
)

Amounts from accumulated other comprehensive income to be amortized into net periodic benefit cost in fiscal 2015: 
 
Pension Benefits
 
Other
Postretirement
 Benefits
 
(in millions)
Actuarial loss (gain)
$
1

 
$
(2
)
Prior service credit
(7
)
 
(3
)
Total
$
(6
)
 
$
(5
)

Benefit obligations in excess of plan assets related to the Company's non-qualified plan:
 
Pension Benefits
September 30,
 
2014
 
2013
 
(in millions)
Accumulated benefit obligation in excess of plan assets
 
 
 
Accumulated benefit obligation—end of year
$
(30
)
 
$
(33
)
Fair value of plan assets—end of year
$
—

 
$
—

Projected benefit obligation in excess of plan assets
 
 
 
Benefit obligation—end of year
$
(30
)
 
$
(34
)
Fair value of plan assets—end of year
$
—

 
$
—


Net periodic pension and other postretirement plan cost:
 
Pension Benefits
 
Other
Postretirement Benefits
Fiscal
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
 
(in millions)
Service cost
$
46

 
$
43

 
$
38

 
$
—

 
$
—

 
$
—

Interest cost
42

 
35

 
40

 
1

 
1

 
1

Expected return on assets
(68
)
 
(61
)
 
(55
)
 
—

 
—

 
—

Amortization of:
 
 
 
 
 
 
 
 
 
 
 
Prior service credit
(8
)
 
(9
)
 
(9
)
 
(3
)
 
(3
)
 
(3
)
Actuarial loss (gain)
1

 
28

 
33

 
(1
)
 
(1
)
 
—

Net benefit cost
$
13

 
$
36

 
$
47

 
$
(3
)
 
$
(3
)
 
$
(2
)
Curtailment gain
(3
)
 
—

 
—

 
—

 
—

 
—

Settlement loss
3

 
—

 
3

 
—

 
—

 
—

Total net periodic benefit cost
$
13

 
$
36

 
$
50

 
$
(3
)
 
$
(3
)
 
$
(2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Other changes in plan assets and benefit obligations recognized in other comprehensive income: 
 
Pension Benefits
 
Other
Postretirement Benefits
2014
 
2013
 
2014
 
2013
 
(in millions)
Current year actuarial loss (gain)
$
18

 
$
(191
)
 
$
(2
)
 
$
(4
)
Amortization of actuarial (loss) gain
(4
)
 
(28
)
 
1

 
1

Current year prior service credit
(3
)
 
—

 
—

 
—

Amortization of prior service credit
11

 
9

 
3

 
3

Total recognized in other comprehensive income
$
22

 
$
(210
)
 
$
2

 
$
—

Total recognized in net periodic benefit cost and other comprehensive income
$
35

 
$
(174
)
 
$
(1
)
 
$
(3
)
 
 
 
 
 
 
 
 

Weighted Average Actuarial Assumptions:
 
Fiscal
 
2014
 
2013
 
2012
Discount rate for benefit obligation:(1)
 
 
 
 
 
Pension
4.27
%
 
4.81
%
 
3.85
%
Postretirement
2.59
%
 
2.76
%
 
2.21
%
Discount rate for net periodic benefit cost:
 
 
 
 
 
Pension
4.81
%
 
3.85
%
 
4.70
%
Postretirement
2.76
%
 
2.21
%
 
3.39
%
Expected long-term rate of return on plan assets(2)
7.00
%
 
7.00
%
 
7.50
%
Rate of increase in compensation levels for:
 
 
 
 
 
Benefit obligation
4.00
%
 
4.50
%
 
4.50
%
Net periodic benefit cost
4.50
%
 
4.50
%
 
4.50
%
(1) 
Based on a “bond duration matching” methodology, which reflects the matching of projected plan liability cash flows to an average of high-quality corporate bond yield curves whose duration matches the projected cash flows.
(2) 
Primarily based on the targeted allocation, and evaluated for reasonableness by considering such factors as: (i) actual return on plan assets; (ii) historical rates of return on various asset classes in the portfolio; (iii) projections of returns on various asset classes; and (iv) current and prospective capital market conditions and economic forecasts.
The assumed annual rate of future increases in health benefits for the other postretirement benefits plan is 8% for fiscal 2015. The rate is assumed to decrease to 5% by 2020 and remain at that level thereafter. These trend rates reflect management’s expectations of future rates. Increasing or decreasing the healthcare cost trend by 1% would change the postretirement plan benefit obligation by less than $1 million.
Pension Plan Assets
Pension plan assets are managed with a long-term perspective to ensure that there is an adequate level of assets to support benefit payments to participants over the life of the pension plan. Pension plan assets are managed by external investment managers. Investment manager performance is measured against benchmarks for each asset class on a quarterly basis. An independent consultant assists management with investment manager selections and performance evaluations.
Pension plan assets are broadly diversified to maintain a prudent level of risk and to provide adequate liquidity for benefit payments. The Company generally evaluates and rebalances the pension plan assets, as appropriate, to ensure that allocations are consistent with target allocation ranges. The current target allocation for pension plan assets is as follows: equity securities of 50% to 80%, fixed income securities of 25% to 35% and other, primarily consisting of cash equivalents to meet near term expected benefit payments and expenses, of up to 7%. At September 30, 2014, pension plan asset allocations for the above categories were 69%, 29% and 2%, respectively, which were within target allocation ranges.
The following table sets forth by level, within the fair value hierarchy, the pension plan’s investments at fair value as of September 30, 2014 and 2013, including the impact of unsettled transactions:
 
 
Fair Value Measurements at September 30,
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
 
(in millions)
Cash equivalents
$
22

 
$
26

 
 
 
 
 
 
 
 
 
$
22

 
$
26

Corporate debt securities
 
 
 
 
$
144

 
$
106

 
 
 
 
 
144

 
106

Debt securities of U.S. Treasury and federal agencies
 
 
 
 
159

 
149

 
 
 
 
 
159

 
149

Asset-backed securities
 
 
 
 
 
 
 
 
$
25

 
$
23

 
25

 
23

Equity securities
767

 
751

 
 
 
 
 
 
 
 
 
767

 
751

Total
$
789

 
$
777

 
$
303

 
$
255

 
$
25

 
$
23

 
$
1,117

 
$
1,055


Level 1 assets. Cash equivalents (money market funds) and equity securities are classified as Level 1 within the fair value hierarchy, as fair value is based on quoted prices in active markets.
Level 2 assets. The fair values of government-sponsored and corporate debt securities are based on quoted prices in active markets for similar assets as provided by third-party pricing vendors. This pricing data is reviewed internally for reasonableness through comparisons with benchmark quotes from independent third-party sources. Based on this review, the valuation is confirmed or revised accordingly.
Level 3 assets. Asset-backed securities are bonds that are backed by various types of assets and primarily consist of mortgage-backed securities. Asset-backed securities are classified as Level 3 due to a lack of observable inputs in measuring fair value.
There were no transfers between Level 1 and Level 2 assets during fiscal 2014 or 2013. A separate roll-forward of Level 3 plan assets measured at fair value is not presented because activities during fiscal 2014 and 2013 were immaterial.
Cash Flows
 
Pension
Benefits
 
Other
Postretirement
Benefits
Actual employer contributions
(in millions)
2014
$
10

 
$
4

2013
$
—

 
$
4

Expected employer contributions
 
 
 
2015
$
7

 
$
3

Expected benefit payments
 
 
 
2015
$
123

 
$
3

2016
$
124

 
$
3

2017
$
115

 
$
3

2018
$
108

 
$
3

2019
$
103

 
$
3

2020-2024
$
437

 
$
6


Other Benefits
The Company sponsors a defined contribution plan, or 401(k) plan, that covers substantially all of its employees residing in the United States. Personnel costs included $46 million, $44 million and $37 million in fiscal 2014, 2013 and 2012, respectively, for expenses attributable to the Company’s employees under the 401(k) plan. The Company’s contributions to this 401(k) plan are funded on a current basis, and the related expenses are recognized in the period that the payroll expenses are incurred.
Settlement Guarantee Management
Settlement Guarantee Management
Note 11—Settlement Guarantee Management
The Company indemnifies its financial institution clients for settlement losses suffered due to failure of any other client to fund its settlement obligations in accordance with Visa's operating regulations. This indemnification creates settlement risk for the Company due to the difference in timing between the date of a payment transaction and the date of subsequent settlement. Settlement at risk, or exposure, is estimated based on the sum of the following inputs: (1) average daily volumes during the quarter multiplied by the estimated number of days to settle plus a safety margin; (2) four months of rolling average chargebacks volume; and (3) the total balance for outstanding Visa Travelers Cheques.
The Company maintains and regularly reviews global settlement risk policies and procedures to manage settlement exposure, which may require clients to post collateral if certain credit standards are not met.
The Company's settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time. The Company's estimated maximum settlement exposure increased to approximately $56.9 billion at September 30, 2014, compared to $53.8 billion at September 30, 2013, as a result of continued growth in the Company's business. Of these amounts, $3.2 billion and $3.0 billion at September 30, 2014 and 2013, respectively, were covered by collateral. The total available collateral balances presented below were greater than the settlement exposure covered by customer collateral held due to instances in which the available collateral exceeded the total settlement exposure for certain financial institutions at each date presented.
The Company maintained collateral as follows:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Cash equivalents
$
961

 
$
866

Pledged securities at market value
148

 
256

Letters of credit
1,242

 
1,191

Guarantees
1,554

 
1,411

Total
$
3,905

 
$
3,724

 
Cash equivalents collateral is reflected in customer collateral on the consolidated balance sheets as it is held in escrow in the Company's name. All other collateral is excluded from the consolidated balance sheets. Pledged securities are held by third parties in trust for the Company and clients. Letters of credit are provided primarily by client financial institutions to serve as irrevocable guarantees of payment. Guarantees are provided primarily by parent financial institutions to secure the obligations of their subsidiaries. The Company routinely evaluates the financial viability of institutions providing the guarantees.
The fair value of the settlement risk guarantee is estimated using a proprietary model which considers statistically derived loss factors based on historical experience, estimated settlement exposures at period end and a standardized grading process for clients (using, where available, third-party estimates of the probability of customer failure). Historically, the Company experienced minimum losses, which has contributed to an estimated probability-weighted value of the guarantee of approximately $2 million and $1 million at September 30, 2014 and 2013, respectively. These amounts were reflected in accrued liabilities on the consolidated balance sheets.
Derivative Financial Instruments
Derivative Financial Instruments
Note 12—Derivative Financial Instruments
The Company maintains a rolling cash flow hedge program with the objective of reducing exchange rate risk from forecasted net exposures of revenues derived from and payments made in non-functional currencies during the following twelve months. The aggregate notional amounts of the Company's derivative contracts outstanding in its hedge program were $1.2 billion and $1.1 billion at September 30, 2014 and 2013, respectively. As of September 30, 2014, the Company’s cash flow hedges in an asset position totaled $39 million and were classified in prepaid expenses and other current assets on the consolidated balance sheet, while cash flow hedges in a liability position totaled $6 million and were classified in accrued liabilities on the consolidated balance sheet. These amounts are subject to master netting agreements, which provide the Company with a legal right to net settle multiple payable and receivable positions with the same counterparty, in a single currency through a single payment. However, the Company presents fair values on a gross basis on the consolidated balance sheets. See Note 1—Summary of Significant Accounting Policies.
To qualify for cash flow hedge accounting treatment, the Company formally documents, at inception of the hedge, all relationships between the hedging transactions and the hedged items, as well as the Company's risk management objective and strategy for undertaking various hedge transactions. The Company also formally assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows of the hedged items and whether those derivatives may be expected to remain highly effective in future periods.
The Company uses regression analysis to assess effectiveness prospectively and retrospectively. The effectiveness tests are performed on the foreign exchange forward contracts based on changes in the spot rate of the derivative instrument compared to changes in the spot rate of the forecasted hedged transaction. Forward points are excluded for effectiveness testing and measurement purposes. The excluded forward points are reported in earnings. For fiscal 2014, 2013 and 2012, the amounts by which earnings were reduced relating to excluded forward points were $27 million, $14 million and $16 million, respectively.
The effective portion of changes in the fair value of derivative contracts is recorded as a component of accumulated other comprehensive income or loss on the consolidated balance sheets. When the forecasted transaction occurs and is recognized in earnings, the amount in accumulated other comprehensive income or loss related to that hedge is reclassified to operating revenue or expense. The Company expects to reclassify $41 million pre-tax, to earnings during fiscal 2015.
The Company's derivative financial instruments are subject to both credit and market risk. The Company monitors the credit-worthiness of the financial institutions that are counterparties to its derivative financial instruments and does not consider the risks of counterparty nonperformance to be significant. The Company mitigates this risk by entering into master netting agreements which require each party to post collateral against its net liability position with the respective counterparty. As of September 30, 2014, the Company has received collateral of $29 million from counterparties, which is included in accrued liabilities on the consolidated balance sheet. Notwithstanding the Company’s efforts to manage foreign exchange risk, there can be no absolute assurance that its hedging activities will adequately protect against the risks associated with foreign currency fluctuations. Credit and market risks related to derivative instruments were not considered significant at September 30, 2014.
Additional disclosures that demonstrate how derivative instruments and related hedged items affect an entity's financial position, financial performance and cash flows have not been presented because the impact of derivative instruments is immaterial to the overall consolidated financial statements.
Enterprise-wide Disclosures and Concentration of Business
Enterprise-wide Disclosures and Concentration of Business
Note 13—Enterprise-wide Disclosures and Concentration of Business
The Company’s long-lived net property, equipment and technology assets are classified by major geographic areas as follows:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
United States
$
1,798

 
$
1,621

International
94

 
111

Total
$
1,892

 
$
1,732

 
Revenue by geographic market is primarily based on the location of the issuing financial institution. Revenues earned in the United States were approximately 54% of total operating revenues in fiscal 2014 and 2013, and 55% in fiscal 2012. No individual country, other than the United States, generated more than 10% of total operating revenues in these years.
A significant portion of Visa’s operating revenues is concentrated among its largest clients. Loss of business from any of these clients could have an adverse effect on the Company. The Company did not have any customer that generated greater than 10% of its net operating revenues in fiscal 2014, 2013 or 2012
Stockholders' Equity
Stockholders' Equity
Note 14—Stockholders' Equity
The number of shares of each class and the number of shares of class A common stock on an as-converted basis at September 30, 2014, are as follows:
(in millions, except conversion rate)
Shares
Outstanding
 
Conversion Rate Into Class A
Common Stock
 
As-converted Class A Common
Stock (1)
Class A common stock
495
 
—
 
495
Class B common stock
245
 
0.4121
 
101
Class C common stock
22
 
1.0000
 
22
Total
 
 
 
 
618

(1)  
Figures in the table may not recalculate exactly due to rounding. As-converted class A common stock is calculated based on unrounded numbers.
Reduction in as-converted shares. During fiscal 2014, total as-converted class A common stock was reduced by 22 million shares, at an average price of $209.15 per share, using $4.6 billion of operating cash on hand. Of the $4.6 billion, $4.1 billion was used to repurchase class A common stock in the open market. In addition, the Company deposited $450 million of operating cash into the litigation escrow account previously established under the retrospective responsibility plan. The deposit has the same economic effect on earnings per share as repurchasing the Company's class A common stock, because it reduces the class B conversion rate and consequently the as-converted class A common stock share count. See Note 3—Retrospective Responsibility Plan.
The following table presents share repurchases in the open market during the following fiscal years:
(in millions, except per share data)
2014
 
2013
Shares repurchased in the open market (1)
20

 
33

Average repurchase price per share (2)
$
208.50

 
$
161.94

Total cost
$
4,118

 
$
5,365

(1) 
All shares repurchased in the open market have been retired and constitute authorized but unissued shares.
(2) 
Figures in table may not recalculate due to rounding. Average repurchase price per share is calculated based on unrounded numbers.
The stock repurchases and litigation escrow deposit discussed above reduced the funds from the $5.0 billion share repurchase program authorized by the Company's board of directors in October 2013. As of September 30, 2014, the program had remaining authorized funds of $682 million. All share repurchase programs authorized prior to October 2013 have been completed. In October 2014, the Company's board of directors authorized an additional $5.0 billion share repurchase program.
Under the terms of the retrospective responsibility plan, when the Company makes a deposit into the litigation escrow account, the shares of class B common stock are subject to dilution through an adjustment to the conversion rate of the shares of class B common stock to shares of class A common stock.
The following table presents as-converted class B common stock after deposits into the litigation escrow account in fiscal 2014. There were no deposits into the litigation escrow account in fiscal 2013.
 
Fiscal 2014
(in millions, except per share and conversion rate data)
September 2014
Deposits under the retrospective responsibility plan
$
450

Effective price per share(1)
$
215.33

Reduction in equivalent number of shares of class A common stock
2

Conversion rate of class B common stock to class A common stock after deposits
0.4121

As-converted class B common stock after deposits
101

(1)
Effective price per share calculated using the volume-weighted average price of the Company's class A common stock over a pricing period in accordance with the Company's current certificate of incorporation.
Class B common stock. The class B common stock is not convertible or transferable until the date on which all of the covered litigation has been finally resolved. This transfer restriction is subject to limited exceptions, including transfers to other holders of class B common stock. After termination of the restrictions, the class B common stock will be convertible into class A common stock if transferred to a person that was not a Visa Member (as defined in the current certificate of incorporation) or similar person or an affiliate of a Visa Member or similar person. Upon such transfer, each share of class B common stock will automatically convert into a number of shares of class A common stock based upon the applicable conversion rate in effect at the time of such transfer.
Adjustment of the conversion rate occurs upon: (i) the completion of any follow-on offering of class A common stock completed to increase the size of the litigation escrow account (or any cash deposit by the Company in lieu thereof) resulting in a further corresponding decrease in the conversion rate; or (ii) the final resolution of the covered litigation and the release of funds remaining on deposit in the litigation escrow account to the Company resulting in a corresponding increase in the conversion rate.
Class C common stock. As of September 30, 2014, all of the shares of class C common stock have been released from transfer restrictions, and 129 million shares have been converted from class C to class A common stock upon their sale into the public market.
Preferred stock. Preferred stock may be issued as redeemable or non-redeemable, and it has preference over any class of common stock with respect to the payment of dividends and distribution of the Company’s assets in the event of a liquidation or dissolution. The Company had no shares of preferred stock outstanding during and at the end of fiscal 2014 and 2013.
Voting rights. Holders of class A common stock have the right to vote on all matters on which stockholders generally are entitled to vote. Holders of classes B and C common stock have no right to vote on any matters, except for certain defined matters, including any consolidation, merger, combination or any decision to exit the core payments business, in which case the holders of classes B and C common stock are entitled to cast a number of votes equal to the number of shares of classes B or C common stock held multiplied by the applicable conversion rate in effect on the record date.
Dividends declared. The Company declared and paid $1.0 billion in dividends in fiscal 2014 at a quarterly rate of $0.40 per share. In October 2014, the Company’s board of directors declared a quarterly cash dividend of $0.48 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis), which will be paid on December 2, 2014, to all holders of record of the Company’s classes A, B and C common stock as of November 14, 2014.
Earnings Per Share
Earnings Per Share
Note 15—Earnings Per Share
The following table presents earnings per share for fiscal 2014.(1) 
 
Basic Earnings Per Share
 
 
Diluted Earnings Per Share
 
(in millions, except per share data)
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
 
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
Class A common stock
$
4,307

 
498

 
$
8.65

 
 
$
5,438

 
631

(3) 
$
8.62

Class B common stock
892

 
245

 
$
3.63

 
 
$
890

 
245

 
$
3.62

Class C common stock
222

 
26

 
$
8.65

 
 
$
221

 
26

 
$
8.62

Participating securities(4)
17

 
Not presented

 
Not presented

 
 
$
16

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
5,438

 
 
 
 
 
 
 
 
 
 
 
The following table presents earnings per share for fiscal 2013.(1) 
 
Basic Earnings Per Share
 
 
Diluted Earnings Per Share
 
(in millions, except per share data)
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
 
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
Class A common stock
$
3,959

 
520

 
$
7.61

 
 
$
4,980

 
656

(3) 
$
7.59

Class B common stock
786

 
245

 
$
3.20

 
 
$
784

 
245

 
$
3.19

Class C common stock
216

 
28

 
$
7.61

 
 
$
215

 
28

 
$
7.59

Participating securities(4)
19

 
Not presented

 
Not presented

 
 
$
19

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
4,980

 
 
 
 
 
 
 
 
 
 
 
The following table presents earnings per share for fiscal 2012.(1) 
 
Basic Earnings Per Share
 
 
Diluted Earnings Per Share
 
(in millions, except per share data)
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
 
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
Class A common stock
$
1,664

 
524

 
$
3.17

 
 
$
2,144

 
678

(3) 
$
3.16

Class B common stock
343

 
245

 
$
1.40

 
 
$
341

 
245

 
$
1.39

Class C common stock
130

 
41

 
$
3.17

 
 
$
129

 
41

 
$
3.16

Participating securities(4)
7

 
Not presented

 
Not presented

 
 
$
7

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
2,144

 
 
 
 
 
 
 
 
 
 
 

(1)
Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers.
(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 fiscal 2014 and 2013, and 108 million for fiscal 2012.
(3)
Weighted-average diluted shares outstanding are calculated on an as-converted basis, and include incremental common stock equivalents, as calculated under the treasury stock method. The computation includes 2 million common stock equivalents for fiscal 2014 and 2013, and 3 million for fiscal 2012, because their effect would have been dilutive. The computation excludes less than 1 million of common stock equivalents for fiscal 2014, 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
Share-based Compensation
Note 16—Share-based Compensation
The Company’s 2007 Equity Incentive Compensation Plan, or the EIP, authorizes the compensation committee of the board of directors to grant non-qualified stock options ("options"), restricted stock awards ("RSAs"), restricted stock units ("RSUs") and performance-based shares to its employees and non-employee directors, for up to 59 million shares of class A common stock. Shares available for award may be either authorized and unissued or previously issued shares subsequently acquired by the Company. The EIP will continue to be in effect until all of the common stock available under the EIP is delivered and all restrictions on those shares have lapsed, unless the EIP is terminated earlier by the Company’s board of directors. No awards may be granted under the plan on or after 10 years from its effective date.
Share-based compensation cost is recorded net of estimated forfeitures on a straight-line basis for awards with service conditions only, and on a graded-vesting basis for awards with service, performance and market conditions. The Company’s estimated forfeiture rate is based on an evaluation of historical, actual and trended forfeiture data. For fiscal 2014, 2013, and 2012, the Company recorded share-based compensation cost of $172 million, $179 million and $147 million, respectively, in personnel on its consolidated statements of operations. The amount of capitalized share-based compensation cost was immaterial during fiscal 2014, 2013 and 2012.
Options
Options issued under the EIP expire 10 years from the date of grant and vest ratably over 3 years from the date of grant, subject to earlier vesting in full under certain conditions.
During fiscal 2014, 2013 and 2012, the fair value of each stock option was estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:
 
 
2014
 
2013
 
2012
Expected term (in years)(1)
 
4.80

 
6.08

 
6.02

Risk-free rate of return(2)
 
1.3
%
 
0.8
%
 
1.2
%
Expected volatility(3)
 
25.2
%
 
29.3
%
 
34.9
%
Expected dividend yield(4)
 
0.8
%
 
0.9
%
 
0.9
%
Fair value per option granted
 
$
44.11

 
$
39.03

 
$
29.65


(1) 
Beginning in fiscal 2014, assumption is based on the Company's historical option exercises and those of a set of peer companies that management believes is generally comparable to Visa. The Company's data is weighted based on the number of years between the measurement date and Visa's initial public offering as a percentage of the options' contractual term. The relative weighting placed on Visa's data and peer data in fiscal 2014 was approximately 58% and 42%, respectively. In fiscal 2013 and 2012, assumption was fully based on peer companies' data.
(2) 
Based upon the zero coupon U.S. treasury bond rate over the expected term of the awards.
(3) 
Based on the Company’s implied and historical volatility. In fiscal 2013 and 2012, historical volatility was a blend of Visa's historical volatility and those of comparable peer companies. The relative weighting between Visa historical volatility and the historical volatility of the peer companies was based on the percentage of years Visa stock price information is available since its initial public offering compared to the expected term. The expected volatilities ranged from 22% to 26% in fiscal 2014.
(4) 
Based on the Company’s annual dividend rate on the date of grant.
The following table summarizes the Company’s option activity for fiscal 2014:
 
Options
 
Weighted-
Average
Exercise Price
Per Share
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
Outstanding at October 1, 2013
3,917,206

 
$
72.21

 
 
 
 
Granted
435,025

 
$
201.37

 
 
 
 
Forfeited
(116,261
)
 
$
150.56

 
 
 
 
Exercised
(1,323,544
)
 
$
68.45

 
 
 
 
Outstanding at September 30, 2014
2,912,426

 
$
90.08

 
5.4
 
$359
Options exercisable at September 30, 2014
2,181,759

 
$
63.03

 
4.3
 
$328
Options exercisable and expected to vest at September 30, 2014(2)
2,832,053

 
$
87.79

 
5.3
 
$356
(1) 
Calculated using the closing stock price on the last trading day of fiscal 2014 of $213.37, less the option exercise price, multiplied by the number of instruments.
(2) 
Applies a forfeiture rate to unvested options outstanding at September 30, 2014 to estimate the number expected to vest in the future.
For the options exercised during fiscal 2014, 2013 and 2012, the total intrinsic value was $187 million, $176 million and $247 million, respectively, and the tax benefit realized was $65 million, $59 million and $86 million, respectively. As of September 30, 2014, there was $17 million of total unrecognized compensation cost related to unvested options, which is expected to be recognized over a weighted-average period of approximately 1.4 years.
Restricted Stock Awards and Restricted Stock Units
RSAs and RSUs issued under the EIP primarily vest ratably over 3 years from the date of grant, subject to earlier vesting in full under certain conditions.
Upon vesting, the RSAs are settled in class A common stock on a one-for-one basis. During the vesting period, RSA award recipients are eligible to receive dividends and participate in the same voting rights as those granted to the holders of the underlying class A common stock. Upon vesting, RSUs can be settled in class A common stock on a one-for-one basis or in cash, or a combination thereof, at the Company’s option. The Company does not currently intend to settle any RSUs in cash. During the vesting period, RSU award recipients are eligible to receive dividend equivalents, but do not participate in the voting rights granted to the holders of the underlying class A common stock.
The fair value and compensation cost before estimated forfeitures for RSAs and RSUs is calculated using the closing price of class A common stock on the date of grant. The weighted-average grant-date fair value of RSAs granted during fiscal 2014, 2013 and 2012 was $199.91, $147.18 and $96.39, respectively. The weighted-average grant-date fair value of RSUs granted during fiscal 2014, 2013 and 2012 was $197.76, $146.18 and $96.97, respectively. The total grant-date fair value of RSAs and RSUs vested during fiscal 2014, 2013 and 2012 was $126 million, $98 million and $81 million, respectively.
The following table summarizes the Company's RSA and RSU activity for fiscal 2014:
 
Restricted Stock
 
Weighted-
Average
Grant Date
Fair Value
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
 
Awards
 
Units
 
RSA
 
RSU
 
RSA
 
RSU
 
RSA
 
RSU
Outstanding at October 1, 2013
1,697,981

 
649,682

 
$
119.20

 
$
119.49

 
 
 
 
 
 
 
 
Granted
609,015

 
226,581

 
$
199.91

 
$
197.76

 
 
 
 
 
 
 
 
Vested
(841,527
)
 
(317,343
)
 
$
108.28

 
$
111.18

 
 
 
 
 
 
 
 
Forfeited
(156,923
)
 
(92,187
)
 
$
150.85

 
$
141.67

 
 
 
 
 
 
 
 
Outstanding at September 30, 2014
1,308,546

 
466,733

 
$
160.00

 
$
158.75

 
1.4
 
1.1
 
$279
 
$100
(1) 
Calculated by multiplying the closing stock price on the last trading day of fiscal 2014 of $213.37 by the number of instruments.
At September 30, 2014, there was $127 million and $35 million of total unrecognized compensation cost related to unvested RSAs and RSUs, respectively, which is expected to be recognized over a weighted-average period of approximately 1.4 years for RSAs and 1.1 years for RSUs.
Performance-based Shares
The following table summarizes the maximum number of performance-based shares which could be earned and related activity for fiscal 2014:
 
Shares
 
Weighted-
Average
Grant Date
Fair Value
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
Outstanding at October 1, 2013
459,899

 
$
126.24

 
 
 
 
Granted(2)
278,451

 
$
225.46

 
 
 
 
Vested and earned
(114,514
)
 
$
85.05

 
 
 
 
Unearned
—

 
$
—

 
 
 
 
Forfeited
(105,026
)
 
$
177.01

 
 
 
 
Outstanding at September 30, 2014
518,810

 
$
177.29

 
0.6
 
$111
(1) 
Calculated by multiplying the closing stock price on the last trading day of fiscal 2014 of $213.37 by the number of instruments.
(2) 
Represents the maximum number of performance-based shares which could be earned.
For the Company's performance-based shares, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of both performance and market conditions. The performance condition is based on the Company's earnings per share target. The market condition is based on the Company's total shareholder return ranked against that of other companies that are included in the Standard & Poor's 500 Index. The fair value of the performance-based shares, incorporating the market condition, is estimated on the grant date using a Monte Carlo simulation model. The grant-date fair value of performance-based shares granted in fiscal 2014, 2013 and 2012 was $225.46, $164.14 and $97.84 per share, respectively. Earned performance shares granted in fiscal 2014, 2013 and 2012 vest approximately 3 years from the initial grant date. All performance awards are subject to earlier vesting in full under certain conditions.
Compensation cost for performance-based shares is initially estimated based on target performance. It is recorded net of estimated forfeitures and adjusted as appropriate throughout the performance period. At September 30, 2014, there was $12 million of total unrecognized compensation cost related to unvested performance-based shares, which is expected to be recognized over a weighted-average period of approximately 0.6 years.
Commitments and Contingencies
Commitments and Contingencies
Note 17—Commitments and Contingencies
Commitments. The Company leases certain premises and equipment throughout the world with varying expiration dates. The Company incurred total rent expense of $134 million, $94 million and $89 million in fiscal 2014, 2013 and 2012, respectively. Future minimum payments on leases, and marketing and sponsorship agreements per fiscal year, at September 30, 2014, are as follows:
 
2015
 
2016
 
2017
 
2018
 
2019
 
Thereafter
 
Total
 
(in millions)
Operating leases
$
76

 
$
60

 
$
37

 
$
32

 
$
30

 
$
118

 
$
353

Marketing and sponsorships
83

 
63

 
62

 
61

 
59

 
130

 
458

Total
$
159

 
$
123

 
$
99

 
$
93

 
$
89

 
$
248

 
$
811

Select sponsorship agreements require the Company to spend certain minimum amounts for advertising and marketing promotion over the life of the contract. For commitments where the individual years of spend are not specified in the contract, the Company has estimated the timing of when these amounts will be spent. In addition to the fixed payments stated above, select sponsorship agreements require the Company to undertake marketing, promotional or other activities up to stated monetary values to support events which the Company is sponsoring. The stated monetary value of these activities typically represents the value in the marketplace, which may be significantly higher than the actual costs incurred by the Company.
Client incentives. The Company has agreements with financial institution clients and other business partners for various programs designed to build payments volume, increase Visa-branded card and product acceptance and win merchant routing transactions. These agreements, with terms ranging from one to fifteen years, can provide card issuance and/or conversion support, volume/growth targets and marketing and program support based on specific performance requirements. These agreements are designed to encourage client business and to increase overall Visa-branded payment and transaction volume, thereby reducing per-unit transaction processing costs and increasing brand awareness for all Visa clients.
Payments made that qualify for capitalization, and obligations incurred under these programs are reflected on the consolidated balance sheet. Client incentives are recognized primarily as a reduction to operating revenue in the period the related volumes and transactions occur, based on management's estimate of the client's performance in accordance with the terms of the incentive agreement. The agreements may or may not limit the amount of client incentive payments.
The table below sets forth the expected future reduction of revenue per fiscal year for client incentive agreements in effect at September 30, 2014: 
(in millions)
2015
 
2016
 
2017
 
2018
 
2019
 
Thereafter
 
Total
Client incentives
$
2,924

 
$
2,548

 
$
2,117

 
$
1,662

 
$
1,162

 
$
1,272

 
$
11,685


The amount of client incentives recorded as a reduction of revenue in future periods under the Company's incentive arrangements, will be greater or less than the estimates above due to changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts. Based on these agreements, increases in incentive payments are generally driven by increased payment and transaction volume, and as a result, in the event incentive payments exceed the above estimates, such payments are not expected to have a material effect on the Company's financial condition, results of operations or cash flows.
Related Parties
Related Parties
Note 18—Related Parties
Visa considers an entity to be a related party for purposes of this disclosure if that entity owns more than 10% of Visa’s total voting common stock at the end of the fiscal year, or if an officer or employee of that entity also serves on the Company's board of directors. The Company considers an investee to be a related party if the Company’s: (i) ownership interest in the investee is greater than or equal to 10% or (ii) if the investment is accounted for under the equity method of accounting. At September 30, 2014 and 2013, no entity owned more than 10% of the Company’s total voting common stock. There were no significant transactions with related parties during fiscal 2014, 2013 and 2012.
Income Taxes
Income Taxes
Note 19—Income Taxes
The Company’s income before taxes by fiscal year consisted of the following:
 
2014
 
2013
 
2012
 
(in millions)
U.S.
$
6,140

 
$
5,992

 
$
1,030

Non-U.S.
1,584

 
1,265

 
1,177

Total income before taxes and non-controlling interest
$
7,724

 
$
7,257

 
$
2,207


U.S. income before taxes included $2.3 billion, $2.0 billion and $1.6 billion of the Company's U.S. entities' income from operations outside of the U.S. for fiscal 2014, 2013 and 2012, respectively.
Income tax provision by fiscal year consisted of the following:
 
2014
 
2013
 
2012
 
(in millions)
Current:
 
 
 
 
 
U.S. federal
$
2,353

 
$
568

 
$
1,376

State and local
237

 
(58
)
 
165

Non-U.S.
274

 
239

 
214

Total current taxes
2,864

 
749

 
1,755

Deferred:
 
 
 
 
 
U.S. federal
(576
)
 
1,401

 
(1,276
)
State and local
(31
)
 
114

 
(415
)
Non-U.S.
29

 
13

 
1

Total deferred taxes
(578
)
 
1,528

 
(1,690
)
Total income tax provision
$
2,286

 
$
2,277

 
$
65


The tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities at September 30, 2014 and 2013, are presented below:
 
2014
 
2013
 
(in millions)
Deferred Tax Assets:
 
 
 
Accrued compensation and benefits
$
134

 
$
154

Comprehensive (income) loss
14

 
(8
)
Investments in joint ventures
14

 
14

Accrued litigation obligation
558

 
1

Client incentives
235

 
226

Net operating loss carryforward
35

 
31

Tax credits
21

 
22

Federal benefit of state taxes
210

 
176

Other
139

 
121

Valuation allowance
(34
)
 
(25
)
Deferred tax assets
1,326

 
712

Deferred Tax Liabilities:
 
 
 
Property, equipment and technology, net
(298
)
 
(310
)
Intangible assets
(4,000
)
 
(4,003
)
Foreign taxes
(125
)
 
(55
)
Other
(12
)
 
(12
)
Deferred tax liabilities
(4,435
)
 
(4,380
)
Net deferred tax liabilities
$
(3,109
)
 
$
(3,668
)

Total net deferred tax assets and liabilities are included in the Company’s consolidated balance sheets as follows:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Current deferred tax assets
$
1,028

 
$
481

Non-current deferred tax liabilities(1)
(4,137
)
 
(4,149
)
Net deferred tax liabilities
$
(3,109
)
 
$
(3,668
)

(1) 
The $4.1 billion of non-current deferred tax liabilities at September 30, 2014 includes $8 million of non-current deferred tax assets, which are reflected in other assets on the consolidated balance sheets.
The increase in the deferred tax asset for accrued litigation obligation reflects the deferred tax impact of the $1.4 billion net increase in covered litigation accrual associated with the interchange multidistrict litigation. See Note 3—Retrospective Responsibility Plan and Note 20—Legal Matters.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible. The fiscal 2014 and 2013 valuation allowances relate primarily to foreign net operating losses from subsidiaries acquired in recent years. 
As of September 30, 2014, the Company had $16 million state and $154 million foreign net operating loss carryforwards. The state net operating loss carryforwards will expire in fiscal 2031. The foreign net operating loss may be carried forward indefinitely. The Company expects to fully utilize the state net operating loss carryforwards in future years.
As of September 30, 2014, the Company also had federal and state research and development tax credit carryforwards of $2 million and $21 million, respectively. The federal carryforwards will expire in fiscal 2029. The state carryforwards may be carried forward indefinitely. The Company expects to realize the benefit of the credit carryforwards in future years.
The income tax provision differs from the amount of income tax determined by applying the applicable U.S. federal statutory rate of 35% to pretax income, as a result of the following:
 
 
For the Years Ended September 30,
 
2014
 
2013
 
2012
 
Dollars
 
Percent
 
Dollars
 
Percent
 
Dollars
 
Percent
 
(in millions, except percentages)
U.S. federal income tax at statutory rate
$
2,704

 
35
 %
 
$
2,540

 
35
 %
 
$
772

 
35
 %
State income taxes, net of federal benefit
129

 
2
 %
 
42

 
1
 %
 
36

 
2
 %
Non-U.S. tax effect, net of federal benefit
(278
)
 
(4
)%
 
(328
)
 
(5
)%
 
(257
)
 
(12
)%
Prior years U.S. domestic production activities deduction
(191
)
 
(2
)%
 
—

 
—
 %
 
—

 
—
 %
Reversal of tax reserves related to the deductibility of covered litigation expense
—

 
—
 %
 
—

 
—
 %
 
(299
)
 
(14
)%
Remeasurement of deferred taxes due to
California state apportionment rule changes
—

 
—
 %
 
—

 
—
 %
 
(208
)
 
(9
)%
Other, net
(78
)
 
(1
)%
 
23

 
—
 %
 
21

 
1
 %
Income tax provision
$
2,286

 
30
 %
 
$
2,277

 
31
 %
 
$
65

 
3
 %

The effective income tax rate of 30% in fiscal 2014 differs from the effective income tax rate of 31% in fiscal 2013 mainly due to:
•
a $264 million tax benefit related to a deduction for U.S. domestic production activities, of which $191 million related to prior fiscal years, as a result of the completion of a study in the second quarter of fiscal 2014; and
•
the absence of the following in fiscal 2014:
•
a tax benefit recognized in fiscal 2013 as a result of new guidance issued by the state of California regarding apportionment rules for years prior to fiscal 2012; and
•
certain foreign tax credit benefits related to prior years recognized in fiscal 2013.
The effective income tax rate of 31% in fiscal 2013 differs from the effective income tax rate of 3% in fiscal 2012 mainly due to:
•
the aforementioned tax benefit recognized in fiscal 2013 as a result of new guidance issued by the state of California regarding apportionment rules for years prior to fiscal 2012;
•
certain foreign tax credit benefits related to prior years recognized in fiscal 2013, as mentioned above; and
•
the absence of the following in fiscal 2013:
•
the fiscal 2012 reversal of previously recorded tax reserves associated with uncertainties related to the deductibility of covered litigation expense;
•
a fiscal 2012 one-time, non-cash benefit from the remeasurement of existing net deferred tax liabilities due to the changes in California apportionment rules adopted in that year; and
•
the effect of applying the aforementioned fiscal 2012 tax benefits to a fiscal 2012 pre-tax income that was reduced by the $4.1 billion covered litigation provision.
Current income taxes receivable were $91 million and $142 million at September 30, 2014 and 2013, respectively. Non-current income taxes receivable of $597 million were included in other assets at September 30, 2014. See Note 5—Prepaid Expenses and Other Assets. At September 30, 2014 and 2013, income taxes payable of $73 million and $64 million, respectively, were included in accrued income taxes as part of accrued liabilities, and accrued income taxes of $855 million and $453 million, respectively, were included in other long-term liabilities. See Note 8—Accrued and Other Liabilities.
Cumulative undistributed earnings of the Company’s international subsidiaries that are intended to be reinvested indefinitely outside the United States amounted to $5.0 billion at September 30, 2014. The amount of income taxes that would have resulted had such earnings been repatriated is not practicably determinable.
The Company’s largest operating hub outside the United States is located in Singapore. It operates under a tax incentive agreement which is effective through September 30, 2023, and is conditional upon meeting certain business operations and employment thresholds in Singapore. The tax incentive agreement decreased Singapore tax by $168 million, $158 million and $130 million, and the benefit of the tax incentive agreement on diluted earnings per share was $0.27, $0.24 and $0.19 in fiscal 2014, 2013 and 2012, respectively.
In accordance with Accounting Standards Codification 740—Income Taxes, the Company is required to inventory, evaluate and measure all uncertain tax positions taken or to be taken on tax returns, and to record liabilities for the amount of such positions that may not be sustained, or may only partially be sustained, upon examination by the relevant taxing authorities.
At September 30, 2014 and 2013, the Company’s total gross unrecognized tax benefits were $1.3 billion and $1 billion, respectively, exclusive of interest and penalties described below. Included in the $1.3 billion and $1 billion are $1.1 billion and $801 million of unrecognized tax benefits, respectively, that if recognized, would reduce the effective tax rate in a future period.
A reconciliation of beginning and ending unrecognized tax benefits by fiscal year is as follows: 
 
2014
 
2013
 
(in millions)
Beginning balance at October 1
$
1,023

 
$
679

Increases of unrecognized tax benefits related to prior years
139

 
335

Decreases of unrecognized tax benefits related to prior years
(54
)
 
(133
)
Increases of unrecognized tax benefits related to current year
199

 
144

Reductions related to lapsing statute of limitations
(4
)
 
(2
)
Ending balance at September 30
$
1,303

 
$
1,023


It is the Company’s policy to account for interest expense and penalties related to uncertain tax positions in non-operating income in its consolidated statements of operations. In fiscal 2014 and 2013, the Company recognized $10 million and $9 million of interest expense, respectively, related to uncertain tax positions. In fiscal 2012, the Company reversed $45 million of interest expense related to uncertain tax positions. In fiscal 2014, the Company accrued $2 million of penalties related to uncertain tax positions. In fiscal 2013 and 2012, the Company reversed $4 million and $1 million of penalties, respectively. At September 30, 2014 and 2013, the Company had accrued interest of $39 million and $29 million, respectively, and accrued penalties of $5 million and $3 million, respectively, related to uncertain tax positions in its other long-term liabilities. 
The Company's fiscal 2009, 2010 and 2011 U.S. federal income tax returns are currently under Internal Revenue Service ("IRS") examination. The Company has filed federal refund claims, mostly related to foreign tax credits, for fiscal years 2002 through 2008, which are also currently under IRS examination. Except for such refund claims, the federal statutes of limitations have expired for fiscal years prior to 2009. The Company's fiscal 2006, 2007 and 2008 California tax returns are currently under examination. Except for certain outstanding refund claims, the California statutes of limitations have expired for fiscal years prior to 2006. During fiscal 2013, the Canada Revenue Agency ("CRA") completed its examination of the Company's fiscal 2003 through 2009 Canadian tax returns and proposed certain assessments. Based on the findings of the examination, the CRA also proposed certain assessments on the Company's fiscal 2010 through 2013 Canadian tax returns. The Company has filed notices of objection against these assessments and believes that its income tax provision adequately reflects its obligations to the CRA. The Company is also subject to examinations by various state and foreign tax authorities. All material state and foreign tax matters have been concluded for years through fiscal 2002. The timing and outcome of the final resolutions of the federal, state and foreign tax examinations and refund claims are uncertain. As such, it is not reasonably possible to estimate the impact that the final outcomes could have on the Company's unrecognized tax benefits in the next 12 months.
Legal Matters
Legal Matters
Note 20—Legal Matters
The Company is party to various legal and regulatory proceedings. Some of these proceedings involve complex claims that are subject to substantial uncertainties and unascertainable damages. Accordingly, except as disclosed, the Company has not established reserves or ranges of possible loss related to these proceedings, as at this time in the proceedings, the matters do not relate to a probable loss and/or the amount or range of losses are not reasonably estimable. Although the Company believes that it has strong defenses for the litigation and regulatory proceedings described below, it could, in the future, incur judgments or fines or enter into settlements of claims that could have a material adverse effect on the Company's financial position, results of operations or cash flows. From time to time, the Company may engage in settlement discussions or mediations with respect to one or more of its outstanding litigation matters, either on its own behalf or collectively with other parties.
The litigation accrual is an estimate and is based on management's understanding of its litigation profile, the specifics of each case, advice of counsel to the extent appropriate and management's best estimate of incurred loss as of the balance sheet date.
The following table summarizes the activity related to accrued litigation.
 
Fiscal 2014
 
Fiscal 2013
 
(in millions)
Balance at October 1
$
5

 
$
4,386

Reestablishment of obligation related to interchange multidistrict litigation
1,056

 
—

Additional provision for legal matters
453

 
3

Payments on legal matters
(58
)
 
(4,384
)
Balance at September 30
$
1,456

 
$
5


Covered Litigation
Visa Inc., Visa U.S.A. and Visa International are parties to certain legal proceedings that are covered by the retrospective responsibility plan, which the Company refers to as the covered litigation. See Note 3—Retrospective Responsibility Plan. An accrual for the covered litigation and a charge to the litigation provision are recorded when loss is deemed to be probable and reasonably estimable. In making this determination, the Company evaluates available information, including but not limited to actions taken by the litigation committee. The total accrual related to the covered litigation could be either higher or lower than the escrow account balance.
The following table summarizes the activity related to covered litigation.
 
Fiscal 2014
 
Fiscal 2013
 
(in millions)
Balance at October 1
$
—

 
$
4,383

Reestablishment of obligation related to interchange multidistrict litigation
1,056

 
—

Additional provision for interchange opt-out litigation
450

 
—

Payments on covered litigation
(57
)
 
(4,383
)
Balance at September 30
$
1,449

 
$
—


The Company recorded an additional accrual of $4.1 billion for the covered litigation during fiscal 2012, which increased its accrued balance for the covered litigation from $285 million to $4.4 billion. During fiscal 2013, pursuant to settlement agreements with the class and individual plaintiffs in the interchange multidistrict litigation, the Company paid approximately $4.0 billion and $350 million, respectively, from the litigation escrow account into settlement funds. Under the class settlement agreement, if class members opt-out (the “opt-out merchants”) of the damages portion of the class settlement, the defendants are entitled to receive payments of no more than 25% of the original cash payments made into the settlement fund, based on the percentage of payment card sales volume for a defined period attributable to merchants who opted out (the "takedown payments"). On January 14, 2014, the court entered the final judgment order approving the settlement with the class plaintiffs in the interchange multidistrict litigation proceedings, which is subject to the adjudication of any appeals. Takedown payments of approximately $1.1 billion were received on January 27, 2014, and deposited into the Company’s litigation escrow account. The deposit into the litigation escrow account and a related increase in accrued litigation to address opt-out claims were recorded in the second quarter of fiscal 2014. In the fourth quarter of fiscal 2014, an additional accrual of $450 million associated with these opt-out claims was recorded and payments totaling $57 million were made from the litigation escrow account reflecting settlements with a number of individual opt-out merchants, resulting in an accrued balance of $1.4 billion related to covered litigation as of September 30, 2014. See further discussion below under Interchange Opt-out Litigation and Note 3—Retrospective Responsibility Plan.
The Attridge Litigation
On December 8, 2004, a complaint was filed in California state court on behalf of an alleged class of consumers asserting claims against Visa U.S.A., Visa International and MasterCard. Visa Inc. was later added as a defendant. The remaining claims in this action, Attridge v. Visa U.S.A. Inc., et al., allege that Visa's bylaw 2.10(e) and MasterCard's Competitive Programs Policy, which prohibited their respective members from issuing American Express or Discover cards, constitute unlawful restraints of trade under California's Unfair Competition Law, and seek restitution, injunctive relief, and attorneys' fees and costs.
In the separate "Indirect Purchaser" Credit/Debit Card Tying Cases, also pending in California state court (see below), an appeals court reversed the trial court’s approval of a settlement agreement, and the case was remanded to the trial court for consideration of the fairness and adequacy of the settlement in light of the inclusion of the Attridge claims in the release. The trial court subsequently granted final approval of a revised written settlement agreement. Objectors filed notices of appeal in the Credit/Debit Card Tying Cases and the Attridge case. An appeals court affirmed the judgment approving the revised written settlement agreement. Certain objectors filed petitions for rehearing. The Attridge case has been stayed pending final resolution of those appeals.
Interchange Multidistrict Litigation (MDL)
Beginning in May 2005, a series of complaints (the majority of which were styled as class actions) were filed in U.S. federal district courts by merchants against Visa U.S.A., Visa International and/or MasterCard, and in some cases, certain Visa member financial institutions. The complaints challenged, among other things, Visa's and MasterCard's purported setting of interchange reimbursement fees, their "no surcharge" rules, and alleged tying and bundling of transaction fees under the federal antitrust laws, and, in some cases, certain state unfair competition laws. The Judicial Panel on Multidistrict Litigation issued an order transferring the cases to the U.S. District Court for the Eastern District of New York for coordination of pre-trial proceedings in MDL 1720. A group of purported class plaintiffs subsequently filed a Second Consolidated Amended Class Action Complaint which, together with the complaints brought by individual merchants, sought money damages alleged to range in the tens of billions of dollars (subject to trebling), as well as attorneys' fees and injunctive relief. The class plaintiffs also filed a Second Supplemental Class Action Complaint against Visa Inc. and certain member financial institutions challenging Visa's reorganization and IPO under the antitrust laws and seeking unspecified money damages and declaratory and injunctive relief, including an order that the IPO be unwound.
The Company and the individual merchants whose claims were consolidated with the MDL (the "Individual Plaintiffs") signed a settlement agreement to resolve the Individual Plaintiffs' claims against the Company for approximately $350 million. This payment was made from the litigation escrow account on October 29, 2012, and the court has dismissed those claims with prejudice.
In addition, Visa Inc., Visa U.S.A., Visa International, MasterCard Incorporated, MasterCard International Incorporated, various U.S. financial institution defendants, and the class plaintiffs signed a settlement agreement (the "Settlement Agreement") to resolve the class plaintiffs' claims. The terms of the Settlement Agreement include, among other terms:
•
A comprehensive release from participating class members for liability arising out of claims asserted in the litigation, and a further release to protect against future litigation regarding default interchange and the other U.S. rules at issue in the MDL;
•
Settlement payments from the Company of approximately $4.0 billion;
•
Distribution to class merchants of an amount equal to 10 basis points of default interchange across all credit rate categories for a period of eight consecutive months, which otherwise would have been paid to issuers and which effectively reduces credit interchange for that period of time. The eight month period for the reduction would begin within 60 days after completion of the court-ordered period during which individual class members may opt out of this settlement;
•
Certain modifications to the Company's rules, including modifications to permit surcharging on credit transactions under certain circumstances, subject to a cap and a level playing field with other general purpose card competitors; and
•
Agreement that the Company will meet with merchant buying groups that seek to negotiate interchange rates collectively.
On December 10, 2012, Visa paid approximately $4.0 billion from the litigation escrow account into a settlement fund established pursuant to the Settlement Agreement.
On January 14, 2014, the court entered a final judgment order approving the settlement, from which a number of objectors have appealed. Until the appeals are finally adjudicated, no assurance can be provided that the Company will be able to resolve the class plaintiffs' claims as contemplated by the Settlement Agreement. On January 27, 2014, Visa's portion of the takedown payments related to the opt-out merchants (referenced above), which was calculated to be approximately $1.1 billion, was deposited into the litigation escrow account.
Consumer Interchange Litigation
On December 16, 2013, a putative class action was filed in federal district court in California against certain financial institutions alleging that they conspired to fix interchange fees and imposed other alleged restraints on competition. The complaint was filed on behalf of an alleged class of all Visa and MasterCard payment cardholders in the United States since January 1, 2000. Although no Visa entity is named as a defendant, the complaint identifies Visa U.S.A., MasterCard, and certain non-defendant financial institutions as co-conspirators, and plaintiffs assert that they may seek leave to amend the complaint to add the co-conspirators as defendants. Plaintiffs seek injunctive relief, attorneys’ fees, and treble damages allegedly to compensate the purported class for more than $54.0 billion dollars in purported overcharges imposed on them each year by defendants and their alleged co-conspirators. The defendants have filed a motion to dismiss. The case has been transferred to MDL 1720.
Interchange Opt-out Litigation
Beginning in May 2013, more than 35 opt-out cases have been filed by hundreds of merchants in various federal district courts, generally pursuing damages claims on allegations similar to those raised in MDL 1720. A number of the cases also include allegations that Visa has monopolized, attempted to monopolize, and/or conspired to monopolize debit card-related market segments, and one of the cases seeks an injunction against the fixed acquirer network fee. The cases name as defendants Visa Inc., Visa U.S.A., Visa International, MasterCard Incorporated, and MasterCard International Incorporated, although some also include certain U.S. financial institutions as defendants. Wal-Mart Stores Inc. and its subsidiaries have filed an opt-out complaint that also adds Visa Europe Limited and Visa Europe Services Inc. as defendants. Visa has acknowledged and confirmed its obligations to indemnify Visa Europe Limited and Visa Europe Services Inc. with respect to the claim against them in Wal-Mart’s complaint.
Visa, MasterCard, and certain U.S. financial institution defendants in MDL 1720 filed a complaint in the Eastern District of New York against certain named class representative plaintiffs who had opted out or stated their intention to opt out of the damages portion of the Settlement Agreement. In addition, Visa filed three more similar complaints in the Eastern District of New York against Wal-Mart Stores Inc.; against The Home Depot, Inc. and Home Depot U.S.A.; and against Sears Holdings Corporation. All four complaints seek a declaration that, from January 1, 2004 to November 27, 2012, the time period for which opt-outs may seek damages under the Settlement Agreement, Visa's conduct in, among other things, continuing to set default interchange rates, maintaining its "honor all cards" rule, enforcing certain rules relating to merchants, and restructuring itself, did not violate federal or state antitrust laws.
Visa and the other defendants in the opt-out cases in MDL 1720 filed a motion to dismiss the then-pending opt-out complaints in MDL 1720. Wal-Mart and the named class representatives that are defendants in the declaratory judgment cases in MDL 1720 filed motions to dismiss the declaratory judgment complaints, and Visa filed a motion to dismiss Wal-Mart's complaint. All of these motions to dismiss were denied.
All the cases filed in federal court have been either assigned to the judge presiding over MDL 1720, or have been transferred by the Judicial Panel on Multidistrict Litigation for inclusion in MDL 1720. The court has entered an order confirming that In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 1:05-md-01720-JG-JO (E.D.N.Y.), includes (1) all current and future actions transferred to MDL 1720 by the Judicial Panel on Multidistrict Litigation or other order of any court for inclusion in coordinated or pretrial proceedings, and (2) all actions filed in the Eastern District of New York that arise out of operative facts as alleged in the cases subject to the transfer orders of the Judicial Panel on Multidistrict Litigation. Cases that are transferred to or otherwise included in MDL 1720 are covered litigation for purposes of the retrospective responsibility plan. See Note 3—Retrospective Responsibility Plan.
Visa has reached settlement agreements with a number of merchants representing approximately 10% of the Visa-branded payment card sales volume of merchants who opted out. The amount of the settlements is not considered material to the consolidated financial statements.
A similar case has been filed by merchants in Texas state court, generally pursuing claims on allegations similar to those raised in MDL 1720. On September 19, 2014, the plaintiffs in that case filed a motion for partial summary judgment regarding standing.
While the Company believes that it has substantial defenses in these matters, the final outcome of individual legal claims is inherently unpredictable. The Company could incur judgments, enter into settlements or revise its expectations regarding the outcome of individual opt-out claims, and such developments could have a material adverse effect on our financial results in the period in which the effect becomes probable and reasonably estimable.
Other Litigation
"Indirect Purchaser" Actions
From 2000 to 2004, complaints were filed on behalf of consumers in nineteen different states and the District of Columbia against Visa U.S.A. and MasterCard (and, in California, Visa International). The complaints allege, among other things, that Visa U.S.A.'s "honor all cards" rule and a similar MasterCard rule violated state antitrust and consumer protection laws, and common law. The claims in these class actions asserted that merchants, faced with excessive merchant discount fees, passed on some portion of those fees to consumers in the form of higher prices on goods and services sold. Plaintiffs seek money damages and injunctive relief. Visa has been successful in the majority of these cases, and has resolved the cases in all jurisdictions but California.
In California, in the consolidated Credit/Debit Card Tying Cases, the court dismissed claims brought under the Cartwright Act, but denied a similar motion with respect to Unfair Competition Law claims for unlawful, unfair and/or fraudulent business practices. The parties agreed to settlement terms to resolve the dispute, which was granted final approval. The plaintiff in Attridge filed a notice of appeal from the final approval order, as did other objectors to the settlement. An appeals court reversed the judgment approving the settlement agreement, and the case was remanded to the trial court for consideration of the fairness and adequacy of the settlement in light of the inclusion of the Attridge claims in the release. The parties subsequently agreed upon a revised written settlement agreement, which was granted final approval. An appeals court affirmed the judgment approving the revised written settlement agreement, and certain objectors filed petitions for rehearing.
European Competition Proceedings
European Commission. On April 3, 2009, the European Commission ("EC") issued a Statement of Objections ("SO") to Visa Europe, Visa International and Visa Inc. alleging a breach of European competition law, namely Article 81 of the European Community Treaty and Article 53 of the European Economic Area Agreement (the "EEA Agreement"). The SO was directed to Visa Inc. and Visa International with respect to the "honor all cards" rule, the "no-surcharge" rule, and certain consumer card interchange fee practices.
In 2010, Visa Europe announced an agreement with the EC to end the proceedings with respect to Visa Europe's debit interchange fees. The EC concluded that the proposed agreement with Visa Europe addressed its competition concerns, made the agreement legally binding upon Visa Europe, and closed its investigation with regard to interchange fees for consumer debit card transactions.
On July 31, 2012, the EC announced a supplementary Statement of Objections ("SSO") that was sent to Visa Europe concerning interchange for consumer credit card transactions; and, on March 8, 2013, a redacted version of the SSO was served on Visa Inc. and Visa International. The SSO alleges a breach of Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA Agreement. Among other things, the SSO asserts claims jointly against Visa Europe, Visa Inc., and Visa International, objecting to domestic, cross-border, and inter-regional interchange, Visa Europe's rules relating to cross-border acquiring, and Visa Europe’s point of sale rules. The SSO also announces the EC's intention to impose fines. The potential amount of any fine cannot be estimated at this time.
On February 26, 2014, the EC adopted a formal decision accepting Visa Europe’s commitments addressing domestic interchange, cross-border interchange for credit card transactions within Europe, and cross-border acquiring within Europe, and made the commitments legally binding on Visa Europe. The EC continues the proceedings in respect of inter-regional interchange fees that apply to transactions involving a Visa credit cardholder from outside the Visa Europe territory and a merchant in the European Economic Area (EEA). These interchange fees are set by Visa Inc.
U.K. Merchant Litigation. Since July 2013, approximately 20 merchants (together with subsidiary/affiliate companies) have commenced proceedings against Visa Europe (used in this U.K. Merchant Litigation section to denote Visa Europe Limited and/or relevant subsidiary/affiliate companies), Visa Inc. and Visa International relating to interchange rates in Europe, and seek damages for alleged anti-competitive conduct primarily in relation to U.K. domestic and/or Irish domestic and/or intra-EEA interchange fees for credit and debit cards. After a successful application for summary judgment, the claims of most merchants were limited to the 6 year period immediately preceding the issuance of each claim. These merchants intend to apply for permission to appeal.
In addition, since March 2013, approximately 20 additional merchants (together with subsidiary/affiliate companies) have threatened to commence proceedings against Visa Europe, Visa Inc. and Visa International with respect to interchange rates in Europe. Visa Europe, Visa Inc., and Visa International entered into standstill agreements with respect to a majority of those merchants’ claims. While the amount of interchange being challenged could be substantial, these claims have not yet been filed and their full scope is not yet known.
Altogether, therefore, merchants accounting for more than 50% of U.K. retail sales have either filed claims or preserved their right to do so. The amount of interchange being challenged is substantial. Although not all of the merchant claims have been served and thus the full scope of the claims is not yet known, and there are substantial defenses to these claims, the total damages sought in the claims that have been served exceed several billion dollars.
Visa Europe is obligated to indemnify Visa Inc. and Visa International in connection with the European Competition Proceedings, in our opinion, including payment of any fines or damages that may be imposed. However, Visa Europe has informed Visa Inc. of its position that it is not obligated to indemnify Visa Inc. or Visa International for any claim in the European Competition Proceedings, including claims asserted in either the European Commission matter or the filed or unfiled claims in the U.K. Merchant Litigation. Visa Inc. continues to firmly believe that Visa Europe is obligated to indemnify for all such claims. While the parties are not currently in non-binding arbitration, both parties have initiated the executive engagement aspect of the dispute resolution procedure contemplated by the Framework Agreement to resolve their dispute regarding this indemnification issue.
Canadian Competition Proceedings
Merchant Litigation. Beginning in December 2010, a number of purported civil follow-on cases to the Competition Bureau's proceeding were filed in Quebec, British Columbia, Ontario, Saskatchewan, and Alberta against Visa Canada, MasterCard, and ten financial institutions on behalf of purported classes of merchants and others that accept payment by Visa and MasterCard. In Saskatchewan, a separate action was filed against Visa Canada Corporation and Visa Inc., two MasterCard entities, and a number of smaller Canadian issuing banks that are not named as defendants in any of the existing proceedings. The purported class action lawsuits allege conduct contrary to Section 45 of Canada's Competition Act and also assert claims of civil conspiracy, interference with economic interests, and unjust enrichment, among others. Plaintiffs allege that Visa and MasterCard each conspired with their member financial institutions to set supra-competitive default interchange rates and merchant discount fees, and that Visa and MasterCard's respective "no-surcharge" and "honor all cards" policies had the anticompetitive effect of increasing merchant discount fees.
On March 26, 2014, the British Columbia Supreme Court, in Watson v. Bank of America Corporation, et al., granted the plaintiffs' application for class certification in part, allowing plaintiffs to proceed as a class on, among other claims, claims for price fixing under Canada's Competition Act. Both plaintiff and defendants are appealing aspects of the certification decision to the British Columbia Court of Appeal. The lawsuits in Quebec, Ontario, Alberta, and Saskatchewan are either being held in abeyance or are effectively stayed pending further proceedings in the British Columbia lawsuit.
The pending Canada Merchant Litigation lawsuits largely seek unspecified monetary damages and injunctive relief, but some allege substantial damages.
Dynamic Currency Conversion
On February 4, 2013, following an investigation into Visa's policies relating to the provision of Dynamic Currency Conversion (DCC), the Australian Competition and Consumer Commission ("ACCC") commenced proceedings in the Federal Court of Australia against Visa Inc., Visa U.S.A., VWPL, and Visa AP (Australia) Pty Limited alleging that certain Visa policies related to the provision of DCC services contravened Australian competition law. The ACCC later filed an amended claim adding Visa International as a respondent. DCC refers to conversion from one currency to another, either of the price of goods or services by the merchant, or of cash withdrawals by an ATM. Among other things, the ACCC alleges that: (1) from May 2010 to October 2010, Visa prohibited DCC services with respect to transactions on Visa international payment cards conducted at Australian merchant outlets that had not previously been conducting DCC transactions; and (2) from at least May 2007, Visa prohibited DCC services with respect to cash withdrawals at Australian ATMs on Visa international payment cards. The ACCC seeks declaratory relief and a monetary penalty. The potential amount of any penalty cannot be estimated at this time.
Data Pass Litigation
On November 19, 2010, a consumer filed an amended class action complaint against Webloyalty.com, Inc., Gamestop Corporation, and Visa Inc. in federal district court in Connecticut. The plaintiff claims, among other things, that consumers who made online purchases at merchants were deceived into also incurring charges for services from Webloyalty.com through the alleged unauthorized passing of cardholder account information during the sales transaction ("data pass"), in violation of federal and state consumer protection statutes and common law. Visa allegedly aided and abetted the conduct of the other defendants. Plaintiff seeks certification of a class of persons and entities whose credit card or debit card data was improperly accessed by Webloyalty.com since October 1, 2008, and seeks damages, restitution, and injunctive relief. Webloyalty.com, GameStop, and Visa each filed motions to dismiss the amended complaint, which the court granted as to the claims that are grounded in fraud. The court reserved decision on whether all of the claims in the amended complaint are grounded in fraud, and granted plaintiff leave to file a further amended complaint. On August 15, 2014, plaintiff filed a second amended class action complaint against the same defendants as in the amended complaint, asserting the same claims.
Korean Fair Trade Commission
Following a complaint lodged by a Visa client, in July 2011 the Korean Fair Trade Commission ("KFTC") initiated an investigation into Visa’s requirements for the processing of international transactions over VisaNet. The KFTC has the authority to issue an injunction or a fine. The potential amount of any fine cannot be estimated at this time.
U.S. ATM Access Fee Litigation
National ATM Council Class Action. On October 12, 2011, the National ATM Council and thirteen non-bank ATM operators filed a class action lawsuit against Visa (Visa Inc., Visa International, Visa U.S.A., and Plus System, Inc.) and MasterCard in the U.S. District Court for the District of Columbia. The complaint challenges Visa's rule (and a similar MasterCard rule) that if an ATM operator chooses to charge consumers an access fee for a Visa or Plus transaction, that fee cannot be greater than the access fee charged for transactions on other networks. Plaintiffs claim that the rule violates Section 1 of the Sherman Act, and seek damages "in an amount not presently known, but which is tens of millions of dollars, prior to trebling," injunctive relief, and attorneys’ fees. Plaintiffs filed an amended class action complaint against the same defendants, also asserting that the ATM access fee rule violates Section 1 of the Sherman Act. Plaintiffs request treble damages, injunctive relief and attorneys' fees.
Consumer Class Actions. In October 2011, a purported consumer class action was filed against Visa and MasterCard in the same federal court challenging the same ATM access fee rules. Two other purported consumer class actions were also filed in October 2011 in the same federal court, and were later combined into a single amended complaint which challenges the same ATM access fee rules and names Visa, MasterCard and three financial institutions as defendants. These consumer class actions purport to represent classes and sub-classes of consumers in claims brought under Section 1 of the Sherman Act, and also allege claims under antitrust and/or consumer protection statutes in certain states and the District of Columbia. The lawsuits seek injunctive relief, attorneys' fees, treble damages, and restitution where available under state law.
On February 13, 2013, the court granted the defendants’ motions to dismiss the complaints in the National ATM Council class action and the consumer class actions, and dismissed the cases without prejudice. The U.S. District Court for the District of Columbia subsequently denied plaintiffs’ motions for leave to file amended complaints in the National ATM Council class action and the consumer class actions, and denied plaintiffs’ motions for an order altering or amending the court's February 13, 2013 judgment. Plaintiffs filed notices of appeal to the U.S. Court of Appeals for the District of Columbia Circuit.
U.S. Department of Justice Civil Investigative Demand
On March 13, 2012, the Antitrust Division of the United States Department of Justice (the "Division") issued a Civil Investigative Demand, or "CID," to Visa Inc. seeking documents and information regarding a potential violation of Section 1 or 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. The CID focuses on PIN-Authenticated Visa Debit and Visa's competitive responses to the Dodd-Frank Act, including Visa's fixed acquirer network fee. Visa is cooperating with the Division in connection with the CID.
Federal Trade Commission Voluntary Access Letter
On September 21, 2012, the Bureau of Competition of the United States Federal Trade Commission (the "Bureau") requested that Visa provide on a voluntary basis documents and information regarding potential violations of certain regulations associated with the Dodd-Frank Act, particularly Section 920(b)(1)(B) of the Electronic Funds Transfer Act, 15 U.S.C. 1693o-2, and Regulation II, 12 C.F.R. § 235.7(b) (commonly known as the “Durbin Amendment” and regulations). The request focuses on information related to the purposes, implementation, and impact of the optional PIN Debit Gateway Service. The revenue generated by the PIN Debit Gateway Service is not material to the Company’s financial statements. Visa is cooperating with the Bureau and responding to its information requests.
Consumer Financial Protection Bureau
On February 7, 2013, Visa received a letter from the Consumer Financial Protection Bureau ("CFPB") seeking documents and information, on a voluntary basis, regarding Visa's practices with respect to the conversion of U.S. cardholder foreign transactions from foreign currency into U.S. dollars. On November 6, 2014, the CFPB notified Visa that it had completed its investigation and did not intend to recommend taking enforcement action against Visa.
Target Data Breach
On March 3, 2014, a purported class action was filed in the U.S. District Court for the District of Utah against Target, Visa and MasterCard alleging, among other things, violations of Utah unfair competition law, invasion of privacy, negligence and breach of contract as a result of unauthorized access in November and December 2013 to certain personal information and payment card data stored by Target. The complaint also alleges that Visa and MasterCard unlawfully failed to implement chip technology in the United States. The complaint seeks damages, restitution, injunctive relief and attorneys’ fees. On April 4, 2014, the Judicial Panel on Multidistrict Litigation issued an order conditionally transferring the action to an existing MDL related to the Target data breach where Visa has not been a party in the U.S. District Court for the District of Minnesota, In re Target Corp. Customer Data Security Breach Litigation, MDL No. 2522. Visa and MasterCard filed a motion to separate and remand the claims against them, or alternatively, to remand the action in its entirety. The motion was granted, and the claims against Visa and MasterCard were severed and remanded to the District of Utah. The case remains stayed.
Subsequent Events
Subsequent Events
Note 21—Subsequent Events
In October 2014, the Company's board of directors authorized a new $5.0 billion share repurchase program. See Note 14—Stockholders' Equity.
In October 2014, the Company’s board of directors declared a dividend in the aggregate amount of $0.48 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis). See Note 14—Stockholders' Equity.
Summary of Significant Accounting Policies (Policies)
Organization 
Organization. In a series of transactions from October 1 to October 3, 2007, Visa Inc. ("Visa" or the "Company") undertook a reorganization in which Visa U.S.A. Inc. ("Visa U.S.A."), Visa International Service Association ("Visa International"), Visa Canada Corporation ("Visa Canada") and Inovant LLC ("Inovant") became direct or indirect subsidiaries of Visa and established the retrospective responsibility plan (the "October 2007 reorganization" or "reorganization"). See Note 3—Retrospective Responsibility Plan. The reorganization was reflected as a single transaction on October 1, 2007 using the purchase method of accounting with Visa U.S.A. as the accounting acquirer. Visa Europe Limited ("Visa Europe") did not become a subsidiary of Visa Inc., but rather remained owned and governed by its European member financial institutions. See Note 2—Visa Europe.
Visa is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. Visa and its wholly-owned consolidated subsidiaries, including Visa U.S.A., Visa International, Visa Worldwide Pte. Limited (“VWPL”), Visa Canada, Inovant and CyberSource Corporation (“CyberSource”), operate one of the world's most advanced processing networks — VisaNet — which facilitates authorization, clearing and settlement of payment transactions worldwide. VisaNet also offers fraud protection for account holders and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for account holders on Visa-branded cards and payment products. In most cases, account holder and merchant relationships belong to, and are managed by, Visa's financial institution clients. Visa provides a wide variety of payment solutions that support payment products that issuers can offer to their account holders: pay now with debit, pay ahead with prepaid or pay later with credit products. These services facilitate transactions on Visa's network among account holders, merchants, financial institutions and governments in mature and emerging markets globally.
Basis of presentation 
Consolidation and basis of presentation. The consolidated financial statements include the accounts of Visa and its consolidated entities and are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company consolidates its majority-owned and controlled entities, including variable interest entities (“VIEs”) for which the Company is the primary beneficiary. The Company's investments in VIEs have not been material to its consolidated financial statements as of and for the periods presented. All significant intercompany accounts and transactions are eliminated in consolidation.
Consolidation 
The Company's activities are interrelated, and each activity is dependent upon and supportive of the other. All significant operating decisions are based on analysis of Visa as a single global business.
Use of estimates 
Use of estimates. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Future actual results could differ materially from these estimates. The use of estimates in specific accounting policies is described further below as appropriate.
Cash and cash equivalents 
Cash and cash equivalents. Cash and cash equivalents include cash and certain highly liquid investments with original maturities of 90 days or less from the date of purchase. Cash equivalents are primarily recorded at cost, which approximates fair value due to their generally short maturities.
Restricted cash--litigation escrow 
Restricted cash—litigation escrow. The Company maintains an escrow account from which monetary liabilities from settlements of, or judgments in, the covered litigation are paid. See Note 3—Retrospective Responsibility Plan and Note 20—Legal Matters for a discussion of the covered litigation. The escrow funds are held in money market investments, together with the interest earned, less applicable taxes payable, and classified as restricted cash on the consolidated balance sheets. Interest earned on escrow funds is included in non-operating income on the consolidated statements of operations.
Investments 
Investments and fair value. The Company measures certain assets and liabilities at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are reported under a three-level valuation hierarchy. See Note 4—Fair Value Measurements and Investments. The classification of the Company’s financial assets and liabilities within the hierarchy is as follows:
Level 1—Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 assets include money market funds, publicly-traded equity securities and U.S. Treasury securities.
Level 2—Inputs to the valuation methodology can include: (1) quoted prices in active markets for similar (not identical) assets or liabilities; (2) quoted prices for identical or similar assets in non-active markets; (3) inputs other than quoted prices that are observable for the asset or liability; or (4) inputs that are derived principally from or corroborated by observable market data. The Company's Level 2 assets and liabilities include commercial paper, U.S. government-sponsored debt securities, corporate debt securities and foreign exchange derivative instruments.
Level 3—Inputs to the valuation methodology are unobservable and cannot be corroborated by observable market data. The Company's Level 3 assets and liabilities include auction rate securities and the Visa Europe put option.
Trading investment securities include mutual fund equity security investments related to various employee compensation and benefit plans. Trading activity in these investments is at the direction of the Company's employees. These investments are held in a trust and are not available for the Company's operational or liquidity needs. Interest and dividend income and changes in fair value are recorded in non-operating income, and offset in personnel expense on the consolidated statements of operations.
Available-for-sale investment securities include investments in debt and equity securities. These securities are recorded at cost at the time of purchase and are carried at fair value. The Company considers these securities to be available-for-sale to meet working capital and liquidity needs. Investments with original maturities of greater than 90 days and stated maturities of less than one year from the balance sheet date, or investments that the Company intends to sell within one year, are classified as current assets, while all other securities are classified as non-current assets. The majority of these investments are classified as non-current as they have stated maturities of more than one year from the balance sheet date. However, these investments are generally available to meet short-term liquidity needs. Unrealized gains and losses are reported in accumulated other comprehensive income or loss on the consolidated balance sheets until realized. The specific identification method is used to calculate realized gain or loss on the sale of marketable securities, which is recorded in non-operating income on the consolidated statements of operations. Dividend and interest income are recognized when earned and are included in non-operating income on the consolidated statements of operations.
The Company evaluates its debt and equity securities for other-than-temporary impairment, or OTTI, on an ongoing basis. When there has been a decline in fair value of a debt or equity security below the amortized cost basis, the Company recognizes OTTI if: (1) it has the intent to sell the security; (2) it is more likely than not that it will be required to sell the security before recovery of the amortized cost basis; or (3) it does not expect to recover the entire amortized cost basis of the security. The Company has not presented required separate disclosures because its gross unrealized loss positions in debt or equity securities for the periods presented are not material.
The Company applies the equity method of accounting for investments in other entities when it holds between 20% and 50% ownership in the entity or when it exercises significant influence. Under the equity method, the Company’s share of each entity’s profit or loss is reflected in non-operating income on the consolidated statements of operations. The equity method of accounting is also used for flow-through entities such as limited partnerships and limited liability companies when the investment ownership percentage is equal to or greater than 5% of outstanding ownership interests, regardless of whether the Company has significant influence over the investees.
The Company applies the cost method of accounting for investments in other entities when it holds less than 20% ownership in the entity and does not exercise significant influence, or for flow-through entities when the investment ownership is less than 5% and the Company does not exercise significant influence. These investments consist of equity holdings in non-public companies and are recorded in other assets on the consolidated balance sheets.
The Company regularly reviews investments accounted for under the cost and equity methods for possible impairment, which generally involves an analysis of the facts and changes in circumstances influencing the investment, expectations of the entity’s cash flows and capital needs, and the viability of its business model.
Financial instruments 
Financial instruments. The Company considers the following to be financial instruments: cash and cash equivalents, restricted cash-litigation escrow, trading and available-for-sale investment securities, settlement receivable and payable, customer collateral, non-marketable equity investments, settlement risk guarantee, derivative instruments, and the Visa Europe put option.
Settlement receivable and payable 
Settlement receivable and payable. The Company operates systems for authorizing, clearing and settling payment transactions worldwide. U.S. dollar settlements with the Company's financial institution clients are typically settled within the same day and do not result in a receivable or payable balance, while settlement currencies other than the U.S. dollar generally remain outstanding for one to two business days, resulting in amounts due from and to clients. These amounts are presented as settlement receivable and settlement payable on the consolidated balance sheets.
Customer collateral 
Customer collateral. The Company holds cash deposits and other non-cash assets from certain clients in order to ensure their performance of settlement obligations arising from Visa-branded cards and payment products processed in accordance with the Company's operating regulations. The cash collateral assets are restricted and fully offset by corresponding liabilities and both balances are presented on the consolidated balance sheets. Non-cash collateral assets are held on behalf of the Company by a third party and are not recorded on the consolidated balance sheets.
Client incentives 
Client incentives. The Company enters into long-term contracts with financial institution clients and other business partners for various programs designed to build payments volume, increase Visa-branded card and product acceptance and win merchant routing transactions over Visa's network. These incentives are primarily accounted for as reductions to operating revenues or as operating expenses if a separate identifiable benefit at fair value can be established. The Company generally capitalizes advance incentive payments under these agreements if select criteria are met. The capitalization criteria include the existence of future economic benefits to Visa, the existence of legally enforceable recoverability language (e.g., early termination clauses), management's ability and intent to enforce the recoverability language and the ability to generate future earnings from the agreement in excess of amounts deferred. Capitalized amounts are amortized over the shorter of the period of contractual recoverability or the corresponding period of economic benefit. Incentives not yet paid are accrued systematically and rationally based on management's estimate of each client's performance. These accruals are regularly reviewed and estimates of performance are adjusted, as appropriate, based on changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts.
Property, equipment and technology, net 
Property, equipment and technology, net. Property, equipment and technology are recorded at historical cost less accumulated depreciation and amortization, which are computed on a straight-line basis over the asset’s estimated useful life. Depreciation and amortization of technology, furniture, fixtures and equipment are computed over estimated useful lives ranging from 2 to 7 years. Capital leases are amortized over the lease term and leasehold improvements are amortized over the shorter of the useful life of the asset or lease term. Building improvements are depreciated between 3 and 40 years, and buildings are depreciated over 40 years. Improvements that increase functionality of the asset are capitalized and depreciated over the asset’s remaining useful life. Land and construction-in-progress are not depreciated. Fully depreciated assets are retained in property, equipment and technology, net, until removed from service.
Technology includes purchased and internally developed software, including technology assets obtained through acquisitions. Internally developed software represents software primarily used by the VisaNet electronic payments network and CyberSource platform. Internal and external costs incurred during the preliminary project stage are expensed as incurred. Qualifying costs incurred during the application development stage are capitalized. Once the project is substantially complete and ready for its intended use these costs are amortized on a straight-line basis over the technology's estimated useful life. Acquired technology assets are initially recorded at fair value and amortized on a straight-line basis over the estimated useful life.
The Company evaluates the recoverability of long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If the sum of expected undiscounted net future cash flows is less than the carrying amount of an asset or asset group, an impairment loss is recognized to the extent that the carrying amount of the asset or asset group exceeds its fair value.
Leases 
Leases. The Company enters into operating and capital leases for the use of premises, software and equipment. Rent expense related to operating lease agreements, which may or may not contain lease incentives, is primarily recorded on a straight-line basis over the lease term.
Intangible assets, net 
Intangible assets, net. The Company records identifiable intangible assets at fair value on the date of acquisition and evaluates the useful life of each asset.
Finite-lived intangible assets primarily consist of customer relationships, reacquired rights, reseller relationships and tradenames obtained through acquisitions. Finite-lived intangible assets are amortized on a straight-line basis and are tested for recoverability if events or changes in circumstances indicate that their carrying amounts may not be recoverable. These intangibles have useful lives ranging from 3 to 15 years. No events or changes in circumstances indicate that impairment existed as of September 30, 2014. See Note 7—Intangible Assets and Goodwill.
Indefinite-lived intangible assets consist of tradename, customer relationships and the Visa Europe franchise right acquired in the October 2007 reorganization. Intangible assets with indefinite useful lives are not amortized but are evaluated for impairment annually or more frequently if events or changes in circumstances indicate that impairment may exist. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangible assets. The Company assesses each category of indefinite-lived intangible assets for impairment on an aggregate basis, which may require the allocation of cash flows and/or an estimate of fair value to the assets or asset group. Impairment exists if the fair value of the indefinite-lived intangible asset is less than the carrying value. The Company relies on a number of factors when completing impairment assessments, including a review of discounted net future cash flows, business plans and the use of present value techniques.
Goodwill 
Goodwill. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not amortized but is evaluated for impairment at the reporting unit level annually as of February 1, or more frequently if events or changes in circumstances indicate that impairment may exist.
Accrued litigation 
Accrued litigation. The Company evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings to which it is a party and records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These judgments are subjective, based on the status of such legal or regulatory proceedings, the merits of the Company's defenses and consultation with corporate and external legal counsel. Actual outcomes of these legal and regulatory proceedings may differ materially from the Company's estimates. The Company expenses legal costs as incurred in professional fees in the consolidated statements of operations. See Note 20—Legal Matters.
Revenue recognition 
Revenue recognition. The Company's operating revenues are comprised principally of service revenues, data processing revenues, international transaction revenues and other revenues, reduced by costs incurred under client incentives arrangements. The Company recognizes revenue, net of sales and other similar taxes, when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.
Service revenues consist of revenues earned for providing financial institution clients with support services for the delivery of Visa-branded payment products and solutions. Current quarter service revenues are primarily assessed using a calculation of current pricing applied to the prior quarter's payments volume. The Company also earns revenues from assessments designed to support ongoing acceptance and volume growth initiatives, which are recognized in the same period the related volume is transacted.
Data processing revenues consist of revenues earned for authorization, clearing, settlement, network access and other maintenance and support services that facilitate transaction and information processing among the Company's clients globally and with Visa Europe. Data processing revenues are also earned for transactions processed by CyberSource's online payment gateway platform. Data processing revenues are recognized in the same period the related transactions occur or services are rendered.
International transaction revenues are earned for cross-border transaction processing and currency conversion activities. Cross-border transactions arise when the country of origin of the issuer is different from that of the merchant. International transaction revenues are primarily generated by cross-border payments and cash volume.
Other revenues consist mainly of license fees for use of the Visa brand, revenues earned from Visa Europe in connection with the Visa Europe Framework Agreement (see Note 2—Visa Europe), fees from account holder services, licensing and certification and other activities related to the Company's acquired entities. Other revenues also include optional service or product enhancements, such as extended account holder protection and concierge services. Other revenues are recognized in the same period the related transactions occur or services are rendered.
Marketing 
Marketing. The Company expenses costs for the production of advertising as incurred. The cost of media advertising is expensed when the advertising takes place. Sponsorship costs are recognized over the period in which the Company benefits from the sponsorship rights. Promotional items are expensed as incurred, when the related services are received, or when the related event occurs.
Income taxes 
Income taxes. The Company's income tax expense consists of two components: current and deferred. Current income tax expense represents taxes paid or payable for the current period. Deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to temporary differences between the financial statement carrying amounts and the respective tax basis of existing assets and liabilities, and operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing whether deferred tax assets are realizable, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. A valuation allowance is recorded for the portions that are not expected to be realized based on the level of historical taxable income, projections of future taxable income over the periods in which the temporary differences are deductible, and qualifying tax planning strategies.
Where interpretation of the tax law may be uncertain, the Company recognizes, measures and discloses income tax uncertainties. The Company accounts for interest expense and penalties related to uncertain tax positions in non-operating income in the consolidated statements of operations. The Company files a consolidated federal income tax return and, in certain states, combined state tax returns. The Company elects to claim foreign tax credits in any given year if such election is beneficial to the Company.
Pension and other postretirement benefit plans 
Pension and other postretirement benefit plans. The Company’s defined benefit pension and other postretirement benefit plans are actuarially evaluated, incorporating various critical assumptions including the discount rate and the expected rate of return on plan assets (for qualified pension plans). The discount rate is based on a "bond duration matching" methodology, which reflects the matching of projected plan obligation cash flows to an average of high-quality corporate bond yield curves whose duration matches the projected cash flows. The expected rate of return on pension plan assets considers the current and expected asset allocation, as well as historical and expected returns on each plan asset class. Any difference between actual and expected plan experience, including asset return experience, in excess of a 10% corridor is recognized in net periodic pension cost over the expected average employee future service period, which is approximately 8 years for plans in the United States. Other assumptions involve demographic factors such as retirement age, mortality, attrition and the rate of compensation increases. The Company evaluates assumptions annually and modifies them as appropriate.
The Company recognizes the funded status of its benefit plans in its consolidated balance sheets as other assets, accrued liabilities and other liabilities. The Company recognizes settlement losses when it settles pension benefit obligations, including making lump-sum cash payments to plan participants in exchange for their rights to receive specified pension benefits, when certain thresholds are met.
Foreign currency remeasurement and translation 
Foreign currency remeasurement and translation. The Company's functional currency is the U.S. dollar for the majority of its foreign operations. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Resulting foreign currency transaction gains and losses related to conversion and remeasurement are recorded in general and administrative expense in the consolidated statements of operations and were not material for fiscal 2014, 2013 and 2012.
For certain foreign operations, the Company's functional currency may be the local currency in which a foreign subsidiary executes its business transactions. Translation from the local currency to the U.S. dollar is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using an average exchange rate for the period. Resulting translation adjustments are reported as a component of accumulated other comprehensive income or loss on the consolidated balance sheets.
Derivative financial instruments 
Derivative financial instruments. The Company uses foreign exchange forward derivative contracts to reduce its exposure to foreign currency rate changes on forecasted non-functional currency denominated operational cash flows. Derivatives are carried at fair value on a gross basis in either prepaid and other current assets or accrued liabilities on the consolidated balance sheets. At September 30, 2014, derivatives outstanding mature within 12 months or less. Gains and losses resulting from changes in fair value of derivative instruments are accounted for either in accumulated other comprehensive income or loss on the consolidated balance sheets, or in the consolidated statements of operations (in the corresponding account where revenue or expense is hedged, or to general and administrative for hedge amounts determined to be ineffective) depending on whether they are designated and qualify for hedge accounting. Fair value represents the difference in the value of the derivative instruments at the contractual rate and the value at current market rates, and generally reflects the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date based on broker quotes for the same or similar instruments. The Company does not enter into derivative contracts for speculative or trading purposes.
Guarantees and indemnifications 
Guarantees and indemnifications. The Company recognizes an obligation at inception for guarantees and indemnifications that qualify for recognition, regardless of the probability of occurrence. The Company indemnifies its financial institution clients for settlement losses suffered due to the failure of any other client to fund its settlement obligations in accordance with Visa's operating regulations. The estimated fair value of the liability for settlement indemnification is included in accrued liabilities on the consolidated balance sheets and is described in Note 11—Settlement Guarantee Management. The Company indemnifies Visa Europe for claims arising from the Company’s or Visa Europe’s activities that are brought outside of Visa Europe’s region, as described in Note 2—Visa Europe.
Share-based compensation 
Share-based compensation. The Company recognizes share-based compensation cost using the fair value method of accounting. The Company recognizes compensation cost for awards with only service conditions on a straight-line basis over the requisite service period, which is generally the vesting period. Compensation cost for performance and market-condition-based awards is recognized on a graded-vesting basis. The amount is initially estimated based on target performance and is adjusted as appropriate based on management's best estimate throughout the performance period. See Note 16—Share-based Compensation.
Earnings per share 
Earnings per share. The Company calculates earnings per share using the two-class method to reflect the different rights of each class and series of outstanding common stock. The dilutive effect of incremental common stock equivalents is reflected in diluted earnings per share by application of the treasury stock method. See Note 15—Earnings Per Share.
Recently Issued Accounting Pronouncements 
Recently Issued Accounting Pronouncements
In January 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. The Company adopted the standard effective October 1, 2013. 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 adopted the standard effective October 1, 2013.
Beginning with fiscal 2014, the components related to pension and postretirement benefit plans are presented on
the consolidated statements of comprehensive income. All prior period information has been reclassified to conform
to current period presentation. The adoption did not have a material impact on the consolidated financial
statements.
In February 2013, the FASB issued ASU 2013-04, which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
In March 2013, the FASB issued ASU 2013-05, which clarifies the applicable guidance for the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity, or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
In July 2013, the FASB issued ASU 2013-11, which provides guidance for the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The Company will adopt the standard effective October 1, 2014. The adoption is not expected to have a material impact on the consolidated financial statements.
In May 2014, the FASB issued ASU No. 2014-09, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of goods or services to customers. The ASU will replace existing revenue recognition guidance in U.S. GAAP when it becomes effective. The Company will adopt the standard effective October 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method and is evaluating the full effect of the standard on its ongoing financial reporting.
In June 2014, the FASB issued ASU No. 2014-12, which requires a performance target in stock compensation awards that affects vesting, and is achievable after the requisite service period, be treated as a performance condition. The Company will adopt the standard effective October 1, 2016. The adoption is not expected to have a material impact to the consolidated financial statements.
Retrospective Responsibility Plan (Tables)
Schedule of Restricted Cash and Cash Equivalents
The following table sets forth the changes in the litigation escrow account:
 
Fiscal 2014
 
Fiscal 2013
 
(in millions)
Balance at October 1
$
49

 
$
4,432

Return of takedown payments from settlement fund into the litigation escrow account
1,056

 
—

Deposits into the litigation escrow account
450

 
—

Payments to opt-out merchants(1)
(57
)
 
—

Payments to class plaintiff settlement fund(1)
—

 
(4,033
)
Payments to individual plaintiff settlement fund(1)
—

 
(350
)
Balance at September 30
$
1,498

 
$
49


(1)
These payments are associated with the interchange multidistrict litigation. The settlement with the class plaintiffs in these proceedings is subject to the adjudication of appeals. See Note 20—Legal Matters.
Fair Value Measurements and Investments (Tables)
Fair Value, Assets and Liabilities Measured on Recurring Basis 
Assets and Liabilities Measured at Fair Value on a Recurring Basis
 
Fair Value Measurements at September 30
Using Inputs Considered as
 
Level 1
 
Level 2
 
Level 3
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents and restricted cash:
 
 
 
 
 
 
 
 
 
 
 
Money market funds
$
2,277

 
$
1,071

 
 
 
 
 
 
 
 
Commercial paper
 
 
 
 
$
37

 
$
51

 
 
 
 
Investment securities, trading:
 
 
 
 
 
 
 
 
 
 
 
Equity securities
69

 
75

 
 
 
 
 
 
 
 
Investment securities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
U.S. government-sponsored debt securities
 
 
 
 
2,162

 
2,704

 
 
 
 
U.S. Treasury securities
2,176

 
1,673

 
 
 
 
 
 
 
 
Equity securities
58

 
101

 
 
 
 
 
 
 
 
Corporate debt securities
 
 
 
 
522

 
269

 
 
 
 
Auction rate securities
 
 
 
 
 
 
 
 
$
7

 
$
7

Prepaid and other current assets:
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange derivative instruments
 
 
 
 
40

 
23

 
 
 
 
Total
$
4,580

 
$
2,920

 
$
2,761

 
$
3,047

 
$
7

 
$
7

Liabilities
 
 
 
 
 
 
 
 
 
 
 
Accrued liabilities:
 
 
 
 
 
 
 
 
 
 
 
Visa Europe put option
 
 
 
 
 
 
 
 
$
145

 
$
145

Foreign exchange derivative instruments
 
 
 
 
$
6

 
$
15

 
 
 
 
Total
$
—

 
$
—

 
$
6

 
$
15

 
$
145

 
$
145

Available-for-sale Securities 
The amortized cost, unrealized gains and losses and fair value of available-for-sale investment securities are as follows:
 
September 30, 2014
 
September 30, 2013

 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Gains
 
Losses
 
Gains
 
Losses
 
 
(in millions)
U.S. government-sponsored debt securities
$
2,160

 
$
2

 
$
—

 
$
2,162

 
$
2,701

 
$
3

 
$
—

 
$
2,704

U.S. Treasury securities
2,174

 
2

 
—

 
2,176

 
1,671

 
2

 
—

 
1,673

Equity securities
15

 
43

 
—

 
58

 
14

 
88

 
(1
)
 
101

Corporate debt securities
521

 
1

 
—

 
522

 
269

 
—

 
—

 
269

Auction rate securities
7

 
—

 
—

 
7

 
7

 
—

 
—

 
7

Total
$
4,877

 
$
48

 
$
—

 
$
4,925

 
$
4,662

 
$
93

 
$
(1
)
 
$
4,754

Less: current portion of available-for-sale investment securities
 
 
 
 
 
 
(1,910
)
 
 
 
 
 
 
 
(1,994
)
Long-term available-for-sale investment securities
 
 
 
 
 
 
$
3,015

 
 
 
 
 
 
 
$
2,760

Available for Sale Investments Classified by Contractual Maturity Date 
The majority of these investments, $3.0 billion, are classified as non-current, as they have stated maturities of more than one year from the balance sheet date. However, these investments are generally available to meet short-term liquidity needs.
 
Amortized Cost
 
Fair Value
 
(in millions)
September 30, 2014:
 
 
 
Due within one year
$
1,903

 
$
1,905

Due after 1 year through 5 years
2,952

 
2,955

Due after 5 years through 10 years
—

 
—

Due after 10 years
7

 
7

Total
$
4,862

 
$
4,867


Investment Income 
Investment income is recorded as non-operating income in the Company's consolidated statements of operations and consisted of the following:
 
For the Years Ended
September 30,
 
2014
 
2013
 
2012
 
(in millions)
Interest and dividend income on cash and investments
$
25

 
$
27

 
$
17

Gain on other investments
8

 
5

 
17

Investment securities, trading:
 
 
 
 
 
Unrealized (losses) gains, net
(2
)
 
4

 
9

Realized gains (losses), net
6

 
2

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

 
(1
)
 
—

Other-than-temporary impairment on investments
(3
)
 
(15
)
 
(6
)
Investment income
$
35

 
$
22

 
$
36

Prepaid Expenses and Other Assets (Tables)
Prepaid Expenses and Other Current Assets Disclosure 
Prepaid expenses and other current assets consisted of the following:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Prepaid expenses and maintenance
$
103

 
$
111

Foreign exchange derivative instruments—(See Note 12—Derivative Financial Instruments)
40

 
23

Other
73

 
53

Total
$
216

 
$
187

Schedule of Other Assets, Noncurrent 
Other non-current assets consisted of the following:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Non-current income tax receivable—(See Note 19—Income Taxes)(1)
$
597

 
$
253

Pension assets—(See Note 10—Pension, Postretirement and Other Benefits)
164

 
192

Other investments—(See Note 4—Fair Value Measurements and Investments)
35

 
30

Long-term prepaid expenses and other
51

 
46

Non-current deferred tax assets—(See Note 19—Income Taxes)
8

 
—

Total
$
855

 
$
521

(1) 
The increase in non-current income tax receivable is mainly due to a tax benefit related to the deduction for U.S. domestic production activities taken during fiscal 2014.
Property, Equipment and Technology, Net (Tables)
Property, Plant and Equipment 
Property, equipment and technology, net, consisted of the following:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Land
$
71

 
$
71

Buildings and building improvements
787

 
766

Furniture, equipment and leasehold improvements
1,197

 
983

Construction-in-progress
76

 
74

Technology
1,784

 
1,545

Total property, equipment and technology
3,915

 
3,439

Accumulated depreciation and amortization
(2,023
)
 
(1,707
)
Property, equipment and technology, net
$
1,892

 
$
1,732

Expected amortization expense 
At September 30, 2014, estimated future amortization expense on technology was as follows:
Fiscal
2015
 
2016
 
2017
 
2018
 
2019 and
thereafter
 
Total
 
 (in millions)
Estimated future amortization expense
$
199

 
$
183

 
$
138

 
$
80

 
$
55

 
$
655

Intangible Assets, Net (Tables)
Schedule of Intangible Assets by Major Class 
Indefinite-lived and finite-lived intangible assets consisted of the following: 
 
September 30, 2014
 
September 30, 2013
 
Gross
 
Accumulated
Amortization
 
Net
 
Gross
 
Accumulated
Amortization
 
Net
 
(in millions)
Finite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
339

 
$
(162
)
 
$
177

 
$
339

 
$
(125
)
 
$
214

Tradenames
192

 
(54
)
 
138

 
192

 
(41
)
 
151

Reseller relationships
95

 
(48
)
 
47

 
95

 
(36
)
 
59

Other
52

 
(12
)
 
40

 
52

 
(8
)
 
44

Total finite-lived intangible assets
$
678

 
$
(276
)
 
$
402

 
$
678

 
$
(210
)
 
$
468

Indefinite-lived intangible assets
 
 
 
 
11,009

 
 
 
 
 
10,883

Total intangible assets, net
 
 
 
 
$
11,411

 
 
 
 
 
$
11,351

Schedule of Estimated Future Amortization Expense 
At September 30, 2014, estimated future amortization expense on finite-lived intangible assets is as follows:
Fiscal
2015
 
2016
 
2017
 
2018
 
2019 and
thereafter
 
Total
 
(in millions)

Estimated future amortization expense
$
62

 
$
49

 
$
47

 
$
41

 
$
203

 
$
402

Accrued and Other Liabilities (Tables)
Accrued Liabilities Table 
Accrued liabilities consisted of the following:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Accrued operating expenses
$
199

 
$
182

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

 
145

Deferred revenue
82

 
60

Accrued marketing and product expenses
11

 
27

Accrued income taxes—(See Note 19—Income Taxes)
73

 
64

Other
114

 
135

Total
$
624

 
$
613


Other Noncurrent Liabilities, Table 
Other non-current liabilities consisted of the following:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Accrued income taxes—(See Note 19—Income Taxes)(2)
$
855

 
$
453

Employee benefits
92

 
86

Other
58

 
63

Total
$
1,005

 
$
602

(1) 
The put option is exercisable at any time at the sole discretion of Visa Europe with payment required 285 days thereafter. Classification in current liabilities is not an indication of management’s expectation of exercise and simply reflects the fact that the obligation resulting from the exercise of the instrument could become payable within 12 months. The fair value of the put option does not represent the actual purchase price that the Company may be required to pay if the option is exercised, which would likely be in excess of $10 billion.
(2) 
The increase in non-current accrued income taxes is primarily related to an increase in liabilities for uncertain tax positions.
Pension, Postretirement and Other Benefits (Tables)
Plans With Accumulated And Projected Benefit Obligations In Excess Of The Fair Value Of Plan Assets, Disclosure 
Benefit obligations in excess of plan assets related to the Company's non-qualified plan:
 
Pension Benefits
September 30,
 
2014
 
2013
 
(in millions)
Accumulated benefit obligation in excess of plan assets
 
 
 
Accumulated benefit obligation—end of year
$
(30
)
 
$
(33
)
Fair value of plan assets—end of year
$
—

 
$
—

Projected benefit obligation in excess of plan assets
 
 
 
Benefit obligation—end of year
$
(30
)
 
$
(34
)
Fair value of plan assets—end of year
$
—

 
$
—

Change in Benefit Obligation:
 
Pension Benefits
 
Other
Postretirement Benefits
 
September 30,
 
September 30,
 
2014
 
2013
 
2014
 
2013
 
(in millions)
Benefit obligation—beginning of fiscal year
$
897

 
$
990

 
$
25

 
$
32

Service cost
46

 
43

 
—

 
—

Interest cost
42

 
35

 
1

 
1

Actuarial loss (gain)
84

 
(127
)
 
(2
)
 
(4
)
Benefit payments
(83
)
 
(44
)
 
(4
)
 
$
(4
)
Plan amendment
$
(3
)
 
$
—

 
$
—

 
$
—

Benefit obligation—end of fiscal year
$
983

 
$
897

 
$
20

 
$
25

Accumulated benefit obligation
$
977

 
$
892

 
NA

 
NA

Change in Plan Assets:
 
 
 
 
 
 
 
Fair value of plan assets—beginning of fiscal year
$
1,055

 
$
973

 
$
—

 
$
—

Actual return on plan assets
135

 
126

 
—

 
—

Company contribution
10

 
—

 
4

 
4

Benefit payments
(83
)
 
(44
)
 
(4
)
 
(4
)
Fair value of plan assets—end of fiscal year
$
1,117

 
$
1,055

 
$
—

 
$
—

Funded status at end of fiscal year
$
134

 
$
158

 
$
(20
)
 
$
(25
)
Recognized in Consolidated Balance Sheets:
 
 
 
 
 
 
 
Non-current asset
$
164

 
$
192

 
$
—

 
$
—

Current liability
(7
)
 
(8
)
 
(3
)
 
(4
)
Non-current liability
(23
)
 
(26
)
 
(17
)
 
(21
)
Funded status at end of fiscal year
$
134

 
$
158

 
$
(20
)
 
$
(25
)
 
 
 
 
 
 
 
 
Pension and Other Postretirement Benefits, Recognized in Accumulated Comprehensive Income (Loss) Disclosure 
Amounts recognized in accumulated other comprehensive income before tax: 
 
Pension Benefits
 
Other
Postretirement Benefits
September 30,
 
September 30,
 
2014
 
2013
 
2014
 
2013
 
(in millions)
Net actuarial loss (gain)
$
121

 
$
108

 
$
(7
)
 
$
(6
)
Prior service credit
(16
)
 
(23
)
 
(8
)
 
(11
)
Total
$
105

 
$
85

 
$
(15
)
 
$
(17
)
Pension And Other Postretirement Benefits, Expected Amortization Of Accumulated Other Comprehensive Income, Disclosure 
Amounts from accumulated other comprehensive income to be amortized into net periodic benefit cost in fiscal 2015: 
 
Pension Benefits
 
Other
Postretirement
 Benefits
 
(in millions)
Actuarial loss (gain)
$
1

 
$
(2
)
Prior service credit
(7
)
 
(3
)
Total
$
(6
)
 
$
(5
)
Schedule of Defined Benefit Plans Disclosures 
Net periodic pension and other postretirement plan cost:
 
Pension Benefits
 
Other
Postretirement Benefits
Fiscal
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
 
(in millions)
Service cost
$
46

 
$
43

 
$
38

 
$
—

 
$
—

 
$
—

Interest cost
42

 
35

 
40

 
1

 
1

 
1

Expected return on assets
(68
)
 
(61
)
 
(55
)
 
—

 
—

 
—

Amortization of:
 
 
 
 
 
 
 
 
 
 
 
Prior service credit
(8
)
 
(9
)
 
(9
)
 
(3
)
 
(3
)
 
(3
)
Actuarial loss (gain)
1

 
28

 
33

 
(1
)
 
(1
)
 
—

Net benefit cost
$
13

 
$
36

 
$
47

 
$
(3
)
 
$
(3
)
 
$
(2
)
Curtailment gain
(3
)
 
—

 
—

 
—

 
—

 
—

Settlement loss
3

 
—

 
3

 
—

 
—

 
—

Total net periodic benefit cost
$
13

 
$
36

 
$
50

 
$
(3
)
 
$
(3
)
 
$
(2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension and Other Postretirement Benefits, Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss (Income) Disclosure 
Other changes in plan assets and benefit obligations recognized in other comprehensive income: 
 
Pension Benefits
 
Other
Postretirement Benefits
2014
 
2013
 
2014
 
2013
 
(in millions)
Current year actuarial loss (gain)
$
18

 
$
(191
)
 
$
(2
)
 
$
(4
)
Amortization of actuarial (loss) gain
(4
)
 
(28
)
 
1

 
1

Current year prior service credit
(3
)
 
—

 
—

 
—

Amortization of prior service credit
11

 
9

 
3

 
3

Total recognized in other comprehensive income
$
22

 
$
(210
)
 
$
2

 
$
—

Total recognized in net periodic benefit cost and other comprehensive income
$
35

 
$
(174
)
 
$
(1
)
 
$
(3
)
 
 
 
 
 
 
 
 
Pension and Other Postretirement Benefits, Net Periodic Benefit Costs Weighted Average Assumptions Disclosure 
Weighted Average Actuarial Assumptions:
 
Fiscal
 
2014
 
2013
 
2012
Discount rate for benefit obligation:(1)
 
 
 
 
 
Pension
4.27
%
 
4.81
%
 
3.85
%
Postretirement
2.59
%
 
2.76
%
 
2.21
%
Discount rate for net periodic benefit cost:
 
 
 
 
 
Pension
4.81
%
 
3.85
%
 
4.70
%
Postretirement
2.76
%
 
2.21
%
 
3.39
%
Expected long-term rate of return on plan assets(2)
7.00
%
 
7.00
%
 
7.50
%
Rate of increase in compensation levels for:
 
 
 
 
 
Benefit obligation
4.00
%
 
4.50
%
 
4.50
%
Net periodic benefit cost
4.50
%
 
4.50
%
 
4.50
%
(1) 
Based on a “bond duration matching” methodology, which reflects the matching of projected plan liability cash flows to an average of high-quality corporate bond yield curves whose duration matches the projected cash flows.
(2) 
Primarily based on the targeted allocation, and evaluated for reasonableness by considering such factors as: (i) actual return on plan assets; (ii) historical rates of return on various asset classes in the portfolio; (iii) projections of returns on various asset classes; and (iv) current and prospective capital market conditions and economic forecasts.
Fair Value of Net Pension Plan Assets Disclosure 
The following table sets forth by level, within the fair value hierarchy, the pension plan’s investments at fair value as of September 30, 2014 and 2013, including the impact of unsettled transactions:
 
 
Fair Value Measurements at September 30,
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
 
(in millions)
Cash equivalents
$
22

 
$
26

 
 
 
 
 
 
 
 
 
$
22

 
$
26

Corporate debt securities
 
 
 
 
$
144

 
$
106

 
 
 
 
 
144

 
106

Debt securities of U.S. Treasury and federal agencies
 
 
 
 
159

 
149

 
 
 
 
 
159

 
149

Asset-backed securities
 
 
 
 
 
 
 
 
$
25

 
$
23

 
25

 
23

Equity securities
767

 
751

 
 
 
 
 
 
 
 
 
767

 
751

Total
$
789

 
$
777

 
$
303

 
$
255

 
$
25

 
$
23

 
$
1,117

 
$
1,055

Pension and Other Postretirement Benefits, Employer Contributions and Expected Benefit Payments Disclosure 
 
Pension
Benefits
 
Other
Postretirement
Benefits
Actual employer contributions
(in millions)
2014
$
10

 
$
4

2013
$
—

 
$
4

Expected employer contributions
 
 
 
2015
$
7

 
$
3

Expected benefit payments
 
 
 
2015
$
123

 
$
3

2016
$
124

 
$
3

2017
$
115

 
$
3

2018
$
108

 
$
3

2019
$
103

 
$
3

2020-2024
$
437

 
$
6

Settlement Guarantee Management (Tables)
Schedule of Customer Collateral
The Company maintained collateral as follows:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Cash equivalents
$
961

 
$
866

Pledged securities at market value
148

 
256

Letters of credit
1,242

 
1,191

Guarantees
1,554

 
1,411

Total
$
3,905

 
$
3,724

 
Enterprise-wide Disclosures and Concentration of Business (Tables)
Schedule of long-lived net property, equipment and technology assets by major geographic area
The Company’s long-lived net property, equipment and technology assets are classified by major geographic areas as follows:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
United States
$
1,798

 
$
1,621

International
94

 
111

Total
$
1,892

 
$
1,732

Stockholders' Equity (Tables)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Stockholders' Equity Note [Abstract]
 
 
Schedule of Common Stock as Converted
Text Block 
 
Schedule of Treasury Stock by Class
 
Text Block 
Share Repurchase Program Disclosure
Text Block 
 
Schedule of Common Stock as Converted 
The number of shares of each class and the number of shares of class A common stock on an as-converted basis at September 30, 2014, are as follows:
(in millions, except conversion rate)
Shares
Outstanding
 
Conversion Rate Into Class A
Common Stock
 
As-converted Class A Common
Stock (1)
Class A common stock
495
 
—
 
495
Class B common stock
245
 
0.4121
 
101
Class C common stock
22
 
1.0000
 
22
Total
 
 
 
 
618

(1)  
Figures in the table may not recalculate exactly due to rounding. As-converted class A common stock is calculated based on unrounded numbers.
Schedule of Treasury Stock by Class 
The following table presents share repurchases in the open market during the following fiscal years:
(in millions, except per share data)
2014
 
2013
Shares repurchased in the open market (1)
20

 
33

Average repurchase price per share (2)
$
208.50

 
$
161.94

Total cost
$
4,118

 
$
5,365

(1) 
All shares repurchased in the open market have been retired and constitute authorized but unissued shares.
Share Repurchase Program Disclosure 
The following table presents as-converted class B common stock after deposits into the litigation escrow account in fiscal 2014. There were no deposits into the litigation escrow account in fiscal 2013.
 
Fiscal 2014
(in millions, except per share and conversion rate data)
September 2014
Deposits under the retrospective responsibility plan
$
450

Effective price per share(1)
$
215.33

Reduction in equivalent number of shares of class A common stock
2

Conversion rate of class B common stock to class A common stock after deposits
0.4121

As-converted class B common stock after deposits
101

(1)
Effective price per share calculated using the volume-weighted average price of the Company's class A common stock over a pricing period in accordance with the Company's current certificate of incorporation.
Earnings Per Share (Tables)
Schedule of Earnings Per Share
The following table presents earnings per share for fiscal 2014.(1) 
 
Basic Earnings Per Share
 
 
Diluted Earnings Per Share
 
(in millions, except per share data)
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
 
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
Class A common stock
$
4,307

 
498

 
$
8.65

 
 
$
5,438

 
631

(3) 
$
8.62

Class B common stock
892

 
245

 
$
3.63

 
 
$
890

 
245

 
$
3.62

Class C common stock
222

 
26

 
$
8.65

 
 
$
221

 
26

 
$
8.62

Participating securities(4)
17

 
Not presented

 
Not presented

 
 
$
16

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
5,438

 
 
 
 
 
 
 
 
 
 
 
The following table presents earnings per share for fiscal 2013.(1) 
 
Basic Earnings Per Share
 
 
Diluted Earnings Per Share
 
(in millions, except per share data)
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
 
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
Class A common stock
$
3,959

 
520

 
$
7.61

 
 
$
4,980

 
656

(3) 
$
7.59

Class B common stock
786

 
245

 
$
3.20

 
 
$
784

 
245

 
$
3.19

Class C common stock
216

 
28

 
$
7.61

 
 
$
215

 
28

 
$
7.59

Participating securities(4)
19

 
Not presented

 
Not presented

 
 
$
19

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
4,980

 
 
 
 
 
 
 
 
 
 
 
The following table presents earnings per share for fiscal 2012.(1) 
 
Basic Earnings Per Share
 
 
Diluted Earnings Per Share
 
(in millions, except per share data)
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
 
 
Income
Allocation
(A) (2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
Class A common stock
$
1,664

 
524

 
$
3.17

 
 
$
2,144

 
678

(3) 
$
3.16

Class B common stock
343

 
245

 
$
1.40

 
 
$
341

 
245

 
$
1.39

Class C common stock
130

 
41

 
$
3.17

 
 
$
129

 
41

 
$
3.16

Participating securities(4)
7

 
Not presented

 
Not presented

 
 
$
7

 
Not presented

 
Not presented

Net income attributable to Visa Inc.
$
2,144

 
 
 
 
 
 
 
 
 
 
 

(1)
Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers.
(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 fiscal 2014 and 2013, and 108 million for fiscal 2012.
(3)
Weighted-average diluted shares outstanding are calculated on an as-converted basis, and include incremental common stock equivalents, as calculated under the treasury stock method. The computation includes 2 million common stock equivalents for fiscal 2014 and 2013, and 3 million for fiscal 2012, because their effect would have been dilutive. The computation excludes less than 1 million of common stock equivalents for fiscal 2014, 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)
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used 
During fiscal 2014, 2013 and 2012, the fair value of each stock option was estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:
 
 
2014
 
2013
 
2012
Expected term (in years)(1)
 
4.80

 
6.08

 
6.02

Risk-free rate of return(2)
 
1.3
%
 
0.8
%
 
1.2
%
Expected volatility(3)
 
25.2
%
 
29.3
%
 
34.9
%
Expected dividend yield(4)
 
0.8
%
 
0.9
%
 
0.9
%
Fair value per option granted
 
$
44.11

 
$
39.03

 
$
29.65


(1) 
Beginning in fiscal 2014, assumption is based on the Company's historical option exercises and those of a set of peer companies that management believes is generally comparable to Visa. The Company's data is weighted based on the number of years between the measurement date and Visa's initial public offering as a percentage of the options' contractual term. The relative weighting placed on Visa's data and peer data in fiscal 2014 was approximately 58% and 42%, respectively. In fiscal 2013 and 2012, assumption was fully based on peer companies' data.
(2) 
Based upon the zero coupon U.S. treasury bond rate over the expected term of the awards.
(3) 
Based on the Company’s implied and historical volatility. In fiscal 2013 and 2012, historical volatility was a blend of Visa's historical volatility and those of comparable peer companies. The relative weighting between Visa historical volatility and the historical volatility of the peer companies was based on the percentage of years Visa stock price information is available since its initial public offering compared to the expected term. The expected volatilities ranged from 22% to 26% in fiscal 2014.
(4) 
Based on the Company’s annual dividend rate on the date of grant.
Schedule of Share-based Compensation, Options Activity 
The following table summarizes the Company’s option activity for fiscal 2014:
 
Options
 
Weighted-
Average
Exercise Price
Per Share
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
Outstanding at October 1, 2013
3,917,206

 
$
72.21

 
 
 
 
Granted
435,025

 
$
201.37

 
 
 
 
Forfeited
(116,261
)
 
$
150.56

 
 
 
 
Exercised
(1,323,544
)
 
$
68.45

 
 
 
 
Outstanding at September 30, 2014
2,912,426

 
$
90.08

 
5.4
 
$359
Options exercisable at September 30, 2014
2,181,759

 
$
63.03

 
4.3
 
$328
Options exercisable and expected to vest at September 30, 2014(2)
2,832,053

 
$
87.79

 
5.3
 
$356
(1) 
Calculated using the closing stock price on the last trading day of fiscal 2014 of $213.37, less the option exercise price, multiplied by the number of instruments.
(2) 
Applies a forfeiture rate to unvested options outstanding at September 30, 2014 to estimate the number expected to vest in the future.
Restricted Share Activity Disclosure 
The following table summarizes the Company's RSA and RSU activity for fiscal 2014:
 
Restricted Stock
 
Weighted-
Average
Grant Date
Fair Value
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
 
Awards
 
Units
 
RSA
 
RSU
 
RSA
 
RSU
 
RSA
 
RSU
Outstanding at October 1, 2013
1,697,981

 
649,682

 
$
119.20

 
$
119.49

 
 
 
 
 
 
 
 
Granted
609,015

 
226,581

 
$
199.91

 
$
197.76

 
 
 
 
 
 
 
 
Vested
(841,527
)
 
(317,343
)
 
$
108.28

 
$
111.18

 
 
 
 
 
 
 
 
Forfeited
(156,923
)
 
(92,187
)
 
$
150.85

 
$
141.67

 
 
 
 
 
 
 
 
Outstanding at September 30, 2014
1,308,546

 
466,733

 
$
160.00

 
$
158.75

 
1.4
 
1.1
 
$279
 
$100
(1) 
Calculated by multiplying the closing stock price on the last trading day of fiscal 2014 of $213.37 by the number of instruments.
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award 
The following table summarizes the maximum number of performance-based shares which could be earned and related activity for fiscal 2014:
 
Shares
 
Weighted-
Average
Grant Date
Fair Value
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (1)
(in millions)
Outstanding at October 1, 2013
459,899

 
$
126.24

 
 
 
 
Granted(2)
278,451

 
$
225.46

 
 
 
 
Vested and earned
(114,514
)
 
$
85.05

 
 
 
 
Unearned
—

 
$
—

 
 
 
 
Forfeited
(105,026
)
 
$
177.01

 
 
 
 
Outstanding at September 30, 2014
518,810

 
$
177.29

 
0.6
 
$111
(1) 
Calculated by multiplying the closing stock price on the last trading day of fiscal 2014 of $213.37 by the number of instruments.
(2) 
Represents the maximum number of performance-based shares which could be earned.
F
Commitments and Contingencies (Tables)
Commitments Disclosure 
Future minimum payments on leases, and marketing and sponsorship agreements per fiscal year, at September 30, 2014, are as follows:
 
2015
 
2016
 
2017
 
2018
 
2019
 
Thereafter
 
Total
 
(in millions)
Operating leases
$
76

 
$
60

 
$
37

 
$
32

 
$
30

 
$
118

 
$
353

Marketing and sponsorships
83

 
63

 
62

 
61

 
59

 
130

 
458

Total
$
159

 
$
123

 
$
99

 
$
93

 
$
89

 
$
248

 
$
811

Expected Reduction of Revenue for Volumn and Support Incentive Agreements 
The table below sets forth the expected future reduction of revenue per fiscal year for client incentive agreements in effect at September 30, 2014: 
(in millions)
2015
 
2016
 
2017
 
2018
 
2019
 
Thereafter
 
Total
Client incentives
$
2,924

 
$
2,548

 
$
2,117

 
$
1,662

 
$
1,162

 
$
1,272

 
$
11,685

Income Taxes (Tables)
Schedule of U.S. and non-U.S. components of income before income tax expense/(benefit) 
The Company’s income before taxes by fiscal year consisted of the following:
 
2014
 
2013
 
2012
 
(in millions)
U.S.
$
6,140

 
$
5,992

 
$
1,030

Non-U.S.
1,584

 
1,265

 
1,177

Total income before taxes and non-controlling interest
$
7,724

 
$
7,257

 
$
2,207

Comprehensive Income Tax (Expense) Benefit Components Table 
Income tax provision by fiscal year consisted of the following:
 
2014
 
2013
 
2012
 
(in millions)
Current:
 
 
 
 
 
U.S. federal
$
2,353

 
$
568

 
$
1,376

State and local
237

 
(58
)
 
165

Non-U.S.
274

 
239

 
214

Total current taxes
2,864

 
749

 
1,755

Deferred:
 
 
 
 
 
U.S. federal
(576
)
 
1,401

 
(1,276
)
State and local
(31
)
 
114

 
(415
)
Non-U.S.
29

 
13

 
1

Total deferred taxes
(578
)
 
1,528

 
(1,690
)
Total income tax provision
$
2,286

 
$
2,277

 
$
65

Components of Deferred Tax Assets and Liabilities 
The tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities at September 30, 2014 and 2013, are presented below:
 
2014
 
2013
 
(in millions)
Deferred Tax Assets:
 
 
 
Accrued compensation and benefits
$
134

 
$
154

Comprehensive (income) loss
14

 
(8
)
Investments in joint ventures
14

 
14

Accrued litigation obligation
558

 
1

Client incentives
235

 
226

Net operating loss carryforward
35

 
31

Tax credits
21

 
22

Federal benefit of state taxes
210

 
176

Other
139

 
121

Valuation allowance
(34
)
 
(25
)
Deferred tax assets
1,326

 
712

Deferred Tax Liabilities:
 
 
 
Property, equipment and technology, net
(298
)
 
(310
)
Intangible assets
(4,000
)
 
(4,003
)
Foreign taxes
(125
)
 
(55
)
Other
(12
)
 
(12
)
Deferred tax liabilities
(4,435
)
 
(4,380
)
Net deferred tax liabilities
$
(3,109
)
 
$
(3,668
)
Deferred Tax Assets and Liabilities 
Total net deferred tax assets and liabilities are included in the Company’s consolidated balance sheets as follows:
 
September 30,
2014
 
September 30,
2013
 
(in millions)
Current deferred tax assets
$
1,028

 
$
481

Non-current deferred tax liabilities(1)
(4,137
)
 
(4,149
)
Net deferred tax liabilities
$
(3,109
)
 
$
(3,668
)
Reconciliation of the US Statutory Federal Tax Rate 
The income tax provision differs from the amount of income tax determined by applying the applicable U.S. federal statutory rate of 35% to pretax income, as a result of the following:
 
 
For the Years Ended September 30,
 
2014
 
2013
 
2012
 
Dollars
 
Percent
 
Dollars
 
Percent
 
Dollars
 
Percent
 
(in millions, except percentages)
U.S. federal income tax at statutory rate
$
2,704

 
35
 %
 
$
2,540

 
35
 %
 
$
772

 
35
 %
State income taxes, net of federal benefit
129

 
2
 %
 
42

 
1
 %
 
36

 
2
 %
Non-U.S. tax effect, net of federal benefit
(278
)
 
(4
)%
 
(328
)
 
(5
)%
 
(257
)
 
(12
)%
Prior years U.S. domestic production activities deduction
(191
)
 
(2
)%
 
—

 
—
 %
 
—

 
—
 %
Reversal of tax reserves related to the deductibility of covered litigation expense
—

 
—
 %
 
—

 
—
 %
 
(299
)
 
(14
)%
Remeasurement of deferred taxes due to
California state apportionment rule changes
—

 
—
 %
 
—

 
—
 %
 
(208
)
 
(9
)%
Other, net
(78
)
 
(1
)%
 
23

 
—
 %
 
21

 
1
 %
Income tax provision
$
2,286

 
30
 %
 
$
2,277

 
31
 %
 
$
65

 
3
 %
Unrecognized Tax Benefits Reconciliation, Table 
A reconciliation of beginning and ending unrecognized tax benefits by fiscal year is as follows: 
 
2014
 
2013
 
(in millions)
Beginning balance at October 1
$
1,023

 
$
679

Increases of unrecognized tax benefits related to prior years
139

 
335

Decreases of unrecognized tax benefits related to prior years
(54
)
 
(133
)
Increases of unrecognized tax benefits related to current year
199

 
144

Reductions related to lapsing statute of limitations
(4
)
 
(2
)
Ending balance at September 30
$
1,303

 
$
1,023

Legal Matters (Tables)
Schedule of Loss Contingencies by Contingency 
The following table summarizes the activity related to accrued litigation.
 
Fiscal 2014
 
Fiscal 2013
 
(in millions)
Balance at October 1
$
5

 
$
4,386

Reestablishment of obligation related to interchange multidistrict litigation
1,056

 
—

Additional provision for legal matters
453

 
3

Payments on legal matters
(58
)
 
(4,384
)
Balance at September 30
$
1,456

 
$
5


Schedule of Loss Contingencies by Contingency 
 
Fiscal 2014
 
Fiscal 2013
 
(in millions)
Balance at October 1
$
—

 
$
4,383

Reestablishment of obligation related to interchange multidistrict litigation
1,056

 
—

Additional provision for interchange opt-out litigation
450

 
—

Payments on covered litigation
(57
)
 
(4,383
)
Balance at September 30
$
1,449

 
$
—

Summary of Significant Accounting Policies - Additional Information (Detail)
12 Months Ended
Sep. 30, 2014
Accounting Policies [Abstract]
 
Expected average employee future service period for United States plans (in years)
8 years 
Building
 
Property, Plant and Equipment [Line Items]
 
Estimated useful life
40 years 
Minimum
 
Property, Plant and Equipment [Line Items]
 
Acquired long-lived intangible assets useful life
3 years 
Minimum |
Furniture and Fixtures
 
Property, Plant and Equipment [Line Items]
 
Estimated useful life
2 years 
Minimum |
Building Improvements
 
Property, Plant and Equipment [Line Items]
 
Estimated useful life
3 years 
Maximum
 
Property, Plant and Equipment [Line Items]
 
Acquired long-lived intangible assets useful life
15 years 
Maximum |
Furniture and Fixtures
 
Property, Plant and Equipment [Line Items]
 
Estimated useful life
7 years 
Maximum |
Building Improvements
 
Property, Plant and Equipment [Line Items]
 
Estimated useful life
40 years 
Visa Europe - Additional Information (Detail) (USD $)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
European Activities [Abstract]
 
 
 
Maximum number of days within which the Company is required to purchase the shares of Visa Europe put option
285 days 
 
 
Visa Europe purchase price
$ 10,000,000,000 
 
 
Put option, fair value
145,000,000 1
145,000,000 1
 
Probability of exercise by Visa Europe
40.00% 
40.00% 
 
P/E differential at the time of exercise
190.00% 
 
 
License fee (per year payable quarterly)
$ 143,000,000 
$ 143,000,000 
$ 143,000,000 
Changes in the Escrow Account (Detail) (USD $)
3 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 3 Months Ended
Sep. 30, 2014
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Opt-out Merchants
Sep. 30, 2013
Opt-out Merchants
Dec. 10, 2012
Class Plaintiffs
Sep. 30, 2014
Class Plaintiffs
Sep. 30, 2013
Class Plaintiffs
Oct. 29, 2012
Individual Plaintiffs
Sep. 30, 2014
Individual Plaintiffs
Sep. 30, 2013
Individual Plaintiffs
Sep. 30, 2014
MasterCard [Member]
Sep. 30, 2014
Visa
Sep. 30, 2014
Covered Litigation
Escrow Account [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Litigation Escrow Account Balance, Beginning of Period
 
$ 49,000,000 
$ 4,432,000,000 
 
 
 
 
 
 
 
 
 
 
 
Return of takedown payments from settlement fund into the litigation escrow account
 
1,056,000,000 
0 
 
 
 
 
 
 
 
 
 
 
 
Deposits into litigation escrow account
450,000,000 
450,000,000 
0 
 
 
 
 
 
 
 
 
 
 
450,000,000 
Payments to Settlement Funds
 
 
 
(57,000,000)
0 
(4,000,000,000)
0 
(4,033,000,000)1
(350,000,000)
0 1
(350,000,000)1
 
 
 
Litigation Escrow Account Balance, End of Period
$ 1,498,000,000 
$ 1,498,000,000 
$ 49,000,000 
 
 
 
 
 
 
 
 
 
 
 
OmnibusLossSharingAgreementPercentage
 
 
 
 
 
 
 
 
 
 
 
33.3333% 
66.6667% 
 
Fair Value Measurements and Investments - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Investment [Line Items]
 
 
 
Payment from litigation escrow account-Retrospective Responsibility Plan
$ 999 
$ (4,383)
$ (140)
Put option, fair value
145 1
145 1
 
Non-marketable equity securities, recognized losses due to impairment
 
15 
0 
Non-marketable equity investments
35 
30 
 
Equity method investments reclassified as available-for-sale, carrying value
 
12 
 
Available-for-sale securities, previously classified as equity method investments, fair value
53 
99 
 
Trading assets, mutual fund investments related to various employee compensation plans
69 
75 
 
Long-term available-for-sale investment securities
$ 3,015 
$ 2,760 
 
Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Investment securities
 
 
Trading
$ 69 
$ 75 
Available-for-sale securities
4,925 
4,754 
Accrued liabilities
 
 
Visa Europe put option
145 1
145 1
Fair Value, Measurements, Recurring |
Level 1
 
 
Prepaid and other current assets
 
 
Fair value, total assets
4,580 
2,920 
Accrued liabilities
 
 
Fair value, total liabilities
0 
0 
Fair Value, Measurements, Recurring |
Level 1 |
Money market funds
 
 
Cash equivalents and restricted cash
 
 
Cash equivalents and restricted cash
2,277 
1,071 
Fair Value, Measurements, Recurring |
Level 1 |
Equity securities
 
 
Investment securities
 
 
Trading
69 
75 
Available-for-sale securities
58 
101 
Fair Value, Measurements, Recurring |
Level 1 |
US Treasury securities
 
 
Investment securities
 
 
Available-for-sale securities
2,176 
1,673 
Fair Value, Measurements, Recurring |
Level 2
 
 
Prepaid and other current assets
 
 
Fair value, total assets
2,761 
3,047 
Accrued liabilities
 
 
Fair value, total liabilities
6 
15 
Fair Value, Measurements, Recurring |
Level 2 |
Foreign exchange derivative instruments
 
 
Accrued liabilities
 
 
Foreign exchange derivative instruments
6 
15 
Fair Value, Measurements, Recurring |
Level 2 |
Commercial Paper
 
 
Cash equivalents and restricted cash
 
 
Cash equivalents and restricted cash
37 
51 
Fair Value, Measurements, Recurring |
Level 2 |
U.S. government-sponsored agency debt securities
 
 
Investment securities
 
 
Available-for-sale securities
2,162 
2,704 
Fair Value, Measurements, Recurring |
Level 2 |
Corporate debt securities
 
 
Investment securities
 
 
Available-for-sale securities
522 
269 
Fair Value, Measurements, Recurring |
Level 2 |
Foreign exchange derivative instruments
 
 
Prepaid and other current assets
 
 
Foreign exchange derivative instruments
40 
23 
Fair Value, Measurements, Recurring |
Level 3
 
 
Prepaid and other current assets
 
 
Fair value, total assets
7 
7 
Accrued liabilities
 
 
Fair value, total liabilities
145 
145 
Fair Value, Measurements, Recurring |
Level 3 |
Visa Europe put option
 
 
Accrued liabilities
 
 
Visa Europe put option
 
145 
Fair Value, Measurements, Recurring |
Level 3 |
Auction Rate Securities
 
 
Investment securities
 
 
Available-for-sale securities
$ 7 
$ 7 
Amortized Cost, Unrealized Gains and Losses, and Fair Value of Available-for-sale Securities (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
$ 4,877 
$ 4,662 
Available-for-sale Securities, Gross Unrealized Gain
48 
93 
Available-for-sale Securities, Gross Unrealized Loss
   
(1)
Available-For-Sale Fair Value
4,925 
4,754 
Less: current portion of available-for-sale investment securities
(1,910)
(1,994)
Long-term available-for-sale investment securities
3,015 
2,760 
US Government-sponsored agency debt securities |
Debt and Equity Securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
2,160 
2,701 
Available-for-sale Securities, Gross Unrealized Gain
2 
3 
Available-for-sale Securities, Gross Unrealized Loss
   
   
Available-For-Sale Fair Value
2,162 
2,704 
US Treasury securities |
Debt and Equity Securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
2,174 
1,671 
Available-for-sale Securities, Gross Unrealized Gain
2 
2 
Available-for-sale Securities, Gross Unrealized Loss
   
   
Available-For-Sale Fair Value
2,176 
1,673 
Equity securities |
Debt and Equity Securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
15 
14 
Available-for-sale Securities, Gross Unrealized Gain
43 
88 
Available-for-sale Securities, Gross Unrealized Loss
   
(1)
Available-For-Sale Fair Value
58 
101 
Corporate debt securities |
Debt and Equity Securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
521 
269 
Available-for-sale Securities, Gross Unrealized Gain
1 
   
Available-for-sale Securities, Gross Unrealized Loss
   
   
Available-For-Sale Fair Value
522 
269 
Auction rate securities |
Debt and Equity Securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-For-Sale Amortized Cost
7 
7 
Available-for-sale Securities, Gross Unrealized Gain
   
   
Available-for-sale Securities, Gross Unrealized Loss
   
   
Available-For-Sale Fair Value
$ 7 
$ 7 
Contractual Maturity of Available-for-sale Debt Securities (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Amortized Cost
 
Due within one year
$ 1,903 
Due after 1 year through 5 years
2,952 
Due after 5 years through 10 years
   
Due after 10 years
7 
Total
4,862 
Fair Value
 
Due within one year
1,905 
Due after 1 year through 5 years
2,955 
Due after 5 years through 10 years
   
Due after 10 years
7 
Total
$ 4,867 
Investment Income, Net (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Fair Value Measurements and Investments [Abstract]
 
 
 
Interest and dividend income on cash and investments
$ 25 
$ 27 
$ 17 
Gain on other investments
8 
5 
17 
Investment securities, trading:
 
 
 
Unrealized gains (losses) , net
(2)
4 
9 
Realized gains (losses), net
6 
2 
(1)
Investment securities, available-for-sale:
 
 
 
Realized gains (losses), net
1 
(1)
   
Other-than-temporary impairment on investments
(3)
(15)
(6)
Investment income
$ 35 
$ 22 
$ 36 
Prepaid Expenses and Other Current Assets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Prepaid Expenses and Other Assets [Abstract]
 
 
Prepaid expenses and maintenance
$ 103 
$ 111 
Foreign exchange derivative instruments—(See Note 12—Derivative Financial Instruments)
40 
23 
Other
73 
53 
Total
$ 216 
$ 187 
Other Non-Current Assets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Prepaid Expenses and Other Assets [Abstract]
 
 
Non-current income tax receivable—(See Note 19—Income Taxes)
$ 597 1
$ 253 1
Pension asset--(See Note 10--Pension, Postretirement and Other Benefits)
164 
192 
Other investments - (See Note 4-Fair Value Measurements and Investments)
35 
30 
Long-term prepaid expenses and other
51 
46 
Non-current deferred tax assets—(See Note 19—Income Taxes)
8 
0 
Total
$ 855 
$ 521 
Property, Equipment and Technology, Net (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
$ 3,915 
$ 3,439 
Accumulated depreciation and amortization
(2,023)
(1,707)
Property, equipment and technology, net
1,892 
1,732 
Land
 
 
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
71 
71 
Buildings and building improvements
 
 
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
787 
766 
Furniture, equipment and leasehold improvements
 
 
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
1,197 
983 
Construction-in-progress
 
 
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
76 
74 
Technology
 
 
Property, Plant and Equipment [Line Items]
 
 
Total property, equipment and technology
$ 1,784 
$ 1,545 
Property, Equipment and Technology, Net - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Finite-Lived Intangible Assets [Line Items]
 
 
 
Technology, accumulated amortization
$ 1,129 
$ 959 
 
Depreciation and amortization
435 
397 
333 
Depreciation and amortization, amortization expense on technology
66 
69 
68 
Property, Equipment and Technology
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Depreciation and amortization
369 
328 
265 
Technology and Software
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Depreciation and amortization, amortization expense on technology
$ 198 
$ 173 
$ 132 
Estimated Future Amortization Expense on Technology Placed in Service (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Finite-Lived Intangible Assets [Line Items]
 
2015
$ 62 
2016
49 
2017
47 
2018
41 
2019 and thereafter
203 
Total
402 
Technology and Software
 
Finite-Lived Intangible Assets [Line Items]
 
2015
199 
2016
183 
2017
138 
2018
80 
2019 and thereafter
55 
Total
$ 655 
Intangible Assets, Net - Additional Information (Detail) (USD $)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Acquired Indefinite-lived Intangible Assets [Line Items]
 
 
 
Goodwill
$ 11,753,000,000 
$ 11,681,000,000 
 
Customer relationships
6,800,000,000 
 
 
Tradename
2,600,000,000 
 
 
Visa Europe franchise right
1,500,000,000 
 
 
Amortization expense related to finite-lived intangible assets
66,000,000 
69,000,000 
68,000,000 
Previously Held Minority Interest Ownership [Member]
 
 
 
Acquired Indefinite-lived Intangible Assets [Line Items]
 
 
 
Payments to Acquire Businesses, Gross
170,000,000 
 
 
Indefinite-lived Intangible Assets Acquired
126,000,000 
 
 
Goodwill
60,000,000 
 
 
Licensing Agreements [Member] |
Strategic Partner [Member]
 
 
 
Acquired Indefinite-lived Intangible Assets [Line Items]
 
 
 
Goodwill
12,000,000 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill
$ 15,000,000 
 
 
Estimated Future Amortization Expense on Finite-Lived Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Intangible Assets, Net (Excluding Goodwill) [Abstract]
 
2015
$ 62 
2016
49 
2017
47 
2018
41 
2019 and thereafter
203 
Total
$ 402 
Accrued Liabilities (Detail) (USD $)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Accrued and Other Liabilities [Abstract]
 
 
Fair Value Adjustment for Europe Put Option
$ 10,000,000,000 
 
Accrued operating expenses
199,000,000 
182,000,000 
Visa Europe put option-(See Note 2-Visa Europe)
145,000,000 1
145,000,000 1
Deferred revenue
82,000,000 
60,000,000 
Accrued marketing and product expenses
11,000,000 
27,000,000 
Accrued income taxes-(See Note 19-Income Taxes)
73,000,000 
64,000,000 
Other
114,000,000 
135,000,000 
Total
$ 624,000,000 
$ 613,000,000 
Other Long-term Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Accrued and Other Liabilities [Abstract]
 
 
Accrued income taxes-(See Note 19-Income Taxes)
$ 855 1
$ 453 1
Employee benefits
92 
86 
Other
58 
63 
Total
$ 1,005 
$ 602 
Maximum number of days within which the Company is required to purchase the shares of Visa Europe put option
285 days 
 
Debt - Additional Information (Detail) (USD $)
12 Months Ended
Sep. 30, 2014
Revolving Credit Facility
Sep. 30, 2013
Revolving Credit Facility
Sep. 30, 2014
Revolving Credit Facility
Minimum
Sep. 30, 2014
Revolving Credit Facility
Maximum
Sep. 30, 2014
Commercial Paper
Debt Instrument [Line Items]
 
 
 
 
 
Commercial Paper Program, Amount Available
 
 
 
 
$ 3,000,000,000 
Commercial Paper Program, Maturity Period
 
 
 
 
P397D 
Commercial Paper Program, Amount Outstanding
 
 
 
 
0 
Credit Facility Maximum Borrowing Capacity
3,000,000,000 
3,000,000,000 
 
 
 
Credit Facility Interest Rate During Period
 
 
0.00% 
0.75% 
 
Credit Facility Commitment Fee Percentage
 
 
 
0.07% 
 
Credit Facility Amount Outanding
$ 0 
 
 
 
 
Pension, Postretirement and Other Benefits - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Cash balance formula contributions, rate of eligible compensation
6.00% 
 
 
Assumed annual rate of future increases in health benefits for the other postretirement benefits plan for fiscal 2011
8.00% 
 
 
Assumed annual rate of future decreases in health benefits for the other postretirement benefits plan by 2017
5.00% 
 
 
Increasing or decreasing the healthcare cost trend by one per cent would increase decrease the postretirement accumulated plan benefit obligation by less than
$ 1 
 
 
Target allocation for plan assets, other
7.00% 
 
 
Defined contribution plan, personnel costs
$ 46 
$ 44 
$ 37 
Equity securities
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Target allocation for plan assets, equity securities, minimum
50.00% 
 
 
Target allocation for plan assets, equity securities, maximum
80.00% 
 
 
Plan asset allocation, equity securities
69.00% 
 
 
Fixed income securities
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Target allocation for plan assets, equity securities, minimum
25.00% 
 
 
Target allocation for plan assets, equity securities, maximum
35.00% 
 
 
Plan asset allocation, equity securities
29.00% 
 
 
Other
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Plan asset allocation, equity securities
2.00% 
 
 
Change in Projected Benefit Obligation/Accumulated Postretirement Benefit Obligation (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Recognized in Consolidated Balance Sheets:
 
 
 
Noncurrent asset
$ (164)
$ (192)
 
Pension Benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Defined Benefit Plan, Plan Amendments
(3)
0 
 
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
 
Benefit obligation-beginning of fiscal year
897 
990 
 
Service cost
46 
43 
38 
Interest cost
42 
35 
40 
Actuarial (gain) loss
84 
(127)
 
Benefit payments
(83)
(44)
 
Benefit obligation-end of fiscal year
983 
897 
990 
Accumulated benefit obligation
977 
892 
 
Change in Plan Assets:
 
 
 
Fair value of plan assets-beginning of fiscal year
1,055 
973 
 
Actual return on plan assets
135 
126 
 
Company contribution
10 
0 
 
Benefit payments
(83)
(44)
 
Fair value of plan assets-end of fiscal year
1,117 
1,055 
973 
Funded status at end of fiscal year
134 
158 
 
Recognized in Consolidated Balance Sheets:
 
 
 
Noncurrent asset
(164)
(192)
 
Current liability
(7)
(8)
 
Noncurrent liability
(23)
(26)
 
Funded status at end of fiscal year
134 
158 
 
Other Postretirement Benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Defined Benefit Plan, Plan Amendments
0 
0 
 
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
 
Benefit obligation-beginning of fiscal year
25 
32 
 
Service cost
0 
0 
0 
Interest cost
1 
1 
1 
Actuarial (gain) loss
(2)
(4)
 
Benefit payments
(4)
(4)
 
Benefit obligation-end of fiscal year
20 
25 
32 
Change in Plan Assets:
 
 
 
Fair value of plan assets-beginning of fiscal year
0 
0 
 
Actual return on plan assets
0 
0 
 
Company contribution
4 
4 
 
Benefit payments
(4)
(4)
 
Fair value of plan assets-end of fiscal year
0 
0 
0 
Funded status at end of fiscal year
(20)
(25)
 
Recognized in Consolidated Balance Sheets:
 
 
 
Noncurrent asset
0 
0 
 
Current liability
(3)
(4)
 
Noncurrent liability
(17)
(21)
 
Funded status at end of fiscal year
$ (20)
$ (25)
 
Amounts Recognized in Accumulated Comprehensive Income Before Tax (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Pension Benefits
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Net actuarial loss (gain)
$ 121 
$ 108 
Prior service credit
(16)
(23)
Total
105 
85 
Other Postretirement Benefits
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Net actuarial loss (gain)
(7)
(6)
Prior service credit
(8)
(11)
Total
$ (15)
$ (17)
Amounts from Accumulated Other Comprehensive Income to be Amortized into Net Periodic Benefit Cost (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Pension Benefits
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Actuarial loss (gain)
$ 1 
Prior service credit
(7)
Total
(6)
Other Postretirement Benefits
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Actuarial loss (gain)
(2)
Prior service credit
(3)
Total
$ (5)
Benefit Obligation and Fair Value of Plan Assets with Obligations in Excess of Plan Assets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Accumulated benefit obligation in excess of plan assets
 
 
Accumulated benefit obligation, end of year
$ (30)
$ (33)
Fair value of plan assets, end of year
0 
0 
Projected benefit obligation in excess of plan assets
 
 
Benefit obligation, end of year
(30)
(34)
Fair value of plan assets, end of year
$ 0 
$ 0 
Components of Net Periodic Benefit Cost (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Pension Benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Service cost
$ 46 
$ 43 
$ 38 
Interest cost
42 
35 
40 
Expected return on assets
(68)
(61)
(55)
Prior service credit
(8)
(9)
(9)
Actuarial loss (gain)
1 
28 
33 
Net benefit cost
13 
36 
47 
Curtailment gain
(3)
0 
 
Settlement loss
3 
0 
3 
Total net periodic benefit cost
13 
36 
50 
Other Postretirement Benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Service cost
0 
0 
0 
Interest cost
1 
1 
1 
Expected return on assets
0 
0 
0 
Prior service credit
(3)
(3)
(3)
Actuarial loss (gain)
(1)
(1)
0 
Net benefit cost
(3)
(3)
(2)
Curtailment gain
0 
0 
0 
Settlement loss
0 
0 
 
Total net periodic benefit cost
$ (3)
$ (3)
$ (2)
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Current year actuarial (gain) loss
$ 27 
$ (187)
$ 23 
Amortization of prior service credit/(cost)
8 
(16)
(23)
Pension benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Current year actuarial (gain) loss
18 
(191)
 
Amortization of actuarial (loss) gain
(4)
(28)
 
Current year prior service credit
(3)
0 
 
Amortization of prior service credit/(cost)
11 
9 
 
Total recognized in other comprehensive income
22 
(210)
 
Total recognized in net periodic benefit cost and other comprehensive income
35 
(174)
 
Other postretirement benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Current year actuarial (gain) loss
(2)
(4)
 
Amortization of actuarial (loss) gain
1 
1 
 
Current year prior service credit
0 
0 
 
Amortization of prior service credit/(cost)
3 
3 
 
Total recognized in other comprehensive income
2 
0 
 
Total recognized in net periodic benefit cost and other comprehensive income
$ (1)
$ (3)
 
Weighted Average Actuarial Assumptions (Detail)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Expected long-term rate of return on plan assets
7.00% 1
7.00% 1
7.50% 1
Rate of increase in compensation levels for:
 
 
 
Benefit obligation
4.00% 
4.50% 
4.50% 
Net periodic benefit cost
4.50% 
4.50% 
4.50% 
Pension Benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Discount rate for benefit obligation
4.27% 2
4.81% 2
3.85% 2
Discount rate for net periodic benefit cost
4.81% 
3.85% 
4.70% 
Other Postretirement Benefits
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Discount rate for benefit obligation
2.59% 2
2.76% 2
2.21% 2
Discount rate for net periodic benefit cost
2.76% 
2.21% 
3.39% 
Plan's Investments at Fair Value (Detail) (Fair Value, Measurements, Recurring, USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Level 1
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
$ 789 
$ 777 
Level 1 |
Cash equivalents
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
22 
26 
Level 1 |
Equity securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
767 
751 
Level 2
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
303 
255 
Level 2 |
Corporate debt securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
144 
106 
Level 2 |
Debt securities of U.S. treasury and federal agencies
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
159 
149 
Level 3
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
25 
23 
Level 3 |
Asset-backed securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
25 
23 
Total
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
1,117 
1,055 
Total |
Cash equivalents
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
22 
26 
Total |
Corporate debt securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
144 
106 
Total |
Debt securities of U.S. treasury and federal agencies
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
159 
149 
Total |
Asset-backed securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
25 
23 
Total |
Equity securities
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Fair Value Measurements
$ 767 
$ 751 
Cash Flows - Actual Employer Contributions (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Pension Benefits
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Actual employer contributions
$ 10 
$ 0 
Expected employer contributions
 
 
Expected employer contributions 2015
7 
 
Expected benefit payments
 
 
Expected benefit payments 2015
123 
 
Expected benefit payments 2016
124 
 
Expected benefit payments 2017
115 
 
Expected benefit payments 2018
108 
 
Expected benefit payments 2019
103 
 
Expected benefit payments 2020-2024
437 
 
Other Postretirement Benefits
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Actual employer contributions
4 
4 
Expected employer contributions
 
 
Expected employer contributions 2015
3 
 
Expected benefit payments
 
 
Expected benefit payments 2015
3 
 
Expected benefit payments 2016
3 
 
Expected benefit payments 2017
3 
 
Expected benefit payments 2018
3 
 
Expected benefit payments 2019
3 
 
Expected benefit payments 2020-2024
$ 6 
 
Settlement Guarantee Management - Additional Information (Detail) (USD $)
Sep. 30, 2014
Sep. 30, 2013
Settlement Guarantee Management [Abstract]
 
 
Estimated maximum settlement exposure
$ 56,900,000,000 
$ 53,800,000,000 
Covered settlement exposure
3,200,000,000 
3,000,000,000 
Estimated probability-weighted value of the guarantee
$ 2,000,000 
$ 1,000,000 
Collateral (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Settlement Guarantee Management [Abstract]
 
 
Cash equivalents
$ 961 
$ 866 
Pledged securities at market value
148 
256 
Letters of credit
1,242 
1,191 
Guarantees
1,554 
1,411 
Total
$ 3,905 
$ 3,724 
Derivative Financial Instruments - Additional Information (Detail) (USD $)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Derivative [Line Items]
 
 
 
Cash flow hedges in an asset position
$ 39,000,000 
 
 
Cash flow hedges in a liability position
6,000,000 
 
 
Reduction in earnings from excluded forward points and ineffectiveness
27,000,000 
14,000,000 
16,000,000 
Expected amount of accumulated other comprehensive income (loss) expected to be reclassified
41,000,000 
 
 
Foreign exchange derivative instruments |
Cash Flow Hedging
 
 
 
Derivative [Line Items]
 
 
 
The aggregate notional amount of the Company's foreign currency forward contracts outstanding
1,200,000,000 
1,100,000,000 
 
Accrued Liabilities
 
 
 
Derivative [Line Items]
 
 
 
Collateral received with counterparties
$ 29,000,000 
 
 
Enterprise-wide Disclosures and Concentration of Business - Additional Information (Detail)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Concentration Risk [Line Items]
 
 
 
Revenues from the largest customers out of total operating revenues is less than
10.00% 
10.00% 
10.00% 
Geographic Concentration Risk |
Sales Revenue, Services, Net
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentration Risk, Percentage
54.00% 
 
55.00% 
Long-Lived Net Property, Equipment and Technology Assets Classified by Major Geographic Area (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Segment Reporting Information [Line Items]
 
 
Property, equipment and technology, net
$ 1,892 
$ 1,732 
United States
 
 
Segment Reporting Information [Line Items]
 
 
Property, equipment and technology, net
1,798 
1,621 
Countries Outside of United States
 
 
Segment Reporting Information [Line Items]
 
 
Property, equipment and technology, net
$ 94 
$ 111 
Stockholders' Equity - Additional Information (Detail) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Oct. 31, 2013
Oct. 31, 2014
Subsequent Event
Dec. 31, 2011
Deposit into Litigation Escrow
Sep. 30, 2014
Deposit into Litigation Escrow
Sep. 30, 2014
Class A common stock
Sep. 30, 2014
Class C common stock
Accelerated Share Repurchase Program Aggregate
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
Repurchase of Class A common stock (shares)
 
20 1
33 1
 
 
 
 
 
22 
 
Repurchase of Class A common stock (dollars per share)
 
 
 
 
 
 
 
 
$ 209.15 
 
Share Reduction, Price Paid Per Share Escrow Funding
$ 0 
$ 0 
$ 0 
 
 
 
 
$ 215.33 2
 
 
Operating Cash On Hand
 
$ 4,600,000,000 
 
 
 
 
 
 
 
 
Stock Repurchased and Retired During Period, Value
 
4,118,000,000 
5,365,000,000 
710,000,000 
 
 
 
 
4,118,000,000 
 
Share repurchase plan, authorized amount
 
 
 
 
5,000,000,000 
5,000,000,000 
 
 
 
 
Stock Repurchase Program, Remaining Authorized Repurchase Amount
682,000,000 
682,000,000 
 
 
 
 
 
 
 
 
Deposits into litigation escrow account
450,000,000 
450,000,000 
0 
 
 
 
0 
450,000,000 
 
 
Shares of class C common stock released from transfer restrictions, converted to class A common stock
 
 
 
 
 
 
 
 
 
129 
Dividends, per share amount declared
 
 
 
 
 
$ 0.48 
 
 
 
 
Dividends, paid
 
$ 1,000,000,000 
 
 
 
 
 
 
 
 
Dividends, paid per share
 
$ 0.40 
 
 
 
 
 
 
 
 
Number of Shares of Class A Common Shares Outstanding on an As-Converted Basis (Detail)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
conversion_rate
Sep. 30, 2013
Class of Stock [Line Items]
 
 
As-converted Class A Common Stock
618 1
 
Class A common stock
 
 
Class of Stock [Line Items]
 
 
Common stock, shares, outstanding
495 
508 
Conversion Rate Into Class A Common Stock
0 
 
As-converted Class A Common Stock
495 1
 
Class B common stock
 
 
Class of Stock [Line Items]
 
 
Common stock, shares, outstanding
245 
245 
Conversion Rate Into Class A Common Stock
0.4121 
 
As-converted Class A Common Stock
101 1
 
Class C common stock
 
 
Class of Stock [Line Items]
 
 
Common stock, shares, outstanding
22 
27 
Conversion Rate Into Class A Common Stock
1.0000 
 
As-converted Class A Common Stock
22 1
 
Stockholders' Equity Share Repurchases in the Open Market (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Stockholders' Equity Attributable to Parent [Abstract]
 
 
 
Shares repurchased in the open market
20 1
33 1
 
Weighted-average repurchase price per share
$ 0 
$ 0 
 
Total cost
$ 4,118 
$ 5,365 
$ 710 
Stockholders' Equity Effect of Escrow Funding on the Company Repurchaseing its Common Stock (Details) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2011
Deposit into Litigation Escrow
Sep. 30, 2014
Deposit into Litigation Escrow
Sep. 30, 2014
Class A common stock
conversion_rate
Sep. 30, 2014
Class A common stock
Deposit into Litigation Escrow
Sep. 30, 2014
Class B common stock
conversion_rate
Sep. 30, 2014
Class B common stock
Deposit into Litigation Escrow
conversion_rate
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
Deposits under the retrospective responsibility plan
$ 450,000,000 
$ 450,000,000 
$ 0 
$ 0 
$ 450,000,000 
 
 
 
 
Weighted-average repurchase price per share
$ 0 
$ 0 
$ 0 
 
$ 215.33 1
 
 
 
 
Equivalent shares of class A common stock repurchased
 
 
 
 
 
 
2 
 
 
Conversion rate after funding of class B common stock to class A common stock
 
 
 
 
 
0 
 
0.4121 
0.4121 
As-converted class B common stock outstanding aftetr deposits
 
618 2
 
 
 
495 2
 
101 2
101 
Basic and Diluted Earnings Per Share (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Dilutive shares of outstanding stock awards included in computation of weighted-average dilutive shares outstanding
2 
2 
3 
Income allocation - Basic
$ 5,438 1
$ 4,980 1
$ 2,144 1
Class A common stock
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Income allocation - Basic
4,307 1
3,959 1
1,664 1
Weighted Average Shares Outstanding - Basic
498 
520 
524 
Earnings per Share - Basic
$ 8.65 2
$ 7.61 2
$ 3.17 2
Income allocation - Diluted
5,438 
4,980 1
2,144 1
Weighted Average Shares Outstanding - Diluted
631 
656 3
678 3
Earnings per Share - Diluted
$ 8.62 2
$ 7.59 2
$ 3.16 2
Class B common stock
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Income allocation - Basic
892 1
786 1
343 1
Weighted Average Shares Outstanding - Basic
245 
245 
245 
Earnings per Share - Basic
$ 3.63 2
$ 3.20 2
$ 1.40 2
Income allocation - Diluted
890 1
784 1
341 1
Weighted Average Shares Outstanding - Diluted
245 
245 
245 
Earnings per Share - Diluted
$ 3.62 2
$ 3.19 2
$ 1.39 2
Class C common stock
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Income allocation - Basic
222 1
216 1
130 1
Weighted Average Shares Outstanding - Basic
26 
28 
41 
Earnings per Share - Basic
$ 8.65 2
$ 7.61 2
$ 3.17 2
Income allocation - Diluted
221 1
215 1
129 1
Weighted Average Shares Outstanding - Diluted
26 
28 
41 
Earnings per Share - Diluted
$ 8.62 2
$ 7.59 2
$ 3.16 2
Participating Securities
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Income allocation - Basic
17 1 4
19 1 4
7 1 4
Income allocation - Diluted
$ 16 1 4
$ 19 1 4
$ 7 1 4
Basic and Diluted Earnings Per Share (Parenthetical) (Detail)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Dilutive shares of outstanding stock awards included in computation of weighted-average dilutive shares outstanding
2 
2 
3 
Maximum
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Stock options excluded from computation of average dilutive shares outstanding (less than)
1 
1 
1 
Class B common stock
 
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
Weighted average numbers of shares of class B common stock outstanding on an as-converted basis used in the allocation of net income
103 
103 
108 
Share-based Compensation - Additional Information (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Vesting period from the date of grant
10 years 
 
 
Share-based compensation expense
$ 172 
$ 179 
$ 147 
Total intrinsic value from options exercised
187 
176 
247 
Tax benefit realized from options exercised
65 
59 
86 
Unrecognized compensation cost
17 
 
 
Total unrecognized compensation cost related to non-vested options expected to be recognized over a weighted average period (in years)
1 year 4 months 24 days 
 
 
Total fair value of RSAs and RSUs vested
126 
98 
81 
Weighted average remaining contractual term
5 years 4 months 24 days 
 
 
Employee Stock Option
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Vesting period from the date of grant
3 years 
 
 
Restricted Stock Awards
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Unrecognized compensation cost
127 
 
 
Weighted average grant date fair value (in dollars per share)
$ 199.91 
$ 147.18 
$ 96.39 
Weighted average remaining contractual term
1 year 4 months 24 days 
 
 
Restricted Stock Units
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Unrecognized compensation cost
35 
 
 
Weighted average grant date fair value (in dollars per share)
$ 197.76 
$ 146.18 
$ 96.97 
Weighted average remaining contractual term
1 year 1 month 6 days 
 
 
Performance Based Shares
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Vesting period from the date of grant
3 years 
3 years 
3 years 
Unrecognized compensation cost
$ 12 
 
 
Weighted average grant date fair value per share
$ 225.46 
$ 164.14 
$ 97.84 
Equity Incentive Compensation Plan, 2007 [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Maximum number of Class A Common Stock authorized for issuance under the 2007 Equity Incentive Compensation Plan ("the "EIP")
59 
 
 
Assumptions Used to Estimate the Fair Value of Each Stock Option on the Date of Grant Using a Black-Scholes Option Pricing Model (Detail)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected term (in years)
4 years 9 months 18 days 1
6 years 0 months 29 days 1
6 years 0 months 7 days 1
Risk-free rate of return
1.30% 2
0.80% 2
1.20% 2
Expected volatility
25.20% 3
29.30% 3
34.90% 3
Expected dividend yield
0.80% 4
0.90% 4
0.90% 4
Weighted-average fair value per option granted
$ 44.11 
$ 39.03 
$ 29.65 
Visa
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected term peer weighted percentage
58.00% 
 
 
Peer Companies [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected term peer weighted percentage
42.00% 
 
 
Assumptions Used to Estimate the Fair Value of Each Stock Option on the Date of Grant Using a Black-Scholes Option Pricing Model (Parenthetical) (Detail)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected volatility
25.20% 1
29.30% 1
34.90% 1
Minimum
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected volatility
22.00% 
 
 
Maximum
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected volatility
26.00% 
 
 
Summary of Option Activity (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Options
 
Beginning balance
3,917,206 
Granted
435,025 
Forfeited/expired
(116,261)
Exercised
(1,323,544)
Ending balance
2,912,426 
Options exercisable at September 30, 2014
2,181,759 
Options exercisable and expected to be vested at September 30, 2014
2,832,053 1
Weighted average price per share
 
Beginning balance
$ 72.21 
Granted
$ 201.37 
Forfeited/expired
$ 150.56 
Exercised
$ 68.45 
Ending balance
$ 90.08 
Options exercisable at September 30, 2014
$ 63.03 
Options exercisable and expected to be vested at September 30, 2014
$ 87.79 1
Weighted-Average Remaining Contractual Term
 
Outstanding at September 30, 2014
5 years 4 months 24 days 
Options exercisable at September 30, 2014
4 years 3 months 18 days 
Options exercisable and expected to be vested at September 30, 2014
5 years 3 months 18 days 1
Aggregate Intrinsic Value
 
Outstanding at September 30, 2014
$ 359 
Options exercisable at September 30, 2014
328 
Options exercisable and expected to be vested at September 30, 2014
$ 356 1
Summary of Option Activity (Parenthetical) (Detail)
Sep. 30, 2014
Share-based Compensation [Abstract]
 
Stock price used to calculate aggregate intrinsic value
$ 213.37 
Summary of RSA and RSU Activity (Detail) (USD $)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Weighted-Average Remaining Contactual Term
 
 
 
Outstanding at September 30, 2014
5 years 4 months 24 days 
 
 
Restricted Stock Awards
 
 
 
Restricted stock
 
 
 
Beginning balance
1,697,981 
 
 
Granted
609,015 
 
 
Vested
(841,527)
 
 
Forfeited/expired
(156,923)
 
 
Ending balance
1,308,546 
1,697,981 
 
Weighted-Average Grant Date Fair Value
 
 
 
Beginning balance
$ 119.20 
 
 
Granted
$ 199.91 
$ 147.18 
$ 96.39 
Vested
$ 108.28 
 
 
Forfeited/expired
$ 150.85 
 
 
Ending balance
$ 160.00 
$ 119.20 
 
Weighted-Average Remaining Contactual Term
 
 
 
Outstanding at September 30, 2014
1 year 4 months 24 days 
 
 
Aggregate Intrinsic Value
 
 
 
Outstanding at September 30, 2014
$ 279,000,000 
 
 
Restricted Stock Units
 
 
 
Restricted stock
 
 
 
Beginning balance
649,682 
 
 
Granted
226,581 
 
 
Vested
(317,343)
 
 
Forfeited/expired
(92,187)
 
 
Ending balance
466,733 
649,682 
 
Weighted-Average Grant Date Fair Value
 
 
 
Beginning balance
$ 119.49 
 
 
Granted
$ 197.76 
$ 146.18 
$ 96.97 
Vested
$ 111.18 
 
 
Forfeited/expired
$ 141.67 
 
 
Ending balance
$ 158.75 
$ 119.49 
 
Weighted-Average Remaining Contactual Term
 
 
 
Outstanding at September 30, 2014
1 year 1 month 6 days 
 
 
Aggregate Intrinsic Value
 
 
 
Outstanding at September 30, 2014
$ 100,000,000 
 
 
Summary of RSA and RSU Activity (Parenthetical) (Detail)
Sep. 30, 2014
Share-based Compensation [Abstract]
 
Stock price used to calculate aggregate intrinsic value
$ 213.37 
Summary of Performance-based Shares Activity (Detail) (USD $)
12 Months Ended
Sep. 30, 2014
Weighted- Average Remaining Contractual Term
 
Outstanding at September 30, 2014
5 years 4 months 24 days 
Performance Awards
 
Shares
 
Beginning balance
(459,899)
Granted
278,451 1
Vested
(114,514)
Unearned
0 
Forfeited/expired
(105,026)
Ending balance
(518,810)
Weighted- Average Grant Date Fair Value
 
Beginning balance
$ 126.24 
Granted
$ 225.46 1
Vested
$ 85.05 
Unearned
$ 0 
Forfeited/expired
$ 177.01 
Ending balance
$ 177.29 
Weighted- Average Remaining Contractual Term
 
Outstanding at September 30, 2014
7 months 6 days 
Aggregate Intrinsic Value
 
Outstanding at September 30, 2014
$ 111,000,000 2
Summary of Performance-based Shares Activity (Parenthetical) (Detail)
Sep. 30, 2014
Share-based Compensation [Abstract]
 
Stock price used to calculate aggregate intrinsic value
$ 213.37 
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Other Commitments [Line Items]
 
 
 
Rent expense incurred
$ 134 
$ 94 
$ 89 
Minimum
 
 
 
Other Commitments [Line Items]
 
 
 
Client Incentive Agreement Period
1 year 
 
 
Maximum
 
 
 
Other Commitments [Line Items]
 
 
 
Client Incentive Agreement Period
15 years 
 
 
Future Minimum Payments on Leases and Marketing and Sponsorship Agreements (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Commitments and Contingencies Disclosure [Abstract]
 
Operating leases, 2015
$ 76 
Operating leases, 2016
60 
Operating leases, 2017
37 
Operating leases, 2018
32 
Operating leases, 2019
30 
Operating leases, Thereafter
118 
Operating leases
353 
Marketing and sponsorships, 2015
83 
Marketing and sponsorships, 2016
63 
Marketing and sponsorships, 2017
62 
Marketing and sponsorships, 2018
61 
Marketing and sponsorships, 2019
59 
Marketing and sponsorships, Thereafter
130 
Marketing and sponsorships
458 
Total, 2015
159 
Total, 2016
123 
Total, 2017
99 
Total, 2018
93 
Total, 2019
89 
Total, Thereafter
248 
Total
$ 811 
Expected Reduction of Revenue for Volume and Support Incentive Agreements (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Commitments and Contingencies Disclosure [Abstract]
 
Client incentives, 2015
$ 2,924 
Client incentives, 2016
2,548 
Client incentives, 2017
2,117 
Client incentives, 2018
1,662 
Client incentives, 2019
1,162 
Client incentives, Thereafter
1,272 
Client incentives
$ 11,685 
Income Taxes - Additional Information (Detail) (USD $)
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Tax Credit Carryforward [Line Items]
 
 
 
Decrease in deferred tax assets reflecting the current tax deduction related to payments made in connection with the covered litigation
$ 1,400,000,000 
 
 
US income before taxes
6,140,000,000 
5,992,000,000 
1,030,000,000 
U.S. federal statutory rate
35.00% 
35.00% 
35.00% 
Income tax provision, percent
30.00% 
31.00% 
3.00% 
Effective Income Tax Rate Reconciliation, Deduction, Qualified Production Activity, Amount
264,000,000 
 
 
Prior years U.S. domestic production activities deduction
191,000,000 
0 
0 
Prior years U.S. domestic production activities deduction, percent
(2.00%)
0.00% 
0.00% 
Loss Contingency, Loss in Period
453,000,000 
3,000,000 
4,100,000,000 
Income Taxes Receivable
597,000,000 1
253,000,000 1
 
Income taxes receivable included in prepaid and other current assets
91,000,000 
142,000,000 
 
Income taxes payable included in accrued taxes as part of accrued liabilities
73,000,000 
64,000,000 
 
Accrued income taxes included in other long-term liabilities
855,000,000 2
453,000,000 2
 
Cumulative undistributed earnings of the Company's international subsidiaries intended to be reinvested indefinitely outside the U.S
5,000,000,000 
 
 
Decreased Singapore tax as a result of the tax incentive agreement
(168,000,000)
(158,000,000)
(130,000,000)
Benefit of the tax incentive agreement on diluted net income per share
$ 0.27 
$ 0.24 
$ 0.19 
Total unrecognized tax benefits exclusive of interest and penalties
1,303,000,000 
1,023,000,000 
679,000,000 
Unrecognized tax benefits, if recognized, would reduce the effective tax rate in a future period
1,100,000,000 
801,000,000 
 
Interest expense included in interest expense and administrative and other
10,000,000 
9,000,000 
45,000,000 
Accrued penalties related to uncertain tax positions
2,000,000 
 
 
Reversal of penalties upon the effective settlement of uncertainties surrounding the timing of certain deductions
 
4,000,000 
1,000,000 
Accrued interest related to uncertain tax positions in other long term liabilities
39,000,000 
29,000,000 
 
Accrued penalties related to uncertain tax positions in other long term liabilities
5,000,000 
3,000,000 
 
Non United States Customers
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
US income before taxes
2,300,000,000 
2,000,000,000 
1,600,000,000 
Federal
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
Research and development tax credit carryforwards
2,000,000 
 
 
State and Local Jurisdiction
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
Net operating loss carryforwards
16,000,000 
 
 
Research and development tax credit carryforwards
21,000,000 
 
 
Foreign Country
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
Net operating loss carryforwards
$ 154,000,000 
 
 
Income Before Taxes by Fiscal Year (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Income Tax Disclosure [Abstract]
 
 
 
U.S.
$ 6,140 
$ 5,992 
$ 1,030 
Non-U.S.
1,584 
1,265 
1,177 
Income before income taxes
$ 7,724 
$ 7,257 
$ 2,207 
Income Tax Expense by Fiscal Year (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Current:
 
 
 
U.S. federal
$ 2,353 
$ 568 
$ 1,376 
State and local
237 
(58)
165 
Non-U.S.
274 
239 
214 
Total current taxes
2,864 
749 
1,755 
Deferred:
 
 
 
U.S. federal
(576)
1,401 
(1,276)
State and local
(31)
114 
(415)
Non-U.S.
29 
13 
1 
Total deferred taxes
(578)
1,528 
(1,690)
Income tax provision
$ 2,286 
$ 2,277 
$ 65 
Tax Effect of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Deferred Tax Assets
 
 
Accrued compensation and benefits
$ 134 
$ 154 
Comprehensive income
14 
(8)
Investments in joint ventures
14 
14 
Accrued litigation obligation
558 
1 
Volume and support incentives
235 
226 
Net operating loss carryforward
35 
31 
Tax credits
21 
22 
Federal benefit of state taxes
210 
176 
Other
139 
121 
Deferred Tax Assets, Valuation Allowance
34 
25 
Deferred tax assets
1,326 
712 
Deferred Tax Liabilities
 
 
Property, equipment and technology, net
(298)
(310)
Intangible assets
(4,000)
(4,003)
Foreign taxes
(125)
(55)
Other
(12)
(12)
Deferred tax liabilities
(4,435)
(4,380)
Net deferred tax (liabilities) assets
$ (3,109)
$ (3,668)
Net Deferred Tax Assets and Liabilities Included in the Consolidated Balance Sheets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Sep. 30, 2013
Tax Credit Carryforward [Line Items]
 
 
Deferred Tax Assets, Valuation Allowance
$ (34)
$ (25)
Current deferred tax assets
1,028 
481 
Non current deferred tax liabilities
(4,137)1
(4,149)1
Net deferred tax (liabilities) assets
(3,109)
(3,668)
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent
8 
0 
Federal
 
 
Tax Credit Carryforward [Line Items]
 
 
Research and development tax credit carryforwards
2 
 
Foreign Country
 
 
Tax Credit Carryforward [Line Items]
 
 
Net operating loss carryforwards
$ 154 
 
Information that Causes the Income Tax Expense to Differ from the Amount of Income Tax Determined by Applying the Applicable U.S. Federal Statutory Rate of 35% to Pretax Income (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Income Tax Disclosure [Abstract]
 
 
 
U.S. federal income tax at statutory rate
$ 2,704 
$ 2,540 
$ 772 
State income taxes, net of federal benefit
129 
42 
36 
Non-U.S. tax effect, net of federal benefit
(278)
(328)
(257)
Prior years U.S. domestic production activities deduction
(191)
0 
0 
Reversal of tax reserves related to the deductibility of covered litigation expense
0 
0 
(299)
Remeasurement of deferred taxes due to California state apportionment rule changes, amount
0 
0 
(208)
Other, net
(78)
23 
21 
Income tax provision
$ 2,286 
$ 2,277 
$ 65 
U.S. federal income tax at statutory rate
35.00% 
35.00% 
35.00% 
State income taxes, net of federal benefit
2.00% 
1.00% 
2.00% 
Non-U.S. tax effect, net of federal benefit
(4.00%)
(5.00%)
(12.00%)
Prior years U.S. domestic production activities deduction, percent
(2.00%)
0.00% 
0.00% 
Reversal of tax reserves related to the deductibility of covered litigation expense
0.00% 
0.00% 
(14.00%)
Remeasurement of deferred taxes due to California state apportionment rule changes, percent
0.00% 
0.00% 
(9.00%)
Other, net
(1.00%)
0.00% 
1.00% 
Income tax expense
30.00% 
31.00% 
3.00% 
Reconciliation of Beginning and Ending Unrecognized Tax Benefits by Fiscal Year (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
Beginning Balance
$ 1,023 
$ 679 
Increases of unrecognized tax benefits related to prior years
139 
335 
Decreases of unrecognized tax benefits related to prior years
(54)
(133)
Increases of unrecognized tax benefits related to current year
199 
144 
Reductions to unrecognized tax benefits related to lapsing statute of limitations
(4)
(2)
Ending Balance
$ 1,303 
$ 1,023 
Legal Matters - Additional Information (Detail) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 12 Months Ended
Oct. 19, 2012
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Dec. 10, 2012
Class Plaintiffs
Sep. 30, 2014
Class Plaintiffs
Sep. 30, 2013
Class Plaintiffs
Oct. 29, 2012
Individual Plaintiffs
Sep. 30, 2014
Individual Plaintiffs
Sep. 30, 2013
Individual Plaintiffs
Sep. 30, 2014
Interchange Multidistrict Litigation
Sep. 30, 2013
Interchange Multidistrict Litigation
Sep. 30, 2014
Opt-out Merchants
Sep. 30, 2013
Opt-out Merchants
Dec. 16, 2013
Consumer Interchange Litigation
Sep. 30, 2014
Interchange Opt Out Litigation
litigation_case
Sep. 30, 2014
U.K. Merchant Litigation
merchant
Sep. 30, 2014
Threatened Litigation
Europe Interchange Rate Litigation
merchant
Jan. 27, 2014
Covered Litigation
Interchange Multidistrict Litigation
Sep. 30, 2014
Unsettled
Sep. 30, 2013
Unsettled
Sep. 30, 2012
Covered Litigation
Sep. 30, 2014
Covered Litigation
Sep. 30, 2013
Covered Litigation
Sep. 30, 2011
Covered Litigation
Sep. 30, 2014
Covered Litigation
Interchange Multidistrict Litigation
Sep. 30, 2013
Covered Litigation
Interchange Multidistrict Litigation
Sep. 30, 2014
Covered Litigation
Interchange Opt Out Litigation
Sep. 30, 2013
Covered Litigation
Interchange Opt Out Litigation
Sep. 30, 2014
Visa, MasterCard, and Certain U.S. Financial Institutions
Interchange Opt Out Litigation
litigation_case
Sep. 30, 2014
Visa
Interchange Opt Out Litigation
litigation_case
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments for legal settlements
 
 
 
 
$ 4,000,000,000 
$ 0 
$ 4,033,000,000 1
$ 350,000,000 
$ 0 1
$ 350,000,000 1
 
 
$ 57,000,000 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for legal matters
 
 
 
 
 
 
 
 
 
 
1,056,000,000 
0 
 
 
 
 
 
 
1,100,000,000 
453,000,000 
3,000,000 
4,100,000,000 
 
 
 
1,056,000,000 
0 
450,000,000 
0 
 
 
Distribution to class merchants, rate amount
0.10% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution to class merchants, period
60 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consecutive months of distribution to class merchants
8 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Litigation accrual
 
1,456,000,000 
5,000,000 
4,386,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,383,000,000 
1,449,000,000 
0 
285,000,000 
 
 
 
 
 
 
Takedown payments percentage
 
25.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Damages sought by plaintiff from all defendants
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 54,000,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of opt-out cases filed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of claims filed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 
3 
Settlements reached by percentage of sales volume of merchants who opted out
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of plaintiffs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20 
20 
 
 
 
 
 
 
 
 
 
 
 
 
 
Claim limitation period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Merchants by sales volume with filed or preserved claims, percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Legal Matters Legal Matters - Accrued Litigation (Details) (USD $)
3 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Loss Contingencies [Line Items]
 
 
 
 
Deposits into litigation escrow account
$ 450,000,000 
$ 450,000,000 
$ 0 
 
Decrease in deferred tax assets reflecting the current tax deduction related to payments made in connection with the covered litigation
 
1,400,000,000 
 
 
Loss Contingency Accrual [Roll Forward]
 
 
 
 
Accrued Litigation, Beginning of Period
 
5,000,000 
4,386,000,000 
 
Accrued Litigation, End of Period
1,456,000,000 
1,456,000,000 
5,000,000 
 
Unsettled
 
 
 
 
Loss Contingency Accrual [Roll Forward]
 
 
 
 
Provision for unsettled legal matters
 
453,000,000 
3,000,000 
 
Payments on unsettled and settled matters
 
(58,000,000)
(4,384,000,000)
 
Covered Litigation
 
 
 
 
Loss Contingencies [Line Items]
 
 
 
 
Deposits into litigation escrow account
450,000,000 
 
 
 
Loss Contingency Accrual [Roll Forward]
 
 
 
 
Accrued Litigation, Beginning of Period
 
0 
4,383,000,000 
285,000,000 
Provision for unsettled legal matters
 
 
 
4,100,000,000 
Payments on unsettled and settled matters
 
(57,000,000)
(4,383,000,000)
 
Accrued Litigation, End of Period
1,449,000,000 
1,449,000,000 
0 
4,383,000,000 
Interchange Multidistrict Litigation
 
 
 
 
Loss Contingency Accrual [Roll Forward]
 
 
 
 
Provision for unsettled legal matters
 
1,056,000,000 
0 
 
Interchange Multidistrict Litigation |
Covered Litigation
 
 
 
 
Loss Contingency Accrual [Roll Forward]
 
 
 
 
Provision for unsettled legal matters
 
$ 1,056,000,000 
$ 0 
 
Subsequent Events - Additional Information (Detail) (USD $)
In Billions, except Per Share data, unless otherwise specified
Oct. 31, 2013
Oct. 31, 2014
Subsequent Event
Subsequent Event [Line Items]
 
 
Share repurchase plan, authorized amount
$ 5.0 
$ 5.0 
Dividends, per share amount declared
 
$ 0.48