Document and Entity Information

3 Months Ended

Dec. 31, 2011

Feb. 1, 2012

Class A

Feb. 1, 2012

Class B

Feb. 1, 2012

Class C

Entity Registrant Name

VISA INC.

Entity Central Index Key

0001403161

Current Fiscal Year End Date

--09-30

Entity Filer Category

Large Accelerated Filer

Document Type

10-Q

Document Period End Date

Dec. 31, 2011

Document Fiscal Year Focus

2012

Document Fiscal Period Focus

Q1

Amendment Flag

false

Entity Common Stock, Shares Outstanding

525,303,252

245,513,385

42,482,868

CONSOLIDATED BALANCE SHEETS (USD $)

In Millions, unless otherwise specified

Dec. 31, 2011

Sep. 30, 2011

Assets

Cash and cash equivalents

$ 1,942

$ 2,127

Restricted cash-litigation escrow (Note 2)

4,352

2,857

Investment securities

Trading

65

57

Available-for-sale

734

1,214

Settlement receivable

509

412

Accounts receivable

629

560

Customer collateral (Note 5)

908

931

Current portion of client incentives

206

278

Deferred tax assets

461

489

Prepaid expenses and other current assets

172

265

Total current assets

9,978

9,190

Investment securities, available-for-sale

899

711

Client incentives

106

85

Property, equipment and technology, net

1,542

1,541

Other assets

121

129

Intangible assets, net

11,454

11,436

Goodwill

11,668

Total assets

35,768

34,760

Liabilities

Accounts payable

87

169

Settlement payable

426

449

Customer collateral (Note 5)

908

931

Accrued compensation and benefits

259

387

Client incentives

615

528

Accrued liabilities

886

562

Accrued litigation (Note 10)

356

425

Total current liabilities

3,537

3,451

Deferred tax liabilities

4,212

4,205

Other liabilities

718

667

Total liabilities

8,467

8,323

Equity

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

Additional paid-in capital

19,929

19,907

Accumulated income

7,544

6,706

Accumulated other comprehensive income (loss), net

Investment securities, available-for-sale

1

Defined benefit pension and other postretirement plans

(183)

(186)

Derivative instruments classified as cash flow hedges

18

Foreign currency translation adjustments

(8)

Total accumulated other comprehensive loss, net

(172)

(176)

Total equity

27,301

26,437

Total liabilities and equity

35,768

34,760

Common Class A [Member]

Equity

Common stock

Common Class B [Member]

Equity

Common stock

Common Class C [Member]

Equity

Common stock

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)

In Millions, except Per Share data, unless otherwise specified

Dec. 31, 2011

Sep. 30, 2011

Preferred Stock

Preferred stock, par value

$ 0.0001

Preferred stock, shares authorized

25

Preferred stock, shares issued

0

Class A

Common stock, par value

$ 0.0001

Common stock, shares authorized

2,001,622

Common stock, shares issued

524

520

Common stock, shares outstanding

524

520

Class B

Common stock, par value

$ 0.0001

Common stock, shares authorized

622

Common stock, shares issued

245

Common stock, shares outstanding

245

Class C

Common stock, par value

$ 0.0001

Common stock, shares authorized

1,097

Common stock, shares issued

44

47

Common stock, shares outstanding

44

47

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

Dec. 31, 2011

Dec. 31, 2010

Operating Revenues

Service revenues

$ 1,151

$ 1,008

Data processing revenues

951

844

International transaction revenues

748

630

Other revenues

178

161

Client incentives

(481)

(405)

Total operating revenues

2,547

2,238

Operating Expenses

Personnel

389

357

Network and processing

98

80

Marketing

190

197

Professional fees

70

61

Depreciation and amortization

80

67

General and administrative

102

110

Total operating expenses

929

872

Operating income

1,618

1,366

Other Income (Expense)

Interest expense

(10)

4

Investment income, net

10

Other

(1)

2

Total other (expense) income

(1)

16

Income before income taxes

1,617

1,382

Income tax provision

590

498

Net income including non-controlling interest

1,027

884

Loss attributable to non-controlling interest

2

Net income attributable to Visa Inc.

1,029

884

Class A common stock

Other Income (Expense)

Net income attributable to Visa Inc.

778

609

Basic earnings per share (Note 7)

$ 1.50

$ 1.23

Basic weighted-average shares outstanding (Note 7)

520

494

Diluted earnings per share (Note 7)

$ 1.49

$ 1.23

Diluted weighted-average shares outstanding (Note 7)

690

719

Class B common stock

Other Income (Expense)

Net income attributable to Visa Inc.

179

156 ¹

Basic earnings per share (Note 7)

$ 0.73

$ 0.63

Basic weighted-average shares outstanding (Note 7)

245

Diluted earnings per share (Note 7)

$ 0.73

$ 0.63

Diluted weighted-average shares outstanding (Note 7)

245

Class C common stock

Other Income (Expense)

Net income attributable to Visa Inc.

$ 69

$ 116

Basic earnings per share (Note 7)

$ 1.50

$ 1.23

Basic weighted-average shares outstanding (Note 7)

46

94

Diluted earnings per share (Note 7)

$ 1.49

$ 1.23

Diluted weighted-average shares outstanding (Note 7)

46

94

[1] Net income attributable to Visa Inc. is allocated to each class of common stock on an as-converted basis. The weighted-average number of shares of as-converted class B common stock used in the income allocation was 119 million and 126 million for the three months ended December 31, 2011 and 2010, respectively.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2011

Dec. 31, 2010

Net income including non-controlling interest

$ 1,027

$ 884

Investment securities, available-for-sale

Net unrealized gain (loss)

1

(2)

Income tax effect

1

Defined benefit pension and other postretirement plans

5

2

Income tax effect

(2)

(1)

Derivative instruments classified as cash flow hedges

Net unrealized loss

(7)

(14)

Income tax effect

1

2

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

6

12

Income tax effect

(4)

Foreign currency translation adjustments

5

Other comprehensive income, net of tax

4

1

Comprehensive income including non-controlling interest

1,031

885

Comprehensive loss attributable to non-controlling interest

2

Comprehensive income attributable to Visa Inc.

$ 1,033

$ 885

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $)

In Millions, unless otherwise specified

Total

USD ($)

Class A

Class B

Class C

Additional Paid In Capital

USD ($)

Accumulated Income

USD ($)

Accumulated Other Comprehensive Loss

USD ($)

Non-controlling Interests

USD ($)

Beginning Balance at Sep. 30, 2011

$ 26,437

$ 19,907

$ 6,706

$ (176)

Beginning Balance (in shares) at Sep. 30, 2011

520

245

47

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

Net income attributable to Visa Inc.

1,029

Loss attributable to non-controlling interest

(2)

Other comprehensive income, net of tax

4

Comprehensive income including non-controlling interest

1,031

Issuance of restricted share awards

1

Conversion of class C common stock upon sale into public market (Note 7)

3

(3)

Share-based compensation

38

Excess tax benefit for share-based compensation

18

Cash proceeds from exercise of stock options (in shares)

1

Cash proceeds from exercise of stock options

44

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

Restricted stock instruments settled in cash for taxes

(39)

Cash dividends declared and paid, at a quarterly amount of $0.15 per as-converted share (Note 7)

(152)

Repurchase of class A common stock (Note 6)

(1.0)

Repurchase of class A common stock (Note 6)

(75)

(36)

(39)

Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests

(1)

(3)

2

Ending Balance at Dec. 31, 2011

$ 27,301

$ 19,929

$ 7,544

$ (172)

Ending Balance (in shares) at Dec. 31, 2011

524

245

44

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical)

3 Months Ended

Dec. 31, 2011

Cash dividends declared and paid, quarterly, per as-converted share

$ 0.22

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2011

Dec. 31, 2010

Operating Activities

Net income including non-controlling interest

$ 1,027

$ 884

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

Amortization of client incentives

481

405

Share-based compensation

38

48

Excess tax benefit for share-based compensation

(18)

(7)

Depreciation and amortization of property, equipment and technology

80

67

Deferred income taxes

34

82

Other

(37)

(18)

Change in operating assets and liabilities:

Trading securities

(8)

(9)

Settlement receivable

(97)

(104)

Accounts receivable

(69)

(51)

Client incentives

(343)

(357)

Other assets

122

57

Accounts payable

(82)

(42)

Settlement payable

(23)

24

Accrued compensation and benefits

(128)

(129)

Accrued and other liabilities

379

227

Accrued litigation

(70)

(71)

Net cash provided by operating activities

1,286

1,006

Investing Activities

Purchases of property, equipment and technology

(66)

(75)

Proceeds from disposal of property, equipment and technology

2

Purchases of intangible assets

(35)

Investment securities, available-for-sale:

Purchases

(933)

Proceeds from sales and maturities

1,224

Purchases of/contributions to other investments

(2)

Proceeds/distributions from other investments

4

2

Net cash provided by (used in) investing activities

194

(73)

Financing Activities

Repurchase of class A common stock (Note 6)

(75)

(306)

Dividends paid (Note 6)

(152)

(108)

Deposits into litigation escrow account-retrospective responsibility plan (Note 6)

(1,565)

(800)

Payment from litigation escrow account-retrospective responsibility plan (Note 2)

70

Cash proceeds from exercise of stock options

44

26

Excess tax benefit for share-based compensation

18

7

Principal payments on debt

(3)

Principal payments on capital lease obligations

(5)

(7)

Net cash used in financing activities

(1,665)

(1,121)

Effect of exchange rate changes on cash and cash equivalents

5

Decrease in cash and cash equivalents

(185)

(183)

Cash and cash equivalents at beginning of year

2,127

3,867

Cash and cash equivalents at end of period

1,942

3,684

Supplemental Disclosure of Cash Flow Information

Income taxes paid, net of refunds

57

29

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

42

17

Interest payments on debt

$ 1

Summary of Significant Accounting Policies

Note 1—Summary of Significant Accounting Policies

Organization. Visa Inc. (“Visa” or the “Company”) is a global payments technology company that connects consumers, businesses, banks and governments around the world, enabling them to use digital currency instead of cash and checks. Visa and its wholly-owned consolidated subsidiaries, including Visa U.S.A. Inc. (“Visa U.S.A.”), Visa International Service Association (“Visa International”), Visa Worldwide Pte. Limited (“VWPL”), Visa Canada Corporation (“Visa Canada”), Inovant LLC (“Inovant”), and CyberSource Corporation (“CyberSource”), operate the world’s largest retail electronic payments network. The Company provides its clients with payment processing platforms that encompass consumer credit, debit, prepaid and commercial payments, and facilitates global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities. The Company does not issue cards, set fees, or determine the interest rates consumers will be charged on Visa-branded cards, which are the independent responsibility of the Company’s issuing clients.

Consolidation and basis of presentation. The accompanying unaudited consolidated financial statements include the accounts of Visa Inc. 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 VIEs have not been material to its consolidated financial statements as of and for the periods presented. Non-controlling interests are reported as a component of equity. All significant intercompany accounts and transactions are eliminated in consolidation.

The accompanying unaudited consolidated financial statements are presented in accordance with the U.S. Securities and Exchange Commission (“SEC”) requirements for Quarterly Reports on Form 10-Q and, consequently, do not include all of the annual disclosures required by U.S. GAAP. Reference should be made to the Visa Inc. Annual Report on Form 10-K for the year ended September 30, 2011, for additional disclosures, including a summary of the Company’s significant accounting policies.

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

Purchase of non-controlling interest in joint venture. During the first quarter of fiscal 2012, the Company purchased the remaining 30% non-controlling interest in Visa Processing Services, Ltd. ("VPS"), for $2 million, making the entity a wholly-owned subsidiary. Prior to the purchase, the Company consolidated VPS within its consolidated financial statements, and recorded the non-controlling interest as a component of equity. The Company does not hold additional investments with non-controlling interest recorded as a component of equity.

Recently adopted accounting pronouncements. In September 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-08, which allows an entity to first assess qualitative factors to determine when it is necessary to perform the two-step quantitative goodwill impairment test. This guidance impacts goodwill impairment testing only and does not impact impairment testing for indefinite-lived intangibles. The Company adopted ASU 2011-08 effective October 1, 2011, which did not have a material impact on the consolidated financial statements.

Recently issued accounting pronouncements. In December 2010, the FASB issued ASU 2010-29, which provides requirements over pro forma revenue and earnings disclosures related to business combinations. The ASU will require disclosure of revenue and earnings of the combined business as if the combination occurred at the start of the prior annual reporting period only. Adoption will be effective October 1, 2012, and is not expected to have a material impact on the consolidated financial statements.

In May 2011, the FASB issued ASU 2011-04, which provides common fair value measurement and disclosure requirements in accordance with U.S. GAAP and International Financial Reporting Standards (“IFRS”). The Company adopted ASU 2011-04 effective January 1, 2012. The adoption is not expected to have a material impact on the consolidated financial statements.

Retrospective Responsibility Plan

Note 2—Retrospective Responsibility Plan

Under the terms of the retrospective responsibility plan, the Company maintains an escrow account from which settlements of, or judgments in, covered litigation are paid. See Note 10—Legal Matters. On December 29, 2011, using operating cash on hand, the Company made a deposit of $1.57 billion into the litigation escrow. See Note 6—Stockholders' Equity.

The following table sets forth the changes in the escrow account during the three months ended December 31, 2011.



	(in millions)
Balance at October 1, 2011	$	2,857
Deposit into the litigation escrow account	1,565
American Express settlement payment	(70		)
Balance at December 31, 2011	$	4,352

The accrual related to covered litigation could be either higher or lower than the escrow account balance. The Company did not record an additional accrual for covered litigation during the three months ended December 31, 2011.

Fair Value Measurements

Note 3—Fair Value Measurements

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



	Fair Value Measurements Using Inputs Considered as
	Level 1				Level 2				Level 3
	December 31, 2011		September 30, 2011		December 31, 2011		September 30, 2011		December 31, 2011		September 30, 2011
	(in millions)
Assets
Cash equivalents and restricted cash
Money market funds and time deposits	$	5,739	$	4,225
U.S. government-sponsored debt securities					$	—	$	175
Investment securities
U.S. government-sponsored debt securities					1,421		1,568
U.S. Treasury securities	205		350
Equity securities	65		57
Auction rate securities									$	7	$	7
Prepaid and other current assets
Foreign exchange derivative instruments					24		30
	$	6,009	$	4,632	$	1,445	$	1,773	$	7	$	7
Liabilities
Accrued liabilities
Visa Europe put option									$	145	$	145
Earn-out related to PlaySpan acquisition									24		24
Foreign exchange derivative instruments					$	6	$	7

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

Level 1 assets measured at fair value on a recurring basis. Cash equivalents (money market funds), mutual fund equity securities and U.S. Treasury securities are classified as Level 1 within the fair value hierarchy, as fair value is based on quoted prices in active markets.

Level 2 assets and liabilities measured at fair value on a recurring basis. U.S. government-sponsored debt securities and foreign exchange derivative instruments are classified as Level 2 within the fair value hierarchy. The fair value of the government-sponsored debt securities is based on quoted prices in active markets for similar assets. Foreign exchange derivative instruments are valued using inputs that are observable in the market or can be derived principally from or corroborated with observable market data. There was no substantive change to the valuation techniques and related inputs used to measure fair value during the three months ended December 31, 2011.

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 was no change to the valuation techniques and related inputs used to measure fair value during the three months ended December 31, 2011.

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

The fair value of the put option represents the value of Visa Europe’s option, which under certain conditions could obligate the Company to purchase its member equity interest for an amount above fair value. While the put option is in fact non-transferable, its fair value represents the Company’s estimate of the amount the Company would be required to pay a third-party market participant to transfer the potential obligation in an orderly transaction at the measurement date. At December 31, 2011 and September 30, 2011, the Company determined the fair value of the put option to be $145 million. 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 differential of 1.9x 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.” While $145 million represents the fair value of the put option at December 31, 2011, it does not represent the actual purchase price that the Company may be required to pay if the option is exercised, which could be several billion dollars or more.

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 our consolidated balance sheet at December 31, 2011. 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 liability is classified within Level 3, as the assumed probability that Visa Europe will elect to exercise its option, the estimated P/E differential, and other inputs used to value the put option are unobservable.

Earn-out related to PlaySpan acquisition. In connection with the acquisition of PlaySpan, the Company recorded a liability of $24 million in the second quarter of fiscal 2011 to reflect the fair value of a potential earn-out provision included in the purchase agreement. The liability is classified as Level 3 due to a lack of observable inputs, such as the likelihood of meeting certain future revenue targets and other milestones. There was no significant change to the fair value of the potential earn-out provision in the first quarter of fiscal 2012. Changes in fair value will be included in general and administrative expense on the consolidated statements of operations.

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

Non-marketable equity investments and investments accounted for under the equity method. These investments are classified as Level 3 due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management judgment. The Company applies fair value measurement to these investments when certain events or circumstances indicate that these investments may be impaired. The Company revalues the investments using various assumptions, including financial metrics and ratios of comparable public companies. There were no events or circumstances that indicated these investments became impaired during the three months ended December 31, 2011 or 2010. At December 31, 2011, and September 30, 2011, these investments totaled $98 million and $100 million, respectively, and were classified as other assets on the consolidated balance sheets.

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 significant non-financial liabilities. The Company measures fair value of goodwill and indefinite-lived intangible assets on a non-recurring basis for purpose of initial recognition, and testing for and recording impairment, if any. Finite-lived intangible assets primarily consist of customer relationships, reseller relationships and tradenames obtained through acquisitions.

The Company primarily uses an income approach for estimating the fair values of goodwill and indefinite-lived intangible assets. 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 in Level 3 of the fair value hierarchy. No recent events or changes in circumstances indicate that impairment existed at December 31, 2011.

Pension and Other Postretirement Benefits

Note 4—Pension and Other Postretirement Benefits

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

The components of net periodic benefit cost are as follows:



	Pension Benefits						Other Postretirement Benefits
	Three Months Ended December 31,
	2011			2010			2011			2010
	(in millions)
Service cost	$	10		$	9		$	—		$	—
Interest cost	10			10			—			—
Expected return on assets	(14		)	(14		)	—			—
Amortization of:
Prior service credit	(2		)	(2		)	(1		)	(1		)
Actuarial loss	8			5			—			—
Total net periodic benefit cost	$	12		$	8		$	(1	)	$	(1	)

Settlement Guarantee Management

Note 5—Settlement Guarantee Management

The indemnification for settlement losses that Visa provides to its customers creates settlement risk for the Company due to the difference in timing between the date of a payment transaction and the date of subsequent settlement. The Company’s settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time. The Company requires certain customers that do not meet its credit standards to post collateral equivalent to their estimated unsettled transactions. The Company’s estimated maximum settlement exposure was $48.4 billion at December 31, 2011, compared to $47.5 billion at September 30, 2011. Of these settlement exposure amounts, $3.3 billion at December 31, 2011, and $3.2 billion at September 30, 2011, were covered by collateral.

The Company maintained collateral as follows:



	December 31, 2011		September 30, 2011
	(in millions)
Cash equivalents	$	908	$	931
Pledged securities at market value	288		296
Letters of credit	932		902
Guarantees	1,851		1,845
Total	$	3,979	$	3,974

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

The fair value of the settlement risk guarantee is estimated based on a proprietary probability-weighted model and was approximately $1 million at December 31, 2011, and September 30, 2011. These amounts are reflected in accrued liabilities on the consolidated balance sheets.

Stockholders' Equity

Note 6—Stockholders' Equity

The number of shares of each class and the number of shares of class A common stock on an as-converted basis at December 31, 2011, 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	524	—	524
Class B common stock	245	0.4254	104
Class C common stock	44	1.0000	44
Total			672


⁽¹⁾	Figures may not sum due to rounding. As-converted class A common stock count calculated based on whole numbers.

Reduction in as-converted shares. Total as-converted class A common stock was reduced by 16.2 million shares during the three months ended December 31, 2011, which was funded from $1.6 billion of the Company's operating cash on hand. Of the $1.6 billion, $75 million was used to repurchase class A common stock in the open market. In addition, the Company deposited $1.57 billion from its operating cash into the litigation escrow account previously established under the retrospective responsibility plan. This deposit has the same economic effect on earnings per share as repurchasing the Company's class A common stock as it reduces the as-converted class B common stock share count.

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



(in millions, except per share data)	December 31, 2011
Shares repurchased in the open market ⁽¹⁾	0.8
Weighted-average repurchase price per share	$	89.81
Total cost	$	75


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

Under the terms of the retrospective responsibility plan, when the Company makes a deposit into the 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 the deposit of $1.57 billion into the litigation escrow account:



(in millions, except per share data)	December 29, 2011
Deposit under the retrospective responsibility plan	$	1,565
Effective price per share ⁽¹⁾	$	101.75
Equivalent shares of class A common stock effectively repurchased	15.4
Conversion rate of class B common stock to class A common stock after deposit	0.4254
As-converted class B common stock after deposit	104


⁽¹⁾	Effective price per share calculated using the volume-weighted average price of the Company's class A common stock over a pricing period in accordance with the Company's amended and restated certificate of incorporation.

The deposit reduced by an equivalent amount funds previously allocated to the amended July 2011 share repurchase program, which had no remaining authorized funds as of December 31, 2011. In February 2012, the Company announced a new $500 million share repurchase program authorized by the board of directors. The authorization will be in effect through February 1, 2013, and the terms of the program are subject to change at the discretion of the board of directors.

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

Accelerated class C share release programs. Of the 152 million shares of class C common stock released from transfer restrictions under the Company’s 2009, 2010 and 2011 accelerated class C share release programs, 108 million shares have been converted from class C to class A common stock upon their sale into the public market through December 31, 2011. Approximately 3 million of those shares were converted during the three months ended December 31, 2011.

Dividends. On February 1, 2012, the Company’s board of directors declared a dividend in the amount of $0.22 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis), which will be paid on March 6, 2012, to all holders of record of the Company’s class A, class B and class C common stock as of February 17, 2012. The Company paid $152 million in dividends during the three months ended December 31, 2011.

Earnings Per Share

Note 7—Earnings Per Share

The following table presents basic and diluted earnings per share for the three months ended December 31, 2011.



	Basic Earnings Per Share						Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)			Weighted Average Shares Outstanding (B)	Earnings per Share = (A)/(B)⁽¹⁾		Income Allocation (A)			Weighted Average Shares Outstanding (B)		Earnings per Share = (A)/(B)⁽¹⁾
Common Stock:
Class A	$	778		520	$	1.50	$	1,029		690	⁽²⁾	$	1.49
Class B	179		⁽³⁾	245	0.73		178		⁽³⁾	245		0.73
Class C	69			46	1.50		68			46		1.49
Participating securities⁽⁴⁾	3			Not presented	Not presented		3			Not presented		Not presented
Net income attributable to Visa Inc.	$	1,029

The following table presents basic and diluted earnings per share for the three months ended December 31, 2010.



	Basic Earnings Per Share						Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)			Weighted Average Shares Outstanding (B)	Earnings per Share = (A)/(B)⁽¹⁾		Income Allocation (A)			Weighted Average Shares Outstanding (B)		Earnings per Share = (A)/(B)⁽¹⁾
Common Stock:
Class A	$	609		494	$	1.23	$	884		719	⁽²⁾	$	1.23
Class B	156		⁽³⁾	245	0.63		155		⁽³⁾	245		0.63
Class C	116			94	1.23		116			94		1.23
Participating securities⁽⁴⁾	3			Not presented	Not presented		3			Not presented		Not presented
Net income attributable to Visa Inc.	$	884


⁽¹⁾	Earnings per share calculated based on whole numbers, not rounded numbers.

⁽²⁾

The computation of weighted-average dilutive shares outstanding included the effect of 3 million and 2 million dilutive shares of outstanding stock awards for the three months ended December 31, 2011 and 2010, respectively. The computation excluded stock options to purchase 1 million and 2 million shares of common stock for the three months ended December 31, 2011 and 2010, respectively, because their effect would have been anti-dilutive.


⁽³⁾	Net income attributable to Visa Inc. is allocated to each class of common stock on an as-converted basis. The weighted-average number of shares of as-converted class B common stock used in the income allocation was 119 million and 126 million for the three months ended December 31, 2011 and 2010, respectively.


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

Share-based Compensation

Note 8—Share-based Compensation

The Company granted the following awards to employees and non-employee directors under the 2007 Equity Incentive Compensation Plan during the three months ended December 31, 2011:



	Granted	Weighted-Average Grant Date Fair Value		Weighted-Average Exercise Price
Non-qualified stock options	431,024	$	29.53	$	92.64
Restricted stock awards (RSA)	839,283	92.64
Restricted stock units (RSU)	354,531	92.64
Performance-based shares⁽¹⁾	66,114	97.84


⁽¹⁾	The ultimate number of performance shares to be earned will be between zero and 132,227, depending on a combination of service, performance and market conditions.

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

Income Taxes

Note 9—Income Taxes

The effective income tax rate was 36% for the three months ended December 31, 2011 and 2010.

During the three months ended December 31, 2011, the Company's unrecognized tax benefits related to tax positions taken in the current period increased by $18 million, all of which would affect the effective tax rate if recognized. During the same period, the Company accrued $8 million of interest and no penalties related to uncertain tax positions.

The Company's fiscal 2003 to 2009 Canadian income tax returns are currently under examination by the Canada Revenue Agency (CRA). The most significant areas being examined by the CRA include transfer pricing and the tax status of the Company's Canadian subsidiary prior to its reorganization in October 2007. The timing and the impact of the final resolution of the tax examination are uncertain. As such, it is not reasonably possible to estimate the impact that the final outcome could have on the Company's unrecognized tax benefits in the next 12 months.

Legal Matters

Note 10—Legal Matters

The Company is party to various legal and regulatory proceedings. Some of these proceedings involve complex claims that are subject to substantial uncertainties and unascertainable damages. Accordingly, except as disclosed, the Company has not established reserves or ranges of possible loss related to these proceedings, as at this time in the proceedings, the matters do not relate to a probable loss and/or amounts are not reasonably estimable. Although the Company believes that it has strong defenses for the litigation and regulatory proceedings described below, it could in the future incur judgments or fines or enter into settlements of claims that could have a material adverse effect on the Company's results of operations, financial position 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.

There was no significant provision activity for the three months ended December 31, 2011 and 2010. The litigation accrual is an estimate and is based on management’s understanding of its litigation profile, the specifics of each case, advice of counsel to the extent appropriate and management’s best estimate of incurred loss at the balance sheet date.

The following table summarizes the activity related to accrued litigation for the three months ended December 31:



	2011			2010
	(in millions)
Balance at October 1	$	425		$	697
Interest accretion on settled matters	1			4
Payments on settled matters	(70		)	(71		)
Balance at December 31	$	356		$	630

Covered Litigation

Visa Inc., Visa U.S.A. and Visa International are parties to certain legal proceedings that are subject to the retrospective responsibility plan, which the Company refers to as the covered litigation. See Note 2—Retrospective Responsibility Plan. An accrual for 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 American Express Litigation. Visa's settlement obligations were fully satisfied with the January 2012 payment to American Express.

The Interchange Litigation

Multidistrict Litigation Proceedings (MDL). The Company remains actively involved in settlement discussions under the auspices of the court and believes the parties are making progress. Many material uncertainties exist, however, including, among other things, uncertainties regarding the level of support for a settlement agreement, and numerous motions pending before the court. Accordingly, under generally accepted accounting principles, the Company believes some loss is reasonably possible, but not probable and reasonably estimable. On December 29, 2011, the Company deposited an additional $1.57 billion into its covered litigation escrow account, increasing the uncommitted balance of the account from $2.72 billion to $4.28 billion. The uncommitted balance of $4.28 billion is consistent with the Company's estimate of its share of the lower end of a reasonably possible loss in the event of a negotiated settlement for the entire matter. While this estimate is consistent with the Company's view of the current status of mediation discussions, the estimate of the reasonably possible loss or range of such loss could materially vary if a negotiated settlement cannot be reached that resolves all financial and business practice claims. The Company will continue to consider and reevaluate this estimate in light of the substantial uncertainties and mediation obstacles that persist. We are unable to estimate a potential loss or range of loss, if any, at trial if a negotiated resolution of the matter cannot be reached.

Other Litigation

“Indirect Purchaser” Actions. On January 9, 2012, the Court of Appeal of the State of California reversed the judgment approving the settlement agreement in the Credit/Debit Tying Cases. The case was remanded to the trial court for reconsideration of the fairness and adequacy of the settlement in light of the inclusion of the Attridge claims in the release.

Vale Canjeable. Visa filed extraordinary appeals of the two August 10 rulings with the Supreme Court.

Canadian Competition Proceedings

Competition Bureau. Document production and examinations for discovery are complete. The hearing before the Competition Tribunal on the merits of the case is scheduled to begin on April 23, 2012.

Call Center Litigation. On November 30, 2011, the court entered a final order approving the settlement and entering judgment in the case.

U.S. ATM Access Fee Litigation.

National ATM Council class action. On January 10, 2012, plaintiffs filed an amended class action complaint against the same defendants. Like the original complaint, the amended complaint alleges that the ATM access fee rule prevents non-bank ATM operators from attracting customers to use other networks in violation of Section 1 of the Sherman Act. The amended complaint also alleges that Visa's rule has enabled Visa to charge artificially high network fees for ATM transactions, to compensate ATM operators inadequately, and to compensate member banks excessively. Plaintiffs request injunctive relief, attorneys' fees, and treble damages.

Consumer class actions. On December 1, 2011, the plaintiff in the Stoumbos case filed a corrected complaint, asserting the same claims as in the original complaint.

On January 10, 2012, the Bartron and Genese complaints were combined into a single amended complaint, now captioned Mackmin. The amended complaint challenges the same ATM access fee rules and names Visa, MasterCard, and three financial institutions as defendants, but the putative class representatives are different from those in the original Bartron and Genese complaints. Mackmin purports to represent classes and sub-classes of consumers in claims brought under Section 1 of the Sherman Act and the antitrust and/or consumer protection statutes in certain states and the District of Columbia. The amended complaint seeks injunctive relief, attorneys' fees, treble damages, and restitution where available under state law.

Summary of Significant Accounting Policies (Policies)

Organization

Organization. Visa Inc. (“Visa” or the “Company”) is a global payments technology company that connects consumers, businesses, banks and governments around the world, enabling them to use digital currency instead of cash and checks. Visa and its wholly-owned consolidated subsidiaries, including Visa U.S.A. Inc. (“Visa U.S.A.”), Visa International Service Association (“Visa International”), Visa Worldwide Pte. Limited (“VWPL”), Visa Canada Corporation (“Visa Canada”), Inovant LLC (“Inovant”), and CyberSource Corporation (“CyberSource”), operate the world’s largest retail electronic payments network. The Company provides its clients with payment processing platforms that encompass consumer credit, debit, prepaid and commercial payments, and facilitates global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities. The Company does not issue cards, set fees, or determine the interest rates consumers will be charged on Visa-branded cards, which are the independent responsibility of the Company’s issuing clients.

Consolidation and basis of presentation

Consolidation and basis of presentation. The accompanying unaudited consolidated financial statements include the accounts of Visa Inc. 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 VIEs have not been material to its consolidated financial statements as of and for the periods presented. Non-controlling interests are reported as a component of equity. All significant intercompany accounts and transactions are eliminated in consolidation.

The accompanying unaudited consolidated financial statements are presented in accordance with the U.S. Securities and Exchange Commission (“SEC”) requirements for Quarterly Reports on Form 10-Q and, consequently, do not include all of the annual disclosures required by U.S. GAAP. Reference should be made to the Visa Inc. Annual Report on Form 10-K for the year ended September 30, 2011, for additional disclosures, including a summary of the Company’s significant accounting policies.

Retrospective Responsibility Plan (Tables)

Schedule of Restricted Cash and Cash Equivalents

The following table sets forth the changes in the escrow account during the three months ended December 31, 2011.



	(in millions)
Balance at October 1, 2011	$	2,857
Deposit into the litigation escrow account	1,565
American Express settlement payment	(70		)
Balance at December 31, 2011	$	4,352

Fair Value Measurements (Tables)

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

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



	Fair Value Measurements Using Inputs Considered as
	Level 1				Level 2				Level 3
	December 31, 2011		September 30, 2011		December 31, 2011		September 30, 2011		December 31, 2011		September 30, 2011
	(in millions)
Assets
Cash equivalents and restricted cash
Money market funds and time deposits	$	5,739	$	4,225
U.S. government-sponsored debt securities					$	—	$	175
Investment securities
U.S. government-sponsored debt securities					1,421		1,568
U.S. Treasury securities	205		350
Equity securities	65		57
Auction rate securities									$	7	$	7
Prepaid and other current assets
Foreign exchange derivative instruments					24		30
	$	6,009	$	4,632	$	1,445	$	1,773	$	7	$	7
Liabilities
Accrued liabilities
Visa Europe put option									$	145	$	145
Earn-out related to PlaySpan acquisition									24		24
Foreign exchange derivative instruments					$	6	$	7

Pension and Other Postretirement Benefits (Tables)

Schedule of Defined Benefit Plans Disclosures

The components of net periodic benefit cost are as follows:



	Pension Benefits						Other Postretirement Benefits
	Three Months Ended December 31,
	2011			2010			2011			2010
	(in millions)
Service cost	$	10		$	9		$	—		$	—
Interest cost	10			10			—			—
Expected return on assets	(14		)	(14		)	—			—
Amortization of:
Prior service credit	(2		)	(2		)	(1		)	(1		)
Actuarial loss	8			5			—			—
Total net periodic benefit cost	$	12		$	8		$	(1	)	$	(1	)

Settlement Guarantee Management (Tables)

Schedule of Customer Collateral

The Company maintained collateral as follows:



	December 31, 2011		September 30, 2011
	(in millions)
Cash equivalents	$	908	$	931
Pledged securities at market value	288		296
Letters of credit	932		902
Guarantees	1,851		1,845
Total	$	3,979	$	3,974

Stockholders' Equity (Tables)

Schedule of Stock by Class [Table Text Block]

The number of shares of each class and the number of shares of class A common stock on an as-converted basis at December 31, 2011, 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	524	—	524
Class B common stock	245	0.4254	104
Class C common stock	44	1.0000	44
Total			672


⁽¹⁾	Figures may not sum due to rounding. As-converted class A common stock count calculated based on whole numbers.

Share Repurchase Program Disclosure

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



(in millions, except per share data)	December 31, 2011
Shares repurchased in the open market ⁽¹⁾	0.8
Weighted-average repurchase price per share	$	89.81
Total cost	$	75


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

Schedule of Conversions of Stock [Table Text Block]

The following table presents as-converted class B common stock after the deposit of $1.57 billion into the litigation escrow account:



(in millions, except per share data)	December 29, 2011
Deposit under the retrospective responsibility plan	$	1,565
Effective price per share ⁽¹⁾	$	101.75
Equivalent shares of class A common stock effectively repurchased	15.4
Conversion rate of class B common stock to class A common stock after deposit	0.4254
As-converted class B common stock after deposit	104


⁽¹⁾	Effective price per share calculated using the volume-weighted average price of the Company's class A common stock over a pricing period in accordance with the Company's amended and restated certificate of incorporation.

Earnings Per Share (Tables)

Schedule of Earnings Per Share, Basic and Diluted

The following table presents basic and diluted earnings per share for the three months ended December 31, 2011.



	Basic Earnings Per Share						Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)			Weighted Average Shares Outstanding (B)	Earnings per Share = (A)/(B)⁽¹⁾		Income Allocation (A)			Weighted Average Shares Outstanding (B)		Earnings per Share = (A)/(B)⁽¹⁾
Common Stock:
Class A	$	778		520	$	1.50	$	1,029		690	⁽²⁾	$	1.49
Class B	179		⁽³⁾	245	0.73		178		⁽³⁾	245		0.73
Class C	69			46	1.50		68			46		1.49
Participating securities⁽⁴⁾	3			Not presented	Not presented		3			Not presented		Not presented
Net income attributable to Visa Inc.	$	1,029

The following table presents basic and diluted earnings per share for the three months ended December 31, 2010.



	Basic Earnings Per Share						Diluted Earnings Per Share
	(in millions, except per share data)
	Income Allocation (A)			Weighted Average Shares Outstanding (B)	Earnings per Share = (A)/(B)⁽¹⁾		Income Allocation (A)			Weighted Average Shares Outstanding (B)		Earnings per Share = (A)/(B)⁽¹⁾
Common Stock:
Class A	$	609		494	$	1.23	$	884		719	⁽²⁾	$	1.23
Class B	156		⁽³⁾	245	0.63		155		⁽³⁾	245		0.63
Class C	116			94	1.23		116			94		1.23
Participating securities⁽⁴⁾	3			Not presented	Not presented		3			Not presented		Not presented
Net income attributable to Visa Inc.	$	884


⁽¹⁾	Earnings per share calculated based on whole numbers, not rounded numbers.

⁽²⁾

The computation of weighted-average dilutive shares outstanding included the effect of 3 million and 2 million dilutive shares of outstanding stock awards for the three months ended December 31, 2011 and 2010, respectively. The computation excluded stock options to purchase 1 million and 2 million shares of common stock for the three months ended December 31, 2011 and 2010, respectively, because their effect would have been anti-dilutive.


⁽³⁾	Net income attributable to Visa Inc. is allocated to each class of common stock on an as-converted basis. The weighted-average number of shares of as-converted class B common stock used in the income allocation was 119 million and 126 million for the three months ended December 31, 2011 and 2010, respectively.


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

Share-based Compensation (Tables)

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

The Company granted the following awards to employees and non-employee directors under the 2007 Equity Incentive Compensation Plan during the three months ended December 31, 2011:



	Granted	Weighted-Average Grant Date Fair Value		Weighted-Average Exercise Price
Non-qualified stock options	431,024	$	29.53	$	92.64
Restricted stock awards (RSA)	839,283	92.64
Restricted stock units (RSU)	354,531	92.64
Performance-based shares⁽¹⁾	66,114	97.84


⁽¹⁾	The ultimate number of performance shares to be earned will be between zero and 132,227, depending on a combination of service, performance and market conditions.

Legal Matters (Tables)

Schedule of Loss Contingencies by Contingency

The following table summarizes the activity related to accrued litigation for the three months ended December 31:



	2011			2010
	(in millions)
Balance at October 1	$	425		$	697
Interest accretion on settled matters	1			4
Payments on settled matters	(70		)	(71		)
Balance at December 31	$	356		$	630

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies [Abstract]

Remaining interest in non-controlling interest purchased, percentage

30.00%

Payment to acquire non-controlling interest

$ 2

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

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2011

Dec. 31, 2010

Dec. 31, 2011

Deposit into Litigation Escrow

Dec. 29, 2011

Deposit into Litigation Escrow

Dec. 28, 2011

Deposit into Litigation Escrow

Escrow Account [Roll Forward]

Beginning balance

$ 2,857

$ 4,280

$ 2,720

Deposit into the litigation escrow account

1,565

American Express settlement payments

(70)

(71)

Ending balance

$ 4,352

$ 4,280

$ 2,720

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

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2011

Fair Value, Measurements, Recurring

Dec. 31, 2011

Level 3

Fair Value, Measurements, Recurring

Sep. 30, 2011

Level 3

Fair Value, Measurements, Recurring

Dec. 31, 2011

Non Marketable Equity Investments

Sep. 30, 2011

Non Marketable Equity Investments

Fair Value, Measurement Inputs, Disclosure [Line Items]

Put option, fair value

$ 145

Probability of exercise by Visa Europe

40.00%

P/E differential at the time of exercise

1.9x

Earn-out related to PlaySpan acquisition

24

Non-marketable equity investments

$ 98

$ 100

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

In Millions, unless otherwise specified

Dec. 31, 2011

Sep. 30, 2011

Accrued liabilities

Visa Europe put option

$ 145

Level 1

Prepaid and other current assets

Fair value, total assets

6,009

4,632

Level 1 |
US Treasury Securities [Member]

Investment securities

205

350

Level 1 |
Equity securities

Investment securities

65

57

Level 1 |
Money Market Funds [Member]

Cash equivalents and restricted cash

5,739

4,225

Level 2

Prepaid and other current assets

Fair value, total assets

1,445

1,773

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

Investment securities

1,421

1,568

Level 2 |
Foreign exchange derivative instruments

Prepaid and other current assets

Foreign exchange derivative instruments

24

30

Accrued liabilities

Foreign exchange derivative instruments

6

7

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

Cash equivalents and restricted cash

175

Level 3

Prepaid and other current assets

Fair value, total assets

7

Accrued liabilities

Earn-out related to PlaySpan acquisition

24

Level 3 |
Auction rate securities

Investment securities

7

Level 3 |
Visa Europe put option

Accrued liabilities

Visa Europe put option

$ 145

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

In Millions, unless otherwise specified

3 Months Ended

Dec. 31, 2011

Dec. 31, 2010

Pension Benefits

Defined Benefit Plan Disclosure [Line Items]

Service cost

$ 10

$ 9

Interest cost

10

Expected return on assets

(14)

Prior service credit

(2)

Actuarial loss

8

5

Total net periodic benefit cost

12

8