Visa 2011 Annual Report Download - page 109
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Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2011
(in millions, except as noted)
There were no transfers between Level 1 and Level 2 assets during fiscal 2011 or 2010. A separate roll-forward of Level 3 plan assets measured at fair
value is not presented because activities during fiscal 2011 and 2010 were immaterial.
Cash Flows
Pension
Benefits
Other
Postretirement
Benefits
Actual employer contributions (in millions)
2011 $ 70 $ 4
2010 62 4
Expected employer contributions
2012 $ 49 $ 5
Expected benefit payments
2012 $ 102 $ 5
2013 99 5
2014 98 5
2015 89 5
2016 90 4
2017-2021 373 17
Other Benefits
The Company sponsors a defined contribution plan that covers substantially all of its employees residing in the United States. Personnel costs included
$34 million, $29 million and $28 million in fiscal 2011, 2010 and 2009, respectively, for expenses attributable to the Company's employees under the plan.
The Company's contributions to this plan are funded on a current basis, and the related expenses are recognized in the period that the payroll expenses are
incurred.
Note 12—Settlement Guarantee Management
The Company indemnifies clients for settlement losses suffered due to failure of any other customer to honor Visa cards, travelers cheques, deposit
access products, point-of-sale check service drivers and other instruments processed in accordance with the 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
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 was approximately $47.5 billion at September 30, 2011, compared to $38.7 billion at September 30, 2010.
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