Visa 2011 Annual Report Download - page 123

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2011
(in millions, except as noted)
Total net deferred tax assets and liabilities are included in the Company's consolidated balance sheets as follows:
September 30,
2011
September 30,
2010
(in millions)
Current deferred tax assets $ 489 $ 623
Non current deferred tax liabilities (4,205) (4,181)
Net deferred tax liabilities $ (3,716) $ (3,558)
The decrease in the deferred tax asset for accrued litigation obligation is primarily due to covered litigation payments in fiscal 2011.
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 become deductible. Management believes it is more likely than not that the Company will realize the benefits of its
deferred tax assets recorded.
As of September 30, 2011, the Company had $56 million federal, $126 million state and $44 million foreign net operating loss carryforwards primarily
from subsidiaries acquired in recent years. The federal and state net operating loss carryforwards will expire in fiscal 2013 through 2030. The foreign net
operating loss may be carried forward indefinitely. Internal Revenue Code Section 382 imposes substantial restrictions on the utilization of net operating
losses and tax credits in the event of a corporation's ownership change, as defined in the Internal Revenue Code. Although the Company's ability to utilize the
U.S. net operating loss carryforwards was limited in fiscal 2011, the Company expects to fully utilize the net operating loss carryforwards in future years.
As of September 30, 2011, the Company also had federal and state research and development tax credit carryforwards of $8 million and $21 million,
respectively. The federal carryforwards will expire in fiscal 2017 through 2028. The state carryforwards may be carried forward indefinitely. The Company
also has federal alternative minimum tax credits of approximately $1 million, which do not expire. The Company expects to realize the benefit of the credit
carryforwards in future years.
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