Visa 2013 Annual Report Download - page 120
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VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2013
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 2013 and 2012 valuation
allowances relate primarily to foreign net operating losses from subsidiaries acquired in recent years.
As of September 30, 2013, the Company had $56 million state and $115 million foreign net
operating loss carryforwards. The state net operating loss carryforwards will expire in fiscal 2025
through 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, 2013, 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 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.
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,
2013 2012 2011
Dollars Percent Dollars Percent Dollars Percent
(in millions, except percentages)
U.S. federal income tax at statutory
rate ........................... $ 2,540 35 % $ 772 35 % $ 1,980 35 %
State income taxes, net of federal
benefit ......................... 42 1 % 36 2 % 203 4 %
Non-U.S. tax effect, net of federal
benefit ......................... (328) (5)% (257) (12)% (150) (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 state apportionment
changes ....................... (6) — % 11 1 % (3) — %
Revaluation of Visa Europe put
option ......................... ——% — — % (43) (1)%
Other, net ...................... 29 — % 10 — % 23 — %
Income tax provision ............. $ 2,277 31 % $ 65 3 % $ 2,010 36 %
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