Visa 2013 Annual Report Download - page 27

the covered litigation may require us to modify the way we do business. See —Limitations on our
business resulting from litigation may materially and adversely affect our revenues and profitability.
Therefore, even if our retrospective responsibility plan provides us with adequate funding to satisfy our
obligations with respect to monetary liabilities from settlements of, and judgments in, the covered
litigation, it will not insulate us from the monetary impact of pending or future litigation.
If we are found liable in other pending or future lawsuits, we may have to pay substantial
damages.
Like many other large companies, we are a defendant in a number of civil actions and
investigations alleging violations of competition/antitrust law, consumer protection law or intellectual
property law, among others. Examples of such claims are described more fully in Note 20—Legal
Matters to our consolidated financial statements included in Item 8 of this report. Some lawsuits involve
complex claims that are subject to substantial uncertainties and unspecified damages; therefore, we
cannot ascertain the probability of loss or estimate our liability. Accordingly, we have not established
allowances for such legal proceedings.
Particularly in cases involving merchants and consumers, private plaintiffs often seek class action
certification in cases against us due to the size and scope of our business. If we are found liable in a
large class action lawsuit, such as the U.S. or Canadian merchant class action lawsuits, monetary
damages could be significant. See Note 20—Legal Matters to our consolidated financial statements
included in Item 8 of this report.
If we are unsuccessful in our defense against any material pending or future legal proceedings, we
may have to pay substantial damages. This could result in a material and adverse effect on our results
of operations, cash flow and financial condition and could even cause us to become insolvent.
Limitations on our business resulting from litigation may materially and adversely affect our
revenues and profitability.
Certain limitations have been placed on our business in recent years because of litigation. We
may also have to change our business practices in response to pending or future litigation. For
example, under the settlement agreement in the interchange multidistrict litigation, we have agreed,
among other things, to permit merchants to add surcharges to credit transactions in certain
circumstances.
These and other settlements of, or judgments in, past, pending and future litigation could force us
to limit the rates we charge, revise our rules about rates charged to consumers who use Visa-branded
payment products, or make other modifications to our business. These modifications could materially
and adversely affect our payments volume, revenues, operating results, prospects for future growth
and overall business.
Tax examinations or disputes, or changes in the tax laws applicable to us, could materially
increase our tax payments.
We exercise significant judgment in calculating our worldwide provision for income taxes and other
tax liabilities. Although we believe our tax estimates are reasonable, many factors may decrease their
accuracy. We are currently under examination by the U.S. Internal Revenue Service and other tax
authorities, and we may be subject to additional examinations in the future. Relevant tax authorities
may disagree with our tax treatment of certain material items and thereby increase our tax liability.
Failure to sustain our position in these matters could result in a material, adverse effect on our cash
flow and financial position. In addition, changes in existing laws, such as recent proposals for
fundamental U.S. and international tax reform, may also increase our effective tax rate. A substantial
increase in our tax burden could have a material, adverse effect on our financial results. See also
Note 19—Income Taxes to our consolidated financial statements included in Item 8 of this report.
19