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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
This management’s discussion and analysis provides a review of the results of operations,
financial condition and liquidity and capital resources of Visa Inc. and its subsidiaries (“Visa,” “we,”
“our” and the “Company”) on a historical basis and outlines the factors that have affected recent
earnings, as well as those factors that may affect future earnings. The following discussion and
analysis should be read in conjunction with the consolidated financial statements and related notes
included in Item 8 of this report.
Overview
Visa is a global payments technology company that connects consumers, businesses, financial
institutions and governments around the world to fast, secure and reliable electronic payments. We
provide our financial institution clients with a global payments infrastructure and support services for
the delivery of Visa-branded payment products, including credit, debit and prepaid. We facilitate global
commerce through the transfer of value and information among financial institutions, merchants,
consumers, businesses and government entities. Each of these constituencies has played a key role in
the ongoing worldwide migration from paper-based to electronic forms of payment, and we believe that
this transformation continues to yield significant growth opportunities, particularly outside the
United States. We continue to explore additional opportunities to enhance our competitive position by
expanding the scope of payment solutions we provide.
Overall economic conditions. Our business is affected by overall economic conditions and
consumer spending. Our business performance during fiscal 2013 reflects the impacts of a slow-
moving global economic recovery.
Interchange multidistrict litigation. On October 19, 2012, Visa, MasterCard, various U.S. financial
institution defendants and the class plaintiffs signed a settlement agreement to resolve the class
plaintiffs’ claims in the interchange multidistrict litigation. The court entered the preliminary approval
order of the settlement agreement on November 27, 2012. On December 10, 2012, Visa paid
approximately $4.0 billion from the litigation escrow account into a settlement fund established
pursuant to the definitive class settlement agreement. Certain merchants in the proposed settlement
classes, however, have objected to the settlement and a number of merchants have filed opt-out
claims. Until the settlement agreement is finally approved by the court and any appeals are finally
adjudicated, no assurance can be provided that Visa will be able to resolve the class plaintiff’s claims
as contemplated by the settlement agreement. We also signed a settlement agreement to resolve the
claims brought by a group of individual merchants which were consolidated with the interchange
multidistrict litigation for coordination of pre-trial proceedings. Pursuant to the settlement agreement,
we paid $350 million from the litigation escrow account to the individual merchants on October 29,
2012, and on November 6, 2012, the court entered an order dismissing the individual merchants’
claims with prejudice. See Note 3—Retrospective Responsibility Plan and Note 20—Legal Matters to
our consolidated financial statements.
Reduction in as-converted shares. During fiscal 2013, we repurchased 33 million shares of our
class A common stock using $5.4 billion of cash on hand. In July 2013, our board of directors
authorized a $1.5 billion share repurchase program to be in effect through July 2014. As of
September 30, 2013, the July program had remaining authorized funds of $251 million. All share
repurchase programs authorized prior to July 2013 have been completed. In October 2013, our board
of directors authorized an additional $5.0 billion share repurchase program.
Adjusted financial results. Our financial results for fiscal 2012 and 2011 reflect the impact of
several significant items that we believe are not indicative of our financial performance in the prior or
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