Visa 2013 Annual Report Download - page 58

Visa Europe, was 1.1x. These ratios are for reference purposes only and are not necessarily indicative of
the ratio or differential that could be applicable if the put option were exercised at any point in the future.
Visa Inc’s Forward
Price-to-Earnings Ratio
Payout Assuming
Adjusted Sustainable
Income of $100 million(1)
Increase/
Decrease in Payout
for Each $25 million of
Adjusted Sustainable
Income Above/
Below $100 million
(in millions) (in millions)
25 $2,500 $625
20 $2,000 $500
15 $1,500 $375
(1) Given the large range of different economic environments and circumstances under which Visa
Europe could decide to exercise its option, the ultimate purchase price could be several billion
dollars or more.
Pension and other postretirement benefits. We sponsor various qualified and non-qualified defined
benefit pension plans that generally provide benefits based on years of service, age and eligible
compensation. We also sponsor a postretirement benefit plan that provides postretirement medical
benefits for retirees and dependents upon meeting minimum age and service requirements. Our policy
with respect to our qualified pension plan is to contribute annually not less than the minimum required
under the Employee Retirement Income Security Act. Our non-qualified pension and other
postretirement benefit plans are funded on a current basis. We typically fund our qualified pension plan
in September of each year. In fiscal 2013, 2012 and 2011, we made contributions to our pension and
other postretirement plans of $4 million, $88 million, and $74 million, respectively. The lower
contribution in fiscal 2013 was driven by a higher-than-expected rate of return on our plan assets
during the year and an increase in the discount rate at September 30, 2013 compared to
September 30, 2012. In fiscal 2014, given current projections and assumptions, we anticipate funding
our defined benefit pension plans and other postretirement plan by approximately $12 million. The
actual contribution amount will vary depending upon the funded status of the pension plan, movements
in the discount rate, performance of the plan assets, and related tax consequences. See Note 10—
Pension, Postretirement and Other Benefits to our consolidated financial statements.
Capital expenditures. Our capital expenditures increased during fiscal 2013 due to investments in
technology, infrastructure and growth initiatives. We expect to continue investing in technology assets
and payments system infrastructure to support our core business as well as our eCommerce and
mobile initiatives.
Acquisitions. There were no material acquisitions during fiscal 2013 and 2012, compared to fiscal
2011, when we acquired PlaySpan and Fundamo for a total of $268 million, net of $22 million in cash
received. We will continue to pursue our growth initiatives and to expand our product offerings through
acquisitions and strategic partnerships in the future.
Fair Value Measurements—Financial Instruments
The assessment of fair value of our financial instruments is based on a fair value hierarchy that
requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. Observable inputs are obtained from independent sources and can
be validated by a third party, whereas unobservable inputs reflect assumptions regarding what a third
party would use in pricing an asset or liability. As of September 30, 2013, our financial instruments
measured at fair value on a recurring basis included approximately $6.0 billion of assets and
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