Visa 2013 Annual Report Download - page 60

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card and product acceptance and win merchant routing transactions over our network. These
agreements, which range in terms from one to thirteen years, can provide card issuance and/or
conversion support, volume/growth targets and marketing and program support based on specific
performance requirements. Payments under these agreements will generally be offset by revenues
earned from higher corresponding payments and transaction volumes. These payment amounts are
estimates and will change based on client performance, amendments to existing contracts or
execution of new contracts. Related amounts disclosed in Note 17—Commitments and
Contingencies to our consolidated financial statements represent the associated expected reduction
of revenue related to these agreements that we estimate we will record.
(4) Visa is a party to contractual sponsorship agreements ranging from approximately three to sixteen
years. These contracts are designed to help increase Visa-branded cards and volumes. Over the
life of these contracts, Visa is required to make payments in exchange for certain advertising and
promotional rights. In connection with these contractual commitments, Visa has an obligation to
spend certain minimum amounts for advertising and marketing promotion over the life of the
contract. For obligations where the individual years of spend are not specified in the contract, we
have estimated the timing of when these amounts will be spent.
(5) Includes expected dividend amount of $255 million as dividends were declared in October 2013 and
will be paid on December 3, 2013 to all holders of record of Visa’s common stock as of
November 15, 2013.
(6) We have liabilities for uncertain tax positions of $453 million. At September 30, 2013, we also
accrued $29 million of interest and $3 million of penalties associated with our uncertain tax
positions. We cannot determine the range of cash payments that will be made and the timing of the
cash settlements, if any, associated with our uncertain tax positions. Therefore, no amounts related
to these obligations have been included in the table.
(7) Visa granted a perpetual put option to Visa Europe, which if exercised, will require us to purchase all
of the outstanding shares of capital stock of Visa Europe from its members. Due to the perpetual
nature of the instrument and the various economic conditions, which could exist when the put is
exercised, the ultimate amount and timing of Visa’s obligation, if any, cannot be reliably estimated.
Therefore, no amounts related to this obligation have been included in the table. However, given the
range of different economic environments and circumstances under which Visa Europe could
exercise its option, the ultimate purchase price could be several billion dollars or more. The fair
value of the Visa Europe put option itself totaling $145 million at September 30, 2013 has also been
excluded from this table as it does not represent the amount, or an estimate of the amount, of Visa’s
obligation in the event of exercise. See the Liquidity and Capital Resources and Critical Accounting
Estimates sections of this Management’s Discussion and Analysis of Financial Condition and
Results of Operations and Note 2—Visa Europe to our consolidated financial statements.
(8) We evaluate the need to make contributions to our pension plan after considering the funded status
of the pension plan, movements in the discount rate, performance of the plan assets and related tax
consequences. Expected contributions to our pension plan have not been included in the table as
such amounts are dependent upon the considerations discussed above, and may result in a wide
range of amounts. See Note 10—Pension, Postretirement and Other Benefits to our consolidated
financial statements and the Liquidity and Capital Resources section of this Management’s
Discussion and Analysis of Financial Condition and Results of Operations.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America which require us to make judgments, assumptions
and estimates that affect the amounts reported. See Note 1—Summary of Significant Accounting
Policies to our consolidated financial statements. We have established policies and control procedures
which seek to ensure that estimates and assumptions are appropriately governed and applied
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