Commitments and Contingencies

12 Months Ended

Sep. 30, 2011

Commitments and Contingencies

Note 18—Commitments and Contingencies

Commitments. The Company leases certain premises and equipment throughout the world with varying expiration dates. The Company incurred total rent expense of $76 million in fiscal 2011, $59 million in fiscal 2010, and $77 million in fiscal 2009. Future minimum payments on leases and marketing and sponsorship agreements per fiscal year, at September 30, 2011 are as follows:

(in millions)	2012		2013		2014		2015		2016		Thereafter		Total
Operating leases	$	65	$	56	$	23	$	19	$	10	$	34	$	207
Capital leases		6		6		—		—		—		—		12
Marketing and sponsorships		119		108		106		71		23		86		513
Total	$	190	$	170	$	129	$	90	$	33	$	120	$	732

Select sponsorship agreements require the Company to spend a certain amount for advertising and marketing promotion over the term of the contract without specifying the exact year of spend. For these obligations, the Company has estimated the timing of when these amounts will be spent. In addition to the fixed payments stated above, select sponsorship agreements require the Company to undertake marketing, promotional or other activities up to stated monetary values to support events which the Company is sponsoring. The stated monetary value of these activities typically represents the value in the marketplace, which may be significantly in excess of the actual costs incurred by the Company.

Client Incentives. The Company has agreements with select clients for various programs designed to build payments volume, increase the acceptance of its products and win merchant preference for transaction routing. These agreements, with original terms ranging 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. These agreements are designed to encourage client business and to increase overall Visa-branded payment and transaction volume, thereby reducing unit transaction processing costs and increasing brand awareness for all Visa clients.

Payments made that qualify for capitalization and obligations incurred under these programs are included on the balance sheet. Obligations under these customer agreements are primarily amortized as a reduction to revenue in the same period as the related revenues are earned, based on management’s estimate of the customer’s performance in accordance with the terms of the incentive agreement. The agreements may or may not limit the amount of customer incentive payments.

The table below sets forth the expected future reduction of revenue for client incentive agreements in effect at September 30, 2011:

(in millions)	2012		2013		2014		2015		2016		Thereafter		Total
Client incentives	$	1,634	$	1,519	$	1,170	$	833	$	558	$	472	$	6,186

The actual amounts that are recorded will be greater or less than the estimates above due to customer performance, execution of new contracts, or amendments to existing contracts. Based on these agreements, increases in incentive payments are generally driven by increased payment and transaction volume, and as a result, in the event incentive payments exceed this estimate, such payments are not expected to have a material effect on the Company’s financial condition, results of operations or cash flows.

Other Contingencies. In the ordinary course of business, the Company enters into contractual arrangements with financial institution and other clients pursuant to which the Company may agree to indemnify the client for certain types of losses incurred relating to the services Visa provides or otherwise relating to the Company’s performance under the applicable agreement.