Income Taxes (Tables)

12 Months Ended

Sep. 30, 2013

Schedule of U.S. and non-U.S. components of income before income tax expense/(benefit)

The Company’s income before taxes by fiscal year consisted of the following:



	2013		2012		2011
	(in millions)
U.S.	$	5,992	$	1,030	$	4,650
Non-U.S.	1,265		1,177		1,006
Total income before taxes and non-controlling interest	$	7,257	$	2,207	$	5,656

Comprehensive Income Tax (Expense) Benefit Components Table

Income tax provision by fiscal year consisted of the following:



	2013			2012			2011
	(in millions)
Current:
U.S. federal	$	568		$	1,376		$	1,365
State and local	(58		)	165			311
Non-U.S.	239			214			168
Total current taxes	749			1,755			1,844
Deferred:
U.S. federal	1,401			(1,276		)	160
State and local	114			(415		)	(2		)
Non-U.S.	13			1			8
Total deferred taxes	1,528			(1,690		)	166
Total income tax provision	$	2,277		$	65		$	2,010

Components of Deferred Tax Assets and Liabilities

The tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities at September 30, 2013 and 2012, are presented below:



	2013			2012
	(in millions)
Deferred Tax Assets:
Accrued compensation and benefits	$	154		$	103
Comprehensive (income) loss	(8		)	102
Investments in joint ventures	14			11
Accrued litigation obligation	1			1,654
Client incentives	226			227
Net operating loss carryforward	31			33
Tax credits	22			23
Federal benefit of state taxes	176			90
Federal benefit of foreign taxes	13			16
Other	108			92
Valuation allowance	(25		)	(13		)
Deferred tax assets	712			2,338
Deferred Tax Liabilities:
Property, equipment and technology, net	(310		)	(288		)
Intangible assets	(4,003		)	(4,027		)
Foreign taxes	(55		)	(44		)
Other	(12		)	(10		)
Deferred tax liabilities	(4,380		)	(4,369		)
Net deferred tax liabilities	$	(3,668	)	$	(2,031	)

Deferred Tax Assets and Liabilities

Total net deferred tax assets and liabilities are included in the Company’s consolidated balance sheets as follows:



	September 30, 2013			September 30, 2012
	(in millions)
Current deferred tax assets	$	481		$	2,027
Non-current deferred tax liabilities	(4,149		)	(4,058		)
Net deferred tax liabilities	$	(3,668	)	$	(2,031	)

Reconciliation of the US Statutory Federal Tax Rate

The income tax provision differs from the amount of income tax determined by applying the applicable U.S. federal statutory rate of 35% to pretax income, as a result of the following:



	For the Years Ended September 30,
	2013					2012					2011
	Dollars			Percent		Dollars			Percent		Dollars			Percent
	(in millions, except percentages)
U.S. federal income tax at statutory rate	$	2,540		35	%	$	772		35	%	$	1,980		35	%
State income taxes, net of federal benefit	42			1	%	36			2	%	203			4	%
Non-U.S. tax effect, net of federal benefit	(328		)	(5	)%	(257		)	(12	)%	(150		)	(2	)%
Reversal of tax reserves related to the deductibility of covered litigation expense	—			—	%	(299		)	(14	)%	—			—	%
Remeasurement of deferred taxes due to:
California state apportionment rule changes	—			—	%	(208		)	(9	)%	—			—	%
Other state apportionment changes	(6		)	—	%	11			1	%	(3		)	—	%
Revaluation of Visa Europe put option	—			—	%	—			—	%	(43		)	(1	)%
Other, net	29			—	%	10			—	%	23			—	%
Income tax provision	$	2,277		31	%	$	65		3	%	$	2,010		36	%

Unrecognized Tax Benefits Reconciliation, Table

A reconciliation of beginning and ending unrecognized tax benefits by fiscal year is as follows:



	2013			2012
	(in millions)
Beginning balance at October 1	$	679		$	850
Increases of unrecognized tax benefits related to prior years	335			186
Decreases of unrecognized tax benefits related to prior years	(133		)	(445		)
Increases of unrecognized tax benefits related to current year	144			89
Reductions related to lapsing statute of limitations	(2		)	(1		)
Ending balance at September 30	$	1,023		$	679