SEC Comment Letter for VISA INC. (V) (CIK 0001403161) (V) — Feb 6, 2009
VISA INC. (V) (CIK 0001403161)
Date: Feb. 6, 2009 · CIK: 0001403161 · Accession: 0000000000-09-006543
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-33977
Referenced dates: January 16, 2009, January 9, 2009
Letter
Mail Stop 4561 February 6, 2009 Joseph W. Saunders Chief Executive Officer Visa Inc. P.O. Box 8999 San Francisco, CA 94128 Re: Visa Inc. Form 10-K for the Fiscal Year Ended September 30, 2008 File No. 001-33977
Dear Mr. Saunders: We have reviewed your response letter dated January 16, 2009 in connection with the above-referenced filings and have the fo llowing comments. If indicated, we think you should revise your document in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Please be as deta iled as necessary in your expl anation. In some of our comments, we may ask you to provide us w ith supplemental information so we may better understand your disclosure. After re viewing this information, we may raise additional comments. Unless otherwise noted, where prior comments are referred to they refer to our letter dated January 9, 2009.
Form 10-K for the Fiscal Year Ended September 30, 2008
Item 7. Management’s Discussion and Analysis of Historical and Pro Forma Financial Conditions and Results of Operations, page 51 Contractual Obligations, page 85
1. We note in your response to prior co mment number 1 that the EU Put “does not…represent a contractual purchase oblig ation.” It would appear, however, that the EU Put does represent a contractual oblig ation that is classified as a long-term liability within your balan ce sheet under GAAP. If management believes that the amount and period of payment cannot be reliably estimated and the liability should be excluded from the table or incl uded in an “other” column, tell us what consideration you gave to disclosing this fact in a footnote to the table including the amounts excluded and the basis for exclusion. We refer you to Section III.D. of SEC Release Number 34-47264. We anal ogize to the issues addressed in
Joseph W. Saunders Visa Inc. February 6, 2009 Page 2 Attachment E to the minutes of th e April 17, 2007 AICPA SEC Regulations Committee joint meeting with SEC Staff. Critical Accounting Estimates, page 86
Fair Value – Visa Europe Put Option, page 87
2. We believe that disclosure about the c ontractual terms, fair value model and assumptions, and the “impact if actual re sults differ from assumptions” could be enhanced in order to help investors un derstand the timing and amount of potential future payout scenarios. In this re gard, please provide us with proposed disclosure that incorporates:
• A more complete descripti on of the option’s triggeri ng events, fair value and exercise price formula, such as the desc ription included in yo ur Form S-1 (see pages 216-218) as well as in your most recent response;
• A discussion of how you estimate th e 12-month forward price-to-earnings multiple applicable to your common stock and that applicable to Visa Europe, including the volatility or sensitivity of this assumption;
• A discussion of the qualitative factors that would cause holders of the Visa Europe shares to exercise the put op tion, cause a faster exercise or higher exercise price;
• Quantification of Visa Europe and Visa ’s 12-month forward price-to-earnings multiple at the reporting date as well as the growth assumptions included in your estimates of Visa Eur ope’s sustainable income;
• Quantification of the amount of the PE di fferential at the reporting date and a discussion of the qualitative factors effecting it; and
• A tabular presentation of the estimated time frame for exercise by Visa Europe implied by the company’s model. For example, of the scenarios that assumed that the put option would be exercised, what percentage assumed exercise within one year, one to three y ears, three to five years, five to ten years, and beyond. In addition, for these periods, provide the average payouts and average P/E differential.
* * * * * * *
Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please submit all correspondence and supplemental materials on EDGAR as required by Rule 101 of Regulation S-T. If you amend your
Joseph W. Saunders Visa Inc. February 6, 2009 Page 3 filing(s), you may wish to provide us with ma rked copies of any amendment to expedite our review. Please furnish a cover letter that keys your response to our comments and provides any requested information. Detailed co ver letters greatly faci litate our review. Please understand that we may have addi tional comments after reviewing any amendment and your response to our comments. You may contact Jason Nietha mer, Staff Accountant, at (202) 551-3855 or me at (202) 551-3730 if you have any questions re garding the above comments. S i n c e r e l y , /s/ Stephen Krikorian Stephen Krikorian Accounting Branch Chief
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Mail Stop 4561 February 6, 2009 Joseph W. Saunders Chief Executive Officer Visa Inc. P.O. Box 8999 San Francisco, CA 94128
Re: Visa Inc.
Form 10-K for the Fiscal Year Ended September 30, 2008 File No. 001-33977
Dear Mr. Saunders:
We have reviewed your response letter dated January 16, 2009 in connection with
the above-referenced filings and have the fo llowing comments. If indicated, we think
you should revise your document in response to these comments. If you disagree, we
will consider your explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as deta iled as necessary in your expl anation. In some of our
comments, we may ask you to provide us w ith supplemental information so we may
better understand your disclosure. After re viewing this information, we may raise
additional comments. Unless otherwise noted, where prior comments are referred to they
refer to our letter dated January 9, 2009.
Form 10-K for the Fiscal Year Ended September 30, 2008
Item 7. Management’s Discussion and Analysis of Historical and Pro Forma Financial
Conditions and Results of Operations, page 51
Contractual Obligations, page 85
1. We note in your response to prior co mment number 1 that the EU Put “does
not…represent a contractual purchase oblig ation.” It would appear, however, that
the EU Put does represent a contractual oblig ation that is classified as a long-term
liability within your balan ce sheet under GAAP. If management believes that the
amount and period of payment cannot be reliably estimated and the liability
should be excluded from the table or incl uded in an “other” column, tell us what
consideration you gave to disclosing this fact in a footnote to the table including
the amounts excluded and the basis for exclusion. We refer you to Section III.D. of SEC Release Number 34-47264. We anal ogize to the issues addressed in
Joseph W. Saunders
Visa Inc. February 6, 2009 Page 2
Attachment E to the minutes of th e April 17, 2007 AICPA SEC Regulations
Committee joint meeting with SEC Staff.
Critical Accounting Estimates, page 86
Fair Value – Visa Europe Put Option, page 87
2. We believe that disclosure about the c ontractual terms, fair value model and
assumptions, and the “impact if actual re sults differ from assumptions” could be
enhanced in order to help investors un derstand the timing and amount of potential
future payout scenarios. In this re gard, please provide us with proposed
disclosure that incorporates:
• A more complete descripti on of the option’s triggeri ng events, fair value and
exercise price formula, such as the desc ription included in yo ur Form S-1 (see
pages 216-218) as well as in your most recent response;
• A discussion of how you estimate th e 12-month forward price-to-earnings
multiple applicable to your common stock and that applicable to Visa Europe,
including the volatility or sensitivity of this assumption;
• A discussion of the qualitative factors that would cause holders of the Visa
Europe shares to exercise the put op tion, cause a faster exercise or higher
exercise price;
• Quantification of Visa Europe and Visa ’s 12-month forward price-to-earnings
multiple at the reporting date as well as the growth assumptions included in
your estimates of Visa Eur ope’s sustainable income;
• Quantification of the amount of the PE di fferential at the reporting date and a
discussion of the qualitative factors effecting it; and
• A tabular presentation of the estimated time frame for exercise by Visa
Europe implied by the company’s model. For example, of the scenarios that
assumed that the put option would be exercised, what percentage assumed
exercise within one year, one to three y ears, three to five years, five to ten
years, and beyond. In addition, for these periods, provide the average payouts
and average P/E differential.
* * * * * * *
Please respond to these comments within 10 business days or tell us when you
will provide us with a response. Please submit all correspondence and supplemental
materials on EDGAR as required by Rule 101 of Regulation S-T. If you amend your
Joseph W. Saunders
Visa Inc. February 6, 2009 Page 3 filing(s), you may wish to provide us with ma rked copies of any amendment to expedite
our review. Please furnish a cover letter that keys your response to our comments and
provides any requested information. Detailed co ver letters greatly faci litate our review.
Please understand that we may have addi tional comments after reviewing any
amendment and your response to our comments.
You may contact Jason Nietha mer, Staff Accountant, at (202) 551-3855 or me at
(202) 551-3730 if you have any questions re garding the above comments.
S i n c e r e l y , /s/ Stephen Krikorian Stephen Krikorian
Accounting Branch Chief