Visa 2007 Annual Report Download - page 72

Table of Contents
The data set forth below should be read in conjunction with Item 7—"Management's Discussion and Analysis of Financial Condition and Results of
Operations of Visa U.S.A." and the Visa U.S.A. fiscal 2007 consolidated financial statements and the notes thereto included elsewhere in this report.
Visa U.S.A.
Fiscal Year Ended September 30,
2007 2006 2005 2004 2003(1)
(in millions)
Statement of Operations Data:
Total operating revenues $ 3,590 $ 2,948 $ 2,665 $ 2,429 $ 1,980
Operating expenses 5,039 2,218 2,212 1,999 3,398
Litigation provision 2,653 23 132 37 1,500
Operating income (loss) (1,449) 730 453 430 (1,418)
Operating income (loss) as a percent of operating revenues (40.4)% 24.8% 17.0% 17.7% (71.6)%
Other income (expense) $ 62 $ (8) $ 3 $ (75) $ (38)
Income (loss) before cumulative effect of change in accounting principle(2) (1,076) 455 265 216 (885)
Net income (loss)(2) (1,076) 455 360 210 (885)
Balance Sheet Data (at end of period):
Cash and cash equivalents $ 275 $ 270 $ 135 $ 174 $ 86
Short-term investment securities, available-for-sale 747 660 681 156 253
Total current assets 2,507 1,594 1,478 920 867
Long-term investment securities, available-for-sale 737 515 319 378 85
Total assets 4,390 2,964 2,745 2,294 1,905
Current portion of long-term debt(3) 41 32 32 32 174
Current portion of accrued litigation(4) 2,236 216 197 244 201
Total current liabilities 3,282 1,393 1,325 1,070 988
Long-term debt(3) — 41 74 106 —
Long-term accrued litigation(4) 1,446 784 1,010 1,019 1,127
Total equity (deficit) (501) 583 126 (230) (440)
Visa U.S.A.
Twelve Months Ended June 30,
2007 2006 2005 2004 2003
(in millions, except percentages)
Statistical Data (unaudited):(5)
Payments volume(6) $ 1,449,226 $ 1,322,837 $ 1,130,896 $ 956,439 $ 818,558
Year-over-year change 9.6% 17.0% 18.2% 16.8% 10.6%
Total transactions(7) 25,942 23,410 20,009 16,653 14,099
Year-over-year change 10.8% 17.0% 20.2% 18.1% 12.4%
(1) On January 1, 2003, Visa U.S.A. purchased Inovant, Inc. and subsequently formed Inovant, which affect the comparability of the financial data of Visa U.S.A. The operating results of
Inovant were included in the consolidated statements of operations of Visa U.S.A. from January 1, 2003.
(2) Visa U.S.A. recorded a cumulative effect of accounting change in fiscal 2005 related to its membership interest in Visa International and in fiscal 2004 related to Visa U.S.A. changing its
method of amortizing volume and support agreements. These accounting changes resulted in additional net income of $96 million in fiscal 2005 and an additional net expense of $6
million in fiscal 2004. See Note 3 — "Cumulative Effect of Change in Adoption of Accounting Principle," to the Visa U.S.A. fiscal 2007 consolidated financial statements.
(3) The long term portion of Visa U.S.A. debt was classified as being due within one year at September 30, 2007 and 2003, because Visa U.S.A. was in default of certain financial
performance covenants as a result of the settlement of the American Express and Retailers' litigation in fiscal 2007 and 2003, respectively, as described in Note 20 – Legal Matters to the
Visa U.S.A. fiscal 2007 consolidated financial statements included elsewhere in this report.
(4) In fiscal 2007, Visa U.S.A. settled the American Express litigation matter for approximately $2.1 billion and in fiscal 2003 Visa U.S.A. settled the Retailers' litigation for approximately
$2.0 billion, as described in Note 20 – Legal Matters to the Visa U.S.A. fiscal 2007 consolidated financial statements included elsewhere in this report. The present value of these
obligations of $1.9 billion and $1.4 billion, respectively, was recorded in fiscal 2007 and 2003, respectively.
(5) The statistical data in this table are based on quarterly operating certificates from Visa's customers and are unaudited. Year-over-year change for fiscal 2003 represents change compared
to fiscal 2002.
(6) Payments volume is the total monetary value of transactions for goods and services that are purchased with cards bearing our brands.
(7) Total transactions represents transactions involving our cards as reported by our customers and includes transactions that are not processed on our VisaNet processing system.
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