Visa 2007 Annual Report Download - page 79

Table of Contents
Volume and Support Incentives
The decrease in volume and support incentives was primarily due to the impact of lower revised estimates of performance under these agreements
during management's regular quarterly review of customer performance and due to amendments to volume and support incentives during the period.
Performance adjustments reduced volume and support incentives cost by a total of $73 million in fiscal 2007 compared to $36 million in fiscal 2006. As the
rate of payments volume growth has softened compared to the prior year, estimates of performance under volume and support incentives have been adjusted
accordingly. We currently expect volume and support incentives to increase substantially during fiscal 2008 due to obligations assumed upon retirement of
certain issuer programs during 2007. See Note 13—Restricted Assets and Liabilities and Note 19—Commitments and Contingencies to the Visa U.S.A. fiscal
2007 consolidated financial statements. The actual amount of volume and support incentives will vary based on modifications to performance expectations for
these contracts, amendments to contracts, or new contracts entered into during 2008.
The net liability of volume and support incentives changed as follows:
2007
(in millions)
Beginning balance at October 1, 2006, net liability(1) $ (65)
Provision
Current year provision (588)
Performance adjustments(2) 73
Contractual amendments(3) 10
Subtotal volume and support incentives (505)
Payments 523
Ending balance at September 30, 2007, net liability(1) $ (47)
(1) Balance represents the net of the current and long term asset and current liability portions of volume and support incentives as presented on the face of the Visa U.S.A. fiscal 2007
consolidated financial statements.
(2) Amount represents adjustments resulting from management's refinement of its estimate of projected sales performance as new information becomes available.
(3) Amount represents adjustments resulting from amendments to existing contractual terms.
International Transaction Fees
The increase in international transaction fees was primarily driven by multi-currency payments volume, which increased by $10 billion, or 15%, during
fiscal 2007, compared to fiscal 2006. The increase in international transaction fees was broadly in line with the growth in multi-currency payments volume,
reflecting more cross-border transactions as overall global travel has increased.
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