Visa 2009 Annual Report Download - page 111

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Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2009
(in millions, except as noted)
from one to thirteen years, provide card issuance, and/or conversion, volume targets and marketing and program support based on specific performance
requirements. These agreements are designed to encourage customer business and to increase overall Visa-branded payment volume, thereby reducing unit
transaction processing costs and increasing brand awareness for all Visa customers.
Payments made, that qualify for capitalization, and obligations incurred under these programs are included on the balance sheet. Obligations under
these customer agreements are 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 volume and support incentive agreements in effect at September 30, 2009:
(in millions) 2010 2011 2012 2013 2014 Thereafter Total
Volume and Support Incentives $ 1,283 $ 1,168 $ 1,019 $ 842 $ 472 $ 523 $ 5,307
The ultimate 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.
Note 19—Related Parties
Since becoming a publicly held company in fiscal 2008, Visa considers an entity to be a related party for purposes of this Note 19 if an entity owns
more than 10% of Visa's total voting common stock at the end of the fiscal year or if an officer or employee of an entity also serves on the board of directors.
The Company considers an investee to be a related party if the Company's: (i) ownership interest in the investee is greater than or equal to 10%; or (ii) if the
investment is accounted for under the equity method of accounting. There were no material operating expenses incurred, or amounts due to or from related
parties during and at the end of fiscal 2009 and 2008.
Ownership. At September 30, 2009 and 2008, no entity owned more than 10% of the Company's total voting common stock.
Board representation. The Company generated total operating revenues of approximately $786 million and $538 million from financial institution
customers represented on its board of directors during fiscal 2009 and 2008, respectively. In addition, the Company maintains banking relationships and has
credit facilities with financial institution customers that have representation on the board of directors. See Note 10—Debt.
110