Visa 2014 Annual Report Download - page 61

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Operating Expenses
The following table sets forth the components of our total operating expenses.
Fiscal Year ended
September 30, $ Change % Change(1)
2014 2013 2012
2014
vs.
2013
2013
vs.
2012
2014
vs.
2013
2013
vs.
2012
(in millions, except percentages)
Personnel ................. $1,875 $1,932 $ 1,726 $ (57) $ 206 (3)% 12 %
Marketing ................. 900 876 873 24 3 3 % — %
Network and processing ..... 507 468 414 39 54 8 % 13 %
Professional fees ........... 328 412 385 (84) 27 (20)% 7 %
Depreciation and
amortization ............... 435 397 333 38 64 10 % 19 %
General and administrative . . . 507 451 451 56 — 12 % — %
Litigation provision .......... 453 3 4,100 450 (4,097) NM NM
Total operating
expenses(2) ............... $5,005 $4,539 $ 8,282 $ 466 $ (3,743) 10 % (45)%
(1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated
based on unrounded numbers.
(2)
Excluding the litigation provisions of $450 million recorded in fiscal 2014 and $4.1 billion recorded in fiscal
2012 associated with litigation covered by the retrospective responsibility plan, operating expenses for
fiscal 2014 and 2012 were $4.6 billion and $4.2 billion, respectively. On an adjusted basis, the percentage
change of fiscal 2014 over fiscal 2013 is flat and fiscal 2013 over fiscal 2012 is an increase of 8%.
•Personnel decreased in fiscal 2014 mainly due to lower incentive compensation and
severance charges, reductions in our net periodic pension cost and the absence of one-time
share-based compensation expenses previously recognized in fiscal 2013. These decreases
were partially offset by a continued increase in headcount throughout the organization
reflecting our strategy to invest for future growth. The increase in fiscal 2013 is primarily due
to increases in headcount and higher severance charges as a result of organizational
restructuring that aligns with our strategic priorities.
•Marketing increased in fiscal 2014 mainly due to elevated spend supporting the 2014 Sochi
Winter Olympics and the 2014 FIFA World Cup campaigns, combined with increased spend in
the second half of the year to support our growth strategies and new product initiatives, such
as Visa Checkout. Marketing in fiscal 2013 remained relatively flat compared to fiscal 2012
reflecting strategies to promote our products in each of those years and spend on specific
campaigns, such as the 2013 FIFA Confederation Cup and preparation for the 2014 Sochi
Winter Olympics in fiscal 2013 and the 2012 London Summer Olympics in fiscal 2012.
•Network and processing in fiscal 2014 and 2013 increased mainly due to continued
technology and processing network investments to support growth.
•Professional fees decreased in fiscal 2014 mainly due to the absence of certain project costs
incurred in fiscal 2013 as part of our effort to align resources with our strategic priorities.
•Depreciation and amortization increased in fiscal 2014 and 2013, primarily due to additional
depreciation from our ongoing investments in technology assets and infrastructure to support
our digital solutions and core business initiatives.
47