Visa 2008 Annual Report Download - page 67

Table of Contents
unrecognized tax benefits decreased by $46 million, of which $30 million were disallowed and will not be recognized and $16 million were received in cash
as a tax refund.
Visa Inc. Fiscal 2008 compared to Visa U.S.A. Fiscal 2007 and Fiscal 2006
The following discussion of results of operations compares Visa Inc. consolidated results for fiscal 2008, to Visa U.S.A. results for fiscal 2007 and
fiscal 2006. Visa U.S.A. was deemed the accounting acquirer in the reorganization that took place on October 1, 2007, and therefore Visa U.S.A. results are
considered the historical predecessor for those of Visa Inc.
Operating Revenues
The following table sets forth the components of our total operating revenues for the periods presented.
Fiscal Year ended
September 30, $ Change % Change
Visa Inc.
2008
Visa
U.S.A.
2007
Visa
U.S.A.
2006
2008
vs.
2007
2007
vs.
2006
2008
vs.
2007
2007
vs.
2006
(in millions, except percentages)
Service fees $ 3,061 $ 1,945 $ 1,610 $ 1,116 $ 335 57% 21%
Data processing fees 2,073 1,416 1,248 657 168 46% 13%
International transaction fees 1,721 454 398 1,267 56 279% 14%
Other revenues 569 280 280 289 — 103% —
Volume and support incentives (1,161) (505) (588) (656) 83 130% (14)%
Total Operating Revenues $ 6,263 $ 3,590 $ 2,948 $ 2,673 $ 642 74% 22%
Fiscal 2008 compared to Fiscal 2007
The increase in operating revenues during fiscal 2008 compared to fiscal 2007 primarily reflects the inclusion of $2.4 billion of operating revenues from
other regions upon the reorganization on October 1, 2007, offset by the absence of data processing and other revenues previously earned from Visa
International and Visa Canada.
Service fees
The increase in service fees during fiscal 2008, is primarily driven by the inclusion of service fees from acquired regions upon the reorganization on
October 1, 2007, which represents an increase of $877 million, or 45%. The remainder of the increase primarily reflects U.S. payments volume growth of
11%. As noted above, our rate of future revenue growth may be impacted by ongoing consolidation in the financial sector. We also expect that current
turbulence in the financial and credit markets will moderate discretionary spending, and the rate of payments volume growth, in the near term.
Data processing fees
The increase in data processing fees during fiscal 2008 is primarily due to the inclusion of data processing fees from acquired regions upon the
reorganization on October 1, 2007, which represents an increase of $463 million, or 33%. The increase also reflects growth in transaction volumes in the
United States, which increased by 12%. Competitive pricing increases primarily related to the Interlink Network also increased data processing fees by 4%.
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