Visa 2008 Annual Report Download - page 71

Table of Contents
Due to the deterioration in market conditions and the resulting impact on the fair value of our pension plan assets upon remeasurement at September 30,
2008, we expect that our pension plan expense will increase in fiscal 2009. Also, we continue to evaluate various alternatives for achieving synergies in the
global organization and expect to incur additional severance charges, which may be significant, in fiscal 2009.
Network, EDP and communications
The increase in network, EDP and communications expense during fiscal 2008 primarily reflects $71 million attributed to the acquired regions. The
remainder of the increase reflects higher software maintenance and hardware rental expense following the outsourcing of certain development functions
during fiscal 2007. Maintenance and equipment rental costs may continue to increase over time as we continue to evaluate outsourcing alternatives for certain
support functions.
Advertising, marketing and promotion
The increase in advertising, marketing and promotion during fiscal 2008 primarily reflects $486 million in advertising, marketing and promotion
expense attributed to the acquired regions and higher advertising and promotion spending in connection with the 2008 Beijing Summer Olympics coupled
with increased promotional activity related to our Visa Extras reward program. These increases were offset by the absence of $67 million of costs incurred
during fiscal 2007 to support certain joint promotional campaigns with financial institution customers which did not recur during fiscal 2008.
Visa International fees
Visa International fees ceased as a result of the reorganization, as Visa U.S.A. and Visa International both became direct subsidiaries of Visa Inc.
Professional and consulting fees
The increase in professional and consulting fees primarily reflects increases of $72 million attributed to the acquired regions during fiscal 2008.
Depreciation and amortization
The increase in depreciation and amortization primarily reflects increases of $118 million attributed to the acquired regions during fiscal 2008. Software
amortization expense would be expected to increase over time as we are committed to maintaining and enhancing our networks as well as to developing new
payment products.
Administrative and other
The increase in administrative and other expense during fiscal 2008, primarily reflects increases of $177 million, attributed to the acquired regions,
offset by the absence of $63 million in facilities expense paid to the real estate joint ventures owned by Visa U.S.A. and Visa International, which were
consolidated as part of Visa Inc. following the reorganization.
Litigation provision
The decrease in litigation provision primarily reflects (i) the absence of a $1.9 billion provision related to the settlement of outstanding litigation with
American Express made in the fourth quarter of fiscal 2007, offset by (ii) an increase during the fourth fiscal quarter of fiscal 2008 of $1.1 billion to our
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