Visa 2009 Annual Report Download - page 42

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Table of Contents
Operating Expenses
The following table sets forth components of our total operating expenses for the periods presented.
Fiscal Year ended
September 30, $ Change % Change(1)
Visa Inc.
2009
Visa Inc.
2008
Visa
U.S.A.
2007
2009
vs.
2008
2008
vs.
2007
2009
vs.
2008
2008
vs.
2007
(in millions, except percentages)
Personnel $ 1,143 $ 1,199 $ 721 $ (56) $ 478 (5)% 66%
Network, EDP and communications 393 339 249 54 90 16% 36%
Advertising, marketing and promotion 918 1,016 581 (98) 435 (10)% 75%
Visa International fees — — 173 — (173) — NM
Professional and consulting fees 353 438 334 (85) 104 (19)% 31%
Depreciation and amortization 226 237 126 (11) 111 (5)% 89%
Administrative and other 338 332 202 6 130 2% 64%
Litigation provision 2 1,470 2,653 (1,468) (1,183) NM (45)%
Total Operating Expenses $ 3,373 $ 5,031 $ 5,039 $ (1,658) $ (8) (33)% — %
(1) Percentage change calculated based on whole numbers, not rounded numbers.
Operating expenses decreased during fiscal 2009, driven by the absence of the litigation provision in connection with our Discover settlement in fiscal
2008, coupled with lower costs in personnel, marketing and professional fees. Operating expenses remained flat in fiscal 2008 compared to fiscal 2007. Fiscal
2008 and 2007 comparisons below focus on factors other than the inclusion of acquired regions' operating expenses in fiscal 2008, which totaled $1.3 billion.
This increase was substantially offset by a decrease in litigation provision of $1.2 billion.
• Personnel decreased in fiscal 2009 primarily reflecting the absence of larger severance and other charges incurred in fiscal 2008 associated with
workforce consolidation and elimination of overlapping functions, combined with reduced employee incentive-related costs in fiscal 2009.
Personnel expenses increased in fiscal 2008 reflecting the severance charges previously discussed and stock-based compensation expenses
awarded to employees in connection with our IPO.
• Network, EDP and communications increased in fiscal 2009 primarily due to higher fees paid for debit processing services related to processing
transactions through non-Visa networks. In fiscal 2008, expenses increased primarily reflecting higher software maintenance and hardware rental
expensed following the outsourcing of certain development functions since fiscal 2007.
• Advertising, marketing and promotion decreased in fiscal 2009, despite the launch of our global "More people go with Visa" campaign in fiscal
2009 reflecting the effective implementation of our global strategy to reduce cost. In fiscal 2008, higher advertising, marketing and promotion
spending in connection with the 2008 Beijing Olympics and our Visa Extras reward program were offset by the absence of costs incurred in fiscal
2007 related to certain joint promotional campaigns which did not recur during fiscal 2008.
• 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 decreased in fiscal 2009 primarily due to the absence of consulting and legal fees incurred in the prior year in
connection with our global
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