Visa 2009 Annual Report Download - page 43

Table of Contents
reorganization and IPO, and related insourcing of professional services. Reduced legal fees also contributed to the decline, reflecting the
settlement of outstanding litigation with Discover in fiscal 2008.
• Depreciation and amortization decreased during fiscal 2009 primarily reflecting the absence of depreciation and amortization for technology and
facility in our Colorado data center which were fully depreciated in fiscal 2008, partially offset by additional depreciation of $13 million in fiscal
2009 from our new east coast data center. We expect our new east coast data center and office building to generate additional depreciation
expense of approximately $12 million in fiscal 2010.
• Administrative and other remained flat in fiscal 2009, primarily due to unrealized foreign exchange losses recorded upon the remeasurement of
monetary assets and liabilities held by foreign subsidiaries into their functional currencies, offset by a decrease in overall spending reflecting our
overall cost reduction strategy. Administrative and other expenses in fiscal 2007 included 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 primarily reflected: (i) $1.1 billion recorded in fiscal 2008 in connection with the Discover settlement, (ii) additional accruals
of $285 million made in fiscal 2008 related to covered litigation, and (iii) $1.9 billion related to the settlement of outstanding litigation with
American Express in fiscal 2007. All of these matters are covered by the Retrospective Responsibility Plan. See Note 4—Retrospective
Responsibility Plan and Note 21—Legal Matters to our consolidated financial statements.
Other Income (Expense)
The following table sets forth the components of our other income (expense) 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)
Equity in earnings of unconsolidated affiliates $ — $ 1 $ 40 $ (1) $ (39) NM (97)%
Interest expense (115) (143) (81) 28 (62) (20)% 77%
Investment income, net 575 211 103 364 108 NM NM
Other 2 35 — (33) 35 (95)% NM
Total Other Income (Expense) $ 462 $ 104 $ 62 $ 358 $ 42 NM 67%
(1) Percentage change calculated based on whole numbers, not rounded numbers.
• Equity in earnings of unconsolidated affiliates in fiscal 2007 reflected the equity in earnings of Visa International which was acquired in the
reorganization.
• Interest expense decreased in 2009 reflecting lower interest accretion from declining litigation balances. The increase in 2008 is primarily due to
interest accretion related to the American Express settlement in the fourth quarter of fiscal 2007. See Note 21—Legal Matters to our consolidated
financial statements.
• Investment income, net increased in 2009 primarily due to a pre-tax gain of $473 million recognized on the sale of our investment in VisaNet do
Brasil, partially offset by lower interest income earned on both our investments in marketable securities and the portion of our IPO proceeds used
to redeem our class C (series II) and class C (series III) common shares in October 2008. Investment income, net in fiscal 2008 also reflected
realized losses and other-
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