Visa 2010 Annual Report Download - page 49

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)
2010 2009 2008
2010
vs.
2009
2009
vs.
2008
2010
vs.
2009
2009
vs.
2008
(in millions, except percentages)
Personnel $ 1,222 $ 1,228 $ 1,314 $ (6) $ (86) (1)% (7)%
Network, EDP and communications 425 393 339 32 54 8% 16%
Advertising, marketing and promotion 964 918 1,016 46 (98) 5% (10)%
Professional and consulting fees 286 268 323 18 (55) 7% (17)%
Depreciation and amortization 265 226 237 39 (11) 17% (5)%
Administrative and other 359 338 332 21 6 7% 2%
Litigation provision (45) 2 1,470 (47) (1,468) NM NM
Total Operating Expenses $ 3,476 $ 3,373 $ 5,031 $ 103 $ (1,658) 3% (33)%
(1) Percentage change calculated based on whole numbers, not rounded numbers.
• Personnel decreased in fiscal 2010, reflecting lower severance charges and reductions in our net periodic pension cost due to the remeasurement
and annual census update of our U.S. pension plan. See Note 12 – Pension, Postretirement and Other Benefits to our consolidated financial
statements. The decrease was offset by additional salary and stock compensation expense as a result of our acquisition of CyberSource in July
2010.
The decrease in fiscal 2009 reflects the absence of larger severance and other charges incurred in fiscal 2008 associated with workforce
consolidation and elimination of overlapping functions, combined with reduced contractor fees and employee incentive-related costs in fiscal
2009.
• Network, EDP and communications increased in fiscal 2010 and 2009, reflecting higher fees paid for debit processing services related to
processing transactions through non-Visa networks.
• Advertising, marketing and promotion increased in fiscal 2010, due to higher spending in connection with the 2010 Winter Olympics and the
2010 FIFA World Cup, which will not recur in fiscal 2011. The increase also reflects additional investment in emerging markets and higher
redemption costs associated with the Visa Extras loyalty platform. We continue to review and refine our marketing and advertising spending
globally to ensure it is consistent with our growth initiatives.
In fiscal 2009, expenses decreased, despite the launch of our global "More people go with Visa" campaign, reflecting the effective
implementation of our global strategy to reduce cost.
• Professional and consulting fees increased in fiscal 2010, primarily reflecting professional fees associated with our acquisition of CyberSource
and consulting fees related to the migration of one of our product platforms to a new service provider. The increase was offset by the absence of
legal fees related to the settlement of Discover financial services and various other litigation matters in fiscal 2009.
The decrease in fiscal 2009 reflects the absence of consulting and legal fees incurred in fiscal 2008 in connection with our global reorganization
and IPO, and related insourcing of professional services.
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