Visa 2013 Annual Report Download - page 51

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overall growth in global payments volume. Activity in fiscal 2012 also reflects certain one-time
incentives incurred outside the United States. The amount of client incentives we record in
future periods will vary based on changes in performance expectations, actual client
performance, amendments to existing contracts or the execution of new contracts. We expect
incentives as a percentage of gross revenues to be in the range of 16.5% to 17.5% for the full
2014 fiscal year.
Operating Expenses
The following table sets forth the components of our total operating expenses.
Fiscal Year ended
September 30, $ Change % Change(1)
2013 2012 2011
2013
vs.
2012
2012
vs.
2011
2013
vs.
2012
2012
vs.
2011
(in millions, except percentages)
Personnel ............... $ 1,932 $ 1,726 $ 1,459 $ 206 $ 267 12% 18%
Marketing ............... 876 873 870 3 3 —% —%
Network and processing . . . 468 414 357 54 57 13% 16%
Professional fees ......... 412 385 337 27 48 7% 14%
Depreciation and
amortization ............. 397 333 288 64 45 19% 16%
General and
administrative .......... 451 451 414 — 37 —% 9%
Litigation provision ........ 34,100 7 (4,097) 4,093 NM NM
Total Operating
Expenses(2) ............. $ 4,539 $ 8,282 $ 3,732 $(3,743) $ 4,550 (45)% NM
(1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated
based on whole numbers, not the rounded numbers presented.
(2) Excluding the litigation provision of $4.1 billion recorded in fiscal 2012, associated with litigation
covered by the retrospective responsibility plan, operating expenses for fiscal 2012 were
$4.2 billion, an increase of 12% over fiscal 2011 on an adjusted basis.
•Personnel increased in fiscal 2013 mainly due to increases in headcount reflecting our strategy
to invest for future growth, particularly in key product and geography-specific initiatives,
combined with severance charges incurred as a result of organizational restructuring that better
aligns our costs and strategic priorities. The increase in fiscal 2012 is primarily due to increases
in headcount, and reflects annualized costs from our acquisitions of PlaySpan and Fundamo in
March 2011 and June 2011, respectively.
•Marketing remained relatively flat in fiscal 2013 and fiscal 2012 when compared to the
respective prior year. Fiscal 2013 activity mainly reflected strategies to promote our core
products, combined with a number of various campaigns, including the 2013 FIFA
Confederation Cup and the 2014 Sochi Winter Olympics. Marketing in fiscal 2012 mainly
reflected sponsorship of the 2012 London Summer Olympics, as well as spend in support of our
new product initiatives.
•Network and processing in fiscal 2013 and 2012 increased mainly due to costs incurred for the
operation of our processing network attributable to increased transaction volumes.
43