Visa 2015 Annual Report Download - page 60

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absence of the 2014 Sochi Winter Olympics and 2014 FIFA World Cup spend incurred in
fiscal 2014. The decrease was partially offset by on-going advertising and promotional
campaigns to support our growth strategies and new product initiatives, such as Visa
Checkout, which began in the second half of fiscal 2014. The increase in marketing during
fiscal 2014 compared to fiscal 2013 was also attributable to elevated spend supporting the
two sporting campaigns.
•Network and processing in fiscal 2015 decreased as a result of initiatives to optimize the use
of our technology resources. The increase in fiscal 2014 was mainly due to continued
technology and processing network investments to support growth.
•Professional fees in fiscal 2015 were flat compared to fiscal 2014. The decrease in fiscal 2014
was mainly due to the absence of certain project costs incurred in fiscal 2013 as part of our
effort to align resources with our strategic priorities.
•Depreciation and amortization increased in fiscal 2015 and 2014, primarily due to additional
depreciation from our ongoing investments in technology assets and infrastructure to support
our digital solutions and core business initiatives.
•General and administrative increased in fiscal 2015 mainly due to an increase in travel
activities, product enhancements and facilities costs in support of our business growth,
combined with losses incurred from the sale of assets held by an international subsidiary.
These increases were partially offset by unrealized foreign exchange gains recorded in fiscal
2015 upon the remeasurement of monetary assets and liabilities held by foreign subsidiaries
into their functional currency and the absence of the fiscal 2014 disposal of obsolete
technology assets. Fiscal 2014 increased mainly due to facilities costs and other corporate
expenses, and the disposal of obsolete technology assets, partially offset by a decrease in
travel activities.
•Litigation provision in fiscal 2014 reflects a $450 million accrual related to the U.S. covered
litigation. See Note 3—U.S. Retrospective Responsibility Plan and Potential Visa Europe
Liabilities and Note 20—Legal Matters to our consolidated financial statements.
Non-operating (Expense) Income
Non-operating expense in fiscal 2015 primarily reflects a non-cash adjustment to the fair value
of the unamended Visa Europe put option of $110 million, which is not subject to tax. The change in
value did not reflect any change in the likelihood that Visa Europe would exercise its option in its
unamended form at September 30, 2015. See Note 2—Visa Europe and Note 4—Fair Value
Measurements and Investments to our consolidated financial statements. Non-operating income in
fiscal 2014 increased from fiscal 2013 primarily due to the absence of a $15 million other-than-
temporary impairment loss recognized during fiscal 2013. See Note 4—Fair Value Measurements and
Investments to our consolidated financial statements.
Effective Income Tax Rate
The effective income tax rates were 30% in fiscal 2015 and 2014. The following highlights the
significant tax items recorded in each respective year:
• a $296 million tax benefit recognized in fiscal 2015 resulting from the resolution of uncertain
tax positions with taxing authorities. Included in the $296 million is a one-time $239 million tax
benefit that relates to prior fiscal years; and
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