Green Dot 2012 Annual Report Download - page 52

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Cash Flows from Investing Activities
Our $210.3 million of net cash used in investing activities in the year ended December 31, 2012 reflects purchases
of available-for-sale investment securities, net of sales and maturities, of $152.8 million, payments for acquisition of
property and equipment of $40.4 million, net payments to acquire Loopt for $31.8 million, partially offset by a decrease
in restricted cash of $12.3 million. Our $50.4 million of net cash used in investing activities in the year ended
December 31, 2011 reflects purchases of available-for-sale investment securities, net of maturities, of $24.9 million,
payments for acquisition of property and equipment of $23.1 million and an increase in restricted cash of $7.8 million.
Our $3.2 million of net cash provided by investing activities in the year ended December 31, 2010 reflects a decrease
in restricted cash of $10.2 million offset by payments for acquisition of property and equipment of $13.5 million.
Restricted cash on our consolidated balance sheet primarily represents our cash collateral requirements on our
line of credit with Synovus Bank. We used the line of credit to fund timing differences between funds remitted by our
retail distributors to the banks that issue our cards and funds utilized by our cardholders. In 2010, we reduced our cash
collateral on our line of credit from $15.0 million to $5.0 million. In 2011, we increased our cash collateral from $5.0
million to $10.0 million. In November 2012, we transitioned all outstanding customer deposits associated with our card
issuing program with Synovus Bank to our subsidiary bank. Concurrently, we terminated our line of credit with Synovus
Bank, thus reducing our cash collateral to zero.
Cash Flows from Financing Activities
Our $179.5 million of net cash provided by financing activities in the year ended December 31, 2012 was primarily
the result of $159.5 million of deposits and $13.7 million of obligations to customers we assumed as part of the transition
of all outstanding customer deposits associated with our GPR card program with Synovus Bank to our subsidiary bank,
proceeds from the exercise of stock options and the issuance of shares under our employee stock purchase plan of
$3.6 million and related excess tax benefits of $2.7 million. Our $14.3 million of net cash provided by financing activities
for the year ended December 31, 2011 was the result of the exercise of stock options and the issuance of shares under
our employee stock purchase plan of $6.1 million and excess tax benefits of $3.0 million. Our $30.9 million of net cash
provided by financing activities for the year ended December 31, 2010 was primarily the result of proceeds from the
exercise of stock options and warrants. We receive cash from the exercise of stock options and the sale of Class A
common stock under our employee stock purchase plan. While we expect to continue to receive these proceeds in
future periods, the timing and amount of such proceeds are difficult to predict and are contingent on a number of factors
including the price of our Class A common stock, the number of employees participating in our equity incentive plan
and our employee stock purchase plan and general market conditions.
Commitments
We anticipate that we will continue to purchase property and equipment as necessary in the normal course of our
business. The amount and timing of these purchases and the related cash outflows in future periods is difficult to
predict and is dependent on a number of factors including the hiring of employees, the rate of change of computer
hardware and software used in our business and our business outlook. During 2013, we intend to continue to invest
in a plan to transition to a new card processing solution and thereby reduce our dependence on Total System Services,
Inc. for card processing services. We also intend to continue our investments in new products and programs, new
features for our existing products and IT infrastructure to scale and operate effectively to meet our strategic objectives.
We expect the level of our total investment in capital expenditures for 2013 to be similar to the level of investment in
2012.
We have used cash to acquire businesses and technologies and we anticipate that we may continue to do so in
the future. The nature of these transactions makes it difficult to predict the amount and timing of such cash requirements.
We may also be required to raise additional financing to complete future acquisitions.
Additionally, we anticipate making ongoing cash contributions to our subsidiary bank, Green Dot Bank, to maintain
its capital, leverage and other financial commitments at levels we have agreed to with our regulators. For example, in
November 2012, we contributed approximately $26 million to our subsidiary bank in connection with the transition of
our card issuing program with Synovus Bank to Green Dot Bank.