NetSpend 2011 Annual Report Download - page 34

Table of Contents
Other Financial and Operating Data
30
Year Ended December 31,
2011 2010 2009 2008 2007
(in thousands, except percentages)
(unaudited)
Adjusted EBITDA(1)
$
84,197
$
65,568
$
40,367
$
37,343
$
31,288
Adjusted net income(2)
$
42,476
$
32,262
$
16,854
$
7,800
$
16,644
Number of active cards
(at period end)(3)
2,063
2,100
1,868
1,578
1,188
Number of active cards
with direct deposit (at
period end)(3)
865
719
515
361
165
Gross dollar volume(4)
$
11,159,181
$
9,810,515
$
7,570,339
$
5,690,842
$
3,686,554
Percentage of direct
deposit active accounts
(5)
41.9
%
34.2
%
27.6
%
22.9
%
13.9
%
(1) We use a non-GAAP financial metric that we label "Adjusted EBITDA" to evaluate our financial performance. We
compute Adjusted EBITDA by adjusting net income or net loss to remove the effect of income and expenses related to
interest, taxes, depreciation and amortization ("EBITDA") and then adjusting for stock-based compensation and non-
recurring gains and losses. We believe that Adjusted EBITDA is an important metric for the following reasons:
• It provides a meaningful comparison of our operating results over several periods because it removes the impact
of income and expense items that are not a direct result of our core operations, such as goodwill and intangible
impairments, legal settlements and one-time settlement gains, losses on the early extinguishment of long-term
debt and other infrequent losses;
• We use it as a tool to assist in our planning for the effect of strategic operating decisions and for the prediction of
future operating results; and
• We use it to evaluate our capacity to incur and service debt, fund capital expenditures and expand our business.
Our Adjusted EBITDA is not necessarily comparable to what other companies define as Adjusted EBITDA. In addition,
Adjusted EBITDA is not a measure defined by U.S. GAAP and should not be considered as a substitute for or alternative
to net income, operating income, cash flows from operating activities or other financial information as determined by
U.S. GAAP. Our presentation of Adjusted EBITDA should not be construed as an implication that our future results will
be unaffected by unusual or non-recurring items.
(2) In addition to Adjusted EBITDA, we use a second non-GAAP financial metric that we label "Adjusted Net Income" to
evaluate our financial performance. We compute Adjusted Net Income by adjusting net income or net loss to remove tax-
effected amortization expense, stock-based compensation and non-recurring gains and losses. We believe Adjusted Net
Income is an important metric that is useful to our board of directors, management and investors for the following
reasons:
• Assets being depreciated will often have to be replaced in the future and Adjusted EBITDA does not reflect any
expenditure for these items;
• Adjusted EBITDA does not reflect the significant interest expense or the payments necessary to service interest
payments on our debt;