NetSpend 2011 Annual Report Download - page 51

Table of Contents
Our contractual commitments and contingencies will have an impact on our future liquidity. The following table summarizes our
contractual obligations that represent material expected or contractually committed future obligations as of December 31, 2011:
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of
America, or U.S. GAAP. In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S. GAAP and does not
require management's judgment in its application. In other cases management's judgment is required in selecting among available alternative
accounting standards that allow different accounting treatment for similar transactions. The preparation of consolidated financial statements
also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and
related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the
circumstances. Accordingly, actual results could differ significantly from our estimates. To the extent that there are differences between our
estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be
affected. We believe that the accounting policies discussed below are critical to understanding our historical and future performance because
these policies relate to the more significant areas involving management's judgments and estimates.
Revenue Recognition
Our operating revenues principally consist of a portion of the service fees and interchange revenues received by our Issuing Banks in
connection with the programs we manage. Revenue is recognized when there is persuasive evidence of an arrangement, the relevant services
have been rendered, the price is fixed or determinable and collectability is reasonably assured.
Our cardholders are charged fees in connection with our products and services as follows:
• Transactions—Cardholders are typically charged a fee for each PIN and signature-based purchase transaction made using
their GPR cards, unless the cardholder is on a monthly or
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Payments Due by Period
As Of December 31, 2011
Total Less than
1 Year 1 - 3 Years 3 - 5 Years More than 5 Years
(in thousands of dollars)
Long
-
term debt obligations(1)
$
67,803
$
1,801
$
5,142
$
60,860
$
—
Operating lease obligations(2)
7,065
938
2,736
2,908
483
Other long
-
term obligations(3)
35,436
15,013
17,604
2,819
—
Total
$
110,304
$
17,752
$
25,482
$
66,587
$
483
(1) Long-term debt obligations consisted of outstanding principal and expected interest payments under our credit facility as
of December 31, 2011. These future expected payments include $58.5 million of principal that is expected to be repaid
upon the maturity of this facility in September 2015 and $9.3 million in future interest payments applicable to the
currently outstanding borrowings at an expected interest rate of 4.3% per year through September 2015.
(2) Operating lease obligations primarily include future payments related to the lease for our offices in Austin, Texas. This
lease expires in 2017.
(3) Other long-term obligations consist of required minimum future payments under contracts with our distributors and other
service providers.