Green Dot 2011 Annual Report Download - page 41

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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Annual Report on Form 10-K, including this Management’s Discussion and Analysis of Financial Condition
and Results of Operations, contains forward-looking statements regarding future events and our future results that are
subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934 (the
“Exchange Act”). All statements other than statements of historical facts are statements that could be deemed to be
forward-looking statements. These statements are based on current expectations, estimates, forecasts and projections
about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,”
“anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “endeavors,”
“strives,” “may” and “assumes,” variations of such words and similar expressions are intended to identify forward-
looking statements. In addition, any statements that refer to projections of our future financial performance, our
anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are
forward-looking statements. Readers are cautioned that these forward-looking statements are subject to risks,
uncertainties, and assumptions that are difficult to predict, including those identified below, under “Part I, Item 1A. Risk
Factors,” and elsewhere herein. Therefore, actual results may differ materially and adversely from those expressed
in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for
any reason.
In this Annual Report, unless otherwise specified or the context otherwise requires, “Green Dot,” “we,” “us,” and
“our” refer to Green Dot Corporation and its consolidated subsidiaries.
Overview
Green Dot is a leading financial services company providing simple, low-cost and convenient money management
solutions to a broad base of U.S. consumers. We believe that we are the leading provider of general purpose reloadable,
or GPR, prepaid debit cards in the United States and that our Green Dot Network is the leading reload network for
prepaid cards in the United States. We sell our cards and offer our reload services nationwide at approximately 59,000
retail store locations, which provide consumers convenient access to our products and services.
We review a number of metrics to help us monitor the performance of, and identify trends affecting, our business.
We believe the following measures are the primary indicators of our quarterly and annual performance.
Number of GPR Cards Activated — represents the total number of GPR cards sold through our retail and online
distribution channels that are activated (and, in the case of our online channel, also funded) by cardholders in a specified
period. We activated 7.97 million, 6.26 million, and 4.27 million GPR cards in the twelve-month periods ended
December 31, 2011, 2010, and 2009, respectively, and 2.12 million and 976,000 GPR cards in the five-month periods
ended December 31, 2009 and 2008, respectively. The number of new GPR card activations from repeat customers,
or former GPR cardholders, in the same comparable periods were 3.39 million, 2.16 million and 0.98 million, 0.53
million and 0.18 million, respectively.
Number of Cash Transfers — represents the total number of MoneyPak and POS swipe reload transactions that
we sell through our retail distributors in a specified period. We sold 34.27 million, 26.49 million, and 17.28 million
MoneyPak and POS swipe reload transactions for the twelve-month periods ended December 31, 2011, 2010, and
2009, respectively, and 8.19 million and 5.00 million MoneyPak and POS swipe reload transactions for the five-month
periods ended December 31, 2009 and 2008, respectively.
Number of Active Cards — represents the total number of GPR cards in our portfolio that had a purchase, reload
or ATM withdrawal transaction during the previous 90-day period. We had 4.20 million, 3.40 million, 2.69 million, and
1.40 million active cards outstanding as of December 31, 2011, 2010, 2009, and 2008, respectively.
Gross Dollar Volume — represents the total dollar volume of funds loaded to our GPR card and reload products.
Our gross dollar volume was $16.1 billion, $10.4 billion, and $5.8 billion for the twelve-month periods ended
December 31, 2011, 2010, and 2009, respectively, and $2.7 billion and $1.6 billion for the five-month periods ended
December 31, 2009 and 2008, respectively.
Total operating revenues for the year ended December 31, 2011 were $467.4 million compared to $363.9 million
for the year ended December 31, 2010. Total operating revenues were favorably impacted by increases in card revenues
and other fees, cash transfer revenues and interchange revenues primarily due to period-over-period growth in all of
our key metrics described above, partially offset by our recognition of stock-based retailer incentive compensation,
which increased $3.9 million, or 29%, in the year ended December 31, 2011. For the comparable period in 2010, we
recorded eight months of stock-based retailer incentive compensation, beginning May 2010. We derived approximately
5% of total operating revenues, excluding stock-based retailer incentive compensation from the Intuit program for the
year ended December 31, 2011, which was discontinued in October 2011. We estimate that approximately $17 million