Green Dot 2012 Annual Report Download - page 48

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associated with our acquisition of Loopt, including remaining retention-based incentives of up to $5.0 million, which
we will recognize on a straight-line basis from January through September 2013.
Processing Expenses — Processing expenses totaled $77.4 million for the year ended December 31, 2012, an
increase of $6.5 million, or 9% from the comparable period in 2011. The increase was primarily the result of period-
over-period growth of 4% in the number of active cards in our portfolio. Processing expenses were partially offset by
an increase in volume incentives from the payment networks. While we expect processing expenses to be favorably
impacted by the November 2012 transition of our card issuing program with Synovus Bank to our subsidiary bank,
there can be no assurance that our processing expenses will decline on a year-over-year basis in absolute dollars or
as percentage of total operating revenues in 2013 or in future years because these expenses are subject to a variety
of factors, many of which are outside our control.
Other General and Administrative Expenses — Other general and administrative expenses totaled $71.9 million
for the year ended December 31, 2012, an increase of $15.3 million, or 27%, from the comparable period in 2011.
This increase was primarily the result of a $5.8 million increase in depreciation and amortization of property and
equipment, a $3.8 million increase in rent expense, and a $2.0 million increase in professional service fees. The
increase in depreciation and amortization is primarily associated with investments in IT infrastructure and product
development. The increase in rent expense was primarily due to additional rent expense associated with our new
corporate office space located in Pasadena, California, which became our new headquarters facility in September
2012. We took control of the office space in January 2012 to construct tenant improvements, and accordingly, recorded
rent expense thereafter. The increase in professional services fees was primarily associated with due diligence work
related to our acquisition of Loopt.
Income Tax Expense
The following table presents a breakdown of our effective tax rate among federal, state and other:
Year Ended December 31,
2012 2011
U.S. federal statutory tax rate 35.0%35.0%
State income taxes, net of federal benefit 1.9 1.6
Employee stock-based compensation 1.4 1.2
Other (0.1) 0.2
Effective tax rate 38.2%38.0%
Our income tax expense decreased by $3.0 million to $28.9 million in the year ended December 31, 2012 from
the comparable period in 2011 due to a decrease in income before income taxes over those same periods, and our
effective tax rate increased 0.2% from 38.0% to 38.2%. The increases in our effective state tax rate and non-deductible
employee stock-based compensation were offset by increases in general business tax credits taken during 2012.
Comparison of Years Ended December 31, 2011 and 2010
Operating Revenues
The following table presents a breakdown of our operating revenues among card revenues and other fees, cash
transfer revenues and interchange revenues as well as contra-revenue items:
Years Ended December 31,
2011 2010
Amount
% of Total
Operating
Revenues Amount
% of Total
Operating
Revenues
(In thousands, except percentages)
Operating revenues:
Card revenues and other fees $ 209,489 44.8% $ 167,375 46.0%
Cash transfer revenues 134,143 28.7 101,502 27.9
Interchange revenues 141,103 30.2 108,380 29.8
Stock-based retailer incentive compensation (17,337) (3.7) (13,369) (3.7)
Total operating revenues $ 467,398 100.0% $ 363,888 100.0%