Green Dot 2013 Annual Report Download - page 46

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Income Tax Expense
The following table presents a breakdown of our effective tax rate among federal, state and other:
Year Ended December 31,
2013 2012
U.S. federal statutory tax rate 35.0%35.0%
State income taxes, net of federal benefit (0.2) 1.9
General business credits (2.3) (0.4)
Employee stock-based compensation 1.4 1.4
Other 1.2 0.3
Effective tax rate 35.1%38.2%
Our income tax expense decreased by $10.5 million to $18.5 million in the year ended December 31, 2013 from
the comparable period in 2012 due to a decrease in income before income taxes over those same periods and a
decrease in our effective tax rate by 3.1 percentage points from 38.2% to 35.1%, primarily driven by $1.2 million of
general business credits related to 2012 and 2013. Although we expect to recognize general business credits in 2014
and beyond, we believe our effective tax rate for the foreseeable future will be higher than our effective tax rate for the
year ended December 31, 2013.
Comparison of Years Ended December 31, 2012 and 2011
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:
Year Ended December 31,
2012 2011
Amount % of Total Operating Revenues Amount % of Total Operating Revenues
(In thousands, except percentages)
Operating revenues:
Card revenues and other fees $ 224,745 41.1%$ 209,489 44.8%
Cash transfer revenues 165,232 30.2 134,143 28.7
Interchange revenues 164,559 30.2 141,103 30.2
Stock-based retailer incentive compensation (8,251) (1.5)(17,337) (3.7)
Total operating revenues $ 546,285 100.0%$ 467,398 100.0%
Card Revenues and Other Fees — Card revenues and other fees totaled $224.7 million for the year ended
December 31, 2012, an increase of $15.3 million, or 7%, from the comparable period in 2011. The increase was
primarily the result of an increase in monthly maintenance fee revenues, driven by period-over-period growth of 4%
in the number of active cards in our portfolio. Card revenues and other fees also increased as a result of growth in
new card fee revenues, which was driven by higher numbers of card activations from distribution channels in which
we assess new card fees. The increases were partially offset by a decrease in ATM fee revenues, which was primarily
driven by the discontinuation of the TurboTax program, as cardholders under this program typically performed more
ATM transactions than the rest of our active card base. Additionally, we began offering our Walmart MoneyCard
customers access to surcharge-free transactions via the nationwide MoneyPass ATM network in late June 2012, which
also contributed to the decrease in ATM fee revenues. In addition, we believe our card revenues and other fees for
the second half of 2012 were adversely impacted by changes in our competitive environment and our implementation
of voluntary risk control mechanisms.
Cash Transfer Revenues — Cash transfer revenues totaled $165.2 million for the year ended December 31, 2012,
an increase of $31.1 million, or 23%, from the comparable period in 2011. The increase was primarily the result of
period-over-period growth of 22% in the number of cash transfers sold. The increase in cash transfer volume was
driven both by growth in our active card base and growth in cash transfer volume from third-party programs participating
in our network. Third party programs participating in our network contributed approximately 23% of total cash transfer
revenues for the year ended December 31, 2012, versus approximately 17% of total cash transfer revenues for the
year ended December 31, 2011. We believe our cash transfer revenues for the second half of 2012 were adversely
impacted by changes in our competitive environment and our implementation of voluntary risk control mechanisms.