Green Dot 2013 Annual Report Download - page 49

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We use trend and variance analysis as well as our detailed budgets and forecasts to project future cash needs,
making adjustments to the projections when needed. We believe that our current unrestricted cash and cash equivalents
and cash flows from operations will be sufficient to meet our working capital and capital expenditure requirements for
at least the next year. Thereafter, we may need to raise additional funds through public or private financings or
borrowings. Any additional financing we require may not be available on terms that are favorable to us, or at all. If we
raise additional funds through the issuance of equity or convertible debt securities, our existing stockholders could
suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior
to those of holders of our Class A common stock and our Series A convertible junior participating non-cumulative
perpetual preferred stock. No assurance can be given that additional financing will be available or that, if available,
such financing can be obtained on terms favorable to our stockholders and us.
Cash Flows from Operating Activities
Our $122.5 million of net cash provided by operating activities in the year ended December 31, 2013 principally
resulted from $34.0 million of net income, adjusted for certain non-cash operating expenses of $61.9 million, and an
increase in accounts payable and accrued liabilities of $26.9 million related primarily to the timing of escheatment and
refund liabilities. Our $102.0 million of net cash provided by operating activities in the year ended December 31, 2012
principally resulted from $47.2 million of net income, adjusted for certain non-cash operating expenses of $46.8 million.
Our $94.1 million of net cash provided by operating activities in the year ended December 31, 2011 principally resulted
from $52.1 million of net income, adjusted for certain non-cash operating expenses of $40.5 million.
Cash Flows from Investing Activities
Our $53.4 million of net cash used in investing activities in the year ended December 31, 2013 reflects payments
for acquisition of property and equipment of purchases of $35.7 million and purchases of available-for-sale investment
securities, net of sales and maturities, of $16.0 million. Our $210.3 million of net cash used in investing activities in
the year ended December 31, 2012 reflects purchases of available-for-sale investment securities, net of sales and
maturities, of $152.8 million, payments for acquisition of property and equipment of $40.4 million, net payments to
acquire Loopt for $33.4 million, partially offset by a decrease in restricted cash of $12.3 million. Our $50.4 million of
net cash used in investing activities in the year ended December 31, 2011 reflects purchases of available-for-sale
investment securities, net of maturities, of $24.9 million, payments for acquisition of property and equipment of $23.1
million and an increase in restricted cash of $7.8 million.
Restricted cash on our consolidated balance sheets in 2012 and 2011 primarily represented our cash collateral
requirements on our line of credit with Synovus Bank. We used the line of credit to fund timing differences between
funds remitted by our retail distributors to the banks that issue our cards and funds utilized by our cardholders. In 2011,
we increased our cash collateral from $5.0 million to $10.0 million. In November 2012, we transitioned all outstanding
customer deposits associated with our card issuing program with Synovus Bank to our subsidiary bank. Concurrently,
we terminated our line of credit with Synovus Bank, thus reducing our cash collateral to zero.
Cash Flows from Financing Activities
Our $57.9 million of net cash provided by financing activities in the year ended December 31, 2013 was primarily
the result of increases of $21.1 million and $19.6 million of deposits and obligations, respectively, to customers
associated with our GPR card program, and proceeds and excess tax benefits of $17.2 million associated with equity
award activities. Our $179.5 million of net cash provided by financing activities in the year ended December 31, 2012
was primarily the result of $159.5 million of deposits and $13.7 million of obligations to customers we assumed as part
of the transition of all outstanding customer deposits associated with our GPR card program with Synovus Bank to
our subsidiary bank, and proceeds and excess tax benefits of $6.3 million associated with equity award activities. Our
$14.3 million of net cash provided by financing activities for the year ended December 31, 2011 was the result of the
proceeds and excess tax benefits of $9.1 million associated with equity award activities.
Commitments
We anticipate that we will continue to purchase property and equipment as necessary in the normal course of our
business. The amount and timing of these purchases and the related cash outflows in future periods is difficult to
predict and is dependent on a number of factors including the hiring of employees, the rate of change of computer
hardware and software used in our business and our business outlook. During 2014, we intend to continue to invest
in new products and programs, new features for our existing products and IT infrastructure to scale and operate
effectively to meet our strategic objectives. We expect the level of our total investment in capital expenditures for 2014
to be similar to the level of investment in 2013.