EFTA01377642.pdf

S-I/A Year Ended December 31, September 30, 2012 2013 2014 2014 2015 (In thousands) (unaudited) Total net revenue $203,449 $552,433 $850,192 $599,298 $892,758 Less: Starbucks transaction revenue 9,471 114,456 123,024 86,508 95,199 Less: transaction costs 126,351 277,833 450,858 318,501 479,937 Adjusted Revenue $ 67,627 $160,144 8276,310 $194.289 $317,622 Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that represents our net loss, adjusted to eliminate the effect of Starbucks transaction revenue and Starbucks transaction costs, before interest income and expense, provision or benefit for income taxes, depreciation, amortization, share-based compensation expense, other income and expense, the gain or loss on the sale of properly and equipment, and impairment of intangible assets. We have included Adjusted EBITDA in this prospectus because it is a key measure used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain non-cash items and certain variable charges. We believe it is useful to exclude non-cash charges, such as depreciation and amortization and share-based compensation expenses, from our Adjusted EBITDA because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. We exclude Starbucks transaction revenue and Starbucks transaction costs because Starbucks has announced that it will transition to another payment processor. We believe that providing Adjusted EBITDA metrics that exclude the impact of our agreement with Starbucks is useful to investors. We exclude gain or loss on the sale of property and equipment, and impairment of intangible assets from Adjusted EBITDA because we do not believe that these items are reflective of our ongoing business operations. In addition, we believe it is useful to exclude interest income and expense, other income and expense, and provision or benefit from income taxes, as these items are not components of our core business operations. Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following: • although depredation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or other capital commitments; 21 Table of Conleafy. • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs: • Adjusted EBITDA does not reflect the effect of income taxes that may represent a reduction in cash available to us; • Adjusted EBITDA does not reflect the effect of foreign currency exchange gains or losses which is included in other income and expense; and other companies, including companies in our industry, may calculate Adjusted EBITDA differently from how we calculate this measure or not at all, which reduces its usefulness as a comparative measure. Because of these firnitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net loss and our other financial results presented in accordance with GAAP. The following table presents a reconciliation of net loss to Adjusted EBITDA for each of the periods indicated: http://www.sec.gov/A rehi vestedgaddata/1512673AXS1119312515369092/d937622dsla. html 11/6/2015 7:37:12 AM! CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0074793 CONFIDENTIAL SDNY_GM_00220977 EFTA01377642