Green Dot 2010 Annual Report Download - page 59

Income Tax Expense
2009 2008
Year Ended
July 31,
U.S. federal income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.0% 35.0%
State income taxes, net of federal benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 5.7
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 0.7
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.0% 41.4%
Our income tax expense increased by $14.6 million to $26.9 million in fiscal 2009 from fiscal 2008, and
there was a slight increase in the effective tax rate. This increase was primarily due to the utilization in fiscal
2008 of our remaining net operating loss carryforwards to reduce taxable income.
Liquidity and Capital Resources
The following table summarizes our major sources and uses of cash for the periods presented:
Year Ended
December 31, 2010
Five Months Ended
December 31, 2009 2009 2008
Year Ended July 31,
(In thousands)
Total cash provided by
(used in)
Operating activities. . . . . . . . $ 83,503 $26,121 $ 35,297 $35,006
Investing activities . . . . . . . . $ (3,213) $ (5,063) $(19,400) $ (5,163)
Financing activities. . . . . . . . $ 30,910 $ 8,681 $(28,618) $ (3,264)
Increase (decrease) in cash
and cash equivalents . . . . . . $111,200 $29,739 $(12,721) $26,579
In the year ended December 31, 2010, the five months ended December 31, 2009 and fiscal 2009 and
2008, we financed our operations primarily through our cash flows from operations. At December 31, 2010,
our primary source of liquidity was unrestricted cash and cash equivalents totaling $167.5 million.
We use trend and variance analyses 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 twelve months. 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 and Class B
common 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.
In February 2010, we entered into a definitive agreement for our proposed bank acquisition. Under the
terms of the agreement, we have agreed to acquire all of the outstanding common shares and voting interest
of Bonneville Bancorp for an aggregate purchase price of approximately $15.7 million in cash. We plan to pay
for the acquisition with existing cash balances. Our proposed bank acquisition is subject to regulatory
approval and other customary closing conditions. The parties intend to consummate the transaction as soon
as practicable following regulatory approval of our proposed bank acquisition, although there can be no
assurance that we will obtain regulatory approval or that our proposed bank acquisition will close.
50