Green Dot 2010 Annual Report Download - page 95

Note 13 — Commitments and Contingencies (continued)
with whom we have contracts against third-party claims that our products infringe a patent, copyright, or
other intellectual property right claims arising from our acts, omissions, or violation of law.
Generally, a maximum obligation under these contracts is not explicitly stated. Because the obligated
amounts associated with these types of agreements are not explicitly stated, the overall maximum amount
of the obligation cannot be reasonably estimated. With the exception of overdrafts on cardholders’
accounts, historically, we have not been required to make payments under these and similar contingent
obligations, and no liabilities have been recorded for these obligations in our consolidated balance sheets.
For additional information regarding overdrafts on cardholders’ accounts, refer to Note 3 — Accounts
Receivable.
Note 14 — Significant Customer Concentrations
A credit concentration may exist if customers are involved in similar industries, economic sectors, and
geographic regions. Our retail distributors operate in similar economic sectors but diverse domestic
geographic regions. The loss of a significant retail distributor could have a material adverse effect upon our
card sales, profitability, and revenue growth.
Revenues derived from our products sold at Walmart and our three other largest retail distributors, as
a group, represented approximately 63% and 20%, respectively, of our total operating revenues for the
year ended December 31, 2010, 66% and 23%, respectively, for the five months ended December 31,
2009, 56% and 27%, respectively, for the year ended July 31, 2009 and 39% and 41%, respectively, for the
year ended July 31, 2008. Revenues derived from our products sold at Walmart and our three other largest
retail distributors, as a group, represented approximately 64% and 18%, respectively, of our total operating
revenues, excluding stock-based retailer incentive compensation, for the year ended December 31, 2010.
In determining the customer concentration, we attributed new card fees and cash transfer revenues to the
retail distributor where the sale of the new cards and cash transfer products occurred.
The concentration of GPR cards activated (in units) for Walmart and our three other largest retail
distributors, in the aggregate, was 84%, 94%, 95% and 94% for the year ended December 31, 2010, the
five months ended December 31, 2009 and the years ended July 31, 2009 and 2008, respectively. The
concentration of sales of cash transfer products (in units) for these retail distributors, in the aggregate, was
93%, 93%, 92% and 89% for the year ended December 31, 2010, the five months ended December 31,
2009 and the years ended July 31, 2009 and 2008, respectively.
Settlement assets attributable to Walmart and our three other largest retail distributors, as a group,
comprised 26% and 31%, respectively, of the settlement assets recorded on our consolidated balance
sheet as of December 31, 2010 and 81% and 15%, respectively, as of December 31, 2009. As a result of
entering into our amended agreement with Walmart, we changed the manner in which customer funds for
certain products sold at Walmart are settled, eliminating the need to record settlement assets and liabilities
related to these products. This change resulted in a significant reduction in our settlement assets and
settlement obligations associated with Walmart and GE Money Bank, respectively.
During the year ended December 31, 2010, the five months ended December 31, 2009, and the years
ended July 31, 2009 and 2008, the majority of the customer funds underlying our products were held in
bank accounts at two card issuing banks. These funds are held in trust for the benefit of the customers, and
we have no legal rights to the customer funds or deposits at the card issuing banks. Additionally, we have
receivables due from these card issuing banks included in accounts receivable, net, on our consolidated
balance sheets. The failure of either of these card issuing banks could result in significant business
disruption, a potential material adverse affect on our ability to service our customers, potential contingent
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GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)