Green Dot 2012 Annual Report Download - page 28

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substantially. If interchange rates decline, whether due to actions by the payment networks, the banks that issue our
cards or existing or future legislation, regulation or the interpretation or enforcement thereof, we would likely need to
change our fee structure to compensate for lost interchange revenues. However, our ability to make these changes
is limited by the terms of our contracts and other commercial factors, such as price competition. To the extent we
increase the pricing of our products and services, we might find it more difficult to acquire consumers and to maintain
or grow card usage and customer retention, and we could suffer reputational damage and become subject to greater
regulatory scrutiny. We also might have to discontinue certain products or services. As a result, our operating revenues,
operating results, prospects for future growth and overall business could be materially and adversely affected.
Our actual operating results may differ significantly from our guidance.
From time to time, we may issue guidance in our quarterly results conference calls, or otherwise, regarding our
future performance that represents our management’s estimates as of the date of release. This guidance, which
includes forward-looking statements, is based on projections prepared by our management. These projections are not
prepared with a view toward compliance with published guidelines of the American Institute of Certified Public
Accountants, and neither our independent registered public accounting firm nor any other independent expert or outside
party compiles or examines the projections. Accordingly, no such person expresses any opinion or any other form of
assurance with respect to those projections.
Projections are based upon a number of assumptions and estimates that, while presented with numerical specificity,
are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of
which are beyond our control, and are based upon specific assumptions with respect to future business decisions,
some of which will change. We intend to state possible outcomes as high and low ranges that are intended to provide
a sensitivity analysis as variables are changed but we can provide no assurances that actual results will not fall outside
of the suggested ranges.
The principal reason that we release guidance is to provide a basis for our management to discuss our business
outlook with analysts and investors. We do not accept any responsibility for any projections or reports published by
any of these persons.
Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying
the guidance furnished by us will prove to be incorrect or will vary significantly from actual results. Accordingly, our
guidance is only an estimate of what management believes is realizable as of the date of release. Actual results will
vary from our guidance and the variations may be material. In light of the foregoing, investors are urged not to rely
upon our guidance in making an investment decision with respect to our Class A common stock.
Any failure to implement our operating strategy successfully or the occurrence of any of the events or circumstances
set forth in this Item 1A. could result in our actual operating results being different from our guidance, and such
differences may be adverse and material.
We rely on relationships with third-party card issuing banks to conduct our business, and our results of
operations and financial position could be materially and adversely affected if we fail to maintain these
relationships or we maintain them under new terms that are less favorable to us.
All of our cards under the Walmart MoneyCard program are issued by GE Capital Retail Bank, formerly GE Money
Bank. Our relationship with GE Capital Retail Bank will be for the foreseeable future, a critical component of our ability
to conduct our business and to maintain our revenue and expense structure. We may be unable to maintain relationships
with the third-party banks that issue our cards for a variety of reasons, including increased regulatory oversight, more
burdensome regulation of our industry, increased compliance requirements or changes in business strategy. If we lose
or do not maintain existing third-party banking relationships, we could incur significant switching and other costs and
expenses and we and users of our products and services could be significantly affected, creating contingent liabilities
for us. As a result, the failure to maintain adequate banking relationships could have a material adverse effect on our
business, results of operations and financial condition. Our agreements with the third-party banks that issue our cards
provide for revenue-sharing arrangements and cost and expense allocations between the parties. Changes in the
revenue-sharing arrangements or the costs and expenses that we have to bear under these relationships could have
a material impact on our operating expenses. In addition, we may be unable to maintain adequate banking relationships
or, following its expiration in 2015, renew our agreements with GE Capital Retail Bank under terms at least as favorable
to us as those existing before renewal.