Green Dot 2010 Annual Report Download - page 26

Operating revenues derived from sales at Walmart and from our three other largest retail
distributors, as a group, represented 63% and 20%, respectively, of our total operating rev-
enues and 64% and 18%, respectively, of our total operating revenues, excluding stock-
based retailer incentive compensation, during the year ended December 31, 2010, and the
loss of operating revenues from any of these retail distributors would adversely affect our
business.
Most of our operating revenues are derived from prepaid financial services sold at our four largest retail
distributors. As a percentage of total operating revenues, operating revenues derived from products and
services sold at the store locations of Walmart and from products and services sold at the store locations of
our three other largest retail distributors, as a group, were approximately 63% and 20%, respectively, in the
year ended December 31, 2010. We do not expect calendar 2011 operating revenues derived from products
and services sold at Walmart stores to change significantly as a percentage of our total operating revenues
from the percentage in the year ended December 31, 2010, and expect that Walmart and our other three
largest retail distributors will continue to have a significant impact on our operating revenues in future years. It
would be difficult to replace any of our large retail distributors, particularly Walmart, and the operating
revenues derived from sales of our products and services at their stores. Accordingly, the loss of Walmart or
any of our other three largest retail distributors would have a material adverse effect on our business, and
might have a positive impact on the business of one of our competitors if it were able to replace us. In addition,
any publicity associated with the loss of any of our large retail distributors could harm our reputation, making
it more difficult to attract and retain consumers and other retail distributors, and could lessen our negotiating
power with our remaining and prospective retail distributors.
Our contracts with these retail distributors have terms that expire at various dates between 2011 and
2015, but they can in limited circumstances, such as our material breach or insolvency or, in the case of
Walmart, our failure to meet agreed-upon service levels, certain changes in control of GE Money Bank or
us, or our inability or unwillingness to agree to requested pricing changes, be terminated by these retail
distributors on relatively short notice. See “Business — Our Business Model — Our Distribution — Our
Relationship with Walmart” for more information regarding the termination rights under our contract with
Walmart. There can be no assurance that we will be able to continue our relationships with our largest retail
distributors on the same or more favorable terms in future periods or that our relationships will continue
beyond the terms of our existing contracts with them. Our operating revenues and operating results could
suffer if, among other things, any of our retail distributors renegotiates, terminates or fails to renew, or to
renew on similar or favorable terms, its agreement with us or otherwise chooses to modify the level of
support it provides for our products.
Our future success depends upon our retail distributors’ active and effective promotion of
our products and services, but their interests and operational decisions might not always
align with our interests.
Most of our operating revenues are derived from our products and services sold at the stores of our
retail distributors. Revenues from our retail distributors depend on a number of factors outside our control
and may vary from period to period. Because we compete with many other providers of consumer products
for placement and promotion of products in the stores of our retail distributors, our success depends on our
retail distributors and their willingness to promote our products and services successfully. In general, our
contracts with these third parties allow them to exercise significant discretion over the placement and
promotion of our products in their stores, and they could give higher priority to the products and services of
other companies. Accordingly, losing the support of our retail distributors might limit or reduce the sales of
our cards and MoneyPak reload product. Our operating revenues may also be negatively affected by our
retail distributors’ operational decisions. For example, if a retail distributor fails to train its cashiers to sell
our products and services or implements changes in its systems that disrupt the integration between its
systems and ours, we could experience a decline in our product sales. Even if our retail distributors actively
and effectively promote our products and services, there can be no assurance that their efforts will result in
growth of our operating revenues.
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