Green Dot 2010 Annual Report Download - page 61

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expected or contractually committed future obligations, at December 31, 2010. We believe that we will be
able to fund these obligations through cash generated from operations and from our existing cash balances.
Total
Less than
1 Year 1-3 Years 3-5 Years
More than
5 Years
Payments Due by Period
Long-term debt obligations . . . . . . . . . . . . . . $ — $ — $ — $ — $ —
Capital lease obligations . . . . . . . . . . . . . . . . — — — — —
Operating lease obligations . . . . . . . . . . . . . . 4,246 2,212 1,563 471 —
Purchase obligations(1). . . . . . . . . . . . . . . . . 36,066 27,201 8,865 — —
Other long-term liabilities. . . . . . . . . . . . . . . . — — — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,312 $29,413 $10,428 $471 $ —
(1) Primarily future minimum payments under agreements with vendors and our retail distributors. See
note 13 of the notes to our audited consolidated financial statements.
Off-Balance Sheet Arrangements
During the year ended December 31, 2010, the five months ended December 31, 2009 and fiscal 2009
and 2008, we did not have any relationships with unconsolidated organizations or financial partnerships,
such as structured finance or special purpose entities that would have been established for the purpose of
facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
Market risk is the potential for economic losses from changes in market factors such as foreign
currency exchange rates, credit, interest rates and equity prices. We believe that we have limited exposure
to risks associated with changes in foreign currency exchange rates, interest rates and equity prices. We
have no foreign operations, and we do not transact business in foreign currencies. We do not hold or enter
into derivatives or other financial instruments for trading or speculative purposes. We do not consider our
cash and cash equivalents to be subject to interest rate risk due to their short periods of time to maturity.
We do have exposure to credit and liquidity risk associated with the financial institutions that hold our cash,
cash equivalents and restricted cash, our settlement assets due from our retail distributors that collect funds
and fees from our customers, and amounts due from our issuing banks for fees collected on our behalf.
We manage the credit and liquidity risk associated with our cash and cash equivalents and amounts
due from issuing banks by maintaining an investment policy that restricts our correspondent banking
relationships to approved, well capitalized institutions and restricts investments to highly liquid, low credit
risk related assets. Our policy has limits related to liquidity ratios, the concentration that we may have with
a single institution or issuer and effective maturity dates as well as restrictions on the type of assets that
may be invested in. The management Asset Liability Committee is responsible for monitoring compliance
with our Capital Asset Liability Management policy and related limits on an ongoing basis, and reports
regularly to the audit committee of our board of directors.
Our exposure to credit risk associated with our retail distributors is mitigated due to the short time
period, currently an average of three days, that retailer settlement assets are outstanding. We perform an
initial credit review and assign a credit limit to each new retail distributor . We monitor each retail
distributor’s settlement asset exposure and its compliance with its specified contractual settlement terms
on a daily basis and assess their credit limit and financial condition on a periodic basis. The management
Enterprise Risk Management Committee is responsible for monitoring our retail distributor exposure and
assigning credit limits and reports regularly to the audit committee of our board of directors.
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