Green Dot 2011 Annual Report Download - page 28

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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 release 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 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.
Substantially all of our cards are issued by GE Capital Retail Bank, formerly GE Money Bank, or Columbus Bank
and Trust Company, a division of Synovus Bank. While we are in the process of transitioning our card issuing program
with Columbus Bank and Trust Company to our subsidiary bank, Green Dot Bank, our existing relationships with these
banks, particularly GE Capital Retail Bank, are currently, and will be for the foreseeable future, a critical component
of our ability to conduct our business and to maintain our revenue and expense structure. Our reliance on third-party
banking relationships will increase and we may need to establish new banking relationships if we are unable to
successfully transition our card issuing program with Columbus Bank and Trust Company to our subsidiary bank, which
has no experience with issuing our GPR cards, and may be unable to do so for the foreseeable future at the volume
necessary to conduct our business. We may be unable to maintain relationships with the 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 banking relationships,
we would 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 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.
We receive important services from third-party vendors, including card processing from Total System
Services, Inc. Replacing them would be difficult and disruptive to our business.
Some services relating to our business, including fraud management and other customer verification services,
transaction processing and settlement, card production and customer service, are outsourced to third-party vendors,
such as Total System Services, Inc. for card processing and Genpact International, Inc. for call center services. We
intend to migrate our card processing from Total System Services, Inc. to an in-house processing solution, but will