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GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
58
Note 1—Organization
Green Dot Corporation (“we,” “us” and “our” refer to Green Dot Corporation and its wholly-owned subsidiaries,
Next Estate Communications, Inc.; Green Dot Bank; and Loopt, LLC) is a bank holding company with a mission to
reinvent personal banking for the masses. Our prepaid products and services are available in more than 90,000 retail
stores nationwide and online at Greendot.com. Our products include: Green Dot MasterCard and Visa-branded prepaid
debit cards and several co-branded reloadable prepaid card programs, collectively referred to as our GPR cards; Visa-
branded gift cards; our MoneyPak and swipe reload proprietary products, collectively referred to as our cash transfer
products, which enable cash loading and transfer services through our Green Dot Network; and GoBank, an innovative
checking account developed for distribution and use via mobile phones. GoBank is available online at GoBank.com
and via the Apple App Store and Google Play. The Green Dot Network enables consumers to use cash to reload our
prepaid debit cards or to transfer cash to any of our Green Dot Network acceptance members, including competing
prepaid card programs and other online accounts.
We market our products and services to banked, underbanked and unbanked consumers in the United States
using distribution channels other than traditional bank branches, such as third-party retailer locations nationwide and
the Internet. Our prepaid debit cards are issued by Green Dot Bank and third-party issuing banks including GE Capital
Retail Bank, The Bancorp Bank, Sunrise Banks, N.A., and prior to November 2012, Columbus Bank and Trust Company,
a division of Synovus Bank. We also have multi-year distribution arrangements with many large and medium-sized
retailers, such as Walmart, Walgreens, CVS, Rite Aid, 7-Eleven, Kroger, Kmart, and Dollar Tree, and with various
industry resellers, such as Blackhawk Network and Incomm. We refer to participating retailers collectively as our “retail
distributors.”
Acquisitions
In March 2012, we acquired Loopt, Inc., or Loopt, for approximately $33.6 million in cash in exchange for all of its
outstanding shares. Loopt's results of operations are included in our consolidated results of operations following the
acquisition date. We paid $9.8 million in retention-based incentives for employees we hired in connection with the
acquisition of Loopt. In December 2012, we converted Loopt from a corporation to a limited liability company.
Note 2—Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
Our consolidated financial statements include the results of entities that we control through a 50% or more ownership
interest. We have prepared the accompanying consolidated financial statements in accordance with generally accepted
accounting principles in the United States of America, or GAAP. We have eliminated all significant intercompany
balances and transactions in consolidation. We include the results of operations of acquired companies from the date
of acquisition.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements, including the accompanying notes. We base
our estimates and assumptions on historical factors, current circumstances, and the experience and judgment of
management. We evaluate our estimates and assumptions on an ongoing basis. Actual results could differ from those
estimates.
Unrestricted Cash and Cash Equivalents and Federal Funds Sold
We consider all unrestricted highly liquid investments with an original maturity of three months or less to be
unrestricted cash and cash equivalents. Federal funds sold consist of unsecured overnight advances of excess balances
in our bank reserve account and are included in unrestricted cash and cash equivalents on our statements of cash
flows.
Investment Securities
Our investment portfolio is primarily comprised of fixed income securities. We classify these securities as available-
for-sale and report them at fair value with the related unrealized gains and losses, net of tax, included in accumulated
other comprehensive income, a component of stockholders’ equity. We classify investment securities with original
maturities greater than 90 days, but less than or equal to 365 days as current assets.