Green Dot 2014 Annual Report Download - page 46

Operating Expenses
The following table presents a breakdown of our operating expenses among sales and marketing, compensation
and benefits, processing, and other general and administrative expenses:
Year Ended December 31,
2014 2013
Amount
% of Total
Operating Revenues Amount
% of Total
Operating Revenues
(In thousands, except percentages)
Operating expenses:
Sales and marketing expenses $235,227 39.1%$218,370 38.1%
Compensation and benefits expenses 123,083 20.5 127,287 22.2
Processing expenses 79,053 13.1 89,856 15.7
Other general and administrative expenses 105,200 17.5 88,976 15.4
Total operating expenses $542,563 90.2%$524,489 91.4%
Sales and Marketing Expenses — Sales and marketing expenses totaled $235.2 million for the year ended
December„31, 2014, an increase of $16.8 million, or 8% from the comparable period in 2013. This increase was
primarily the result of an increase of $18.5 million in sales commissions and $1.9 million of additional costs of
manufacturing and distributing card packages, driven by period-over-period growth in new cards activated and a 3%
increase in the number of cash transfers sold. The cost of manufacturing and distributing card packages also increased
as we rolled out new products, including the GoBank product at Walmart. Sales and marketing expenses were partially
offset by a decrease in overall advertising expenses of $3.6 million.
Compensation and Benefits Expenses — Compensation and benefits expenses totaled $123.1 million for the year
ended December„31, 2014, a decrease of $4.2 million or 3%, from the comparable period in 2013. This decrease was
primarily the result of an increase to our overall capitalization rate associated with internally-developed software and
the absence of retention-based incentives associated with our acquisition of Loopt for the year ended December„31,
2014, which had favorable impacts of $9.7 million and $5.8 million, respectively. Compensation and benefits expenses
also decreased as a result of a decline of $4.7 million in third-party contractor expenses. These favorable impacts
were offset by increases of $10.4 million in employee salaries and related benefits and $5.6 million in employee stock-
based compensation due to growth in employee headcount and increases in incentive based awards to retain key
employees.
Processing Expenses — Processing expenses totaled $79.1 million for the year ended December„31, 2014, a
decrease of $10.8 million, or 12% from the comparable period in 2013. This decrease was primarily due to a reduction
of $9.5 million in fees paid to third-party issuing banks as we transitioned our card issuing program with GE Capital
Retail Bank to Green Dot Bank in February 2014.
Other General and Administrative Expenses — Other general and administrative expenses totaled $105.2 million
for the year ended December„31, 2014, an increase of $16.2 million, or 18%, from the comparable period in 2013.
This increase was primarily the result of a $6.7 million increase in professional services, primarily associated with our
acquisitions, a $5.5 million increase in depreciation and amortization of property and equipment associated with our
investment in technology to support our new product launches and infrastructure, a $4.6 million increase in transaction
losses, primarily associated with customer disputed transactions and a $4.4 million increase in amortization of acquired
intangibles. These increases were partially offset by a decrease of $5.2 million in impairment charges for the comparable
period. During 2013 these impairment charges were associated with capitalized internal-use software we determined
were no longer viable.
38