Green Dot 2015 Annual Report Download - page 45

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Sales and Marketing Expenses — Sales and marketing expenses totaled $230.4 million for the year ended
December 31, 2015, a decrease of $4.8 million, or 2% from the comparable period in 2014. Despite the increased
sales commission rate we pay to Walmart under the new agreement, sales commissions decreased as a result of a
period-over-period decline in the number of active cards in our portfolio and a decrease in our cash transfer revenues.
This decrease was partially offset by an increase in advertising and marketing expenses of $3.3 million due to our
acquired subsidiaries that focus on online and direct-to-consumer marketing channels.
Compensation and Benefits Expenses — Compensation and benefits expenses totaled $168.2 million for the year
ended December 31, 2015, an increase of $45.1 million or 37%, from the comparable period in 2014. This increase
was due to increases of $35.8 million in employee salaries and related benefits, $6.7 million in stock based compensation
and $2.7 million in third party contractor expenses, each primarily driven by our acquisitions from the fourth quarter of
2014 and first quarter of 2015.
Processing Expenses — Processing expenses totaled $102.1 million for the year ended December 31, 2015, an
increase of $23.0 million, or 29% from the comparable period in 2014. This increase was due to our growth in period-
over-period purchase volume of 13%, primarily attributable to our acquisitions from the fourth quarter of 2014 and first
quarter of 2015, offset by an increase in volume incentives from the payment networks.
Other General and Administrative Expenses — Other general and administrative expenses totaled $134.6 million
for the year ended December 31, 2015, an increase of $29.4 million, or 28%, from the comparable period in 2014.
This increase was primarily driven by increases of $18.7 million in amortization of acquired intangibles, $6.1 million in
depreciation and amortization of property and equipment, and $5.9 million in impairment charges associated with
certain capitalized internal-use use software. Other general and administrative expenses were also impacted by
increases in general overhead expenses incurred during the normal course of operations and our acquisitions of $5.3
million, our provision for overdrawn accounts of $3.4 million, and telecommunication expenses of $2.9 million. The
overall increases in other general and administrative expenses was partially offset by an $8.2 million gain associated
with the change in the fair value of contingent consideration, and decreases of $7.7 million in losses from customer
disputed transactions and professional services of $1.3 million.
Income Tax Expense
The following table presents a breakdown of our effective tax rate among federal, state and other:
Year Ended December 31,
2015 2014
U.S. federal statutory tax rate 35.0%35.0%
State income taxes, net of federal benefit 0.4 1.1
General business credits (0.9) (1.3)
Employee stock-based compensation 0.8 0.7
Transaction costs (2.1) 1.8
Other 0.7 0.7
Effective tax rate 33.9%38.0%
Our income tax expense decreased by $6.5 million to $19.7 million in the year ended December 31, 2015 from
the comparable period in 2014 due to an decrease in income before income taxes and an decrease in our effective
tax rate by 4.1 percentage points from 38.0% to 33.9%. The decrease in the effective tax rate for the year ended
December 31, 2015 as compared to the year ended December 31, 2014 is primarily attributable to transaction costs.
Results of Operations by Segment
Refer to Note 23—Segment Information to the consolidated financial statements and related notes in Item 8.
Financial Statements and Supplementary Data of this report.