Green Dot Reports Second Quarter 2021 Results

1

Reconciliations of total operating revenues to non-GAAP total operating revenues, net income to non-GAAP net income, diluted earnings per share to non-GAAP diluted earnings per share, and net income to adjusted EBITDA, respectively, are provided in the tables immediately following the consolidated financial statements. Additional information about the Company's non-GAAP financial measures can be found under the caption “About Non-GAAP Financial Measures” below.

2021

2020

Q2

Q1

Q4

Q3

Q2

Q1

(In millions)

Consolidated (1)

Gross dollar volume

$

17,399

$

20,666

$

14,349

$

14,453

$

15,107

$

14,294

Number of active accounts

6.03

6.35

5.45

5.72

6.25

5.74

Purchase volume

$

8,870

$

10,445

$

6,861

$

7,600

$

8,477

$

8,282

Consumer Services

Gross dollar volume

$

8,188

$

10,156

$

7,562

$

8,333

$

8,683

$

7,561

Number of active accounts

3.97

4.07

3.73

3.98

4.10

3.70

Direct deposit active accounts

0.92

0.97

0.88

0.91

0.90

0.89

Purchase volume

$

6,455

$

7,138

$

5,176

$

5,840

$

6,123

$

5,555

B2B Services

Gross dollar volume

$

9,211

$

10,510

$

6,787

$

6,120

$

6,424

$

6,733

Number of active accounts

2.06

2.28

1.72

1.74

2.15

2.04

Purchase volume

$

2,415

$

3,307

$

1,685

$

1,760

$

2,354

$

2,727

Money Movement

Number of cash transfers

10.19

10.32

11.29

12.81

12.48

12.13

Number of tax refunds processed

4.15

7.44

0.11

0.75

1.90

9.70

(1) Represents the sum of Green Dot's Consumer Services and B2B Services segments.

Range

Low

High

(In millions, except per share data)

Adjusted EBITDA

$

215.0

$

225.0

Depreciation and amortization*

(58.5

)

(58.5

)

Non-GAAP pre-tax income

$

156.5

$

166.5

Tax impact**

(36.0

)

(38.3

)

Non-GAAP net income

$

120.5

$

128.2

Non-GAAP diluted weighted-average shares issued and outstanding

56.5

56.5

Non-GAAP earnings per share

$

2.13

$

2.27

*

Excludes the impact of amortization of acquired intangible assets

**

Assumes a non-GAAP effective tax rate of approximately 23% for full year.

2

For additional information, see reconciliations of forward-looking guidance for these non-GAAP financial measures to their respective, most directly comparable projected GAAP financial measures provided in the tables immediately following the reconciliation of Net Income to Adjusted EBITDA.

GREEN DOT CORPORATION

CONSOLIDATED BALANCE SHEETS

June 30, 2021

December 31, 2020

(unaudited)

Assets

(In thousands, except par value)

Current assets:

Unrestricted cash and cash equivalents

$

1,891,100

$

1,491,842

Restricted cash

4,206

4,859

Settlement assets

384,200

782,262

Accounts receivable, net

58,299

67,755

Prepaid expenses and other assets

61,795

66,705

Income tax receivable

611

—

Total current assets

2,400,211

2,413,423

Investment securities available-for-sale, at fair value

1,090,513

970,969

Loans to bank customers, net of allowance for loan losses of $6,693 and $757 as of June 30, 2021 and December 31, 2020, respectively

27,355

21,011

Prepaid expenses and other assets

124,563

40,481

Property, equipment, and internal-use software, net

130,821

133,400

Operating lease right-of-use assets

12,024

13,134

Deferred expenses

8,688

18,332

Net deferred tax assets

17,499

12,739

Goodwill and intangible assets

476,890

491,778

Total assets

$

4,288,564

$

4,115,267

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

39,032

$

34,823

Deposits

2,864,782

2,735,116

Obligations to customers

129,641

95,375

Settlement obligations

11,252

17,759

Amounts due to card issuing banks for overdrawn accounts

498

235

Other accrued liabilities

120,427

145,359

Operating lease liabilities

7,329

8,175

Deferred revenue

16,254

28,584

Income tax payable

10,795

12,146

Total current liabilities

3,200,010

3,077,572

Other accrued liabilities

2,333

4,275

Operating lease liabilities

11,329

16,396

Net deferred tax liabilities

7,192

7,192

Total liabilities

3,220,864

3,105,435

Stockholders’ equity:

Class A common stock, $0.001 par value; 100,000 shares authorized as of June 30, 2021 and December 31, 2020; 54,640 and 54,034 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

55

54

Additional paid-in capital

375,551

354,460

Retained earnings

702,558

651,890

Accumulated other comprehensive (loss) income

(10,464

)

3,428

Total stockholders’ equity

1,067,700

1,009,832

Total liabilities and stockholders’ equity

$

4,288,564

$

4,115,267

GREEN DOT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

(In thousands, except per share data)

Operating revenues:

Card revenues and other fees

$

197,937

$

152,681

$

383,949

$

294,075

Cash processing revenues

66,825

65,450

157,740

188,516

Interchange revenues

101,115

95,970

212,341

186,836

Interest income, net

3,496

2,139

8,829

8,982

Total operating revenues

369,373

316,240

762,859

678,409

Operating expenses:

Sales and marketing expenses

96,507

106,811

215,410

223,549

Compensation and benefits expenses

59,984

58,867

134,951

111,932

Processing expenses

94,316

71,371

191,985

142,466

Other general and administrative expenses

86,763

73,801

154,725

136,223

Total operating expenses

337,570

310,850

697,071

614,170

Operating income

31,803

5,390

65,788

64,239

Interest expense, net

38

443

75

684

Other income, net

1,633

2,154

547

2,346

Income before income taxes

33,398

7,101

66,260

65,901

Income tax expense

8,465

3,807

15,592

15,762

Net income

$

24,933

$

3,294

$

50,668

$

50,139

Basic earnings per common share:

$

0.46

$

0.06

$

0.93

$

0.95

Diluted earnings per common share:

$

0.45

$

0.06

$

0.91

$

0.93

Basic weighted-average common shares issued and outstanding:

54,005

52,275

53,829

52,084

Diluted weighted-average common shares issued and outstanding:

55,061

53,164

55,059

52,913

GREEN DOT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended June 30,

2021

2020

(In thousands)

Operating activities

Net income

$

50,668

$

50,139

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of property, equipment and internal-use software

27,181

28,175

Amortization of intangible assets

13,887

14,231

Provision for uncollectible overdrawn accounts from purchase transactions

10,213

4,398

Provision for loan losses

10,143

254

Stock-based compensation

25,603

24,987

(Earnings) losses in equity method investments

(578

)

2,716

Realized gain on sale of available-for-sale investment securities

—

(5,062

)

Amortization of premium on available-for-sale investment securities

1,588

432

Amortization of deferred financing costs

84

84

Impairment of long-lived assets

—

1,088

Changes in operating assets and liabilities:

Accounts receivable, net

(757

)

8,583

Prepaid expenses and other assets

6,330

9,285

Deferred expenses

9,644

9,981

Accounts payable and other accrued liabilities

(15,505

)

13,665

Deferred revenue

(12,542

)

(15,096

)

Income tax receivable/payable

(1,958

)

15,407

Other, net

(4,545

)

(1,751

)

Net cash provided by operating activities

119,456

161,516

Investing activities

Purchases of available-for-sale investment securities

(217,652

)

(208,502

)

Proceeds from maturities of available-for-sale securities

72,666

61,717

Proceeds from sales and calls of available-for-sale securities

5,198

187,668

Payments for acquisition of property and equipment

(23,826

)

(31,395

)

Net changes in loans

(16,487

)

1,612

Investment in TailFin Labs, LLC

(35,000

)

(35,000

)

Purchase of bank-owned life insurance policies

(50,000

)

—

Other

(599

)

(832

)

Net cash used in investing activities

(265,700

)

(24,732

)

Financing activities

Borrowings on revolving line of credit

—

100,000

Repayments on revolving line of credit

—

(135,000

)

Proceeds from exercise of options and ESPP purchases

5,230

4,858

Taxes paid related to net share settlement of equity awards

(9,741

)

(2,985

)

Net changes in deposits

125,539

826,203

Net changes in settlement assets and obligations to customers

425,821

(56,603

)

Contingent consideration payments

(2,000

)

(2,000

)

Net cash provided by financing activities

544,849

734,473

Net increase in unrestricted cash, cash equivalents and restricted cash

398,605

871,257

Unrestricted cash, cash equivalents and restricted cash, beginning of period

1,496,701

1,066,154

Unrestricted cash, cash equivalents and restricted cash, end of period

$

1,895,306

$

1,937,411

Cash paid for interest

$

274

$

759

Cash paid for income taxes

$

17,289

$

34

Reconciliation of unrestricted cash, cash equivalents and restricted cash at end of period:

Unrestricted cash and cash equivalents

$

1,891,100

$

1,931,467

Restricted cash

4,206

5,944

Total unrestricted cash, cash equivalents and restricted cash, end of period

$

1,895,306

$

1,937,411

GREEN DOT CORPORATION

REPORTABLE SEGMENTS

(UNAUDITED)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Segment Revenue

(In thousands)

Consumer Services

$

182,093

$

162,639

$

366,434

$

315,561

B2B Services

112,589

76,619

218,564

150,459

Money Movement Services

66,019

65,667

156,386

185,719

Corporate and Other

(2,763

)

(4,906

)

(3,641

)

(5,179

)

Total segment revenues

357,938

300,019

737,743

646,560

Net revenue adjustment (8)

11,435

16,221

25,116

31,849

Total operating revenues

$

369,373

$

316,240

$

762,859

$

678,409

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Segment Profit

(In thousands)

Consumer Services

$

55,790

$

58,412

$

109,317

$

108,797

B2B Services

18,174

16,327

35,707

36,154

Money Movement Services

38,192

27,842

87,006

94,561

Corporate and Other

(49,232

)

(57,331

)

(95,746

)

(102,144

)

Total segment profit *

62,924

45,250

136,284

137,368

Reconciliation to income before income taxes

Depreciation and amortization of property, equipment and internal-use software

13,981

14,479

27,181

28,176

Stock based compensation and related employer taxes

8,444

13,758

25,626

25,336

Amortization of acquired intangible assets

6,943

6,952

13,887

14,231

Impairment charges

—

1,088

—

1,088

Other expense

1,753

3,583

3,802

4,298

Operating income

31,803

5,390

65,788

64,239

Interest expense, net

38

443

75

684

Other income, net

1,633

2,154

547

2,346

Income before income taxes

$

33,398

$

7,101

$

66,260

$

65,901

* Total segment profit is also referred to herein as adjusted EBITDA in its non-GAAP measures. Additional information about the Company's non-GAAP financial measures can be found under the caption “About Non-GAAP Financial Measures."

GREEN DOT CORPORATION

Reconciliation of Total Operating Revenues to Non-GAAP Total Operating Revenues (1)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

(In thousands)

Total operating revenues

$

369,373

$

316,240

$

762,859

$

678,409

Net revenue adjustments (8)

(11,435

)

(16,221

)

(25,116

)

(31,849

)

Non-GAAP total operating revenues

$

357,938

$

300,019

$

737,743

$

646,560

Reconciliation of Net Income to Non-GAAP Net Income (1)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

(In thousands, except per share data)

Net income

$

24,933

$

3,294

$

50,668

$

50,139

Stock-based compensation and related employer payroll taxes (3)

8,444

13,758

25,626

25,336

Amortization of acquired intangible assets (4)

6,943

6,952

13,887

14,231

Transaction costs (4)

1,124

—

1,124

—

Amortization of deferred financing costs (5)

42

42

84

84

Impairment charges (5)

—

1,088

—

1,088

Extraordinary severance expenses (6)

1,233

3,583

3,248

4,319

(Earnings) losses in equity method investments (5)

(1,453

)

2,939

(578

)

2,716

Realized gain on sale of investment securities (5)

—

(5,062

)

—

(5,062

)

Other income, net (5)

(784

)

(31

)

(539

)

(21

)

Income tax effect (7)

(2,699

)

(3,146

)

(9,657

)

(9,040

)

Non-GAAP net income

$

37,783

$

23,417

$

83,863

$

83,790

Diluted earnings per common share

GAAP

$

0.45

$

0.06

$

0.91

$

0.93

Non-GAAP

$

0.68

$

0.43

$

1.51

$

1.56

Diluted weighted-average common shares issued and outstanding

GAAP

55,061

53,164

55,059

52,913

Non-GAAP

55,576

54,004

55,614

53,788

Reconciliation of GAAP to Non-GAAP Diluted Weighted-Average

Shares Issued and Outstanding

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

(In thousands)

Diluted weighted-average shares issued and outstanding

55,061

53,164

55,059

52,913

Weighted-average unvested Walmart restricted shares (9)

515

840

555

875

Non-GAAP diluted weighted-average shares issued and outstanding

55,576

54,004

55,614

53,788

GREEN DOT CORPORATION

Supplemental Detail on Non-GAAP Diluted Weighted-Average Common Shares Issued and Outstanding

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

(In thousands)

Class A common stock outstanding as of June 30:

54,640

53,297

54,640

53,297

Weighting adjustment

(120

)

(182

)

(256

)

(338

)

Dilutive potential shares:

Stock options

446

58

477

57

Service based restricted stock units

362

567

453

469

Performance-based restricted stock units

242

258

293

299

Employee stock purchase plan

6

6

7

4

Non-GAAP diluted weighted-average shares issued and outstanding

55,576

54,004

55,614

53,788

Reconciliation of Net Income to Adjusted EBITDA (1)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

(In thousands)

Net income

$

24,933

$

3,294

$

50,668

$

50,139

Interest expense, net (2)

38

443

75

684

Income tax expense

8,465

3,807

15,592

15,762

Depreciation and amortization of property, equipment and internal-use software (2)

13,981

14,479

27,181

28,176

Stock-based compensation and related employer payroll taxes (2)(3)

8,444

13,758

25,626

25,336

Amortization of acquired intangible assets (2)(4)

6,943

6,952

13,887

14,231

Transaction costs (2)(4)

1,124

—

1,124

—

Impairment charges (2)(5)

—

1,088

—

1,088

Extraordinary severance expenses (2)(6)

1,233

3,583

3,248

4,319

(Earnings) losses in equity method investments (2)(5)

(1,453

)

2,939

(578

)

2,716

Realized gain on sale of investment securities (2)(5)

—

(5,062

)

—

(5,062

)

Other income, net (2)(5)

(784

)

(31

)

(539

)

(21

)

Adjusted EBITDA

$

62,924

$

45,250

$

136,284

$

137,368

Non-GAAP total operating revenues

$

357,938

$

300,019

$

737,743

$

646,560

Adjusted EBITDA/Non-GAAP total operating revenues (adjusted EBITDA margin)

17.6

%

15.1

%

18.5

%

21.2

%

GREEN DOT CORPORATION

Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to

Projected GAAP Total Operating Revenues (1)

(Unaudited)

FY 2021

Range

Low

High

(In millions)

Total operating revenues

$

1,368

$

1,388

Net revenue adjustments (8)

(38

)

(38

)

Non-GAAP total operating revenues

$

1,330

$

1,350

Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to

Projected GAAP Net Income (1)

(Unaudited)

FY 2021

Range

Low

High

(In millions)

Net income

$

55.4

$

63.0

Adjustments (10)

159.6

162.0

Adjusted EBITDA

$

215.0

$

225.0

Non-GAAP total operating revenues

$

1,350

$

1,330

Adjusted EBITDA / Non-GAAP total operating revenues (Adjusted EBITDA margin)

15.9

%

16.9

%

Reconciliation of Forward Looking Guidance for Non-GAAP Financial Measures to

Projected GAAP Net Income and GAAP Diluted Weighted-Average Shares Issued and Outstanding (1)

(Unaudited)

FY 2021

Range

Low

High

(In millions, except per share data)

Net income

$

55.4

$

63.0

Adjustments (10)

65.1

65.2

Non-GAAP net income

$

120.5

$

128.2

Diluted earnings per share

GAAP

$

0.99

$

1.12

Non-GAAP

$

2.13

$

2.27

Diluted weighted-average shares issued and outstanding

GAAP

56.0

56.0

Weighted-average unvested Walmart restricted shares (9)

0.5

0.5

Non-GAAP

56.5

56.5

(1)

To supplement Green Dot’s consolidated financial statements presented in accordance with GAAP, Green Dot uses measures of operating results that are adjusted to exclude various, primarily non-cash, expenses and charges. These financial measures are not calculated or presented in accordance with GAAP and should not be considered as alternatives to or substitutes for operating revenues, operating income, net income or any other measure of financial performance calculated and presented in accordance with GAAP. These financial measures may not be comparable to similarly-titled measures of other organizations because other organizations may not calculate their measures in the same manner as Green Dot does. These financial measures are adjusted to eliminate the impact of items that Green Dot does not consider indicative of its core operating performance. You are encouraged to evaluate these adjustments and the reasons Green Dot considers them appropriate.

Green Dot believes that the non-GAAP financial measures it presents are useful to investors in evaluating Green Dot’s operating performance for the following reasons:

• Green Dot records stock-based compensation from period to period, and recorded stock-based compensation expenses and related employer payroll taxes, net of forfeitures, of approximately $8.4 million and $13.8 million for the three months ended June 30, 2021 and 2020, respectively. By comparing Green Dot’s adjusted EBITDA, non-GAAP net income and non-GAAP diluted earnings per share in different historical periods, investors can evaluate Green Dot’s operating results without the additional variations caused by stock-based compensation expense and related employer payroll taxes, which may not be comparable from period to period due to changes in the fair market value of Green Dot’s Class A common stock (which is influenced by external factors like the volatility of public markets and the financial performance of Green Dot’s peers) and is not a key measure of Green Dot’s operations;
• adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items, such as non-operating net interest income and expense, income tax benefit and expense, depreciation and amortization, stock-based compensation and related employer payroll taxes, changes in the fair value of contingent consideration, impairment charges, severance costs related to extraordinary personnel reductions, certain legal settlement charges, earnings or losses from equity method investments, realized gains or losses on the sale of investment securities, and other charges and income that can vary substantially from company to company depending upon their respective financing structures and accounting policies, the book values of their assets, their capital structures and the methods by which their assets were acquired; and
• securities analysts use adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies.

Green Dot’s management uses the non-GAAP financial measures:

• as measures of operating performance, because they exclude the impact of items not directly resulting from Green Dot’s core operations;
• for planning purposes, including the preparation of Green Dot’s annual operating budget;
• to allocate resources to enhance the financial performance of Green Dot’s business;
• to evaluate the effectiveness of Green Dot’s business strategies;
• to establish metrics for variable compensation; and
• in communications with Green Dot’s board of directors concerning Green Dot’s financial performance.

Green Dot understands that, although adjusted EBITDA and other non-GAAP financial measures are frequently used by investors and securities analysts in their evaluations of companies, these measures have limitations as an analytical tool, and you should not consider them in isolation or as substitutes for analysis of Green Dot’s results of operations as reported under GAAP. Some of these limitations are:

• that these measures do not reflect Green Dot’s capital expenditures or future requirements for capital expenditures or other contractual commitments;
• that these measures do not reflect changes in, or cash requirements for, Green Dot’s working capital needs;
• that these measures do not reflect non-operating interest expense or interest income;
• that these measures do not reflect cash requirements for income taxes;
• that, although depreciation and amortization are non-cash charges, the assets being depreciated or amortized will often have to be replaced in the future, and these measures do not reflect any cash requirements for these replacements; and
• that other companies in Green Dot’s industry may calculate these measures differently than Green Dot does, limiting their usefulness as comparative measures.

(2)

Green Dot does not include any income tax impact of the associated non-GAAP adjustment to adjusted EBITDA, as the case may be, because each of these non-GAAP financial measures is provided before income tax expense.

(3)

This expense consists primarily of expenses for restricted stock units (including performance-based restricted stock units), performance-based stock options and related employer payroll taxes. Stock-based compensation expense is not comparable from period to period due to changes in the fair market value of Green Dot’s Class A common stock (which is influenced by external factors like the volatility of public markets and the financial performance of Green Dot’s peers) and is not a key measure of Green Dot’s operations. Green Dot excludes stock-based compensation expense from its non-GAAP financial measures primarily because it consists of non-cash expenses that Green Dot does not believe are reflective of ongoing operating results. Green Dot also believes that it is not useful to investors to understand the impact of stock-based compensation to its results of operations. Further, the related employer payroll taxes are dependent upon volatility in Green Dot's stock price, as well as the timing and size of option exercises and vesting of restricted stock units, over which Green Dot has limited to no control. This expense is included as a component of compensation and benefits expenses on Green Dot's consolidated statements of operations.

(4)

Green Dot excludes certain income and expenses that are the result of acquisitions. These acquisition-related adjustments include items such as the amortization of acquired intangible assets, changes in the fair value of contingent consideration, settlements of contingencies established at time of acquisition and other acquisition related charges, such as integration charges and professional and legal fees, which result in Green Dot recording expenses or fair value adjustments in its GAAP financial statements. Green Dot analyzes the performance of its operations without regard to these adjustments. In determining whether any acquisition-related adjustment is appropriate, Green Dot takes into consideration, among other things, how such adjustments would or would not aid in the understanding of the performance of its operations. These items are included as a component of other general and administrative expenses on Green Dot's consolidated statements of operations, as applicable for the periods presented.

(5)

Green Dot excludes certain income and expenses that are not reflective of ongoing operating results. It is difficult to estimate the amount or timing of these items in advance. Although these events are reflected in Green Dot's GAAP financial statements, Green Dot excludes them in its non-GAAP financial measures because Green Dot believes these items may limit the comparability of ongoing operations with prior and future periods. These adjustments include items such as amortization attributable to deferred financing costs, impairment charges related to long-lived assets, earnings or losses from equity method investments, credit-related impairment and/or realized gains or losses on the sale of investment securities, legal settlement expenses and other income and expenses, as applicable for the periods presented. In determining whether any such adjustment is appropriate, Green Dot takes into consideration, among other things, how such adjustments would or would not aid in the understanding of the performance of its operations. Each of these adjustments, except for amortization of deferred financing costs, earnings and losses from equity method investments and credit-related impairment and/or realized gains and losses on the sale of investment securities, which are all included below operating income, are included within other general and administrative expenses on Green Dot's consolidated statements of operations.

(6)

During the three and six months ended June 30, 2021, Green Dot recorded charges of $1.2 million and $3.2 million, respectively, principally related to severance benefits, which were paid out in connection with the transition and employment agreements of certain former executives and other personnel. Although severance expenses are an ordinary part of its operations, the magnitude and scale of these costs are not indicative of its core operating performance. This expense is included as a component of compensation and benefits expenses on Green Dot's consolidated statements of operations.

(7)

Represents the tax effect for the related non-GAAP measure adjustments using Green Dot's year to date non-GAAP effective tax rate. It also excludes both the impact of excess tax benefits related to stock-based compensation and the IRC §162(m) limitation that applies to performance-based restricted stock units and stock options expense as of June 30, 2021.

(8)

Represents commissions and certain processing-related costs associated with Banking as a Service ("BaaS") products and services where Green Dot does not control customer acquisition. This adjustment is netted against Green Dot's B2B Services revenues when evaluating segment performance.

(9)

Represents the weighted average of the unvested balance of restricted shares issued to Walmart in January 2020. Walmart is entitled to voting rights and participate in any dividends paid on the unvested balance and therefore, the shares are included in the computation of non-GAAP diluted earnings per share.

(10)

These amounts represent estimated adjustments for non-operating net interest income, income taxes, depreciation and amortization, employee stock-based compensation and related employer taxes, contingent consideration, impairment charges, severance costs related to extraordinary personnel reductions, earnings and losses from equity method investments, realized gains and losses from investment securities, legal settlement gains and expenses and other income and expenses. Employee stock-based compensation expense includes assumptions about the future fair value of the Company’s Class A common stock (which is influenced by external factors like the volatility of public markets and the financial performance of the Company’s peers).