Variable Interest Entities

Upon completion of our IPO, GreenSky, Inc. became the managing member of GS Holdings with 100% of the management and voting power in GS Holdings. In its capacity as managing member, GreenSky, Inc. has the sole authority to make decisions on behalf of GS Holdings and bind GS Holdings to signed agreements. Further, GS Holdings maintains separate capital accounts for its investors as a mechanism for tracking earnings and subsequent distribution rights. Accordingly, management concluded that GS Holdings is determined to be a limited partnership or similar legal entity as contemplated in ASC 810.

Furthermore, management concluded that GreenSky, Inc. is GS Holdings' primary beneficiary. As the primary beneficiary, GreenSky, Inc. consolidates the results of GS Holdings for financial reporting purposes under the variable interest consolidation model guidance in ASC 810.

GreenSky, Inc.’s relationship with GS Holdings results in no recourse to the general credit of GreenSky, Inc. GS Holdings and its consolidated subsidiaries represents GreenSky, Inc.’s sole investment. GreenSky, Inc. shares in the income and losses of GS Holdings in direct proportion to GreenSky, Inc.’s ownership percentage. Further, GreenSky, Inc. has no contractual requirement to provide financial support to GS Holdings.

Below are tabular disclosures, which give insight into how GS Holdings affects GreenSky, Inc.’s financial position, performance and cash flows. Prior to the IPO and Reorganization Transactions, GreenSky, Inc. was not impacted by GS Holdings, and therefore 2017 periods were not presented below.

The following table presents the balances related to GS Holdings that are included on the Unaudited Consolidated Balance Sheets as well as GreenSky, Inc.'s interest in the variable interest entity ("VIE") at June 30, 2018.



	June 30, 2018
	June 30, 2018

Assets
Cash	$	236,524
Restricted cash	142,542
Loan receivables held for sale, net	43,489
Accounts receivable, net	20,424
Related party receivables	335
Property, equipment and software, net	8,518
Other assets	5,401
Total assets	$	457,233

Liabilities and Members Equity (Deficit)
Liabilities
Accounts payable	$	6,342
Accrued compensation and benefits	6,451
Other accrued expenses	1,077
Finance charge reversal liability	107,047
Term loan	387,979
Related party liabilities	825
Other liabilities	39,612
Total liabilities	549,333

Members Equity (Deficit)
Equity attributable to Continuing LLC Members	(68,020		)
Equity attributable to GreenSky, Inc.	(24,080		)
Total members equity (deficit)	(92,100		)
Total liabilities and members equity (deficit)	$	457,233

The following table reflects the impact of consolidation of GS Holdings into the Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2018.



	Three Months Ended June 30,			Six Months Ended June 30,
	2018			2018

Total operating revenue	$	105,704		$	191,030
Total operating expenses	58,896			120,645
Operating profit	46,808			70,385
Total other income/(expense), net	(4,398		)	(9,371		)
Net income	$	42,410		$	61,014

The following table reflects the cash flow impact of GS Holdings on the Unaudited Consolidated Statement of Cash Flows during the six months ended June 30, 2018:



	Six Months Ended June 30,
	2018

Net cash provided by operating activities	$	109,604
Net cash (used in) investing activities	(2,707		)
Net cash (used in) financing activities	(81,669		)

Net increase in cash and restricted cash	25,228
Cash and restricted cash at beginning of period	353,838
Cash and restricted cash at end of period	$	379,066