eTrade 1999 Annual Report Download - page 53

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aggregate principal amount of $3,147,000. The proceeds of this loan were used to fund the purchase by Mr. Cotsakos of a personal
residence in the Silicon Valley area. The relocation loan accrued interest at the rate of 7% per annum. The principal amount and
accrued interest were repaid in May 1999.
7. LONG-TERM NOTES PAYABLE AND SHORT-TERM FUNDING
The principal source of financing for E*TRADE Securities' margin lending is cash balances in customers' accounts and financing
obtained from other broker- dealers through E*TRADE Securities' stock loan program. E*TRADE Securities also maintains financing
facilities with banks totaling $325 million to finance margin lending. There were no borrowings outstanding under these lines at
September 30, 1999 or 1998.
55
8. INCOME TAXES
The components of pre-tax income (loss) are as follows (in thousands):
Years Ended
September 30,
--------------------------
1999 1998 1997
-------- -------
-------
Domestic.......................................... $(96,816) $(1,485)
$25,240
Foreign........................................... 5,280 3,636
4,083
-------- -------
-------
Total pre-tax income (loss)..................... $(91,536) $2,151
$29,323
======== =======
=======
The components of income tax expense (benefit) are as follows (in thousands):
Years Ended
September 30,
------------------------
1999 1998 1997
-------- ----- -------
Current:
Federal.......................................... $ 1,387 $(223) $ 5,499
Foreign.......................................... 236 227 705
State............................................ 297 (353) 2,222
-------- ----- -------
Total current.................................. 1,920 (349) 8,426
-------- ----- -------
Deferred:
Federal.......................................... (30,717) (33) 1,727
State............................................ (8,301) 606
(23)
-------- ----- -------
Total deferred................................. (39,018) 573 1,704
-------- ----- -------
Income tax expense (benefit)....................... $(37,098) $ 224 $10,130
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