eTrade 2001 Annual Report Download - page 146

Balance at year-end $ 3,264,140 $ 1,894,000
Mortgage-backed securities underlying the repurchase agreements as of the end of the
year:
Carrying value, including accrued interest $ 3,001,445 $ 1,951,950
Estimated market value $ 2,986,949 $ 1,933,630
The Company enters into sales of securities under agreements to repurchase similar securities. Repurchase agreements are
collateralized by fixed and variable rate mortgage-backed securities or investment grade securities. Repurchase agreements are treated
as financings for financial statement purposes, and the obligations to repurchase securities sold are reflected as borrowings by Bank
subsidiary in the consolidated balance sheet. The brokers retain possession of the securities collateralizing the repurchase agreements
until maturity. If the counterparty in a repurchase agreement were to fail, the Company might incur an accounting loss for the excess
collateral posted with the counterparty. As of December 31, 2001, there were no counterparties with which the Company’ s amount at
risk exceeded 10% of the Company’ s shareowners’ equity. Included in repurchase agreements and other short-term borrowings at
December 31, 2001 are $371 million of overnight and other short-term borrowings from the Federal Reserve Bank in connection with
the Federal Reserve Bank’ s special direct investment and treasury, tax and loan programs. The Company has pledged $502million of
securities and mortgage loans to secure these borrowings.
14.ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES AND SHORT-TERM FUNDING
Accounts payable, accrued and other liabilities consist of the following (in thousands):
December31, 2001 September30, 2000
Fair value of financial derivative instruments (see Note 24) $ 253,342 $ —
Accrued expenses 186,758 156,740
Other short-term borrowing arrangements 33,050 27,480
Restructuring accrual (see Note 3) 89,543 —
Accounts payable 33,683 8,076
Capital lease obligations 18,209 26,903
Other 203,879 137,127
$ 818,464 $ 356,326
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The principal source of financing for E*TRADE Securities’ margin lending activity 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 $275.0 million to finance margin lending. There were no borrowings outstanding under these
lines at December 31, 2001 and September30, 2000.
During the year ended December 31, 2001, the Company obtained term loans from financial institutions, which are collateralized by
equipment owned by the Company. Borrowings under these term loans bear interest at 3.0% to 3.25% above LIBOR (4.876% to
5.126% at December 31, 2001). The Company had $15.0 million outstanding under these term loans at December 31, 2001.
In November 2001, the Company renewed a $50 million line of credit under an agreement with a bank that expires in October 2002.
2002. EDGAR Online, Inc.