eTrade 2002 Annual Report Download - page 119

Table of Contents
Index to Financial Statements
Acquired net tangible assets and liabilities of E*TRADE Professional Trading and their allocation are as follows (in thousands):
Brokerage receivables, net $ 3,811
Investments 604
Property and equipment, net 7,906
Other assets 7,837
Accounts payable, accrued and other liabilities (32,074 )
Net tangible liabilities assumed $ (11,916 )
The Company is still waiting for information to determine the amount of certain E*TRADE Professional Trading liabilities which existed at the
date of acquisition; the Company anticipates finalizing these amounts by June 2003, otherwise it will record its best estimate of those liabilities
at that time. Any recognition of these liabilities would result in an increase to the amount of recorded goodwill. In addition, if contingent stock
consideration is paid, the Company will increase the purchase price with a corresponding increase to goodwill.
Pooling of Interests—Prior Years
The following acquisitions were accounted for as pooling of interests in fiscal 2000, and accordingly, all prior financial data of the Company
was restated to include the historical operating results of the acquired businesses. No significant adjustments were made to conform the
consolidated financial statements of E*TRADE Technologies from accounting principles generally accepted in Canada to accounting principles
generally accepted in the United States of America. All intercompany transactions related to the licensing arrangement between E*TRADE and
E*TRADE Technologies and the prior investment in E*TRADE Technologies by E*TRADE have been eliminated in all periods presented.
There were no significant intercompany transactions with any of the other companies discussed below. Acquisition-related expenses for the
three months ended December 31, 2000 and fiscal 2000 represent direct costs, principally financial advisory and other professional fees, related
to these transactions.
E*TRADE Technologies
On August 28, 2000, the Company completed its acquisition of VERSUS Technologies Corporation (now E*TRADE Technologies), a
Canadian-based provider of electronic securities trading services for institutional and retail investors and the owner of the E*TRADE Canada
license, in a share exchange. Prior to the acquisition, E*TRADE Technologies had been a strategic partner of E*TRADE, holding the rights to
the E*TRADE Canada license since 1997. Each E*TRADE Technologies shareholder received approximately 0.725 shares of E*TRADE
common stock or 0.725 shares of EGI Canada Corporation that are exchangeable on a one-for-one basis for common stock of E*TRADE (the
“Exchangeable Shares” see Note 20). Options held by E*TRADE Technologies employees were assumed by E*TRADE and, upon exercise,
are convertible into approximately 0.725 shares of E*TRADE common stock. In total, 10,644,223 Exchangeable Shares were authorized for
issuance in an exchange valued at approximately $173.9 million.
E*TRADE Financial Corporation
On January 12, 2000, the Company completed its acquisition of Telebanc Financial Corporation (subsequently renamed ETFC). Under the
terms of the agreement, ETFC shareholders received 1.05 shares of E*TRADE common stock for each share of ETFC common stock,
representing a total of 35,671,622 shares of the Company’ s common stock. The Company also assumed all outstanding ETFC options, which
were converted to options to purchase approximately 5,494,000 shares of the Company’ s common stock.
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2003. EDGAR Online, Inc.