eTrade 2003 Annual Report Download - page 39

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Table of Contents
Index to Financial Statements
LIQUIDITY AND CAPITAL RESOURCES
In addition to our cash flows from operations, we have historically met our liquidity needs primarily through investing and financing
activities, consisting principally of equity and debt offerings, increases in core deposit accounts, other borrowings and sales of loans or
securities. We believe that we will be able to renew or replace our funding sources at prevailing market rates, which may be higher or lower
than current rates, as well as to supplement these funding sources with cash flow from operations.
We currently anticipate that our available cash resources and credit will be sufficient to meet our anticipated working capital and capital
expenditure requirements for at least the next twelve months. We may need to raise additional funds in order to support expansion, fund
regulatory capital requirements, develop new or enhanced products and services, respond to competitive pressures, acquire complementary
businesses or technologies and/or take advantage of unanticipated opportunities.
Cash Provided by Operating Activities
The following table presents those significant items affecting our operating cash position for the periods indicated (in thousands):
During 2003, cash provided from operating activities decreased primarily due to decreased cash flow in loans held-for-sale and trading
activities. Offsetting these decreases were sales of our shares in SBI, generating approximately $122.2 million in gains.
During 2002, cash provided from operating activities increased from 2001 primarily due to an increase in loans held-for-sale activity.
This increase reflects the decision to reclassify $2.7 billion in loans held-for-investment to loans held-for-sale and the subsequent sale of these
When considered in conjunction with additional cash provided through financing activities of $3.3 billion, available cash resources in 2002
related to our bank activities were used to finance investing activities, which included net purchases of mortgage-backed and investment
securities totaling $3.5 billion and the purchase of E*TRADE Consumer Finance for $1.9 billion.
Equity and Debt Offerings and Retirements
Year Ended December 31,
2003
2002
2001
Net income (loss)
$
203,027
$
(186,405
)
$
(241,532
)
Selected non
-
cash charges:
Depreciation, amortization and discount accretion
443,746
325,980
179,126
Non
-
cash restructuring costs and other exit charges
70,811
11,880
96,793
Cumulative effect of accounting change
—
293,669
—
Net effect of changes in brokerage
-
related assets and liabilities
(103,595
)
102,996
325,369
Net loans held
-
for
-
sale activity
710,378
2,533,052
(604,899
)
Net trading securities activity
(454,905
)
(354,565
)
128,705
Other assets
75,329
(325,223
)
48,503
Total other net activity*
(257,442
)
(175,183
)
(157,583
)
Net cash provided by (used in) operating activities
$
687,349
$
2,226,201
$
(225,518
)
* Refer to the Consolidated Statements of Cash Flows for further detail included in Item 8. Consolidated Financial Statements and Supplementary Data.
In 2003, our Board of Directors approved a $100.0 million repurchase program. The open-ended plan provides the flexibility to buy back
common stock and retire debt or a combination of both. At December 31,
31