eTrade 2003 Annual Report Download - page 73

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Table of Contents
Index to Financial Statements
The preceding pro forma information is provided for informational purposes only and is not necessarily indicative of future operating
results or results that would have been achieved had the acquisitions taken place at the beginning of 2001. The acquisitions in 2003 were not
material to the pro forma results and therefore have been excluded.
NOTE 4—BROKERAGE RECEIVABLES, NET AND BROKERAGE PAYABLES
Brokerage receivables, net and brokerage payables consist of the following (in thousands):
Receivable from customers and non-customers represents credit extended to customers and non-customers to finance their purchases of
securities on margin, as well as amounts receivable from customers upon settlement of their trades. Receivable from and payable to brokers,
dealers and clearing organizations result from the Company’s brokerage activities. Credit extended to customers and non-customers with
respect to margin accounts was $1,752 million at December 31, 2003 and $980 million at December 31, 2002. Securities owned by customers
and non-customers are held as collateral for amounts due on margin balances, the value of which is not reflected in the consolidated balance
sheets. At December 31, 2003, the Company has received collateral primarily in connection with securities borrowed and customer margin
loans, which it can sell or repledge with a market value of $2,749 million. Of this amount, $773 million has been pledged or sold at December
31, 2003 in connection with securities loans, bank borrowings and deposits with clearing organizations. Included in deposits paid for securities
borrowed and deposits received for securities loaned at December 31, 2003, are amounts from transactions involving MJK Clearing and one
other broker. The parties in this transaction have a dispute over the amounts owed, as more fully described in Note 25. Payable to customers
and non-customers represents free credit balances and other customer and non-customer funds pending completion of securities transactions.
The Company pays interest on certain customer and non-customer credit balances.
62
December 31,
2003
2002
Receivable from customers and non
-
customers (less allowance for doubtful accounts of $1,082 and $3,062)
$
1,820,161
$
1,074,677
Receivable from brokers, dealers and clearing organizations:
Net settlement and deposits with clearing organizations
128,419
53,912
Deposits paid for securities borrowed
315,789
279,214
Securities failed to deliver
2,592
1,707
Other
30,817
12,256
Total brokerage receivables, net
$
2,297,778
$
1,421,766
Payable to customers and non
-
customers
$
3,123,478
$
2,099,852
Payable to brokers, dealers and clearing organizations:
Deposits received for securities loaned
521,454
581,534
Securities failed to receive
4,978
3,117
Other
41,266
29,184
Total brokerage payables
$
3,691,176
$
2,713,687