eTrade 2003 Annual Report Download - page 78

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Table of Contents
Index to Financial Statements
NOTE 6—OTHER INVESTMENTS
Other investments are composed of equity method and other investments. Investments in entities in which the Company owns between
20% and 50% or has the ability to exercise significant influence are accounted for using the equity method. Investments in securities in which
there is a less than 20% ownership are carried at cost.
The carrying amounts of other investments are shown below (in thousands):
Equity Method Investments
December 31,
2003
2002
Joint ventures
$
16,386
$
61,451
Venture capital funds
20,168
18,613
Other investments
12,752
33,132
Total other investments
$
49,306
$
113,196
Equity in the net income (loss) of equity method investees and unrealized loss on venture capital funds were as follows (in thousands):
Losses from the sales and other-than-temporary impairment of equity method and other investments were as follows (in thousands):
Joint Ventures
Year Ended December 31,
2003
2002
2001
Joint Ventures:
KAP Group
$
14,584
$
9,934
$
—
E*TRADE Japan K.K.
203
(869
)
1,543
Soundview Technology Group, Inc.
—
—
(
6,646
)
eAdvisor
—
(
52
)
(1,755
)
Other
47
58
684
Net recognized in equity in income (loss) of investments
$
14,834
$
9,071
$
(6,174
)
Venture Capital Funds:
E*TRADE eCommerce Fund I
$
(756
)
$
(4,053
)
$
(26,851
)
ArrowPath Fund II
(1,348
)
272
(819
)
Other funds
(3,536
)
(5,902
)
(7,046
)
Net recognized in unrealized losses on venture funds
$
(5,640
)
$
(9,683
)
$
(34,716
)
Year Ended December 31,
2003
2002
2001
Impairment of privately held equity investments
$
(8,006
)
$
(12,549
)
$
(30,038
)
Other
—
(
4,228
)
(4,673
)
Net recognized losses included in gain (loss) on investments
$
(8,006
)
$
(16,777
)
$
(34,711
)
KAP Group —At December 31, 2003 , the Company has a 31% ownership in KAP Group with a carrying amount of $12.1 million that is
accounted for under the equity method. KAP Group has invested substantially all of its assets in two other entities, which were formed for the
purpose of engaging in electronic options trading. KAP Group investors include two members of the Company’
s Board of Directors. Beginning
in 2002, the
66