eTrade 2003 Annual Report Download - page 79

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Table of Contents
Index to Financial Statements
Company has received distributions from KAP Group in proportion to its ownership of shares totaling $4.7 million in 2003 and $8.2 million in
2002.
Thor Credit Corporation —E*TRADE Consumer Finance, which was acquired by the Company in December 2002 (see Note 3), has a
50% ownership in Thor Credit Corporation (“Thor Credit”). Thor Industries, Inc., a manufacturer and marketer of new and used Recreational
Vehicles (“RVs”), holds the remaining 50% ownership in this joint venture. Thor Credit offers retail financing to customers who purchase new
or used recreational vehicles through a Thor Industries dealer. Under a separate Portfolio Purchase Agreement, E*TRADE Consumer Finance
purchased $641.6 million contracts, or substantially all of the retail sales contracts that Thor Credit purchased from dealers in 2003. In 2003,
E*TRADE Consumer Finance also recognized $4.5 million of fees from Thor Credit for management services it provides to the joint venture,
including strategic oversight, accounting, credit administration, marketing and systems assistance.
Venture Capital Funds
The Company has investments in E*TRADE eCommerce Fund I (“Fund I”) and ArrowPath Fund II (“Fund II”). The Company is a non-
managing member of each Fund and their general partners. The Company’s former CEO and former Chief Strategic Investment Officer are
managing members of the general partner of each Fund. At December 31, 2003, the Company’s remaining capital commitment was $0.4
million to Fund I and $36.8 million to Fund II.
The Company also has limited partnership interests in two other unrelated venture capital funds, including one sponsored by
SOFTBANK Corp. (“SOFTBANK”). At December 31, 2003, the Company had funding commitments to these funds totaling $1.6 million.
Other Investments
The Company has also made investments in non-public, venture capital-
backed, high technology companies. These investments represent
less than 20% of the outstanding shares of these companies and are accounted for under the cost method. The Company recorded other-than-
temporary impairments of $8.0 million for 2003, $12.5 million for 2002 and $30.0 million for 2001, associated with these privately held equity
investments. These impairments are recorded in gain (loss) on investments in the consolidated statements of operations. Each quarter, the
Company evaluates its privately held investments using factors that aid in the identification of possible other-than-temporary impairments.
These factors include evaluating, as available, the cash flows and profitability of the investee, general economic conditions, trends in the
investee’s industry and trends in publicly traded peers of the investee.
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