eTrade 2004 Annual Report Download - page 117

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Table of Contents
Index to Financial Statements
Facility Consolidation Obligations
The components of the facility consolidation restructuring liabilities for the 2003 and 2001 Restructuring Plans at December 31, 2004,
and their timing are as follows (in thousands):
Other Exit Charges
Israel exit activity
Facilities
Obligations
Sublease Income
Discounted
Rents and
Sublease
Net
Year
Contracted
Estimate
2005
$
12,774
$
(2,297
)
$
(407
)
$
(143
)
$
9,927
2006
13,923
(2,394
)
(2,971
)
(286
)
8,272
2007
10,478
(1,836
)
(2,869
)
(572
)
5,201
2008
7,431
(1,023
)
(1,732
)
(858
)
3,818
2009
5,951
(573
)
(1,231
)
(1,144
)
3,003
Thereafter
3,082
(48
)
(817
)
(430
)
1,787
Total
$
53,639
$
(8,171
)
$
(10,027
)
$
(3,433
)
$
32,008
Year Ended December 31,
2004
2003
2002
Israel exit activity
$
14,500
$
1,435
$
—
Exit of institutional research business
—
4,917
—
Exit of keyboard lending activities
506
2,747
—
(Gain) loss on exit of E*TRADE Bank AG (German subsidiary)
—
(
3,898
)
12,199
Subsequent recovery related to sale of E*TRADE @ Net Bourse S.A.
—
—
(
3,513
)
Resolution of obligation upon the liquidation of E*TRADE South Africa
—
—
(
3,552
)
Other
94
59
—
Total other exit charges, net
$
15,100
$
5,260
$
5,134
The Company terminated the trademark and technology license of an Israeli-based company in 2002 due to failure to perform obligations
and commenced arbitration proceedings. The Israeli company counterclaimed for wrongful termination. An arbitration tribunal in London
decided against the Company and as a result, the Company recognized $14.5 million in additional exit charges for 2004.
Exit of Institutional Research Business
In December 2003, the Company exited its proprietary institutional research business located in Europe and recorded an exit charge of
approximately $4.9 million. The charge was primarily related to severance and related tax amounts. In addition, the Company incurred costs
related to cancellation of certain contracts and other legal fees.
Exit of Keyboard Lending Activities
During 2003, the Company exited its keyboard lending activities, which it originally entered into as a result of its acquisition of
E*TRADE Consumer Finance in December 2002. This included the sale of substantially all of its keyboard loans (of approximately $100
million) and write-off of other assets, resulting in a loss of approximately $2.7 million. Contributions from keyboard lending activities were
insignificant to the overall
108