eTrade 2004 Annual Report Download - page 99

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Table of Contents
Index to Financial Statements
Amortization expense of other intangible assets was $26.9 million for 2004, $30.1 million for 2003 and $22.2 million for 2002. Assuming
no future impairments of these assets or additional acquisitions, annual amortization expense will be as follows (in thousands):
NOTE 12—OTHER ASSETS
Years ending December 31,
2005
$
22,152
2006
15,698
2007
13,928
2008
10,464
2009
7,196
Thereafter
64,683
Total future amortization expense
$
134,121
Other assets consist of the following (in thousands):
Receivables for Bank Securities Sold, Collateral Not Delivered
December 31,
2004
2003
Securities sold collateral not delivered
$
53,152
$
46,514
Deferred tax assets
41,119
84,544
Servicing rights
21,513
27,394
Deferred compensation plan
11,974
7,929
Assets of discontinued operations
1,610
47,785
Other
79,910
93,044
Total other assets
$
209,278
$
307,210
The Bank has receivables for mortgage-backed securities from third-party brokers that the Bank committed to sell, but did not deliver to
the brokers by the settlement date. The Bank was unable to deliver the securities primarily because other parties failed to deliver similar
securities to the Bank, which the Bank had committed to buy.
NOTE 13—ASSET SECURITIZATION
Collateralized Debt Obligations
In 2004, 2003 and 2002, ETGAM transferred asset-backed securities to E*TRADE ABS CDO III, Ltd. (“CDO III”), E*TRADE ABS
CDO II, Ltd. (“CDO II”) and E*TRADE ABS CDO I, Ltd. (“CDO I”), respectively. The Bank also transferred asset-backed securities to CDO
II and an unrelated financial advisor transferred asset-backed securities to CDO I and CDO III. Concurrent with these transfers, the respective
CDOs sold beneficial interests to independent investors in the form of senior and subordinated notes and preference shares, collateralized by
the asset-backed securities. Neither the CDOs themselves nor the investors in the beneficial interests sold by the CDOs have recourse to
ETGAM or the Company. Each of the CDOs are qualifying special purpose entities, as defined in SFAS No. 140, and, as such, are not required
to be consolidated in the Company’s consolidated financial statements. ETGAM purchased preference shares in each of the CDOs. ETGAM’s
retained interests are subordinate to the notes sold by each CDO and on an equal standing with the preference shares purchased by other
preference share investors in CDO I, CDO II and CDO III.
90