eTrade 2005 Annual Report Download - page 181

Table of Contents
settlement with the IRS. This agreement resolved various issues for all federal tax liabilities through 2000, including most notably
certain research and experimentation credit claims.
NOTE 19—SHAREHOLDERS’ EQUITY
Preferred Stock
The Company has 1.0million shares authorized in preferred stock. None were issued and outstanding at December31, 2005 and 2004.
Shares Exchangeable into Common Stock
At December31, 2005, there were no shares of common stock that were exchangeable into the Company’s common stock
(“Exchangeable Shares”) outstanding. In August 2000, EGI Canada Corporation issued approximately 9.4million Exchangeable Shares
in connection with the Company’s acquisition of E*TRADE Technologies. In 2005, the Company called and exchanged the remaining
Exchangeable Shares. Upon exchange, these shares were converted on a one-for-one basis to the Company’s common
stock.Exchangeable Shares converted were 1.3million in 2005, 0.1million in 2004 and 0.2million in 2003.
Issuance of Common Stock
In 2005, the Company issued $718.4 million or 41.1 million shares of common stock including $691.8 million sold in conjunction with the
funding of our BrownCo acquisition.
Mandatory Convertible Notes
In November 2005, the Company issued 18.0million Units that are convertible into up to 25.0million shares of common stock, on or
before the Purchase Date. The conversion ratio depends on the market price of our common stock 20 trading days prior to conversion.
Units are generally convertible only on or near the Purchase Date. (See Note 16 for additional details on the transaction.)
Share Repurchases
From time to time, the Company’s Board of Directors authorizes share repurchase and debt retirement plans, as they determine that
they are likely to create long-term value for its shareholders. These plans are open-ended and provide the flexibility to buy back
common stock, redeem for cash its outstanding convertible subordinated notes, retire debt in the open market or a combination of all
three. Under these authorized plans, the Company has repurchased common stock and retired portions of its convertible subordinated
notes.
In 2005, the Company repurchased nearly 4.6million shares of its common stock for an aggregate $58.2 million. In 2004, the Company
repurchased 13.7million shares of its common stock for an aggregate $175.8 million. Also under the repurchase plans, the Company
used $86.2 million in cash for a partial redemption of its 6.75% convertible subordinated notes.
As of December31, 2005, the Company had approximately $179.8 million available under its authorized share repurchase and debt
retirement plans to purchase additional shares of its common stock or retire additional debt.
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2006. EDGAR Online, Inc.