eTrade 2005 Annual Report Download - page 41

Table of Contents
Significant Events in 2004
Sale of Our ATM Business
In June 2004, we completed the sale of our ATM business for $107.0 million. We sold the ATM network as we determined that,
although it was an important distribution channel, its direct ownership was not essential to providing this customer benefit and that
the capital could be better used elsewhere in the Company.
Continued Use of the SDA
We began sweeping brokerage customers’ excess cash balances to the Bank in late 2003. In 2004, we continued sweeping funds and
grew the SDA balance by $1.9 billion to $6.2 billion at December31, 2004. Further, we increased the balance to $7.7 billion at
December31, 2005
.
Repurchase of Common Stock
Through Board approved plans, we repurchased $175.8 million, or 13.7million shares of our common stock during 2004, as the Board
determined that the use of cash to reduce outstanding common stock was likely to create long-term value for our shareholders.
Summary Financial Results (dollars in millions, except per share amounts)
As of or For the Year Ended
December31,
Variance
2005
2004
2003
2005vs.2004
Total net revenues
$
1,703.8
$
1,482.9
$
1,342.7
15
%
Net income
$
430.4
$
380.5
$
203.0
13
%
Diluted earnings per share
$
1.12
$
0.99
$
0.55
13
%
Operating margin ($)
$
649.8
$
495.8
$
189.1
31
%
Operating margin (%)
38
%
33
%
14
%
5
%
Highlights of 2005 include:
•
Net interest income increased 37% compared with 2004. The continued growth in customer cash and deposits is the primary
factor that led to the increase in net interest income. Generally, customer cash and deposits are our lowest cost sources of funds.
This increase was also driven by higher interest-earning assets.
•
Loans receivable, net increased $7.9 billion, or 69% compared with 2004. Loans receivable, net growth was focused on two core
products consisting of $3.4 billion growth in mortgages and $4.6 billion growth in Home Equity Lines of Credit (“HELOC”.) Our
consumer loan products are down $0.1 billion as we focused our efforts on growing mortgage loan products.
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2006. EDGAR Online, Inc.