eTrade 2005 Annual Report Download - page 7

Table of Contents
PART I
ITEM 1.BUSINESS
OVERVIEW
E*TRADE Financial Corporation is a global financial services company, offering a wide range of financial solutions to retail and
institutional customers under the brand “E*TRADE FINANCIAL.” We strive to create a differentiated franchise by leveraging
technology to deliver a compelling combination of product, service and price to the value-driven consumer.
Our corporate offices are located at 135 East 57th Street, New York, New York 10022. We maintain significant domestic corporate and
operational offices in Arlington, Virginia; Menlo Park, California; Irvine, California; Chicago, Illinois; Rancho Cordova, California; Salt
Lake City, Utah; Tampa, Florida; Charlotte, North Carolina; Jersey City, New Jersey; Pittsburgh, Pennsylvania; and Alpharetta,
Georgia. We also maintain international offices in London, United Kingdom; Toronto, Canada; Stockholm, Sweden; Copenhagen,
Denmark; Berlin, Germany; Paris, France; Tokyo, Japan; and Hong Kong. We were incorporated in California in 1982 and
reincorporated in Delaware in July 1996. We have approximately 3,400 employees. We operate directly and through numerous
subsidiaries many of which are overseen by governmental and self-regulatory organizations. Our most significant subsidiaries, which
together, in 2005, held 90% of consolidated assets and generated 79% of consolidated net income, are described below:
•
E*TRADE Bank is a Federally chartered savings bank that provides lending products to retail customers nationwide and
deposit accounts insured by the Federal Deposit Insurance Corporation (“FDIC”);
•
E*TRADE Clearing LLC is the clearing firm for the brokerage subsidiaries. Its main purpose is to transfer securities from one
party to another;
•
E*TRADE Capital Markets-Execution Services, LLC is a registered broker-dealer, specialist, market-making firm and the parent
company to E*TRADE Capital Markets, LLC;
•
E*TRADE Capital Markets, LLC is a registered broker-dealer, a market-making firm and also acts as agent for our institutional
customers; and
•
E*TRADE Securities LLC is a registered broker-dealer and provider of brokerage services to both retail and institutional
customers.
A complete list of our subsidiaries can be found in Exhibit 21.1.
Beginning in 2005, we implemented a new organizational and financial reporting structure to better address our primary customer
segments and to reflect the manner in which our chief operating decision maker assesses our performance and makes resource
allocation decisions. Our new segments—retail and institutional—reflect our primary customer segments. Retail customers are offered
an integrated product set including investing, trading, cash management and lending products. Consistent with our philosophy of
being a customer advocate, we offer retail customers an opportunity to view their complete financial picture through E*TRADE
Complete. E*TRADE Complete helps customers optimize cash, investing and credit allocations by utilizing tools designed to help them
determine the appropriate mix of cash, investing and credit products. In addition, we provide corporate clients with employee stock
plan administration and options management tools. These corporate client accounts provide us with an opportunity to reach our
clients’ employees and offer them our retail products and services.
Institutional customers are offered access to a range of execution services through traditional sales traders and direct market access to
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