eTrade 2005 Annual Report Download - page 73

Table of Contents
LIQUIDITY AND CAPITAL RESOURCES
Our liquidity and capital resources enable us to fund our operating activities, and finance acquisitions and asset growth. Cash flows
are derived from capital markets activities and core operations in the retail and institutional segments. The segment cash flows provide
capital to fund growth in our regulated subsidiaries. A summary of the capital markets activity of the Company and a high level
summary of our sources and uses of cash and equivalents at the parent company level during the year is discussed below.
Changes in Cash and Equivalents
In 2005, cash and equivalents at E*TRADE Financial Corporation, on a standalone holding company basis, increased $25 million to $94
million primarily due to an increase in operating cash flows of $340 million and the following significant activities and events impacting
cash:
•
The acquisitions of Harris
direct
and BrownCo for $2.3 billion; and
•
Issuances of long-term debt and equity of $2.2 billion.
Our capital markets activity during 2005 included the issuance of common stock and debt securities. The following table shows our
2005 equity and debt issues:
MonthIssued
PrincipalAmount
(in millions)
FixedCouponRate
Maturity
September
$
100.0
8.00
%
(
1)
June 2011
September
350.0
7
3
/
8
%
September 2013
October
250.0
7
3
/
8
%
September2013
November
300.0
7
7
/
8
%
December 2015
November
450.0
6
1
/
8
%
(
2)
November 2018
Total debt
1,450.0
Equity
(3)
718.4
Total
$
2,168.4
(1)
This debt was issued at a premium with an effective yield of 7
1
/ 4 %.
(2)
Mandatory convertible notes issued.
(3)
Includes $691.8 million issued in connection with funding our acquisition of BrownCo, Howard Capital, Kobren and other acquisitions.
In November 2005, we issued 18.0million units of mandatory convertible notes (“Units”) with a face value of $450 million. Each Unit
consists of a purchase contract and a 6 1/8% senior note. We recorded the purchase contracts and senior notes at fair value with $15
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2006. EDGAR Online, Inc.