eTrade 2006 Annual Report Download - page 77

E*TRADE FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share amounts)
Year Ended December 31,
2006 2005 2004
Revenue:
Operating interest income $ 2,774,679 $1,650,264 $1,145,597
Operating interest expense (1,374,647) (779,164) (510,455)
Net operating interest income 1,400,032 871,100 635,142
Provision for loan losses (44,970) (54,016) (38,121)
Net operating interest income after provision for loan losses 1,355,062 817,084 597,021
Commission 625,265 458,834 431,638
Service charges and fees 137,441 135,314 97,575
Principal transactions 110,235 99,336 126,893
Gain on sales of loans and securities, net 55,986 98,858 140,718
Other revenue 136,332 94,419 89,077
Total non-interest income 1,065,259 886,761 885,901
Total net revenue 2,420,321 1,703,845 1,482,922
Expense excluding interest:
Compensation and benefits 469,202 380,803 350,440
Clearing and servicing 253,040 189,736 162,354
Advertising and market development 119,782 105,935 62,155
Communications 110,346 82,485 69,674
Professional services 96,947 77,416 69,014
Depreciation and amortization 73,845 74,981 77,892
Occupancy and equipment 85,568 69,089 69,572
Amortization of other intangibles 46,220 43,765 19,443
Facility restructuring and other exit activities 28,537 (30,017) 15,688
Other 136,042 59,860 90,891
Total expense excluding interest 1,419,529 1,054,053 987,123
Income before other income (expense), income taxes, minority interest, discontinued operations
and cumulative effect of accounting change 1,000,792 649,792 495,799
Other income (expense):
Corporate interest income 8,433 11,043 6,692
Corporate interest expense (152,496) (73,956) (47,525)
Gain on sales and impairment of investments 70,796 83,144 128,111
Loss on early extinguishment of debt (1,179) — (22,972)
Equity in income of investments and venture funds 2,451 6,103 4,382
Total other income (expense) (71,995) 26,334 68,688
Income before income taxes, minority interest, discontinued operations and cumulative effect of
accounting change 928,797 676,126 564,487
Income tax expense 301,983 229,823 181,764
Minority interest in subsidiaries — 65 893
Net income from continuing operations 626,814 446,238 381,830
Discontinued operations, net of tax:
Loss from discontinued operations (721) (21,495) (32,755)
Gain on disposal of discontinued operations 2,766 4,023 31,408
Gain (loss) from discontinued operations, net of tax 2,045 (17,472) (1,347)
Cumulative effect of accounting change, net of tax — 1,646 —
Net income $ 628,859 $ 430,412 $ 380,483
Basic earnings per share from continuing operations $ 1.49 $ 1.20 $ 1.04
Basic earnings (loss) per share from discontinued operations 0.00 (0.04) (0.00)
Basic earnings per share from cumulative effect of accounting change — 0.00 —
Basic net earnings per share $ 1.49 $ 1.16 $ 1.04
Diluted earnings per share from continuing operations $ 1.44 $ 1.16 $ 0.99
Diluted earnings (loss) per share from discontinued operations 0.00 (0.04) (0.00)
Diluted earnings per share from cumulative effect of accounting change — 0.00 —
Diluted net earnings per share $ 1.44 $ 1.12 $ 0.99
Shares used in computation of per share data:
Basic 421,127 371,468 366,586
Diluted 436,357 384,630 405,389
See accompanying notes to consolidated financial statements
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