eTrade 2007 Annual Report Download - page 103

servicing business does not qualify as a discontinued operation. The Company does not have significant
continuing involvement in the operations of the origination business and does not continue any significant
revenue-producing or cost-generating activities of the origination business. Therefore, the results of operations,
net of income taxes, of this origination business are presented as discontinued operations on the Company’s
consolidated statement of income for all periods presented.
The following table summarizes the results of discontinued operations for the origination business (dollars
in thousands):
Year Ended
December 31,
2005
Net loss $ (7,750)
Loss from discontinued operations $(22,959)
Income tax benefit (8,783)
Loss from discontinued operations, net of tax $(14,176)
NOTE 4—FACILITY RESTRUCTURING AND OTHER EXIT ACTIVITIES
Restructuring liabilities are included in accounts payable, accrued and other liabilities in the consolidated
balance sheet. The following table summarizes the expense recognized by the Company as facility restructuring
and other exit activities for the periods presented (dollars in thousands):
Year Ended December 31,
2007 2006 2005
Restructuring of institutional equity business $17,094 $ — $ —
Exit of wholesale mortgage origination channel 3,621 — —
2003 Restructuring Plan 11 (963) 2,002
2001 Restructuring Plan (500) (367) 1,096
Exit of Consumer Finance Corporation—servicing business — — (35,496)
Other exit activities 13,000 29,867 2,381
Total facility restructuring and other exit activities $33,226 $28,537 $(30,017)
Exit of Non-Core Operations
Toward the end of the third quarter in 2007, the Company announced a plan to simplify and streamline the
business by exiting and/or restructuring certain non-core operations, including the wholesale mortgage
origination channel and the institutional equity business.
Institutional Equity Business
In institutional, the Company has taken steps to restructure the institutional equity business to focus on areas
that complement order flow generated by retail customers. As a result of this exit, the Company incurred costs of
$9.1 million for facilities consolidation and asset write-off costs, $7.0 million in severance costs and $1.0 million
of other costs related to the exit for the year ended December 31, 2007. The total charge for this exit activity is
expected to be between $20.0 million and $25.0 million, all of which will be recorded to the institutional
segment.
Wholesale Mortgage Origination Channel
In lending, the Company exited its wholesale mortgage origination channel, and repositioned the lending
business to focus on direct retail originations. As a result of this exit, the Company incurred costs of $2.7 million
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