eTrade 2007 Annual Report Download - page 29

Launch of New E*TRADE Website
We launched a new and improved website at www.etrade.com. The new site features intuitive navigation,
demonstrations of some of our most popular products and tools, direct access to account opening and customer
service on every page and quick access to our powerful quotes and research functionality.
Development of Automated Trading Strategies Functionality
We developed new conditional orders functionality for retail customers including trailing stops for options
and group orders such as contingent, one-cancels-all, one-triggers-all and one-trigger-one-cancels-other orders.
When combined with the conditional order functionality already available to customers, such as trailing stops and
bracketed orders for stocks, we believe this functionality will allow our customers to better manage risk.
Move of Listing to the NASDAQ
On December 27, 2006 we moved the listing of the Company’s common stock from the NYSE to the
NASDAQ under the symbol ETFC. We made this move to demonstrate our commitment to our customers and
shareholders by aligning ourselves with the market that best meets their needs. As an industry innovator,
NASDAQ’s value proposition parallels our own, leveraging technology to provide customers with low fees,
superior service and fair, efficient and transparent market access and execution.
Summary Financial Results
Income Statement Highlights for the Year Ended December 31, 2007 (dollars in millions, except per share
amounts)
Year Ended December 31, Variance
2007 2006 2007 vs. 2006
Total net revenue $ (378.2) $2,420.3 (116)%
Net operating interest income $ 1,609.1 $1,400.0 15 %
Provision for loan losses $ (640.1) $ (45.0) 1323 %
Net operating interest income after provision for loan losses $ 969.0 $1,355.1 (28)%
Commission revenue $ 694.1 $ 625.3 11 %
Fees and service charges revenue $ 258.1 $ 238.8 8 %
Operating margin $(2,054.6) $1,000.8 (305)%
Net income (loss) $(1,441.8) $ 628.9 (329)%
Diluted net earnings (loss) per share $ (3.40) $ 1.44 (336)%
The operating environment during 2007, particularly during the second half of the year, was extremely
challenging as the crisis in the residential real estate and credit markets adversely impacted our financial
performance. The losses in our institutional segment caused by this crisis more than offset the considerable
growth in our retail segment. Total net revenue for the year ended December 31, 2007 decreased 116% compared
to the prior year due primarily to the $2.2 billion loss on the sale of our asset-backed securities portfolio and an
increase in our provision for loan losses of $595.1 million to $640.1 million. As a result of the decrease in net
revenue, net income declined by 329% from the prior year to a loss of $1.4 billion for the year ended
December 31, 2007.
The retail segment delivered strong organic growth and overall results during the year ended
December 31, 2007. Total retail segment income increased 14% to $789.3 million for the year ended
December 31, 2007 compared to the prior year. This growth in the retail segment was primarily driven by a 12%
increase in net operating interest income and a 14% increase in commission revenue compared to the same
period in the prior year.
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