eTrade 2008 Annual Report Download - page 55

Other Sources of Liquidity
We also maintain $325.0 million in uncommitted financing to meet margin lending needs. At December 31,
2008, there were no outstanding balances, and the full $325.0 million was available.
We rely on borrowed funds, such as FHLB advances and securities sold under agreements to repurchase, to
provide liquidity for the Bank. Our ability to borrow these funds is dependent upon the continued availability of
funding in the wholesale borrowings market. At December 31, 2008, the Bank had approximately $9.8 billion in
additional borrowing capacity with the FHLB.
We have the option to make interest payments on our springing lien notes in the form of either cash or
additional springing lien notes through May 2010. During the second quarter of 2008, we elected to make our
first interest payment of approximately $121 million in cash. During the fourth quarter of 2008, we elected to
make our second interest payment of $121 million in the form of additional springing lien notes. We expect to
make our next three interest payments, which equates to all interest payments on the springing lien notes through
May 2010 in the form of additional springing lien notes. The November 2010 payment is the first interest
payment we are required to pay in cash.
Corporate Debt
Our current senior debt ratings are B2 by Moody’s Investor Service, B (developing) by S&P and B (high) by
Dominion Bond Rating Service (“DBRS”). The Company’s long-term deposit ratings are Ba3 by Moody’s
Investor Service, BB- (developing) by S&P and BB by DBRS. A significant change in these ratings may impact
the rate and availability of future borrowings.
Off-Balance Sheet Arrangements
We enter into various off-balance-sheet arrangements in the ordinary course of business, primarily to meet
the needs of our customers and to reduce our own exposure to interest rate risk. These arrangements include firm
commitments to extend credit and letters of credit. Additionally, we enter into guarantees and other similar
arrangements as part of transactions in the ordinary course of business. For additional information on each of
these arrangements, see Item 8. Financial Statements and Supplementary Data.
Contractual Obligations and Commitments
The following summarizes our contractual obligations at December 31, 2008 and the effect such obligations
are expected to have on our liquidity and cash flow in future periods (dollars in thousands):
Payments Due by Period
Less Than 1 Year 1-3 Years 3-5 years Thereafter Total
Certificates of deposit and brokered certificate of deposit (1)(2) $2,231,375 $ 383,955 $ 108,450 $ 189,624 $ 2,913,404
Securities sold under agreements to repurchase(2) 4,780,262 1,422,058 274,437 1,174,948 7,651,705
Other borrowings(2)(3) 2,020,693 377,537 645,919 2,407,125 5,451,274
Corporate debt(4) 341,698 1,100,039 1,019,459 3,343,954 5,805,150
Operating lease payments(5) 35,108 52,498 30,332 47,458 165,396
Purchase Obligations(6) 71,317 20,287 4,429 1,889 97,922
FIN 48 liabilities 5,036 15,500 4,122 45,916 70,574
Total contractual obligations $9,485,489 $3,371,874 $2,087,148 $7,210,914 $22,155,425
(1) Does not include sweep deposit accounts, money market and savings accounts or checking accounts as there are no maturities and /or
scheduled contractual payments.
(2) Includes annual interest based on the contractual features of each transaction, using market rates at December 31, 2008. Interest rates are
assumed to remain at current levels over the life of all adjustable rate instruments.
(3) For mandatorily redeemable preferred securities included in other borrowings, does not assume early redemption under current
conversion provisions.
(4) Includes annual interest payments; does not assume early redemption under current call provisions. See Note 15—Corporate Debt for
further details.
(5) Includes facilities restructuring leases and excludes estimated future sublease income.
(6) Includes purchase obligations for goods and services covered by non-cancelable contracts and contracts including cancellation fees.
Excluded from the table are purchase obligations expected to be settled in cash within one year of the end of the reporting period.
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