eTrade 2009 Annual Report Download - page 121

The Company expects to incur charges in future periods as it periodically evaluates the estimates made in
connection with this activity; however, the Company does not expect those costs to be significant.
Facility Consolidation Obligations
The components of the facility consolidation obligations for the Company’s restructuring and other exit
activities at December 31, 2009 and their timing are as follows (dollars in thousands):
Facilities
Obligations
Sublease Income Discounted
Rents and
Sublease NetContracted Estimate
Years ending December 31,
2010 $ 7,954 $(602) $ (96) $(644) $ 6,612
2011 3,288 (23) (702) (246) 2,317
2012 2,290 — (889) (73) 1,328
2013 291 — (154) (12) 125
Thereafter — — — — —
Total future facility consolidation obligations $13,823 $(625) $(1,841) $(975) $10,382
NOTE 4—OPERATING INTEREST INCOME AND OPERATING INTEREST EXPENSE
The following table shows the components of operating interest income and operating interest expense from
continuing operations (dollars in thousands):
Year Ended December 31,
2009 2008 2007
Operating interest income:
Loans $1,138,116 $ 1,587,838 $ 1,986,034
Mortgage-backed and investment securities 471,087 436,165 879,922
Margin receivables 138,510 278,213 502,149
Other 84,845 167,724 154,950
Total operating interest income(1) 1,832,558 2,469,940 3,523,055
Operating interest expense:
Deposits (211,788) (615,848) (821,955)
Repurchase agreements and other borrowings (216,300) (318,291) (643,382)
FHLB advances (132,560) (218,940) (364,442)
Other (11,308) (48,855) (109,677)
Total operating interest expense(2) (571,956) (1,201,934) (1,939,456)
Net operating interest income $1,260,602 $ 1,268,006 $ 1,583,599
(1) Operating interest income reflects $53.9 million, $26.1 million and $13.6 million in income on hedges that qualify for hedge accounting
for the years ended December 31, 2009, 2008 and 2007, respectively.
(2) Operating interest expense reflects $136.3 million, $74.9 million and $3.2 million in expense on hedges that qualify for hedge accounting
for the years ended December 31, 2009, 2008 and 2007, respectively.
NOTE 5—FAIR VALUE DISCLOSURES
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. In determining fair value, the Company
may use various valuation approaches, including market, income and/or cost approaches. The fair value hierarchy
requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. Fair value is a market-based measure considered from the perspective of a market
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