eTrade 2009 Annual Report Download - page 140

is derivative assets net of derivative liabilities at the counterparty level. If the Company were to be in violation of
certain provisions of the derivative instruments, the counterparties to the derivative instruments could request
payment or collateralization on derivative instruments. The Company expects such requests would be based on the
fair value of derivative assets net of derivative liabilities at the counterparty level. The fair value of derivative
instruments in net liability positions at the counterparty level was $113.1 million as of December 31, 2009. The fair
value of the Company’s mortgage-backed and investment securities pledged as collateral related to derivative
contracts in net liability positions to counterparties, $146.1 million as of December 31, 2009, exceeded derivative
instruments in net liability positions at the counterparty level by $33.0 million.
NOTE 9—PROPERTY AND EQUIPMENT, NET
Property and equipment, net consists of the following (dollars in thousands):
December 31, 2009 December 31, 2008
Gross
Amount
Accumulated
Depreciation
and
Amortization
Net
Amount
Gross
Amount
Accumulated
Depreciation
and
Amortization
Net
Amount
Software $559,262 $(393,895) $165,367 $493,588 $(346,750) $146,838
Equipment 182,753 (147,592) 35,161 174,871 (132,551) 42,320
Leasehold improvements 115,643 (64,123) 51,520 111,112 (54,454) 56,658
Buildings 71,927 (15,755) 56,172 71,927 (13,700) 58,227
Furniture and fixtures 28,637 (20,115) 8,522 31,223 (19,766) 11,457
Land 3,427 — 3,427 3,722 — 3,722
Total $961,649 $(641,480) $320,169 $886,443 $(567,221) $319,222
Depreciation and amortization expense from continuing operations related to property and equipment was
$83.3 million, $82.5 million and $83.2 million for the years ended December 31, 2009, 2008 and 2007,
respectively.
Software includes capitalized internally developed software costs. These costs were $59.2 million,
$65.5 million and $64.1 million for the years ended December 31, 2009, 2008 and 2007, respectively. Completed
projects are carried at cost and are amortized on a straight-line basis over their estimated useful lives, generally
four years. Amortization expense from continuing operations for the capitalized amounts was $39.6 million,
$33.4 million and $27.2 million for the years ended December 31, 2009, 2008 and 2007. Also included in
software at December 31, 2009 is $56.0 million of internally developed software in the process of development
for which amortization has not begun.
NOTE 10—GOODWILL AND OTHER INTANGIBLES, NET
The following table discloses the changes in the carrying value of the Company’s goodwill that occurred in
the trading and investing segment for the periods presented (dollars in thousands):
Trading & Investing
Balance at December 31, 2007 $1,933,368
Additional purchase consideration 17,314
Write-off of goodwill related to exit activities and discontinued operations (12,357)
Balance at December 31, 2008 1,938,325
Additional purchase consideration 14,001
Balance at December 31, 2009(1) $1,952,326
(1) As of December 31, 2009, there is no accumulated impairment losses related to the trading and investing segment goodwill.
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