eTrade 2009 Annual Report Download - page 60

Corporate Cash
Corporate cash is the primary source of liquidity at the parent company and is available to invest in our
regulated subsidiaries. We define corporate cash as cash held at the parent company as well as cash held in
certain subsidiaries that can distribute cash to the parent company without any regulatory approval. The
components of corporate cash as of December 31, 2009 and 2008 are as follows (dollars in millions):
December 31, Variance
2009 2008 2009 vs. 2008
Parent company cash $388.7 $216.6 $ 172.1
Other cash(1) 4.5 218.3 (213.8)
Total corporate cash $393.2 $434.9 $ (41.7)
(1) Other cash consists of corporate subsidiaries that can distribute cash to the parent company without any regulatory approval.
Consolidated Cash and Equivalents
The consolidated cash and equivalents balance increased by $0.4 billion to $3.5 billion for the year ended
December 31, 2009. The majority of this balance is cash held in regulated subsidiaries, primarily the Bank,
outlined as follows (dollars in millions):
December 31, Variance
2009 2008 2009 vs. 2008
Corporate cash $ 393.2 $ 434.9 $ (41.7)
Bank cash(1) 2,863.2 3,276.5 (413.3)
International brokerage and other cash 275.8 288.7 (12.9)
Less:
Cash reported in other assets(2) (49.0) (146.3) 97.3
Total consolidated cash $3,483.2 $3,853.8 $(370.6)
(1) During the second quarter of 2009, E*TRADE Securities LLC became a wholly-owned operating subsidiary of E*TRADE Bank. As a
result, $167.1 million and $56.4 million in cash held at E*TRADE Securities LLC is included in Bank cash at December 31, 2009 and
2008, respectively.
(2) Cash reported in other assets consists of cash that we invested in The Reserve Funds’ Primary Fund and is included as a receivable in the
other assets line item.
The cash held in our regulated subsidiaries serves as a source of liquidity for those subsidiaries and is not a
primary source of capital for the parent company.
Cash and Equivalents Held in the Reserve Fund
At December 31, 2009, we held cash in The Reserve Funds’ Primary Fund (“the Fund”) of $49.0 million,
which is included as a receivable in the other assets line item on the balance sheet. On September 16, 2008, the
Fund reported that its shares had fallen below the standard of $1 per share, which is commonly referred to as
“breaking the buck.” The following table details our cash held in the Fund at the date the Fund was reported as
“breaking the buck” and at December 31, 2009 (dollars in millions):
Variance
December 31,
2009
September 15,
2008
December 31, 2009 vs.
September 15, 2008
Corporate cash $15.2 $230.3 $(215.1)
Bank cash(1) 32.2 489.7 (457.5)
International brokerage and other cash 1.6 24.3 (22.7)
Total cash held in the Fund $49.0 $744.3 $(695.3)
(1) During the second quarter of 2009, E*TRADE Securities LLC became a wholly-owned operating subsidiary of E*TRADE Bank. As a
result, $4.6 million and $69.3 million in cash related to E*TRADE Securities LLC is included in Bank cash at December 31, 2009 and
September 15, 2008, respectively.
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