eTrade 2010 Annual Report Download - page 116

Facility Consolidation Obligations
The components of the facility consolidation obligations for the Company’s restructuring and other exit
activities at December 31, 2010 and their timing are as follows (dollars in thousands):
Facilities
Obligations
Sublease Income Discounted
Rents and
Sublease NetContracted Estimate
Years ending December 31,
2011 $3,962 $ (565) $ (53) $(434) $2,910
2012 3,247 (589) (325) (181) 2,152
2013 1,334 (80) (56) (37) 1,161
Thereafter — — — — —
Total future facility consolidation obligations $8,543 $(1,234) $(434) $(652) $6,223
NOTE 4—OPERATING INTEREST INCOME AND OPERATING INTEREST EXPENSE
The following table shows the components of operating interest income and operating interest expense
(dollars in thousands):
Year Ended December 31,
2010 2009 2008
Operating interest income:
Loans $ 879,013 $1,138,116 $ 1,587,838
Mortgage-backed and investment securities 386,347 471,087 436,165
Margin receivables 200,260 138,510 278,213
Other 81,093 84,845 167,724
Total operating interest income(1) 1,546,713 1,832,558 2,469,940
Operating interest expense:
Securities sold under agreements to repurchase (129,574) (200,121) (291,570)
FHLB advances and other borrowings (119,344) (148,739) (245,661)
Deposits (62,828) (211,788) (615,848)
Other (8,684) (11,308) (48,855)
Total operating interest expense(2) (320,430) (571,956) (1,201,934)
Net operating interest income $ 1,226,283 $1,260,602 $ 1,268,006
(1) Operating interest income reflects $21.9 million, $53.9 million, and $26.1 million in income on hedges that qualify for hedge accounting
for the years ended December 31, 2010, 2009, and 2008, respectively.
(2) Operating interest expense reflects $122.4 million, $136.3 million, and $74.9 million in expense on hedges that qualify for hedge
accounting for the years ended December 31, 2010, 2009, and 2008, 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 participant.
Accordingly, even when market assumptions are not readily available, the Company’s own assumptions reflect
those that market participants would use in pricing the asset or liability at the measurement date. The fair value
measurement accounting guidance describes the following three levels used to classify fair value measurements:
• Level 1—Quoted prices in active markets for identical assets or liabilities.
• Level 2—Quoted prices in markets that are not active or for which all significant inputs are observable,
either directly or indirectly.
• Level 3—Unobservable inputs that are significant to the fair value of the assets or liabilities.
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