eTrade 2010 Annual Report Download - page 2

E*TRADE FINANCIAL CORPORATION
FORM 10-K ANNUAL REPORT
For the Year Ended December 31, 2010
TABLE OF CONTENTS
PART I
Reverse Stock Split ..................................................................... 1
Forward-Looking Statements ............................................................ 1
Item 1. Business ...................................................................... 1
Overview ..................................................................... 1
Strategy ....................................................................... 2
Products and Services ............................................................ 2
Sales and Customer Service ....................................................... 4
Technology .................................................................... 5
Competition ................................................................... 5
Regulation .................................................................... 5
Item 1A. Risk Factors .................................................................. 8
Item 1B. Unresolved Staff Comments ..................................................... 19
Item 2. Properties .................................................................... 19
Item 3. Legal Proceedings .............................................................. 19
PART II
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer
Purchases of Equity Securities ................................................... 24
Item 6. Selected Consolidated Financial Data ............................................. 26
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations .................................................................... 28
Overview ..................................................................... 28
Earnings Overview .............................................................. 31
Segment Results Review ......................................................... 44
Balance Sheet Overview ......................................................... 50
Liquidity and Capital Resources ................................................... 54
Risk Management ............................................................... 59
Concentrations of Credit Risk ..................................................... 61
Summary of Critical Accounting Policies and Estimates ................................ 71
Statistical Disclosure by Bank Holding Companies .................................... 79
Glossary of Terms .............................................................. 85
Item 7A. Quantitative and Qualitative Disclosures about Market Risk .......................... 90
Item 8. Financial Statements and Supplementary Data ..................................... 92
Management Report on Internal Control Over Financial Reporting .................... 92
Reports of Independent Registered Public Accounting Firm .......................... 93
Consolidated Statement of Loss .................................................. 95
Consolidated Balance Sheet ...................................................... 96
Consolidated Statement of Comprehensive Loss .................................... 97
Consolidated Statement of Shareholders’ Equity .................................... 98
Consolidated Statement of Cash Flows ............................................ 100
Notes to Consolidated Financial Statements ........................................ 102
Note 1—Organization, Basis of Presentation and Summary of Significant Accounting
Policies ................................................................... 102
Note 2—Discontinued Operations .............................................. 110
Note 3—Facility Restructuring and Other Exit Activities ............................ 111
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