eTrade 2003 Annual Report Download - page 94

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Table of Contents
Index to Financial Statements
share. The notes bear interest at 6.75%, payable semiannually, and are non-callable for three years and may then be called by the Company at a
premium, which declines over time. The holders have the right to require redemption at a premium in the event of a change in control or other
defined redemption event. Original debt issuance costs of $10.5 million are included in other assets and are being amortized to interest expense
over the term of the notes.
6.00% Convertible Subordinated Notes Due February 2007
In February and March 2000, the Company completed a private offering of an aggregate principal amount of $650 million of convertible
subordinated notes due February 2007. The notes are convertible, at the option of the holder, into common stock at a conversion price of
interest at 6.00%, payable semiannually, and are non-callable for three years and may then be called by the Company at a premium, which
declines over time. The holders have the right to require redemption at a premium in the event of a change in control or other defined
redemption events. Debt issuance costs of $19.1 million were incurred in connection with the issuance of this debt and included in other assets.
Through December 31, 2003, approximately $8.1 million had been amortized and reflected in corporate interest expense and $6.4 million
removed in connection with the extinguishment of the $279.7 million of debt described below.
Gain on Early Extinguishment of Debt
The Company recorded no gain on early extinguishment of debt in 2003, $5.3 million in 2002 and $49.3 million in 2001. In 2002, gain on
early extinguishment of debt included an $8.6 million gain from the retirement of $64.9 million of the Company’s 6.00% convertible
subordinated notes in exchange for approximately 6.5 million shares of the Company’
s common stock, offset by a $3.3 million loss recorded as
a result of the early redemption of $100 million adjustable rate advances from the FHLB. In 2001, gain on early extinguishment of debt
included a $59.9 million gain from the retirement of $214.8 million of the Company’s 6.00% convertible subordinated notes in exchange for
approximately 19.2 million shares of the Company’s common stock and $15.3 million in cash, offset by a $10.6 million loss recorded as a
result of normal funding requirements of the Company’s banking operations. The loss consisted primarily of prepayment penalties and costs
associated with these early redemptions.
NOTE 16—ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES
Accounts payable, accrued and other liabilities consist of the following (in thousands):
81
December 31,
2003
2002
Payables for Bank securities purchased, collateral not received
$
35,947
$
130,460
Accrued expenses
154,244
105,020
Taxes payable
92,468
96
Restructuring accrual (see Note 20)
45,331
70,156
Accounts payable
29,588
13,662
Other short
-
term borrowing arrangements
17,221
29,139
Capital lease obligations
896
4,397
Other
287,769
265,324
Total accounts payable, accrued and other liabilities
$
663,464
$
618,254