eTrade 2004 Annual Report Download - page 133
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Index to Financial Statements
123
Year Ended December 31, 2003
Brokerage
Banking
Eliminations
(1)
Total
Net revenues:
Commissions
$
337,468
$
—
$
—
$
337,468
Principal transactions
229,846
—
—
229,846
Interest income
144,379
748,527
—
892,906
Interest expense
(10,305
)
(475,824
)
—
(
486,129
)
Gain on sales of originated loans
—
192,467
—
192,467
Gain on sales of loans held-for-sale and
securities, net
—
97,261
—
97,261
Provision for loan losses
—
(
38,523
)
—
(
38,523
)
Other revenues
186,457
35,821
(8,775
)
213,503
Net revenues
887,845
559,729
(8,775
)
1,438,799
Expenses excluding interest:
Compensation and benefit
234,951
158,320
—
393,271
Occupancy and equipment
63,238
22,224
—
85,462
Communications
76,290
5,925
—
82,215
Professional services
31,906
25,555
—
57,461
Commissions, clearance and floor brokerage
151,233
85
—
151,318
Advertising and market development
19,024
50,631
(8,775
)
60,880
Servicing and other banking expenses
464
37,888
—
38,352
Fair value adjustments of financial derivatives
—
15,338
—
15,338
Depreciation and amortization
69,597
19,909
—
89,506
Amortization of other intangibles
21,213
8,925
—
30,138
Facility restructuring and other exit charges
106,945
27,246
—
134,191
Acquisition
-
related expenses
2,202
(343
)
—
1,859
Other
60,954
42,857
—
103,811
Total expenses excluding interest
838,017
414,560
(8,775
)
1,243,802
Segment income
$
49,828
$
145,169
$
—
$
194,997
(1)
Reflects the elimination of an intercompany payment made by the banking segment to the brokerage segment related to the SDA product, which was initiated in 2003. Under this
relationship, the banking segment pays the brokerage segment a negotiated rate that approximates market on the average SDA balance. The banking segment reflects this payment as
marketing expense as it is a fee associated with deposit gathering activity and the brokerage segment reflects this payment as other revenue as it is a fee for access to customers.