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Table of Contents
Index to Financial Statements
E*TRADE FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Year Ended December 31,
2004
2003
2002
Brokerage revenues:
Commissions
$
349,539
$
337,468
$
294,791
Principal transactions
252,162
229,846
223,531
Other brokerage-related revenues
163,686
177,682
174,263
Brokerage interest income
177,362
144,379
182,103
Brokerage interest expense
(18,524
)
(10,305
)
(12,515
)
Net brokerage revenues
924,225
879,070
862,173
Banking revenues:
Banking interest income
968,411
748,527
767,587
Banking interest expense
(491,931
)
(475,824
)
(548,659
)
Provision for loan losses
(38,121
)
(38,523
)
(14,664
)
Gain on sales of originated loans
71,561
192,467
128,506
Gain on sales of loans held-for-sale and securities, net
57,853
97,261
80,256
Other banking
-
related revenues
35,988
35,821
12,006
Net banking revenues
603,761
559,729
425,032
Total net revenues
1,527,986
1,438,799
1,287,205
Expenses excluding interest:
Compensation and benefits
382,184
393,271
321,328
Occupancy and equipment
78,244
85,462
83,751
Communications
74,559
82,215
85,648
Professional services
70,826
57,461
53,404
Commissions, clearance and floor brokerage
156,814
151,318
167,259
Advertising and market development
65,673
60,880
70,191
Servicing and other banking expenses
36,525
38,352
45,424
Fair value adjustments of financial derivatives
(2,299
)
15,338
11,662
Depreciation and amortization
82,853
89,506
104,766
Amortization of other intangibles
26,899
30,138
22,169
Facility restructuring and other exit charges
16,157
134,191
15,357
Acquisition-related expenses
248
1,859
11,473
Executive agreement
—
—
(
23,485
)
Other
94,063
103,811
69,978
Total expenses excluding interest
1,082,746
1,243,802
1,038,925
Income before other income (loss), income taxes, discontinued operations and cumulative effect of accounting change
445,240
194,997
248,280
Other income (loss):
Corporate interest income
6,692
6,550
12,612
Corporate interest expense
(47,525
)
(45,592
)
(47,716
)
Gain (loss) on sale and impairment of investments
128,103
147,967
(20,302
)
(Loss) gain on early extinguishment of debt, net
(22,972
)
—
5,346
Equity in income (losses) of investments and venture funds
4,468
9,132
(682
)
Total other income (loss)
68,766
118,057
(50,742
)
Income before income taxes and discontinued operations
514,006
313,054
197,538
Income tax expense
162,183
113,423
86,509
Minority interest in subsidiaries
893
(5,061
)
1,555
Net income from continuing operations
350,930
204,692
109,474
Discontinued operations, net of tax:
Loss from discontinued operations, net
(1,855
)
(1,665
)
(2,210
)
Gain on disposal of discontinued operations, net
31,408
—
—
Net income (loss) from discontinued operations
29,553
(1,665
)
(2,210
)
Cumulative effect of accounting change, net of tax
—
—
(
293,669
)
Net income (loss)
$
380,483
$
203,027
$
(186,405
)