eTrade 2004 Annual Report Download - page 71

Table of Contents
Index to Financial Statements
E*TRADE FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
See accompanying notes to consolidated financial statements
63
Year Ended December 31,
2004 2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$
380,483
$
203,027
$
(186,405
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Cumulative effect of accounting change — —
293,669
Provision for loan losses
38,121
38,523
14,664
Depreciation, amortization and discount accretion
398,297
443,746
325,980
Net realized gains on available-for-sale securities, loans held-for-sale and trading securities
(275,795
)
(445,552
)
(223,159
)
Gain on disposition of assets
(57,451
)
— —
Realized loss on impairment of investments
18,330
10,406
24,972
Minority interest and equity in income of subsidiaries and investments
(9,882
)
(14,834
)
(9,040
)
Unrealized loss on venture funds
5,413
5,640
9,683
Noncash restructuring costs and other exit charges
15,029
70,811
11,880
Executive agreement — — (
23,485
)
Amortization of deferred stock compensation
4,654
2,287
8,712
Deferred income taxes
79,787
3,556
84,138
Gain on early extinguishment of debt — — (
8,669
)
Other
11,427
16,033
(35,368
)
Net effect of changes in brokerage-related assets and liabilities:
(Increase) decrease in cash and investments required to be segregated under Federal or other regulations
936,492
(171,287
)
(675,514
)
(Increase) decrease in brokerage receivables
(713,656
)
(856,359
)
646,240
Increase (decrease) in brokerage payables
(117,567
)
924,051
132,270
Net effect of changes in banking
-
related assets and liabilities:
Proceeds from sales, repayments and maturities of loans held-for-sale
6,857,431
13,662,209
12,794,746
Purchases of loans held-for-sale
(6,063,974
)
(12,951,831
)
(10,261,694
)
Proceeds from sales, repayments and maturities of trading securities
9,354,027
14,749,315
12,892,384
Purchases of trading securities
(9,122,071
)
(15,204,220
)
(13,246,949
)
Other changes, net:
(Increase) decrease in other assets
(84,778
)
72,867
(333,461
)
Accrued interest receivable and payable, net
(13,207
)
12,814
(8,452
)
Increase in accounts payable, accrued and other liabilities
1,044
142,227
10,695
Decrease in restructuring liabilities
(11,564
)
(30,626
)
(18,846
)
Net cash provided by operating activities
1,630,590
682,803
2,218,991
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in loans receivable, net of loans received in business acquisition
(3,487,941
)
(2,426,789
)
165,488
Purchases of mortgage-backed and investment securities, available-for-sale
(20,701,412
)
(21,516,669
)
(17,151,373
)
Proceeds from sales, maturities of and principal payments on mortgage-backed and investment securities, available-for-
sale
17,995,471
20,271,822
13,646,716
Purchases of property and equipment, net of property and equipment received in business acquisition
(105,245
)
(54,437
)
(109,713
)
Proceeds from sale of property and equipment
5,957
3,846
—
Restricted deposits
—
—
71,888
Cash used in business acquisitions, net
(19,025
)
(3,466
)
(1,853,188
)
Proceeds from escrow settlement — —
3,513
Net cash flow from derivatives designated in a fair value hedge relationship
(33,354
)
(59,607
)
(331,321
)
Proceeds from sale of E*TRADE Access
106,868
— —
Other
(11,156
)
(1,832
)
11,015
Net cash used in investing activities
$
(6,249,837
)
$
(3,787,132
)
$
(5,546,975
)