eTrade 2005 Annual Report Download - page 77

Table of Contents
Brokerage subsidiaries are prohibited from paying cash dividends, or making unsecured advances or loans to its parent or employees if
such payment would result in net capital of less than 5% of aggregate debit balances or less than 120% of its minimum dollar
requirement of $250,000. At December31, 2005, all of our brokerage subsidiaries met their minimum required net capital requirements.
Share Repurchases and Debt Retirements
The Company’s Board of Directors (the “Board”) authorizes share repurchase and debt retirement plans, as they determine that they
are likely to create long-term value for our shareholders. In 2004, the Board authorized the April 2004 Plan and the December 2004 Plan.
Under these plans, we may repurchase common stock or retire convertible subordinated notes. In 2005, we repurchased an aggregate
of $58.2 million in common shares. More information about the April 2004 and the December 2004 repurchase plans can be found in
Item5 on page 16.
Off-Balance-Sheet Arrangements
We enter into various off-balance-sheet arrangements in the ordinary course of business, primarily to meet the needs of our clients and
to reduce our own exposure to interest rate risk. These arrangements include firm commitments to extend credit and letters of credit.
Additionally, we enter into guarantees and other similar arrangements as part of transactions in the ordinary course of business. For
additional information on each of these arrangements, see “Item 8—Financial Statements and Supplementary Data”.
Contractual Obligations
The following summarizes our contractual obligations at December31, 2005 and the effect such obligations are expected to have on our
liquidity and cash flow in future periods (in thousands):
Due in
Thereafter
Total
2006
2007
2008
2009
2010
Security commitments to:
Purchase securities
$
882,135
$
—
$
—
$
—
$
—
$
—
$
882,135
Sell securities
(950,762
)
—
—
—
—
—
(950,762
)
Loan commitments to:
Originate loans
(1)
362,203
—
—
—
—
—
362,203
Purchase loans
112,452
—
—
—
—
—
112,452
Sell mortgages
(35,087
)
—
—
—
—
—
(35,087
)
Equity funding commitments
(2)
18,297
18,707
8,332
—
—
—
45,336
Acquisition-related commitments
3,400
—
—
—
—
—
3,400
Certificates of deposit
(3)(4)
2,423,817
426,882
177,405
76,380
89,550
126,797
3,320,831
Other borrowings by Bank subsidiary
(5)
11,931,620
872,852
142,648
287,601
185,705
2,814,914
16,235,340
Mandatorily redeemable preferred securities
(5)
24,042
24,042
24,042
24,042
24,042
851,068
971,278
Convertible and senior notes
(5)
151,013
330,647
139,722
139,204
139,155
2,371,968
3,271,709
Facilities offered for sublease, less estimated future
sublease income
(6)
8,366
6,476
4,860
4,075
2,255
140
26,172
Operating lease payments
27,503
26,872
25,374
22,397
19,753
27,596
149,495
Total contractual obligations
(7)
$
14,958,999
$
1,706,478
$
522,383
$
553,699
$
460,460
$
6,192,483
$
24,394,502
(1)
Contains optional commitments to originate.
(2)
Estimated based on investment plans of the venture capital funds, low income housing credit partnerships and joint ventures.
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2006. EDGAR Online, Inc.