eTrade 2007 Annual Report Download - page 126
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Before the purchase in November 2008, the Units will be reflected in diluted earnings per share calculations
using the treasury stock method as defined by SFAS No. 128, Earnings per Share. Under this method, the
number of shares of common stock used in calculating diluted earnings per share (based on the settlement
formula applied at the end of the reporting period) is deemed to be increased by the excess, if any, of the number
of shares that would be issued upon settlement of the purchase contracts less the number of shares that could be
purchased by the Company in the market at the average market price during the period using the proceeds to be
received upon settlement. Therefore, dilution will occur for periods when the average market price of the
Company’s common stock for the reporting period is above $21.816.
Senior Secured Revolving Credit Facility
In September 2005, the Company entered into a $250 million, three-year senior secured revolving credit
facility. As a result of the Citadel Investment in November 2007, the facility was terminated and all unamortized
debt issuance costs were expensed.
Corporate Debt Covenants
Certain of the Company’s corporate debt described above have terms which include customary financial
covenants. As of December 31, 2007, the Company was in compliance with all such covenants.
Early Extinguishment of Debt
In 2006, the Company called the entire remaining $185.2 million principal amount of its 6% Notes for
redemption. The Company recorded a $0.7 million loss on early extinguishment of debt relating to the write-off
of the unamortized debt offering costs. The Company did not have any early extinguishments of debt in 2005.
Other Corporate Debt
The Company also has multiple term loans from financial institutions. These loans are collateralized by
equipment and are included within other borrowings on the consolidated balance sheet. See Note 14—Securities
Sold Under Agreement to Repurchase and Other Borrowings.
Future Maturities of Corporate Debt
Scheduled principal payments of corporate debt as of December 31, 2007 are as follows (dollars in
thousands):
Years ending December 31,
2008 $ —
2009 —
2010 —
2011 453,815
2012 —
Thereafter 2,996,337
Total future principal payments of corporate debt 3,450,152
Unamortized discount, net (427,454)
Total corporate debt $3,022,698
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