eTrade 2008 Annual Report Download - page 110

Sale of E*TRADE Professional Trading, LLC
In 2005, the Company decided to sell its professional agency business, E*TRADE Professional Trading,
LLC. The Company executed and settled this transaction during the year ended December 31, 2006 and recorded
approximately $2.6 million in gain, net of tax, on the sale.
The Company does not have significant continuing involvement in the operations of its professional agency
business and does not continue any significant revenue-producing or cost-generating activities of this business.
Therefore, the Company’s results of operations, net of income tax, include this business as a discontinued
operation on the Company’s consolidated statement of income (loss) for all periods presented. Prior to this
business being recorded as a discontinued operation, it was included in the results of the institutional segment.
The following table summarizes the results of discontinued operations for the agency trading business
(dollars in thousands):
For the Year Ended
December 31, 2006
Net revenue $ 5,526
Loss from discontinued operations before income tax benefit $(1,181)
Income tax benefit (460)
Loss from discontinued operations, net of tax $ (721)
NOTE 4—FACILITY RESTRUCTURING AND OTHER EXIT ACTIVITIES
Restructuring and other exit activities liabilities are included in accounts payable, accrued and other
liabilities in the consolidated balance sheet. The following table summarizes the changes in the facility
restructuring and other exit activities liabilities for the years ended December 31, 2008 and 2007 (dollars in
thousands):
Year Ended
December 31,
2008 2007
Beginning balance $ 26,651 $ 26,892
Facility restructuring and other exit activities(1) 29,502 33,226
Cash payments (27,232) (19,119)
Non-cash charges(2) (7,038) (14,348)
Total facility restructuring and other exit activities liabilities $ 21,883 $ 26,651
(1) Includes $6.0 million of charges reclassified to discontinued operations for the year ended December 31, 2007. Refer to Note 3—
Discontinued Operations for more information.
(2) Non-cash charges primarily relate to fixed assets that were written off related to the restructuring or exit activity.
The following table summarizes the expense recognized by the Company as facility restructuring and other
exit activities from continuing operations for the periods presented (dollars in thousands):
Year Ended December 31,
2008 2007 2006
Restructuring of institutional brokerage business $10,292 $17,094 $ —
Gain on sale of RAA (2,753) — —
Other exit activities 21,963 10,089 22,864
Total facility restructuring and other exit activities $29,502 $27,183 $22,864
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