eTrade 2010 Annual Report Download - page 156

NOTE 17—SHAREHOLDERS’ EQUITY
The activity in shareholders’ equity during the year ended December 31, 2010 is summarized as follows
(dollars in thousands):
Common Stock /
Additional
Paid-In Capital
Accumulated
Deficit / Other
Comprehensive
Loss Total
Beginning balance, December 31, 2009 $6,277,051 $(2,527,496) $3,749,555
Net loss — (28,472) (28,472)
Conversions of convertible debentures 316,983 — 316,983
Claims settlement under Section 16(b) 35,000 — 35,000
Net change from available-for-sale securities — (240) (240)
Net change from cash flow hedging instruments — (29,950) (29,950)
Other(1) 13,889 (4,320) 9,569
Ending balance, December 31, 2010 $6,642,923 $(2,590,478) $4,052,445
(1) Other includes employee share-based compensation accounting and changes in accumulated other comprehensive loss from foreign
currency translation.
Claims Settlement
In January 2010, a security holder paid the Company $35 million to settle a claim under Section 16(b) of the
Securities Exchange Act of 1934. Section 16(b) requires certain persons and entities whose securities trading
activities result in “short swing” profits to repay such profits to the issuer of the security. Section 16(b) liability
does not require that the security holder trade while in possession of material non-public information.
Reverse Stock Split
In the second quarter of 2010, after approval by the Company’s shareholders at the Company’s 2010 Annual
Meeting, a 1-for-10 reverse stock split of the Company’s common stock became effective. All prior periods have
been adjusted to reflect the impact of the reverse stock split.
Preferred Stock
The Company has 1.0 million shares authorized in preferred stock. None were issued and outstanding at
December 31, 2010 and 2009. On March 30, 2010, the Company amended its Certificate of Incorporation to
eliminate the designation of the Series A Preferred Stock and Series B Participating Cumulative Preferred Stock.
Conversions of Convertible Debentures
During the years ended December 31, 2010 and 2009, $317.0 million and $720.9 million of the Company’s
convertible debentures were converted into 30.7 million and 69.7 million shares of common stock, respectively.
For further details on the convertible debentures, see Note 14—Corporate Debt.
Common Stock Offerings
In September 2009, the Company initiated and completed an At the Market Program to offer and sell up to
$150 million of common stock, in which the Company issued 8.0 million shares of common stock resulting in net
proceeds of $147 million.
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