eTrade 2010 Annual Report Download - page 34
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Simplified Commission and Fee Structure
• In February 2010, we announced several changes to the pricing structure in our brokerage business. We
eliminated the $12.99 commission tier, account activity fees and a per share commission applied to
market trades larger than 2,000 shares. We believe these changes simplified our overall pricing
structure.
Market Recognition
• Our corporate services business rated highest in overall satisfaction and loyalty among broker plan
administrators for full and partial outsourced stock plan administration by GROUP FIVE, an
independent consulting and research firm, in their 2010 Stock Plan Administration Benchmarking
Study.
Completed the Sale of Approximately $1 Billion in Deposits
• We sold approximately $1 billion of savings accounts to Discover Financial Services in March 2010.
This transaction is in line with our overall strategy of reducing our balance sheet and growing our
brokerage business as the savings accounts sold were predominantly with customers not affiliated with
an active brokerage account.
Completion of 1-for-10 Reverse Stock Split
• In June 2010, we completed a 1-for-10 reverse stock split. All prior periods presented have been
adjusted to reflect the impact of this reverse stock split, including the impact on basic and diluted
weighted-average shares and shares issued and outstanding.
EARNINGS OVERVIEW
2010 Compared to 2009
We incurred a net loss of $28.5 million for the year ended December 31, 2010, due primarily to provision
for loan losses of $779.4 million. Our provision for loan losses reported in our balance sheet management
segment more than offset the strong performance of our trading and investing segment, which generated segment
income of $721.8 million for the year ended December 31, 2010. The provision for loan losses has declined for
two consecutive years and we expect it to continue to decline in 2011 when compared to 2010, although
performance is subject to variability in any given quarter.
The following sections describe in detail the changes in key operating factors and other changes and events
that have affected our net revenue, provision for loan losses, operating expense, other income (expense) and
income tax expense (benefit).
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