eTrade 2010 Annual Report Download - page 46

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Compensation and Benefits
Compensation and benefits decreased 4% to $366.2 million for the year ended December 31, 2009
compared to 2008. The decrease for the year ended December 31, 2009 resulted primarily from lower salary
expense due to a reduction in our employee base of 5% compared to the year ended December 31, 2008.
Advertising and Market Development
Advertising and market development expense decreased 35% to $114.4 million for the year ended
December 31, 2009 compared to 2008. This decrease was due to high levels of advertising in the first half of
2008 that was aimed at restoring customer confidence as well as an overall decline in advertising rates in the year
ended December 31, 2009.
FDIC Insurance Premiums
FDIC insurance premiums increased 202% to $94.3 million for the year December 31, 2009 compared to
2008. The increase was primarily due to an increase in the ongoing FDIC insurance rates as well as an industry
wide special assessment in the second quarter of 2009. Our portion of this special assessment was $21.6 million.
Facility Restructuring and Other Exit Activities
Facility restructuring and other exit activities were $20.7 million for the year ended December 31, 2009.
These costs were due primarily to the restructuring of our international brokerage business.
Other Operating Expenses
Other operating expenses increased 35% to $122.5 million for the year ended December 31, 2009 compared
to 2008. The increase for the year ended December 31, 2009, was primarily due to a $23.7 million gain on the
sale of our corporate aircraft related assets during the year ended December 31, 2008, which reduced other
operating expenses during that period and to higher real estate owned expenses during the year ended
December 31, 2009.
Other Income (Expense)
Other income (expense) was an expense of $1.3 billion for the year ended December 31, 2009 compared to
an expense of $330.6 million for the year ended December 31, 2008. Total other expense of $1.3 billion for the
year ended December 31, 2009 was largely due to the $968.3 million pre-tax non-cash loss on the early
extinguishment of debt related to our Debt Exchange. The loss on the Debt Exchange resulted from the
de-recognition of the debt that was exchanged and the corresponding recognition of the newly-issued
non-interest-bearing convertible debentures at fair value.
Total other income (expense) also includes corporate interest expense resulting from our interest-bearing
corporate debt. Corporate interest expense decreased 22% to $282.7 million for the year ended December 31,
2009, primarily due to the reduction in interest-bearing debt in connection with our Debt Exchange.
Income Tax Benefit
Income tax benefit from continuing operations was $537.7 million and $469.5 million for the years ended
December 31, 2009 and 2008, respectively. Our effective tax rates were (29.3)% and (36.7)% for the years ended
December 31, 2009 and 2008, respectively.
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