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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 12, 2000
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E*TRADE Group, Inc.
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(Exact name of registrant as specified in charter)
Delaware 1-11921 94-2844166
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4500 Bohannon Drive, Menlo Park, California 94025
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (650) 331-6000
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Not Applicable
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
On April 12, 2000, E*TRADE Group, Inc. ("E*TRADE") announced its financial
results for the quarter ended March 31, 2000, reporting net revenues of $407
million, net loss of $23 million, and basic and diluted net loss per share of
$0.08 for the three months ended March 31, 2000 and net revenues of $675
million, net loss of $28 million, and basic and diluted net loss per share of
$0.11 for the six months ended March 31, 2000. A copy of E*TRADE's
Consolidated Balance Sheets at March 31, 2000 and September 30, 1999 and
Consolidated Statements of Operations for the three and six months ended March
31, 2000 and 1999 are attached as Exhibit 99.1 hereto. This Form 8-K is being
filed to present the first period of consolidated results of E*TRADE and
Telebanc Financial Corporation ("Telebanc"). Consolidated results give
retroactive effect to E*TRADE's merger with Telebanc on January 12, 2000 which
was accounted for as a pooling of interests.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Consolidated Statements of Operations for the three and six
months ended March 31, 2000 and 1999 and Consolidated Balance
Sheets at March 31, 2000 and September 30, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
E*TRADE Group, Inc.
(Registrant)
Dated: April 17, 2000
By: /s/ Leonard C. Purkis
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Leonard C. Purkis
Chief Financial Officer
(principal financial and
accounting officer)
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EXHIBIT INDEX
Exhibit Description
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99.1 Consolidated Statements of Operations for the three and six
months ended March 31, 2000 and 1999 and Consolidated Balance
Sheets at March 31, 2000 and September 30, 1999.
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EXHIBIT 99.1
Consolidated Statements of Operations for the three and six months ended March
31, 2000 and 1999 and Consolidated Balance Sheets at March 31, 2000 and
September 30, 1999.
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E * T R A D E G R O U P, I N C . A N D S U B S I D I A R I E S
C o n s o l i d a t e d S t a t e m e n t s o f O p e r a t i o n s
(in thousands, except per share amounts)
(Unaudited)
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<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
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2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Revenues:
Transaction revenues....................... $ 254,596 $ 90,524 $ 406,908 $ 150,844
Interest income............................ 242,675 80,527 399,872 141,567
Global and institutional................... 41,384 29,308 75,083 57,414
Other...................................... 16,640 10,389 35,923 18,639
--------- -------- --------- ---------
Gross revenues......................... 555,295 210,748 917,786 368,464
Interest expense............................ (146,609) (48,483) (240,921) (86,502)
Provision for loan losses................... (1,256) (490) (1,793) (770)
--------- -------- --------- ---------
Net revenues........................... 407,430 161,775 675,072 281,192
--------- -------- --------- ---------
Cost of services............................ 130,474 66,493 241,981 116,730
--------- -------- --------- ---------
Operating expenses:
Selling and marketing...................... 177,484 78,174 307,164 135,883
Technology development..................... 42,127 15,256 78,507 29,822
General and administrative................. 50,225 24,714 92,303 45,080
Amortization of goodwill and other
intangibles............................... 5,159 609 7,184 1,369
Merger related expenses.................... 24,599 - 30,386 -
--------- -------- --------- ---------
Total operating expenses............... 299,594 118,753 515,544 212,154
--------- -------- --------- ---------
Total cost of services and operating
expenses............................. 430,068 185,246 757,525 328,884
--------- -------- --------- ---------
Operating loss.............................. (22,638) (23,471) (82,453) (47,692)
--------- -------- --------- ---------
Non-operating income (expense):
Gain on sale of investments................ 10,915 33,367 42,231 33,367
Unrealized gain (loss) on venture funds.... (14,628) - 10,825 -
Other...................................... (5,353) 4,754 (7,300) 10,133
--------- -------- --------- ---------
Total non-operating income expense).... (9,066) 38,121 45,756 43,500
Pre-tax income (loss)....................... (31,704) 14,650 (36,697) (4,192)
Income tax expense (benefit)................ (8,923) 5,052 (9,620) (3,429)
Minority interest in subsidiary.......... 408 561 903 1,132
--------- -------- --------- ---------
Income (loss) before cumulative effect of
accounting change......................... (23,189) 9,037 (27,980) (1,895)
Cumulative effect of accounting change, net
of accounting charge....................... - (469) - (469)
--------- -------- --------- ---------
Net income (loss)........................... (23,189) 8,568 (27,980) (2,364)
Preferred stock dividends................... - 60 - 120
--------- -------- --------- ---------
Income (loss) applicable to common stock... $ (23,189) $ 8,508 $ (27,980) $ (2,484)
========= ======== ========= =========
Income (loss) per share:
Basic...................................... $ (0.08) $ 0.03 $ (0.11) $ (0.01)
========= ======== ========= =========
Diluted.................................... $ (0.08) $ 0.03 $ (0.11) $ (0.01)
========= ======== ========= =========
Shares used in computation of income
(loss) per share:
Basic...................................... 285,004 261,104 266,001 233,563
Diluted.................................... 285,004 282,580 266,001 233,563
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E * T R A D E G R O U P , I N C . A N D S U B S I D I A R I E S
C o n s o l i d a t e d B a l a n c e S h e e t s
(in thousands)
(Unaudited)
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<CAPTION>
March 31, September 30,
2000 1999
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<S> <C> <C>
ASSETS
Cash and equivalents................................................................ $ 371,136 $ 124,801
Cash and investments required to be segregated
under Federal or other regulations............................................... 267,155 104,500
Brokerage receivables - net......................................................... 7,016,255 2,912,581
Mortgage-backed securities.......................................................... 2,693,519 1,426,053
Loans receivable - net.............................................................. 3,049,840 2,154,509
Investments......................................................................... 1,353,148 830,329
Property and equipment - net........................................................ 225,094 178,854
Goodwill and other intangibles...................................................... 382,299 17,211
Other assets........................................................................ 351,440 159,386
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Total assets................................................................ $ 15,709,886 $ 7,908,224
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LIABILITIES AND SHAREOWNERS' EQUITY
Liabilities:
Brokerage payables.............................................................. $ 6,676,359 $ 2,824,212
Banking deposits................................................................ 3,360,872 2,162,682
Borrowings by bank subsidiary................................................... 2,573,599 1,267,474
Accounts payable, accrued and other liabilities................................. 556,357 203,971
Subordinated notes.............................................................. 650,000 -
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Total liabilities........................................................... 13,817,187 6,458,339
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Mandatorily redeemable preferred securities......................................... 30,615 30,584
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Shareowners' equity:
Common stock, $.01 par value; shares authorized, 600,000,000;
issued and outstanding: March 2000, 289,705,776
September 1999, 275,145,791................................................. 2,897 2,751
Additional paid-in-capital...................................................... 1,629,729 1,269,167
Unearned ESOP shares............................................................ (1,834) (2,122)
Accumulated deficit............................................................. (36,344) (8,364)
Accumulated other comprehensive income.......................................... 267,636 157,869
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Total shareowners' equity................................................... 1,862,084 1,419,301
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Total liabilities and shareowners' equity............................. $ 15,709,886 $ 7,908,224
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