Form
20-F o
|
Form
40-F x
|
Yes
o
|
No
x
|
THE
TORONTO-DOMINION BANK
|
|||
DATE: August
24,
2006
|
By:
|
/s/
Rasha El Sissi
|
|
Name:
|
Rasha
El Sissi
|
||
Title:
|
Associate
Vice President, Legal
|
|
Bank Financial Group |
3nd
Quarter 2006 •
Report to Shareholders •
Three
and nine months ended July 31,
2006
|
TD
Bank
Financial Group Reports Very Strong
Third
Quarter 2006 Results, Raises
Dividend
|
•
|
Reported
diluted earnings per share1
were $1.09, up 88% from $.58
|
•
|
Adjusted
diluted earnings per share2
were $1.21, up 16% from $1.04.
|
•
|
Reported
net income was $796 million, compared with $411 million.
|
•
|
Adjusted
net income was $886 million, compared with $739 million.
|
•
|
Amortization
of intangibles of $61 million after-tax (8 cents per share), compared
with
$91 million after-tax (12 cents per share) in the third quarter last
year.
The $61 million is net of a related tax benefit in the future tax
liability of $24 million due to scheduled reductions in the income
tax
rate.
|
•
|
The
impact of hedging relationships accounting guideline (AcG-13) resulting
in
a loss of $5 million after-tax (1 cent per share), compared with
a loss of
$12 million after-tax (2 cents per share) in the same quarter last
year.
|
•
|
The
negative impact on the provision for income taxes of the scheduled
reductions in the income tax rate, resulting in an offsetting decrease
of
$24 million (3 cents per share) in the net future tax assets.
|
1
|
Reported
results are prepared in accordance with Canadian generally accepted
accounting principles (GAAP).
|
2
|
Adjusted
earnings and reported results referenced in this Press Release and
Report
to Shareholders are explained in detail on page 5 under the “How the Bank
Reports” section. Commencing from the first quarter 2006, the items of
note include the Bank’s amortization of intangible assets. Previously, the
Bank described adjusted earnings as earnings before amortization
of
intangibles and items of note.
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
2
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
3
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
4
|
(unaudited)
|
||||||||||||||||
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
July
31
|
April
30
|
July
31
|
July
31
|
July
31
|
||||||||||||
(millions
of Canadian dollars, except as noted)
|
2006
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
Results
of operations
|
||||||||||||||||
Total
revenues
|
$
|
3,288
|
$
|
3,118
|
$
|
3,098
|
$
|
9,810
|
$
|
8,814
|
||||||
Dilution
gain (loss), net
|
-
|
(5
|
)
|
-
|
1,559
|
-
|
||||||||||
Provision
for credit losses
|
109
|
16
|
40
|
239
|
70
|
|||||||||||
Non-interest
expenses
|
2,147
|
2,103
|
2,577
|
6,540
|
6,579
|
|||||||||||
Net
income - reported
|
796
|
738
|
411
|
3,841
|
1,640
|
|||||||||||
Net
income - adjusted1
|
886
|
780
|
739
|
2,501
|
2,096
|
|||||||||||
Economic
profit2
|
347
|
271
|
258
|
981
|
780
|
|||||||||||
Return
on common equity
|
16.8
|
%
|
16.5
|
%
|
10.4
|
%
|
29.0
|
%
|
15.4
|
%
|
||||||
Return
on invested capital2
|
15.7
|
%
|
14.6
|
%
|
15.5
|
%
|
15.7
|
%
|
16.1
|
%
|
||||||
Financial
position
|
||||||||||||||||
Total
assets
|
$
|
385,845
|
$
|
388,596
|
$
|
368,423
|
$
|
385,845
|
$
|
368,423
|
||||||
Total
risk-weighted assets
|
139,141
|
135,763
|
130,495
|
139,141
|
130,495
|
|||||||||||
Total
shareholders’ equity
|
19,427
|
19,283
|
15,775
|
19,427
|
15,775
|
|||||||||||
Financial
ratios
- reported
(percent)
|
||||||||||||||||
Efficiency
ratio
|
65.3
|
%
|
67.6
|
%
|
83.2
|
%
|
57.5
|
%
|
74.6
|
%
|
||||||
Tier
1 capital to risk-weighted assets
|
12.1
|
12.1
|
10.0
|
12.1
|
10.0
|
|||||||||||
Tangible
common equity as a % of risk-weighted assets
|
9.1
|
9.0
|
7.0
|
9.1
|
7.0
|
|||||||||||
Provision
for credit losses as a % of net average loans
|
.26
|
.04
|
.10
|
.20
|
.07
|
|||||||||||
Common
share information - reported (Canadian
dollars)
|
||||||||||||||||
Per
share
|
||||||||||||||||
Basic
earnings
|
$
|
1.10
|
$
|
1.02
|
$
|
.58
|
$
|
5.34
|
$
|
2.39
|
||||||
Diluted
earnings
|
1.09
|
1.01
|
.58
|
5.30
|
2.38
|
|||||||||||
Dividends
|
.44
|
.44
|
.40
|
1.30
|
1.16
|
|||||||||||
Book
value
|
26.36
|
26.24
|
22.25
|
26.36
|
22.25
|
|||||||||||
Closing
share price
|
57.75
|
62.45
|
55.90
|
57.75
|
55.90
|
|||||||||||
Shares
outstanding (millions)
|
||||||||||||||||
Average
basic
|
719.1
|
715.7
|
707.6
|
715.8
|
684.9
|
|||||||||||
Average
diluted
|
724.7
|
722.5
|
713.4
|
722.1
|
690.4
|
|||||||||||
End
of
period
|
720.8
|
718.8
|
709.0
|
720.8
|
709.0
|
|||||||||||
Market
capitalization (billions of Canadian dollars)
|
$
|
41.6
|
$
|
44.9
|
$
|
39.6
|
$
|
41.6
|
$
|
39.6
|
||||||
Dividend
yield
|
2.9
|
%
|
2.6
|
%
|
2.8
|
%
|
2.8
|
%
|
2.9
|
%
|
||||||
Dividend
payout ratio
|
40.0
|
%
|
43.0
|
%
|
68.9
|
%
|
24.3
|
%
|
48.8
|
%
|
||||||
Price
to earnings multiple
|
9.4
|
11.1
|
17.0
|
9.4
|
17.0
|
|||||||||||
Common
share information - adjusted
(Canadian dollars)
|
||||||||||||||||
Per
share
|
||||||||||||||||
Basic
earnings
|
$
|
1.22
|
$
|
1.10
|
$
|
1.04
|
$
|
3.49
|
$
|
3.09
|
||||||
Diluted
earnings
|
1.21
|
1.09
|
1.04
|
3.46
|
3.07
|
|||||||||||
Dividend
payout ratio
|
35.9
|
%
|
40.7
|
%
|
38.3
|
%
|
37.5
|
%
|
38.2
|
%
|
||||||
Price
to earnings multiple
|
12.8
|
14.4
|
14.0
|
12.8
|
14.0
|
|
1
Adjusted earnings and reported results are explained in detail
on
page 5 under the “How the Bank Reports”
section.
|
|
2
Economic profit and return on invested capital are adjusted
measures
and are explained in detail on page 7 under the “Economic Profit and
Return on Invested Capital”
section.
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
5
|
Operating
results - reported
(unaudited)
|
||||||||||||||||
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
July
31
|
April
30
|
July
31
|
July
31
|
July
31
|
||||||||||||
(millions
of Canadian dollars)
|
2006
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
Net
interest income
|
$
|
1,623
|
$
|
1,427
|
$
|
1,563
|
$
|
4,657
|
$
|
4,367
|
||||||
Other
income
|
1,665
|
1,691
|
1,535
|
5,153
|
4,447
|
|||||||||||
Total
revenues
|
3,288
|
3,118
|
3,098
|
9,810
|
8,814
|
|||||||||||
Dilution
gain (loss), net
|
-
|
(5
|
)
|
-
|
1,559
|
-
|
||||||||||
Provision
for credit losses
|
(109
|
)
|
(16
|
)
|
(40
|
)
|
(239
|
)
|
(70
|
)
|
||||||
Non-interest
expenses
|
(2,147
|
)
|
(2,103
|
)
|
(2,577
|
)
|
(6,540
|
)
|
(6,579
|
)
|
||||||
Income
before provision for income taxes, non-controlling interests in
subsidiaries and equity in net income of associated
company
|
1,032
|
994
|
481
|
4,590
|
2,165
|
|||||||||||
Provision
for income taxes
|
(235
|
)
|
(244
|
)
|
(12
|
)
|
(699
|
)
|
(446
|
)
|
||||||
Non-controlling
interests, net of tax
|
(52
|
)
|
(47
|
)
|
(58
|
)
|
(136
|
)
|
(79
|
)
|
||||||
Equity
in net income of associated company, net of tax
|
51
|
35
|
-
|
86
|
-
|
|||||||||||
Net
income - reported
|
796
|
738
|
411
|
3,841
|
1,640
|
|||||||||||
Preferred
dividends
|
(6
|
)
|
(6
|
)
|
-
|
(17
|
)
|
-
|
||||||||
Net
income available to common shareholders -
reported
|
$
|
790
|
$
|
732
|
$
|
411
|
$
|
3,824
|
$
|
1,640
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
6
|
Reconciliation
of non-GAAP measures1
(unaudited)
|
||||||||||||||||
Adjusted
net income to reported results
|
||||||||||||||||
Operating
results - adjusted
|
For
the three months ended
|
For
the
nine months ended4
|
||||||||||||||
July
31
|
April
30
|
July
31
|
July
31
|
July
31
|
||||||||||||
(millions
of
Canadian dollars)
|
2006
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
Net
interest income
|
$
|
1,623
|
$
|
1,427
|
$
|
1,563
|
$
|
4,657
|
$
|
4,367
|
||||||
Other
income
|
1,673
|
1,675
|
1,599
|
5,182
|
4,477
|
|||||||||||
Total
revenues
|
3,296
|
3,102
|
3,162
|
9,839
|
8,844
|
|||||||||||
Provision
for credit losses
|
(109
|
)
|
(76
|
)
|
(82
|
)
|
(299
|
)
|
(225
|
)
|
||||||
Non-interest
expenses
|
(2,021
|
)
|
(1,978
|
)
|
(2,052
|
)
|
(6,111
|
)
|
(5,764
|
)
|
||||||
Income
before provision for income taxes, non-controlling interests in
subsidiaries and equity in net income of associated
company
|
1,166
|
1,048
|
1,028
|
3,429
|
2,855
|
|||||||||||
Provision
for income taxes
|
(283
|
)
|
(260
|
)
|
(231
|
)
|
(871
|
)
|
(680
|
)
|
||||||
Non-controlling
interests, net of tax
|
(57
|
)
|
(50
|
)
|
(58
|
)
|
(159
|
)
|
(79
|
)
|
||||||
Equity
in net income of associated company, net of tax
|
60
|
42
|
-
|
102
|
-
|
|||||||||||
Net
income - adjusted
|
886
|
780
|
739
|
2,501
|
2,096
|
|||||||||||
Preferred
dividends
|
(6
|
)
|
(6
|
)
|
-
|
(17
|
)
|
-
|
||||||||
Net
income available to common shareholders -
adjusted
|
$
|
880
|
$
|
774
|
$
|
739
|
$
|
2,484
|
$
|
2,096
|
||||||
Items
of note affecting net income, net of income taxes
|
||||||||||||||||
Amortization
of intangibles2
|
$
|
(61
|
)
|
$
|
(86
|
)
|
$
|
(91
|
)
|
$
|
(229
|
)
|
$
|
(268
|
)
|
|
Dilution
gain on Ameritrade transaction, net of costs
|
-
|
(5
|
)
|
-
|
1,665
|
-
|
||||||||||
Dilution
loss on the acquisition of Hudson United by TD Banknorth
|
-
|
-
|
-
|
(72
|
)
|
-
|
||||||||||
Balance
sheet restructuring charge in TD Banknorth
|
-
|
-
|
-
|
(19
|
)
|
-
|
||||||||||
Wholesale
Banking restructuring charge
|
-
|
-
|
(10
|
)
|
(35
|
)
|
(25
|
)
|
||||||||
Hedging
impact due to AcG-13
|
(5
|
)
|
10
|
(12
|
)
|
15
|
10
|
|||||||||
General
allowance release
|
-
|
39
|
-
|
39
|
23
|
|||||||||||
Other
tax items
|
(24
|
)
|
-
|
30
|
(24
|
)
|
30
|
|||||||||
Non-core
portfolio loan loss recoveries (sectoral related)
|
-
|
-
|
23
|
-
|
67
|
|||||||||||
Loss
on structured derivative portfolios
|
-
|
-
|
(30
|
)
|
-
|
(30
|
)
|
|||||||||
Tax
charge related to reorganizations
|
-
|
-
|
-
|
-
|
(25
|
)
|
||||||||||
Litigation
charge
|
-
|
-
|
(238
|
)
|
-
|
(238
|
)
|
|||||||||
Total
items of note
|
(90
|
)
|
(42
|
)
|
(328
|
)
|
1,340
|
(456
|
)
|
|||||||
Net
income available to common shareholders -
reported
|
$
|
790
|
$
|
732
|
$
|
411
|
$
|
3,824
|
$
|
1,640
|
Reconciliation
of reported earnings per share (EPS) to adjusted3
(unaudited)
|
||||||||||||||||
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
July
31
|
April
30
|
July
31
|
July
31
|
July
31
|
||||||||||||
(Canadian
dollars)
|
2006
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
Diluted
- reported
|
$
|
1.09
|
$
|
1.01
|
$
|
.58
|
$
|
5.30
|
$
|
2.38
|
||||||
Items
of note affecting income (as above)
|
.12
|
.06
|
.46
|
(1.86
|
)
|
.66
|
||||||||||
Items
of note affecting EPS only5
|
-
|
.02
|
-
|
.02
|
.03
|
|||||||||||
Diluted
- adjusted
|
$
|
1.21
|
$
|
1.09
|
$
|
1.04
|
$
|
3.46
|
$
|
3.07
|
||||||
Basic
- reported
|
$
|
1.10
|
$
|
1.02
|
$
|
.58
|
$
|
5.34
|
$
|
2.39
|
1.
|
Certain
comparative amounts have been restated to conform to the presentation
adopted in the current period.
|
2.
|
See
additional information in the “Amortization of Intangibles, net of income
taxes” table on page 7.
|
3.
|
Earnings
per share (EPS) is computed by dividing income by the weighted average
number of shares outstanding during the period. As a result, the
sum of
the quarterly EPS figures may not equal year-to-date
EPS.
|
4.
|
Items
of note in addition to those included in the third quarter of 2006
are as
follows: first
quarter 2005
-
amortization of intangibles-$87 million; non-core portfolio loan
loss
recoveries (sectoral related)-$20 million; hedging impact due to
AcG-13-($11) million; and $23 million relating to general allowance
release; first
quarter 2006 - amortization
of intangibles-$82 million; dilution gain of $1.67 billion (U.S.$1.45
billion) on the Ameritrade transaction net of costs; dilution loss
of $72
million on the acquisition of Hudson United Bancorp by TD Banknorth;
the
Bank’s share of TD Banknorth’s balance sheet restructuring charge of $19
million (U.S.$16 million); restructuring charge in connection with
the
previously announced decision to reposition the Bank’s global structured
products businesses of $35 million; the impact of hedging relationships
accounting guideline (AcG-13) resulting in a gain of $10 million;
second
quarter 2005
-
amortization of intangibles-$90 million; restructuring charge in
connection with the Bank’s global structured products businesses of $15
million; the impact of hedging relationships accounting guideline
(AcG-13)
resulting in a gain of $33 million; other tax items related to an
internal
restructuring tax charge of $25 million; non-core portfolio loss
recoveriers-$24 million; second
quarter 2006
-
amortization of intangibles-$86 million; a reduction to the TD Ameritrade
dilution gain of $5 million; the impact of hedging relationships
accounting guideline (AcG-13) resulting in a gain of $10 million;
general
loss provision release-$39 million; third
quarter 2005
-
amortization of intangibles - $91 million; restructuring charge of
$10
million in connection with the repositioning of the Bank’s global
structured products in Wholesale Banking; the impact of hedging
relationships accounting guideline (AcG-13) resulting in a loss of
$12
million; a tax benefit of $30 million as a result of a higher tax
rate
applied to the future tax asset related to specific provisions; specific
non-core portfolio loan loss recoveries (sectoral related) of $23
million;
loss of $30 million on exiting a portfolio within the global structured
products businesses in Wholesale Banking; and a contingent litigation
reserve of $238 million related to
Enron.
|
5.
|
Second
quarter 2006 - one-time
adjustment for the impact of TD Ameritrade earnings, due to the one
month
lag between fiscal quarter ends. The results of the Bank include
its
equity share in TD Ameritrade from January 25, 2006 to March 31,
2006. As
a result of the one month lag, the impact on earnings per share was
approximately 2 cents per share. Second
quarter 2005 - adjustment
for the impact of TD Banknorth earnings, due to the one month lag
between
fiscal quarter ends. Only one month of TD Banknorth earnings were
included
in the third quarter while two months of funding costs and share
issuance
affected the quarter.
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
7
|
Amortization
of Intangibles, net of income taxes (unaudited)
|
||||||||||||||||
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
July
31
|
April
30
|
July
31
|
July
31
|
July
31
|
||||||||||||
(millions
of Canadian dollars)
|
2006
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
TD
Canada Trust
|
$
|
31
|
$
|
60
|
$
|
72
|
$
|
155
|
$
|
234
|
||||||
TD
Banknorth Reported
amortization of intangibles
|
21
|
17
|
15
|
52
|
20
|
|||||||||||
Less: non-controlling interest
|
4
|
3
|
1
|
8
|
1
|
|||||||||||
Net amortization of intangibles
|
17
|
14
|
14
|
44
|
19
|
|||||||||||
TD
Ameritrade (included in equity in net income of associated
company)
|
9
|
7
|
-
|
16
|
-
|
|||||||||||
Other
|
4
|
5
|
5
|
14
|
15
|
|||||||||||
Amortization
of intangibles, net of income taxes1
|
$
|
61
|
$
|
86
|
$
|
91
|
$
|
229
|
$
|
268
|
1
|
Amortization
of intangibles is included in the Corporate segment.
|
Reconciliation of Economic Profit, Return on Invested Capital and Adjusted Net Income | ||||||||||||||||
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
July
31
|
April
30
|
July
31
|
July
31
|
July
31
|
||||||||||||
(millions
of Canadian dollars)
|
2006
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
Average
common equity
|
$
|
18,692
|
$
|
18,183
|
$
|
15,693
|
$
|
17,650
|
$
|
14,255
|
||||||
Average
cumulative goodwill/intangible assets amortized, net of income
taxes
|
3,578
|
3,511
|
3,259
|
3,506
|
3,168
|
|||||||||||
Average
invested capital
|
$
|
22,270
|
$
|
21,694
|
$
|
18,952
|
$
|
21,156
|
$
|
17,423
|
||||||
Rate
charged for invested capital
|
9.5
|
%
|
9.5
|
%
|
10.1
|
%
|
9.5
|
%
|
10.1
|
%
|
||||||
Charge
for invested capital
|
$
|
(533
|
)
|
$
|
(503
|
)
|
$
|
(481
|
)
|
$
|
(1,503
|
)
|
$
|
(1,316
|
)
|
|
Net
income available to common shareholders - reported
|
790
|
732
|
411
|
3,824
|
1,640
|
|||||||||||
Items
of note impacting income, net of income taxes
|
90
|
42
|
328
|
(1,340
|
)
|
456
|
||||||||||
Net
income available to common shareholders - adjusted
|
880
|
774
|
739
|
2,484
|
2,096
|
|||||||||||
Economic
profit
|
$
|
347
|
$
|
271
|
$
|
258
|
$
|
981
|
$
|
780
|
||||||
Return
on invested capital
|
15.7
|
%
|
14.6
|
%
|
15.5
|
%
|
15.7
|
%
|
16.1
|
%
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
8
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
9
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
10
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
11
|
Provision for Credit Losses | ||||||||||||||||
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
July
31
|
April
30
|
July
31
|
July
31
|
July
31
|
||||||||||||
(millions
of Canadian dollars)
|
2006
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
Net
new specifics (net of reversals)
|
$
|
140
|
$
|
106
|
$
|
114
|
$
|
397
|
$
|
292
|
||||||
Recoveries
|
(33
|
)
|
(32
|
)
|
(54
|
)
|
(96
|
)
|
(163
|
)
|
||||||
Provision
for credit losses - specifics
|
107
|
74
|
60
|
301
|
129
|
|||||||||||
Change
in general allowance
|
||||||||||||||||
TD
Bank
|
-
|
(60
|
)
|
-
|
(60
|
)
|
(35
|
)
|
||||||||
VFC
|
9
|
-
|
-
|
9
|
-
|
|||||||||||
TD
Banknorth
|
(7
|
)
|
2
|
(20
|
)
|
(11
|
)
|
(24
|
)
|
|||||||
Total
|
$
|
109
|
$
|
16
|
$
|
40
|
$
|
239
|
$
|
70
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
12
|
Taxes
|
|||||||||||||||||||||||||||||||
For
the three months ended
|
For
the nine months ended
|
||||||||||||||||||||||||||||||
July
31
|
April
30
|
July
31
|
July
31
|
July
31
|
|||||||||||||||||||||||||||
(millions
of Canadian dollars)
|
2006
|
2006
|
2005
|
2006
|
2005
|
||||||||||||||||||||||||||
Income
taxes at Canadian statutory income tax rate
|
$
|
362
|
35.0
|
%
|
$
|
347
|
34.9
|
%
|
$
|
169
|
35.0
|
%
|
$
|
1,605
|
35.0
|
%
|
$
|
758
|
35.0
|
%
|
|||||||||||
Increase
(decrease) resulting from:
|
|||||||||||||||||||||||||||||||
Dividends
received
|
(58
|
)
|
(5.6
|
)
|
(53
|
)
|
(5.3
|
)
|
(55
|
)
|
(11.4
|
)
|
(172
|
)
|
(3.8
|
)
|
(171
|
)
|
(7.9
|
)
|
|||||||||||
Rate
differentials on international operations
|
(73
|
)
|
(7.0
|
)
|
(45
|
)
|
(4.5
|
)
|
(90
|
)
|
(18.7
|
)
|
(171
|
)
|
(3.7
|
)
|
(188
|
)
|
(8.7
|
)
|
|||||||||||
Federal
large corporations tax
|
(8
|
)
|
(.8
|
)
|
2
|
.2
|
4
|
.9
|
(4
|
)
|
(.1
|
)
|
9
|
.4
|
|||||||||||||||||
Items
related to dilution gains and losses
|
-
|
-
|
2
|
.2
|
-
|
-
|
(582
|
)
|
(12.7
|
)
|
25
|
1.2
|
|||||||||||||||||||
Future
tax rate reduction - future tax assets
|
24
|
2.3
|
-
|
-
|
-
|
-
|
24
|
.5
|
-
|
-
|
|||||||||||||||||||||
Future
tax rate reduction - intangibles
|
(24
|
)
|
(2.3
|
)
|
-
|
-
|
-
|
-
|
(24
|
)
|
(.5
|
)
|
-
|
-
|
|||||||||||||||||
Other
-
net
|
12
|
1.2
|
(9
|
)
|
(1.0
|
)
|
(16
|
)
|
(3.3
|
)
|
23
|
.5
|
13
|
.6
|
|||||||||||||||||
Provision
for income taxes and effective income tax rate -reported
|
$
|
235
|
22.8
|
%
|
$
|
244
|
24.5
|
%
|
$
|
12
|
2.5
|
%
|
$
|
699
|
15.2
|
%
|
$
|
446
|
20.6
|
%
|
Reconciliation
of non-GAAP provision for income taxes
|
||||||||||||||||
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
July
31
|
April
30
|
July
31
|
July
31
|
July
31
|
||||||||||||
(millions
of Canadian dollars)
|
2006
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
Provision
for income taxes - reported
|
$
|
235
|
$
|
244
|
$
|
12
|
$
|
699
|
$
|
446
|
||||||
Increase
(decrease) resulting from items of note:
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Amortization
of
intangibles
|
69
|
43
|
52
|
158
|
143
|
|||||||||||
Dilution
gain
on Ameritrade, net of costs
|
-
|
-
|
-
|
34
|
-
|
|||||||||||
Balance
sheet restructuring charge in TD Banknorth
|
-
|
-
|
-
|
18
|
-
|
|||||||||||
Wholesale
Banking restructuring charge
|
-
|
-
|
5
|
15
|
12
|
|||||||||||
Hedging
impact due to AcG-13
|
3
|
(6
|
)
|
6
|
(8
|
)
|
(7
|
)
|
||||||||
Tax
charges related to reorganizations
|
-
|
-
|
-
|
-
|
(25
|
)
|
||||||||||
Other
tax items
|
(24
|
)
|
-
|
30
|
(24
|
)
|
30
|
|||||||||
Loss
on
structured derivative portfolio
|
-
|
-
|
16
|
-
|
16
|
|||||||||||
Litigation
charge
|
-
|
-
|
129
|
-
|
130
|
|||||||||||
Non-core
loan
loss recoveries (sectoral related)
|
-
|
-
|
(19
|
)
|
-
|
(53
|
)
|
|||||||||
General
allowance release
|
-
|
(21
|
)
|
-
|
(21
|
)
|
(12
|
)
|
||||||||
Tax
effect - items of note
|
48
|
16
|
219
|
172
|
234
|
|||||||||||
Provision
for income taxes - adjusted
|
$
|
283
|
$
|
260
|
$
|
231
|
$
|
871
|
$
|
680
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
13
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
14
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
15
|
Wealth
Management
|
||||||||||||||||
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
July
31
|
April
30
|
July
31
|
July
31
|
July
31
|
||||||||||||
(millions
of Canadian dollars)
|
2006
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
Canadian
Wealth
|
$
|
97
|
$
|
113
|
$
|
73
|
$
|
311
|
$
|
239
|
||||||
TD
Ameritrade / TD Waterhouse U.S.A.
|
55
|
39
|
26
|
131
|
57
|
|||||||||||
Net
income
|
$
|
152
|
$
|
152
|
$
|
99
|
$
|
442
|
$
|
296
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
16
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
17
|
Changes
in Gross Impaired Loans and Acceptances
|
||||||||||||||||
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
July
31
|
April
30
|
July
31
|
July
31
|
July
31
|
||||||||||||
(millions
of Canadian dollars)
|
2006
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
Balance
at beginning of period
|
$
|
349
|
$
|
365
|
$
|
482
|
$
|
349
|
$
|
537
|
||||||
Additions
|
206
|
214
|
200
|
683
|
570
|
|||||||||||
Return
to performing status, repaid or sold
|
(58
|
)
|
(97
|
)
|
(103
|
)
|
(250
|
)
|
(396
|
)
|
||||||
Arising
on acquisition of TD Banknorth
|
-
|
-
|
-
|
-
|
86
|
|||||||||||
Write-offs
|
(137
|
)
|
(130
|
)
|
(125
|
)
|
(419
|
)
|
(349
|
)
|
||||||
Foreign
exchange and other adjustments
|
(3
|
)
|
(3
|
)
|
(2
|
)
|
(6
|
)
|
4
|
|||||||
Balance
at end of period
|
$
|
357
|
$
|
349
|
$
|
452
|
$
|
357
|
$
|
452
|
Allowance
for Credit Losses
|
||||||||||
As at | ||||||||||
July
31
|
April
30
|
July
31
|
||||||||
(millions
of Canadian dollars)
|
2006
|
2006
|
2005
|
|||||||
Specific
allowance
|
$
|
142
|
$
|
135
|
$
|
237
|
||||
General
allowance
|
1,137
|
1,156
|
1,143
|
|||||||
Total
allowance for credit losses
|
$
|
1,279
|
$
|
1,291
|
$
|
1,380
|
||||
Total
net impaired loans
|
$
|
(922
|
)
|
$
|
(942
|
)
|
$
|
(928
|
)
|
|
Net
impaired loans as a percentage of net loans
|
(.6
|
)%
|
(.6
|
)%
|
(.6
|
)%
|
||||
Provision
for credit losses as a percentage of net average loans
|
.26
|
.04
|
.10
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
18
|
Capital
Structure and Ratios - reported
|
||||||||||
As at | ||||||||||
July
31
|
Oct.
31
|
July
31
|
||||||||
(billions
of Canadian dollars)
|
2006
|
2005
|
2005
|
|||||||
Tier
1 capital
|
$
|
16.8
|
$
|
13.1
|
$
|
13.1
|
||||
Tier
1 capital ratio
|
12.1
|
%
|
10.1
|
%
|
10.0
|
%
|
||||
Total
capital
|
$
|
18.3
|
$
|
17.2
|
$
|
17.1
|
||||
Total
capital ratio
|
13.2
|
%
|
13.2
|
%
|
13.3
|
%
|
||||
Risk-weighted
assets
|
$
|
139.1
|
$
|
130.0
|
$
|
130.5
|
||||
Tangible
common equity
|
$
|
12.7
|
$
|
9.6
|
$
|
9.1
|
||||
Tangible
common equity as a percentage of risk-weighted assets
|
9.1
|
%
|
7.4
|
%
|
7.0
|
%
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
19
|
Value
at Risk Usage
|
||||||||||||||||
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
July
31, 2006
|
July
31, 2006
|
July
31, 2005
|
July
31, 2006
|
July
31, 2005
|
||||||||||||
(millions
of Canadian dollars)
|
As
at
|
Average
|
Average
|
Average
|
Average
|
|||||||||||
Interest
rate risk
|
$
|
6.5
|
$
|
8.5
|
$
|
8.0
|
$
|
9.1
|
$
|
8.2
|
||||||
Equity
risk
|
7.0
|
6.1
|
5.3
|
5.4
|
5.7
|
|||||||||||
Foreign
exchange risk
|
3.8
|
2.2
|
2.1
|
2.2
|
2.5
|
|||||||||||
Commodity
risk
|
1.6
|
2.0
|
.8
|
1.4
|
1.1
|
|||||||||||
Diversification
effect
|
(6.0
|
)
|
(8.7
|
)
|
($7.1
|
)
|
(7.8
|
)
|
(8.1
|
)
|
||||||
General
Market Value at Risk
|
$
|
12.9
|
$
|
10.1
|
$
|
9.1
|
$
|
10.3
|
$
|
9.4
|
Quarterly
Results
|
|||||||||||||||||||||||||
For the three months ended | |||||||||||||||||||||||||
2006
|
2005
|
2004
|
|||||||||||||||||||||||
(millions
of Canadian dollars)
|
July
31
|
Apr.
30
|
Jan.
31
|
Oct.
31
|
July
31
|
Apr.
30
|
Jan.
31
|
Oct.
31
|
|||||||||||||||||
Net
interest income
|
$
|
1,623
|
$
|
1,427
|
$
|
1,607
|
$
|
1,641
|
$
|
1,563
|
$
|
1,393
|
$
|
1,411
|
$
|
1,435
|
|||||||||
Other
income
|
1,665
|
1,691
|
1,797
|
1,442
|
1,535
|
1,517
|
1,395
|
1,118
|
|||||||||||||||||
Total
revenues
|
3,288
|
3,118
|
3,404
|
3,083
|
3,098
|
2,910
|
2,806
|
2,553
|
|||||||||||||||||
Provision
for (reversal of) credit losses
|
109
|
16
|
114
|
(15
|
)
|
40
|
20
|
10
|
(73
|
)
|
|||||||||||||||
Dilution
gain, net
|
-
|
(5
|
)
|
1,564
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||
Non-interest
expenses
|
2,147
|
2,103
|
2,290
|
2,203
|
2,577
|
2,057
|
1,945
|
1,904
|
|||||||||||||||||
Provision
for income taxes
|
235
|
244
|
220
|
253
|
12
|
213
|
221
|
127
|
|||||||||||||||||
Non-controlling
interests
|
52
|
47
|
37
|
53
|
58
|
21
|
-
|
-
|
|||||||||||||||||
Equity
in net income of associated company, net of tax
|
51
|
35
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||
Net
income - reported
|
796
|
738
|
2,307
|
589
|
411
|
599
|
630
|
595
|
|||||||||||||||||
Adjustments
for items of note, net of taxes
|
90
|
42
|
(1,472
|
)
|
176
|
328
|
73
|
55
|
2
|
||||||||||||||||
Net
income - adjusted
|
886
|
780
|
835
|
765
|
739
|
672
|
685
|
597
|
|||||||||||||||||
Preferred
dividends
|
6
|
6
|
5
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||
Net
income available to common shareholders - adjusted
|
$
|
880
|
$
|
774
|
$
|
830
|
$
|
765
|
$
|
739
|
$
|
672
|
$
|
685
|
$
|
597
|
|||||||||
(Canadian
dollars)
|
|||||||||||||||||||||||||
Basic
earnings per share
|
|||||||||||||||||||||||||
-
reported
|
1.10
|
$
|
1.02
|
$
|
3.23
|
$
|
.83
|
$
|
.58
|
$
|
.87
|
$
|
.96
|
$
|
.91
|
||||||||||
-
adjusted
|
1.22
|
1.10
|
1.16
|
1.08
|
1.04
|
1.00
|
1.04
|
.91
|
|||||||||||||||||
Diluted
earnings per share
|
|||||||||||||||||||||||||
-
reported
|
1.09
|
1.01
|
3.20
|
.82
|
.58
|
.86
|
.95
|
.90
|
|||||||||||||||||
-
adjusted
|
1.21
|
1.09
|
1.15
|
1.06
|
1.04
|
1.00
|
1.04
|
.91
|
|||||||||||||||||
Return
on common shareholders’ equity
|
16.8
|
%
|
16.5
|
%
|
55.4
|
%
|
14.8
|
%
|
10.4
|
%
|
17.2
|
%
|
19.5
|
%
|
19.1
|
%
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
20
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
21
|
INTERIM
CONSOLIDATED BALANCE SHEET (unaudited)
|
|||||||
As at | |||||||
July
31
|
Oct.
31
|
||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
|||||
ASSETS
|
|||||||
Cash
and due from banks
|
$
|
1,958
|
$
|
1,673
|
|||
Interest-bearing
deposits with banks
|
10,236
|
11,745
|
|||||
12,194
|
13,418
|
||||||
Securities
|
|||||||
Investment
|
43,542
|
42,321
|
|||||
Trading
|
73,733
|
65,775
|
|||||
117,275
|
108,096
|
||||||
Securities
purchased under reverse repurchase agreements
|
27,854
|
26,375
|
|||||
Loans
|
|||||||
Residential
mortgages
|
51,767
|
52,740
|
|||||
Consumer
instalment and other personal
|
63,995
|
62,754
|
|||||
Credit
card
|
4,419
|
2,998
|
|||||
Business
and government
|
39,844
|
35,044
|
|||||
160,025
|
153,536
|
||||||
Allowance
for credit losses (Note
3)
|
(1,279
|
)
|
(1,293
|
)
|
|||
Loans
(net of allowance for credit losses)
|
158,746
|
152,243
|
|||||
Other
|
|||||||
Customers’
liability under acceptances
|
7,244
|
5,989
|
|||||
Investment
in TD Ameritrade
(Note 13(c))
|
4,284
|
-
|
|||||
Trading
derivatives’ market revaluation
|
32,308
|
33,651
|
|||||
Goodwill
|
7,411
|
6,518
|
|||||
Other
intangibles
|
2,007
|
2,124
|
|||||
Land,
buildings and equipment
|
1,865
|
1,801
|
|||||
Other
assets
|
14,657
|
14,995
|
|||||
69,776
|
65,078
|
||||||
Total
assets
|
$
|
385,845
|
$
|
365,210
|
|||
LIABILITIES
|
|||||||
Deposits
|
|||||||
Personal
|
$
|
137,492
|
$
|
131,783
|
|||
Banks
|
17,855
|
11,505
|
|||||
Business
and government
|
100,440
|
103,693
|
|||||
255,787
|
246,981
|
||||||
Other
|
|||||||
Acceptances
|
7,244
|
5,989
|
|||||
Obligations
related to securities sold short
|
24,153
|
24,406
|
|||||
Obligations
related to securities sold under repurchase agreements
|
19,431
|
11,284
|
|||||
Trading
derivatives’ market revaluation
|
33,380
|
33,498
|
|||||
Other
liabilities
|
15,285
|
18,545
|
|||||
99,493
|
93,722
|
||||||
Subordinated
notes and debentures (Note 6)
|
6,915
|
5,138
|
|||||
Liabilities
for preferred shares and capital trust securities (Note
7)
|
1,794
|
1,795
|
|||||
Non-controlling
interests in subsidiaries
|
2,429
|
1,708
|
|||||
SHAREHOLDERS’
EQUITY
|
|||||||
Common
shares (millions of shares issued and outstanding: 720.8
and 711.8) (Note
8)
|
6,353
|
5,872
|
|||||
Preferred
shares (millions of shares issued and outstanding: 17.0
and nil) (Note
8)
|
425
|
-
|
|||||
Contributed
surplus
|
56
|
40
|
|||||
Foreign
currency translation adjustments
|
(951
|
)
|
(696
|
)
|
|||
Retained
earnings
|
13,544
|
10,650
|
|||||
19,427
|
15,866
|
||||||
Total
liabilities and shareholders’ equity
|
$
|
385,845
|
$
|
365,210
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
22
|
INTERIM
CONSOLIDATED STATEMENT OF INCOME (unaudited)
|
|||||||||||||
For
the three months ended
|
For
the nine months ended
|
||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Interest
income
|
|||||||||||||
Loans
|
$
|
2,862
|
$
|
2,269
|
$
|
7,828
|
$
|
5,994
|
|||||
Securities
|
|||||||||||||
Dividends
|
193
|
205
|
605
|
702
|
|||||||||
Interest
|
865
|
717
|
2,678
|
2,320
|
|||||||||
Deposits
with banks
|
70
|
109
|
228
|
309
|
|||||||||
3,990
|
3,300
|
11,339
|
9,325
|
||||||||||
Interest
expense
|
|||||||||||||
Deposits
|
1,836
|
1,388
|
5,124
|
3,719
|
|||||||||
Subordinated
notes and debentures
|
107
|
82
|
292
|
244
|
|||||||||
Preferred
shares and capital trust securities
|
28
|
37
|
95
|
100
|
|||||||||
Other
liabilities
|
396
|
230
|
1,171
|
895
|
|||||||||
2,367
|
1,737
|
6,682
|
4,958
|
||||||||||
Net
interest income
|
1,623
|
1,563
|
4,657
|
4,367
|
|||||||||
Other
income
|
|||||||||||||
Investment
and securities services
|
500
|
576
|
1,674
|
1,783
|
|||||||||
Trading
income
|
160
|
80
|
699
|
235
|
|||||||||
Insurance,
net of claims
|
230
|
217
|
682
|
616
|
|||||||||
Service
charges
|
250
|
227
|
691
|
568
|
|||||||||
Loan
securitizations (Note
4)
|
85
|
101
|
249
|
294
|
|||||||||
Credit
fees
|
93
|
76
|
261
|
259
|
|||||||||
Card
services
|
103
|
81
|
270
|
194
|
|||||||||
Trust
fees
|
33
|
33
|
99
|
78
|
|||||||||
Net
investment securities gains
|
113
|
67
|
218
|
166
|
|||||||||
Other
|
98
|
77
|
310
|
254
|
|||||||||
1,665
|
1,535
|
5,153
|
4,447
|
||||||||||
Total
revenues
|
3,288
|
3,098
|
9,810
|
8,814
|
|||||||||
Provision
for credit losses (Note 3)
|
109
|
40
|
239
|
70
|
|||||||||
Dilution
gain, net (Note 13 (c))
|
-
|
-
|
1,559
|
-
|
|||||||||
Non-interest
expenses
|
|||||||||||||
Salaries
and employee benefits
|
1,102
|
1,082
|
3,369
|
3,092
|
|||||||||
Occupancy,
including depreciation
|
176
|
191
|
514
|
503
|
|||||||||
Equipment,
including depreciation
|
150
|
159
|
435
|
438
|
|||||||||
Amortization
of other intangibles
|
126
|
143
|
379
|
411
|
|||||||||
Restructuring
costs
|
-
|
15
|
50
|
37
|
|||||||||
Marketing
and business development
|
127
|
123
|
356
|
353
|
|||||||||
Brokerage
related fees
|
37
|
56
|
129
|
171
|
|||||||||
Professional
and advisory services
|
138
|
117
|
369
|
339
|
|||||||||
Communications
|
50
|
55
|
147
|
150
|
|||||||||
Other
|
241
|
636
|
792
|
1,085
|
|||||||||
2,147
|
2,577
|
6,540
|
6,579
|
||||||||||
Income
before provision for income taxes, non-controlling interests in
subsidiaries and equity in net income of associated
company
|
1,032
|
481
|
4,590
|
2,165
|
|||||||||
Provision
for income taxes
|
235
|
12
|
699
|
446
|
|||||||||
797
|
469
|
3,891
|
1,719
|
||||||||||
Non-controlling
interests in subsidiaries, net of tax
|
52
|
58
|
136
|
79
|
|||||||||
Equity
in net income of associated company, net of tax (Note
13(c))
|
51
|
-
|
86
|
-
|
|||||||||
Net
income
|
796
|
411
|
3,841
|
1,640
|
|||||||||
Preferred
dividends
|
6
|
-
|
17
|
-
|
|||||||||
Net
income available to common shareholders
|
$
|
790
|
$
|
411
|
$
|
3,824
|
$
|
1,640
|
|||||
Average
number of common shares outstanding (millions)
|
|||||||||||||
Basic
|
719.1
|
707.6
|
715.8
|
684.9
|
|||||||||
Diluted
|
724.7
|
713.4
|
722.1
|
690.4
|
|||||||||
Earnings
per share (in
dollars)
|
|||||||||||||
Basic
|
$
|
1.10
|
$
|
.58
|
$
|
5.34
|
$
|
2.39
|
|||||
Diluted
|
1.09
|
.58
|
5.30
|
2.38
|
|||||||||
Dividends
per share (in
dollars)
|
.44
|
.40
|
1.30
|
1.16
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
23
|
INTERIM
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(unaudited)
|
|||||||
For
the nine months ended
|
|||||||
July
31
|
July
31
|
||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
|||||
Common
shares
|
|||||||
Balance
at beginning of period
|
$
|
5,872
|
$
|
3,373
|
|||
Proceeds
from shares issued on exercise of options
|
93
|
94
|
|||||
Proceeds
from shares issued as a result of dividend reinvestment
plan
|
302
|
276
|
|||||
Impact
of shares sold in Wholesale Banking
|
16
|
13
|
|||||
Issued
on acquisition of TD Banknorth
|
-
|
1,988
|
|||||
Issued
on acquisition of VFC (Note
13 (a))
|
70
|
-
|
|||||
Balance
at end of period
|
6,353
|
5,744
|
|||||
Preferred
Shares
|
|||||||
Proceeds
from share issues (Note
8)
|
425
|
-
|
|||||
Balance
at end of period
|
425
|
-
|
|||||
Contributed
surplus
|
|||||||
Balance
at beginning of period
|
40
|
20
|
|||||
Stock
options (Note
9)
|
16
|
16
|
|||||
Balance
at end of period
|
56
|
36
|
|||||
Foreign
currency translation adjustments
|
|||||||
Balance
at beginning of period
|
(696
|
)
|
(265
|
)
|
|||
Foreign
exchange losses from investments in subsidiaries and other
items
|
(691
|
)
|
(90
|
)
|
|||
Impact
of reduction in investment in TD Waterhouse U.S.A. (Note
13 (c))
|
66
|
-
|
|||||
Foreign
exchange gains (losses) from hedging activities
|
544
|
(15
|
)
|
||||
(Provision
for) benefit of income taxes
|
(174
|
)
|
7
|
||||
Balance
at end of period
|
(951
|
)
|
(363
|
)
|
|||
Retained
earnings
|
|||||||
Balance
at beginning of period
|
10,650
|
9,540
|
|||||
Net
income
|
3,841
|
1,640
|
|||||
Common
dividends
|
(931
|
)
|
(800
|
)
|
|||
Preferred
dividends
|
(17
|
)
|
-
|
||||
Other
|
1
|
(22
|
)
|
||||
Balance
at end of period
|
13,544
|
10,358
|
|||||
Total
shareholders’ equity at end of period
|
$
|
19,427
|
$
|
15,775
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
24
|
INTERIM
CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
|
|||||||||||||
For
the three months ended
|
For
the nine months ended
|
||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Cash
flows from (used in) operating activities
|
|||||||||||||
Net
income
|
$
|
796
|
$
|
411
|
$
|
3,841
|
$
|
1,640
|
|||||
Adjustments
to determine net cash flows from (used in) operating
activities
|
|||||||||||||
Provision
for
credit losses
|
109
|
40
|
239
|
70
|
|||||||||
Restructuring
costs
|
-
|
15
|
50
|
37
|
|||||||||
Depreciation
|
83
|
92
|
245
|
227
|
|||||||||
Amortization
of
other intangibles
|
126
|
143
|
379
|
411
|
|||||||||
Stock
option
|
5
|
8
|
16
|
16
|
|||||||||
Dilution
loss
(gain), net
|
-
|
-
|
(1,559
|
)
|
-
|
||||||||
Net
investment securities gains
|
(113
|
)
|
(67
|
)
|
(218
|
)
|
(166
|
)
|
|||||
Net
gain on securitizations
|
(19
|
)
|
(32
|
)
|
(73
|
)
|
(119
|
)
|
|||||
Equity
in net income of associated company
|
(51
|
)
|
-
|
(86
|
)
|
-
|
|||||||
Non-controlling
interests
|
52
|
58
|
136
|
79
|
|||||||||
Changes
in operating assets and liabilities
|
|||||||||||||
Future
income taxes
|
(46
|
)
|
(265
|
)
|
59
|
(107
|
)
|
||||||
Current
income taxes payable
|
110
|
29
|
102
|
(239
|
)
|
||||||||
Interest
receivable and payable
|
(165
|
)
|
124
|
(200
|
)
|
389
|
|||||||
Trading
securities
|
(3,924
|
)
|
(849
|
)
|
(7,958
|
)
|
(5,704
|
)
|
|||||
Unrealized
gains and amounts receivable on derivatives contracts
|
3,122
|
764
|
1,343
|
(488
|
)
|
||||||||
Unrealized
losses and amounts payable on derivatives contracts
|
(2,915
|
)
|
528
|
(118
|
)
|
1,004
|
|||||||
Other
|
452
|
1,544
|
(3,083
|
)
|
1,718
|
||||||||
Net
cash from (used in) operating activities
|
(2,378
|
)
|
2,543
|
(6,885
|
)
|
(1,232
|
)
|
||||||
Cash
flows from (used in) financing activities
|
|||||||||||||
Change
in deposits
|
2,796
|
2,924
|
4,126
|
15,626
|
|||||||||
Securities
sold under repurchase agreements
|
2,448
|
1,036
|
7,441
|
1,439
|
|||||||||
Securities
sold short
|
(2,884
|
)
|
2,671
|
(253
|
)
|
4,023
|
|||||||
Issue
of subordinated notes and debentures
|
-
|
-
|
2,341
|
-
|
|||||||||
Repayment
of subordinated notes and debentures
|
(800
|
)
|
(2
|
)
|
(950
|
)
|
(754
|
)
|
|||||
Subordinated
notes and debentures (acquired) sold in Wholesale Banking
|
21
|
3
|
1
|
7
|
|||||||||
Liability
for preferred shares and capital trust securities
|
8
|
(12
|
)
|
(1
|
)
|
(362
|
)
|
||||||
Translation
adjustment on subordinated notes and debentures issued in a foreign
currency
|
(54
|
)
|
-
|
(51
|
)
|
3
|
|||||||
Common
shares issued on exercise of options
|
13
|
22
|
93
|
94
|
|||||||||
Common
shares issued as a result of dividend reinvestment plan
|
95
|
102
|
302
|
276
|
|||||||||
Common
shares (acquired) sold in Wholesale Banking
|
-
|
(12
|
)
|
16
|
13
|
||||||||
Dividends
paid on common shares
|
(316
|
)
|
(283
|
)
|
(931
|
)
|
(800
|
)
|
|||||
Issuance
of preferred shares
|
-
|
-
|
425
|
-
|
|||||||||
Dividends
paid on preferred shares
|
(6
|
)
|
-
|
(17
|
)
|
-
|
|||||||
Net
cash from financing activities
|
1,321
|
6,449
|
12,542
|
19,565
|
|||||||||
Cash
flows from (used in) investing activities
|
|||||||||||||
Interest-bearing
deposits with banks
|
59
|
(1,250
|
)
|
1,509
|
(2,673
|
)
|
|||||||
Activity
in investment securities
|
|||||||||||||
Purchases
|
(27,093
|
)
|
(48,609
|
)
|
(92,457
|
)
|
(168,496
|
)
|
|||||
Proceeds
from
maturities
|
23,123
|
45,615
|
78,859
|
154,617
|
|||||||||
Proceeds
from
sales
|
3,388
|
2,236
|
15,603
|
11,058
|
|||||||||
Activity
in lending activities
|
|||||||||||||
Origination
and
acquisitions
|
(35,834
|
)
|
(26,489
|
)
|
(93,506
|
)
|
(60,760
|
)
|
|||||
Proceeds
from
maturities
|
30,424
|
19,298
|
81,740
|
47,605
|
|||||||||
Proceeds
from
sales
|
1,977
|
1,201
|
2,575
|
2,688
|
|||||||||
Proceeds
from
loan securitizations
|
1,149
|
1,472
|
4,466
|
5,622
|
|||||||||
Land,
buildings and equipment
|
(91
|
)
|
(153
|
)
|
(399
|
)
|
(692
|
)
|
|||||
Securities
purchased under reverse repurchase agreements
|
4,490
|
(1,897
|
)
|
(1,471
|
)
|
(3,736
|
)
|
||||||
TD
Banknorth share repurchase program
|
-
|
-
|
(290
|
)
|
(603
|
)
|
|||||||
Acquisition
and disposition less cash and cash equivalents acquired
|
(632
|
)
|
-
|
(1,967
|
)
|
(2,184
|
)
|
||||||
Net
cash from (used in) investing activities
|
960
|
(8,576
|
)
|
(5,338
|
)
|
(17,554
|
)
|
||||||
Effect
of exchange rate changes on cash and cash equivalents
|
9
|
(41
|
)
|
(34
|
)
|
(11
|
)
|
||||||
Net
increase (decrease) in cash and cash equivalents
|
(88
|
)
|
375
|
285
|
768
|
||||||||
Cash
and cash equivalents at beginning of period
|
2,046
|
1,797
|
1,673
|
1,404
|
|||||||||
Cash
and cash equivalents at end of period, represented by cash and due
from
banks
|
$
|
1,958
|
$
|
2,172
|
$
|
1,958
|
$
|
2,172
|
|||||
Supplementary
disclosure of cash flow information
|
|||||||||||||
Amount
of interest paid during the period
|
$
|
2,512
|
$
|
1,772
|
$
|
6,813
|
$
|
4,873
|
|||||
Amount
of income taxes paid during the period
|
75
|
228
|
678
|
773
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
25
|
Allowance
for Credit Losses
|
For
the nine months ended
|
For
the nine months ended
|
|||||||||||||||||
July
31, 2006
|
July
31, 2005
|
||||||||||||||||||
Specific
|
General
|
Specific
|
General
|
||||||||||||||||
(millions
of Canadian dollars)
|
allowance
|
allowance
|
Total
|
allowance
|
allowance
|
Total
|
|||||||||||||
Balance
at beginning of year
|
$
|
153
|
$
|
1,140
|
$
|
1,293
|
$
|
266
|
$
|
917
|
$
|
1,183
|
|||||||
Acquisitions
of TD Banknorth (includes Hudson) and VFC
|
-
|
87
|
87
|
27
|
289
|
316
|
|||||||||||||
Provision
for (reversal of) credit losses
|
301
|
(62
|
)
|
239
|
129
|
(59
|
)
|
70
|
|||||||||||
Write-offs
|
(419
|
)
|
-
|
(419
|
)
|
(349
|
)
|
-
|
(349
|
)
|
|||||||||
Recoveries
|
96
|
-
|
96
|
163
|
-
|
163
|
|||||||||||||
Other1
|
11
|
(28
|
)
|
(17
|
)
|
1
|
(4
|
)
|
(3
|
)
|
|||||||||
Allowance
for credit losses at end of period
|
$
|
142
|
$
|
1,137
|
$
|
1,279
|
$
|
237
|
$
|
1,143
|
$
|
1,380
|
1
|
Includes
foreign exchange rate changes.
|
New
Securitization Activity
|
|||||||||||||||||||||||||||||||
For
the three months ended
|
For
the three months ended
|
||||||||||||||||||||||||||||||
July
31, 2006
|
July
31, 2005
|
||||||||||||||||||||||||||||||
Residential
|
Credit
|
Commercial
|
Residential
|
Credit
|
Commercial
|
||||||||||||||||||||||||||
mortgage
|
Personal
|
card
|
mortgage
|
mortgage
|
Personal
|
card
|
mortgage
|
||||||||||||||||||||||||
(millions
of Canadian dollars)
|
loans
|
loans
|
loans
|
loans
|
Total
|
loans
|
loans
|
loans
|
loans
|
Total
|
|||||||||||||||||||||
Gross
proceeds
|
$
|
1,576
|
$
|
848
|
$
|
800
|
$
|
134
|
$
|
3,358
|
$
|
1,457
|
$
|
817
|
$
|
1,300
|
$
|
-
|
$
|
3,574
|
|||||||||||
Retained
interest
|
20
|
9
|
13
|
7
|
49
|
37
|
6
|
23
|
-
|
66
|
|||||||||||||||||||||
Cash
flows received on retained interests
|
59
|
12
|
36
|
-
|
107
|
50
|
18
|
39
|
1
|
108
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
26
|
New
Securitization Activity
|
|||||||||||||||||||||||||||||||
For
the nine months ended
|
For
the nine months ended
|
||||||||||||||||||||||||||||||
July
31, 2006
|
July
31, 2005
|
||||||||||||||||||||||||||||||
Residential
|
Credit
|
Commercial
|
Residential
|
Credit
|
Commercial
|
||||||||||||||||||||||||||
mortgage
|
Personal
|
card
|
mortgage
|
mortgage
|
Personal
|
card
|
mortgage
|
||||||||||||||||||||||||
(millions
of Canadian dollars)
|
loans
|
loans
|
loans
|
loans
|
Total
|
loans
|
loans
|
loans
|
loans
|
Total
|
|||||||||||||||||||||
Gross
proceeds
|
$
|
4,657
|
$
|
2,296
|
$
|
3,400
|
$
|
424
|
$
|
10,777
|
$
|
4,547
|
$
|
3,456
|
$
|
3,900
|
$
|
299
|
$
|
12,202
|
|||||||||||
Retained
interest
|
62
|
19
|
58
|
7
|
146
|
106
|
25
|
72
|
-
|
203
|
|||||||||||||||||||||
Cash
flows received on retained interests
|
165
|
26
|
128
|
1
|
320
|
139
|
37
|
123
|
3
|
302
|
Securitization Gains and Servicing Income | |||||||||||||||||||||||||||||||
For
the three months ended
|
For
the three months ended
|
||||||||||||||||||||||||||||||
July
31, 2006
|
July
31, 2005
|
||||||||||||||||||||||||||||||
Residential
|
Credit
|
Commercial
|
Residential
|
Credit
|
Commercial
|
||||||||||||||||||||||||||
mortgage
|
Personal
|
card
|
mortgage
|
mortgage
|
Personal
|
card
|
mortgage
|
||||||||||||||||||||||||
(millions
of Canadian dollars)
|
loans
|
loans
|
loans
|
loans
|
Total
|
loans
|
loans
|
loans
|
loans
|
Total
|
|||||||||||||||||||||
Gain
on sale (loss)1
|
$
|
(5
|
)
|
$
|
9
|
$
|
13
|
$
|
2
|
$
|
19
|
$
|
5
|
$
|
5
|
$
|
22
|
$
|
-
|
$
|
32
|
||||||||||
Servicing
income
|
26
|
11
|
29
|
-
|
66
|
33
|
19
|
17
|
-
|
69
|
|||||||||||||||||||||
Total
|
$
|
21
|
$
|
20
|
$
|
42
|
$
|
2
|
$
|
85
|
$
|
38
|
$
|
24
|
$
|
39
|
$
|
-
|
$
|
101
|
Securitization
Gains and Servicing Income
|
|||||||||||||||||||||||||||||||
For
the nine months ended
|
For
the nine months ended
|
||||||||||||||||||||||||||||||
July
31, 2006
|
July
31, 2005
|
||||||||||||||||||||||||||||||
Residential
|
Credit
|
Commercial
|
Residential
|
Credit
|
Commercial
|
||||||||||||||||||||||||||
mortgage
|
Personal
|
card
|
mortgage
|
mortgage
|
Personal
|
card
|
mortgage
|
||||||||||||||||||||||||
(millions
of Canadian dollars)
|
loans
|
loans
|
loans
|
loans
|
Total
|
loans
|
loans
|
loans
|
loans
|
Total
|
|||||||||||||||||||||
Gain
on sale (loss)1
|
$
|
(7
|
)
|
$
|
19
|
$
|
56
|
$
|
5
|
$
|
73
|
$
|
30
|
$
|
16
|
$
|
66
|
$
|
7
|
$
|
119
|
||||||||||
Servicing
income
|
80
|
24
|
72
|
-
|
176
|
79
|
38
|
58
|
-
|
175
|
|||||||||||||||||||||
Total
|
$
|
73
|
$
|
43
|
$
|
128
|
$
|
5
|
$
|
249
|
$
|
109
|
$
|
54
|
$
|
124
|
$
|
7
|
$
|
294
|
1
|
For term loans, the gain on sale is after the impact of hedges on
assets
sold.
|
Key
Assumptions
|
|||||||||||||||||||||||||
2006
|
2005
|
||||||||||||||||||||||||
Residential
|
Credit
|
Commercial
|
Residential
|
Credit
|
Commercial
|
||||||||||||||||||||
mortgage
|
Personal
|
card
|
mortgage
|
mortgage
|
Personal
|
card
|
mortgage
|
||||||||||||||||||
(percentage)
|
loans
|
loans
|
loans
|
loans
|
loans
|
loans
|
loans
|
loans
|
|||||||||||||||||
Prepayment
rate1
|
20.0
|
%
|
6.0
|
%
|
44.2
|
%
|
8.5
|
%
|
20.0
|
%
|
5.9
|
%
|
41.5
|
%
|
2.5
|
%
|
|||||||||
Excess
spread2
|
.6
|
1.1
|
12.6
|
.8
|
.7
|
1.1
|
13.2
|
-
|
|||||||||||||||||
Discount
rate
|
5.6
|
4.1
|
5.5
|
5.7
|
5.2
|
3.2
|
3.9
|
9.8
|
|||||||||||||||||
Expected
credit losses3
|
-
|
-
|
2.4
|
.1
|
-
|
-
|
2.7
|
.1
|
1
|
Represents monthly payment rate for personal and credit card loans.
|
2
|
The excess spread for credit card loans reflects the net portfolio
yield,
which is interest earned and other revenues less funding costs and
losses.
|
3
|
There are no expected credit losses for residential mortgage loans
as
these mortgages are government guaranteed.
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
27
|
Liabilities
|
|||||||
(millions
of Canadian dollars)
|
July
31, 2006
|
Oct.
31, 2005
|
|||||
Preferred
Shares
|
|||||||
Preferred
shares issued by the Bank (thousands of shares):
|
|||||||
Class
A - 16 Series I
|
$
|
-
|
$
|
-
|
|||
Class
A - 14,000 Series M
|
350
|
350
|
|||||
Class
A - 8,000 Series N
|
200
|
200
|
|||||
550
|
550
|
||||||
Preferred
shares issued by TD Mortgage
|
|||||||
Investment
Corporation (thousands of shares):
|
|||||||
350
non-cumulative preferred shares, Series A
|
344
|
345
|
|||||
Total
Preferred shares
|
894
|
895
|
|||||
Capital
Trust Securities (thousands of units)1
|
|||||||
Trust
units issued by TD Capital Trust (900)
|
900
|
900
|
|||||
Total
Preferred Shares and Capital Trust Securities
|
$
|
1,794
|
$
|
1,795
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
28
|
Shares
Issued and Outstanding
|
|||||||||||||
For
the nine months ended
|
For
the nine months ended
|
||||||||||||
July
31, 2006
|
July
31, 2005
|
||||||||||||
(millions
of shares and millions of Canadian dollars)
|
Number
of shares
|
Amount
|
Number
of shares
|
Amount
|
|||||||||
Common:
|
|||||||||||||
Balance
at beginning of period
|
711.8
|
$
|
5,872
|
655.9
|
$
|
3,373
|
|||||||
Issued
on exercise of options
|
2.6
|
93
|
3.2
|
94
|
|||||||||
Issued
as a result of dividend reinvestment plan
|
5.0
|
302
|
5.4
|
276
|
|||||||||
Impact
of shares sold in Wholesale Banking
|
.3
|
16
|
.2
|
13
|
|||||||||
Issued
on the acquisition of VFC
|
1.1
|
70
|
-
|
-
|
|||||||||
Issued
on the acquisition of TD Banknorth
|
-
|
-
|
44.3
|
1,988
|
|||||||||
Balance
at end of period - Common
|
720.8
|
$
|
6,353
|
709.0
|
$
|
5,744
|
|||||||
Balance
at October 31, 2005 - Common
|
711.8
|
$
|
5,872
|
||||||||||
Preferred
(Class A - Series O):
|
|||||||||||||
Balance
at end of period - Preferred
|
17.0
|
$
|
425
|
-
|
$
|
-
|
|||||||
Balance
at October 31, 2005 - Preferred
|
-
|
$
|
-
|
For
the three months ended
|
For
the nine months ended
|
||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
TD
Bank
|
$
|
5
|
$
|
8
|
$
|
16
|
$
|
16
|
|||||
TD
Banknorth
|
2
|
-
|
6
|
-
|
For
the nine months ended
|
|||||||
July
31
|
July
31
|
||||||
2006
|
2005
|
||||||
Risk-free
interest rate
|
3.91
|
%
|
3.70
|
%
|
|||
Expected
option life
|
5.1
years
|
5.3
years
|
|||||
Expected
volatility
|
21.9
|
%
|
25.7
|
%
|
|||
Expected
dividend yield
|
2.88
|
%
|
2.84
|
%
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
29
|
Principal
Pension Plan Expense
|
|||||||||||||
For
the three months ended
|
For
the nine months ended
|
||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Elements
of pension plan expense before adjustments to recognize the long
term
nature of the cost:
|
|||||||||||||
Service
cost - benefits earned
|
$
|
18
|
$
|
11
|
$
|
54
|
$
|
34
|
|||||
Interest
cost
on projected benefit obligation
|
27
|
25
|
79
|
76
|
|||||||||
Actual
return on plan assets
|
21
|
(36
|
)
|
(108
|
)
|
(155
|
)
|
||||||
Actuarial
gains
|
-
|
(9
|
)
|
-
|
(9
|
)
|
|||||||
Plan
amendments
|
-
|
(3
|
)
|
7
|
54
|
||||||||
Adjustments
to recognize the long term nature of plan cost
|
|||||||||||||
Difference
between costs arising in the period and costs recognized
|
|||||||||||||
In
the period in
respect of:
|
|||||||||||||
Return
on plan assets1
|
(53
|
)
|
9
|
12
|
72
|
||||||||
Actuarial
losses2
|
6
|
11
|
16
|
16
|
|||||||||
Plan
amendments3
|
2
|
4
|
(1
|
)
|
(50
|
)
|
|||||||
Total
|
$
|
21
|
$
|
12
|
$
|
59
|
$
|
38
|
1
|
For
the three
months ended July 31, 2006, includes expected return on plan assets
of $32
million (three months ended July 31, 2005 - $27 million) less actual
return on plan assets of $(21) million (three months ended July 31,
2005 -
$36 million). For the nine months ended July 31, 2006, includes expected
return on plan assets of $96 million (nine months ended July 31,
2005 -
$83 million) less actual return on plan assets of $108 million (nine
months ended July 31, 2005 - $155 million).
|
2
|
For
the three
months ended July 31, 2006, includes loss recognized of $6 million
(three
months ended July 31, 2005 - $2 million) less actuarial losses on
projected benefit obligation of nil(three months ended July 31, 2005
-
$(9) million). For the nine months ended July 31, 2006, includes
loss
recognized of $16 million (nine months ended July 31, 2005 - $7 million)
less actuarial losses on projected benefit obligation of nil (nine
months
ended July 31, 2005 - $(9) million).
|
3
|
For
the three
months ended July 31, 2006, includes amortization of costs for plan
amendments of $2 million (three months ended July 31, 2005 - $1 million)
less actual cost amendments of nil (three months ended July 31, 2005
-
$(3) million). For the nine months ended July 31, 2006, includes
amortization of costs for plan amendments of $6 million (nine months
ended
July 31, 2005 - $4 million) less actual cost amendments of $7 million
(nine months ended July 31, 2005 - $54 million).
|
Other
Pension Plans’ Expense
|
|||||||||||||
For
the three months ended
|
For
the nine months ended
|
||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
CT
defined benefit pension plan
|
$
|
2
|
$
|
1
|
$
|
4
|
$
|
4
|
|||||
TD
Banknorth defined benefit pension plans
|
2
|
2
|
6
|
2
|
|||||||||
Supplemental
employee retirement plans
|
9
|
9
|
25
|
22
|
|||||||||
Total
|
$
|
13
|
$
|
12
|
$
|
35
|
$
|
28
|
Principal
Non-Pension Post-Retirement Benefit Plans Expense
|
|||||||||||||
For
the three months ended
|
For
the nine months ended
|
||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Service
cost - benefits earned
|
$
|
3
|
$
|
3
|
$
|
9
|
$
|
8
|
|||||
Interest
cost on projected benefit obligation
|
5
|
5
|
15
|
15
|
|||||||||
Plan
amendments
|
-
|
-
|
(65
|
)
|
-
|
||||||||
Difference
between costs arising in the period and costs recognized in the period
in
respect of:
|
|||||||||||||
Actuarial
losses
|
2
|
-
|
6
|
-
|
|||||||||
Plan
amendments
|
(1
|
)
|
-
|
61
|
-
|
||||||||
Total
|
$
|
9
|
$
|
8
|
$
|
26
|
$
|
23
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
30
|
Pension
Plan Contributions
|
|||||||||||||
For
the three months ended
|
For
the nine months ended
|
||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Principal
pension plan
|
$
|
16
|
$
|
16
|
$
|
46
|
$
|
43
|
|||||
CT
defined benefit pension plan
|
1
|
30
|
2
|
31
|
|||||||||
TD
Banknorth defined benefit pension plans
|
-
|
-
|
33
|
-
|
|||||||||
Supplemental
employee retirement plans
|
2
|
2
|
6
|
6
|
|||||||||
Non-pension
post-retirement benefit plans
|
2
|
1
|
6
|
5
|
|||||||||
Total
|
$
|
21
|
$
|
49
|
$
|
93
|
$
|
85
|
Basic
and Diluted Earnings per Share
|
|||||||||||||
For
the three months ended
|
For
the nine months ended
|
||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Basic
Earnings per Share
|
|||||||||||||
Net
income available to common shares ($ millions)
|
$
|
790
|
$
|
411
|
$
|
3,824
|
$
|
1,640
|
|||||
Average
number of common shares outstanding (millions)
|
719.1
|
707.6
|
715.8
|
684.9
|
|||||||||
Basic
earnings per share ($)
|
$
|
1.10
|
$
|
.58
|
$
|
5.34
|
$
|
2.39
|
|||||
Diluted
Earnings per Share
|
|||||||||||||
Net
income available to common shares ($ millions)
|
$
|
790
|
$
|
411
|
$
|
3,824
|
$
|
1,640
|
|||||
Average
number of common shares outstanding (millions)
|
719.1
|
707.6
|
715.8
|
684.9
|
|||||||||
Stock
options potentially exercisable as determined under the treasury
stock
method1
|
5.6
|
5.8
|
6.3
|
5.5
|
|||||||||
Average
number of common shares outstanding - diluted (millions)
|
724.7
|
713.4
|
722.1
|
690.4
|
|||||||||
Diluted
earnings per share ($)
|
$
|
1.09
|
$
|
.58
|
$
|
5.30
|
$
|
2.38
|
1 |
For
the nine months ended July 31, 2006, the computation of diluted earnings
per common share excluded weighted average options outstanding of
953
thousand (nine months ended July 31, 2005 - 363 thousand) with a
weighted
exercise price of $60.02 (nine months ended July 31, 2005 - $49.40)
as the
options’ price was greater than the average market price of the Bank’s
common shares.
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
31
|
Results
by Business Segment
|
|||||||||||||||||||||||||||||||||||||
Canadian
Personal
|
U.S.
Personal and
|
||||||||||||||||||||||||||||||||||||
and
Commercial
|
Commercial
|
Wealth
|
|||||||||||||||||||||||||||||||||||
(millions
of Canadian dollars)
|
Banking
|
Banking
|
Wholesale
Banking1
|
Management
|
Corporate1
|
Total
|
|||||||||||||||||||||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||||||||||||||||||
For
the three months ended
|
2006
|
2005
|
2006
|
2005
|
2006
|
2005
|
2006
|
2005
|
2006
|
2005
|
2006
|
2005
|
|||||||||||||||||||||||||
Net
interest income
|
$
|
1,260
|
$
|
1,094
|
$
|
342
|
$
|
308
|
$
|
127
|
$
|
164
|
$
|
68
|
$
|
167
|
$
|
(174
|
)
|
$
|
(170
|
)
|
$
|
1,623
|
$
|
1,563
|
|||||||||||
Other
income
|
669
|
600
|
142
|
141
|
456
|
279
|
424
|
508
|
(26
|
)
|
7
|
1,665
|
1,535
|
||||||||||||||||||||||||
Total
revenue
|
1,929
|
1,694
|
484
|
449
|
583
|
443
|
492
|
675
|
(200
|
)
|
(163
|
)
|
3,288
|
3,098
|
|||||||||||||||||||||||
Provision
for (reversal of)
credit losses
|
104
|
90
|
10
|
4
|
15
|
13
|
-
|
-
|
(20
|
)
|
(67
|
)
|
109
|
40
|
|||||||||||||||||||||||
Non-interest
expenses
|
1,039
|
956
|
284
|
250
|
303
|
296
|
344
|
531
|
177
|
544
|
2,147
|
2,577
|
|||||||||||||||||||||||||
Income
(loss) before
provision for (benefit of)
income taxes
|
786
|
648
|
190
|
195
|
265
|
134
|
148
|
144
|
(357
|
)
|
(640
|
)
|
1,032
|
481
|
|||||||||||||||||||||||
Provision
for (benefit of)
income
taxes
|
262
|
214
|
65
|
67
|
86
|
44
|
51
|
45
|
(229
|
)
|
(358
|
)
|
235
|
12
|
|||||||||||||||||||||||
Non-controlling
interests
|
-
|
-
|
57
|
58
|
-
|
-
|
-
|
-
|
(5
|
)
|
-
|
52
|
58
|
||||||||||||||||||||||||
Equity
in net income
of associated company,
net of tax
|
-
|
-
|
-
|
-
|
-
|
-
|
55
|
-
|
(4
|
)
|
-
|
51
|
-
|
||||||||||||||||||||||||
Net
income (loss)
|
$
|
524
|
$
|
434
|
$
|
68
|
$
|
70
|
$
|
179
|
$
|
90
|
$
|
152
|
$
|
99
|
$
|
(127
|
)
|
$
|
(282
|
)
|
$
|
796
|
$
|
411
|
|||||||||||
Total
assets (billions of
|
|||||||||||||||||||||||||||||||||||||
Canadian
dollars)
|
|||||||||||||||||||||||||||||||||||||
-
balance sheet
|
$
|
140.7
|
$
|
127.3
|
$
|
43.8
|
$
|
37.4
|
$
|
160.1
|
$
|
161.1
|
$
|
12.4
|
$
|
26.6
|
$
|
28.8
|
$
|
16.0
|
$
|
385.8
|
$
|
368.4
|
|||||||||||||
-
securitized
|
37.3
|
34.6
|
-
|
-
|
-
|
-
|
-
|
-
|
(12.1
|
)
|
(11.3
|
)
|
25.2
|
23.3
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
32
|
Canadian
Personal
|
U.S.
Personal and
|
||||||||||||||||||||||||||||||||||||
and
Commercial
|
Commercial
|
Wealth
|
|||||||||||||||||||||||||||||||||||
(millions
of Canadian dollars)
|
Banking
|
Banking
|
Wholesale
Banking1
|
Management
|
Corporate1
|
Total
|
|||||||||||||||||||||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||||||||||||||||||
For
the nine months ended
|
2006
|
2005
|
2006
|
2005
|
2006
|
2005
|
2006
|
2005
|
2006
|
2005
|
2006
|
2005
|
|||||||||||||||||||||||||
Net
interest income
|
$
|
3,584
|
$
|
3,213
|
$
|
953
|
$
|
407
|
$
|
341
|
$
|
743
|
$
|
308
|
$
|
468
|
$
|
(529
|
)
|
$
|
(464
|
)
|
$
|
4,657
|
$
|
4,367
|
|||||||||||
Other
income
|
1,920
|
1,761
|
349
|
180
|
1,437
|
874
|
1,448
|
1,556
|
1,558
|
76
|
6,712
|
4,447
|
|||||||||||||||||||||||||
Total
revenue
|
5,504
|
4,974
|
1,302
|
587
|
1,778
|
1,617
|
1,756
|
2,024
|
1,029
|
(388
|
)
|
11,369
|
8,814
|
||||||||||||||||||||||||
Provision
for (reversal of)
credit losses
|
281
|
276
|
25
|
(3
|
)
|
55
|
39
|
-
|
-
|
(122
|
)
|
(242
|
)
|
239
|
70
|
||||||||||||||||||||||
Non-interest
expenses
|
3,018
|
2,805
|
793
|
333
|
1,019
|
993
|
1,218
|
1,569
|
492
|
879
|
6,540
|
6,579
|
|||||||||||||||||||||||||
Income
(loss) before
provision for (benefit of)
income taxes
|
2,205
|
1,893
|
484
|
257
|
704
|
585
|
538
|
455
|
659
|
(1,025
|
)
|
4,590
|
2,165
|
||||||||||||||||||||||||
Provision
for (benefit of)
income taxes
|
740
|
634
|
167
|
89
|
221
|
204
|
190
|
159
|
(619
|
)
|
(640
|
)
|
699
|
446
|
|||||||||||||||||||||||
Non-controlling
interests
|
-
|
-
|
144
|
79
|
-
|
-
|
-
|
-
|
(8
|
)
|
-
|
136
|
79
|
||||||||||||||||||||||||
Equity
in net income
of associated company,
net of tax
|
-
|
-
|
-
|
-
|
-
|
-
|
94
|
-
|
(8
|
)
|
-
|
86
|
-
|
||||||||||||||||||||||||
Net
income (loss)
|
$
|
1,465
|
$
|
1,259
|
$
|
173
|
$
|
89
|
$
|
483
|
$
|
381
|
$
|
442
|
$
|
296
|
$
|
1,278
|
$
|
(385
|
)
|
$
|
3,841
|
$
|
1,640
|
1
|
The
taxable equivalent basis adjustment is reflected primarily in the
Wholesale Banking segment’s results and eliminated in the Corporate
segment.
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
33
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
34
|
Net
Income
|
|||||||||||||
For
the three months ended
|
For
the nine months ended
|
||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||
(millions
of Canadian dollars)
|
20061
|
2005
|
20062
|
2005
|
|||||||||
Net
income based on Canadian GAAP
|
$
|
796
|
$
|
411
|
$
|
3,841
|
$
|
1,640
|
|||||
Employee
future benefits
|
(2
|
)
|
(1
|
)
|
-
|
(2
|
)
|
||||||
Securitizations
|
-
|
(1
|
)
|
-
|
(4
|
)
|
|||||||
Available
for sale securities
|
4
|
3
|
12
|
6
|
|||||||||
Derivative
instruments and hedging activities
|
(25
|
)
|
(97
|
)
|
(9
|
)
|
(264
|
)
|
|||||
Guarantees
|
(9
|
)
|
(6
|
)
|
(21
|
)
|
(15
|
)
|
|||||
Liabilities
and equity
|
28
|
37
|
96
|
100
|
|||||||||
Amortization
of intangible assets
|
(15
|
)
|
(15
|
)
|
(45
|
)
|
(20
|
)
|
|||||
Other
|
5
|
-
|
(16
|
)
|
-
|
||||||||
Income
taxes and net change in income taxes due to the above
items
|
12
|
25
|
(1
|
)
|
133
|
||||||||
Non-controlling
interest
|
(7
|
)
|
(7
|
)
|
(21
|
)
|
(47
|
)
|
|||||
Net
income based on U.S. GAAP
|
787
|
349
|
3,836
|
1,527
|
|||||||||
Preferred
dividends
|
12
|
15
|
47
|
33
|
|||||||||
Net
income applicable to common shares based on U.S.
GAAP
|
$
|
775
|
$
|
334
|
$
|
3,789
|
$
|
1,494
|
|||||
Average
number of common shares outstanding (millions)
|
|||||||||||||
Basic -
U.S.
GAAP/Canadian GAAP
|
719.1
|
707.6
|
715.8
|
684.9
|
|||||||||
Diluted
- U.S. GAAP/Canadian GAAP
|
724.7
|
713.4
|
722.1
|
690.4
|
|||||||||
Basic
earnings per share - U.S. GAAP
|
$
|
1.08
|
$
|
.47
|
$
|
5.29
|
$
|
2.18
|
|||||
-
Canadian GAAP
|
1.10
|
.58
|
5.34
|
2.39
|
|||||||||
Diluted
earnings per share - U.S. GAAP
|
$
|
1.07
|
$
|
.47
|
$
|
5.25
|
$
|
2.16
|
|||||
-
Canadian GAAP
|
1.09
|
.58
|
5.30
|
2.38
|
Consolidated
Interim Statement of Comprehensive Income
|
|||||||||||||
For
the three months ended
|
For
the nine months ended
|
||||||||||||
July
31
|
July
31
|
July
31
|
July
31
|
||||||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Net
income based on U.S. GAAP
|
$
|
787
|
$
|
349
|
$
|
3,836
|
$
|
1,527
|
|||||
Other
comprehensive income (loss), net of income taxes
|
|||||||||||||
Net
change in unrealized gains and losses on available for sale
securities
|
21
|
128
|
(124
|
)
|
209
|
||||||||
Reclassification
to earnings in respect of available for sale securities
|
-
|
-
|
-
|
5
|
|||||||||
Change
in unrealized foreign currency translation gains and
losses
|
(444
|
)
|
(65
|
)
|
(255
|
)
|
(98
|
)
|
|||||
Change
in gains and losses on derivative instruments designated as cash
flow hedges
|
107
|
49
|
298
|
(94
|
)
|
||||||||
Reclassification
to earnings of gains and losses on cash flow hedges
|
(42
|
)
|
(16
|
)
|
(21
|
)
|
(6
|
)
|
|||||
Minimum
pension liability adjustment
|
-
|
-
|
3
|
(3
|
)
|
||||||||
Comprehensive
income
|
$
|
429
|
$
|
445
|
$
|
3,737
|
$
|
1,540
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
35
|
Condensed
Consolidated Interim Balance Sheet
|
||||||||||||||||||||||||||||
As
at
|
As
at
|
As
at
|
||||||||||||||||||||||||||
July
31
|
Oct.
31
|
July
31
|
||||||||||||||||||||||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
2005
|
|||||||||||||||||||||||||
Canadian
|
Adjust-
|
U.S.
|
Canadian
|
Adjust-
|
U.S.
|
Canadian
|
Adjust-
|
U.S.
|
||||||||||||||||||||
GAAP
|
ments
|
GAAP
|
GAAP
|
Ments
|
GAAP
|
GAAP
|
ments
|
GAAP
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||
Cash
resources and other
|
$
|
12,194
|
$
|
-
|
$
|
12,194
|
$
|
13,418
|
$
|
-
|
$
|
13,418
|
$
|
12,479
|
$
|
-
|
$
|
12,479
|
||||||||||
Securities
|
||||||||||||||||||||||||||||
Investment
|
43,542
|
4,634
|
48,176
|
42,321
|
3,898
|
46,219
|
40,709
|
4,043
|
44,752
|
|||||||||||||||||||
Trading
|
73,733
|
-
|
73,733
|
65,775
|
-
|
65,775
|
72,597
|
-
|
72,597
|
|||||||||||||||||||
Securities
purchased under reverse repurchase agreements
|
27,854
|
-
|
27,854
|
26,375
|
-
|
26,375
|
25,624
|
-
|
25,624
|
|||||||||||||||||||
Loans
(net)
|
158,746
|
-
|
158,746
|
152,243
|
-
|
152,243
|
153,280
|
-
|
153,280
|
|||||||||||||||||||
Investment
in TD Ameritrade
|
4,284
|
-
|
4,284
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||
Trading
derivatives’ market revaluation
|
32,308
|
789
|
33,097
|
33,651
|
674
|
34,325
|
34,185
|
2,103
|
36,288
|
|||||||||||||||||||
Goodwill
|
7,411
|
1,535
|
8,946
|
6,518
|
1,604
|
8,122
|
6,785
|
1,696
|
8,481
|
|||||||||||||||||||
Other
intangibles
|
2,007
|
314
|
2,321
|
2,124
|
338
|
2,462
|
2,286
|
405
|
2,691
|
|||||||||||||||||||
Other
assets
|
23,766
|
30
|
23,796
|
22,785
|
22
|
22,807
|
20,478
|
36
|
20,514
|
|||||||||||||||||||
Total
assets
|
$
|
385,845
|
$
|
7,302
|
$
|
393,147
|
$
|
365,210
|
$
|
6,536
|
$
|
371,746
|
$
|
368,423
|
$
|
8,283
|
$
|
376,706
|
||||||||||
Liabilities
|
||||||||||||||||||||||||||||
Deposits
|
$
|
255,787
|
$
|
38
|
$
|
255,825
|
$
|
246,981
|
$
|
21
|
$
|
247,002
|
$
|
251,438
|
$
|
(4
|
)
|
$
|
251,434
|
|||||||||
Trading
derivatives’ market revaluation
|
33,380
|
537
|
33,917
|
33,498
|
598
|
34,096
|
34,877
|
668
|
35,545
|
|||||||||||||||||||
Other
liabilities
|
66,113
|
4,809
|
70,922
|
60,224
|
4,037
|
64,261
|
56,819
|
5,134
|
61,953
|
|||||||||||||||||||
Subordinated
notes and debentures
|
6,915
|
-
|
6,915
|
5,138
|
-
|
5,138
|
5,570
|
-
|
5,570
|
|||||||||||||||||||
Liabilities
for preferred shares and capital trust securities
|
1,794
|
(1,794
|
)
|
-
|
1,795
|
(1,795
|
)
|
-
|
2,198
|
(2,198
|
)
|
-
|
||||||||||||||||
Total
liabilities
|
363,989
|
3,590
|
367,579
|
347,636
|
2,861
|
350,497
|
350,902
|
3,600
|
354,502
|
|||||||||||||||||||
Non-controlling
interest in subsidiaries
|
2,429
|
3,066
|
5,495
|
1,708
|
3,149
|
4,857
|
1,746
|
3,285
|
5,031
|
|||||||||||||||||||
Shareholders’
equity
|
||||||||||||||||||||||||||||
Preferred
shares
|
425
|
544
|
969
|
-
|
545
|
545
|
-
|
948
|
948
|
|||||||||||||||||||
Common
shares
|
6,353
|
39
|
6,392
|
5,872
|
39
|
5,911
|
5,744
|
39
|
5,783
|
|||||||||||||||||||
Contributed
surplus
|
56
|
-
|
56
|
40
|
-
|
40
|
36
|
-
|
36
|
|||||||||||||||||||
Foreign
currency translation adjustments
|
(951
|
)
|
951
|
-
|
(696
|
)
|
696
|
-
|
(363
|
)
|
363
|
-
|
||||||||||||||||
Retained
earnings
|
13,544
|
(281
|
)
|
13,263
|
10,650
|
(246
|
)
|
10,404
|
10,358
|
(254
|
)
|
10,104
|
||||||||||||||||
Accumulated
other comprehensive income
|
||||||||||||||||||||||||||||
Net
unrealized gains on available for sale securities
|
-
|
156
|
156
|
-
|
280
|
280
|
-
|
512
|
512
|
|||||||||||||||||||
Foreign
currency translation adjustments
|
-
|
(951
|
)
|
(951
|
)
|
-
|
(696
|
)
|
(696
|
)
|
-
|
(363
|
)
|
(363
|
)
|
|||||||||||||
Derivative
instruments
|
-
|
223
|
223
|
-
|
(54
|
)
|
(54
|
)
|
-
|
161
|
161
|
|||||||||||||||||
Minimum
pension liability adjustment
|
-
|
(35
|
)
|
(35
|
)
|
-
|
(38
|
)
|
(38
|
)
|
-
|
(8
|
)
|
(8
|
)
|
|||||||||||||
Total
shareholders’ equity
|
19,427
|
646
|
20,073
|
15,866
|
526
|
16,392
|
15,775
|
1,398
|
17,173
|
|||||||||||||||||||
Total
liabilities and shareholders’ equity
|
$
|
385,845
|
$
|
7,302
|
$
|
393,147
|
$
|
365,210
|
$
|
6,536
|
$
|
371,746
|
$
|
368,423
|
$
|
8,283
|
$
|
376,706
|
TD BANK FINANCIAL GROUP • THIRD QUARTER 2006 REPORT TO SHAREHOLDERS |
Page
36
|
1 |
The
Bank’s financial results are prepared in accordance with Canadian
generally accepted accounting principles (GAAP). The Bank refers
to
results prepared in accordance with GAAP as “reported” results. The Bank
also utilizes “adjusted” earnings to assess each of its businesses and to
measure overall Bank performance. To arrive at adjusted earnings,
the Bank
removes “items of note”, net of tax, from reported earnings. The items of
note relate to items which management does not believe are indicative
of
underlying business performance. Commencing from the first quarter
of
2006, the items of note include the Bank’s amortization of intangible
assets which primarily relates to the TD Banknorth acquisition
in March
2005 and the Canada Trust acquisition in fiscal 2000. Previously,
the Bank
described adjusted earnings as earnings before the amortization
of
intangibles and items of note. The Bank believes that adjusted
earnings
provide the reader with a better understanding of how management
views the
Bank’s performance. As explained, adjusted earnings are different
from
reported results determined in accordance with GAAP. Adjusted
earnings and
related terms are not defined terms under GAAP, and therefore
may not be
comparable to similar terms used by other issuers. Please see
page 5 of
the Bank’s Third Quarter 2006 Report to Shareholders for a reconciliation
between the Bank’s adjusted earnings and its reported
results.
|