TD B ankgrou preports S ec ond Q u arter20 16 Res u lts Report to Shareholders Three and Six months ended April 30, 2016

Transcription

1 TD B ankgrou preports S ec ond Q u arter20 16 Res u lts Report to Shareholders Three and Six months ended April The financ ialinformation in this d oc u mentis reported in C anad ian d o lars and is bas ed on the B ank's u nau d ited Interim C ons olid ated Financ ials tatements and related N otes prepared in ac c ord anc e withinternationalfinanc ialreportings tand ard s (IFRS )as is s u ed by the InternationalA c c ou ntings tand ard s B oard (IA S B ) u nles s otherwis e noted Reported res u lts c onform to generaly ac c epted ac c ou ntingprinc iples (GA A P ) in ac c ord anc e withifrs A d ju s ted meas u res are non-ga A P meas u res Referto the "H ow the B ankreports " s ec tion ofthe M anagement's D is c u s s ion and A nalys is (M D & A )foran explanation ofreported and ad ju s ted res u lts SECOND QUARTER FINANCIAL HIGHLIGHTS compared with the second quarter a year ago: Reported diluted earnings per share were $107 compared with $097 Adjusted diluted earnings per share were $120 compared with $114 Reported net income was $2052 million compared with $1859 million Adjusted net income was $2282 million compared with $2169 million YEAR-TO-DATE FINANCIAL HIGHLIGHTS six months ended April compared with the corresponding period a year ago: Reported diluted earnings per share were $224 compared with $206 Adjusted diluted earnings per share were $238 compared with $226 Reported net income was $4275 million compared with $3919 million Adjusted net income was $4529 million compared with $4292 million SECOND QUARTER ADJUSTMENTS (ITEMS OF NOTE) The second quarter reported earnings figures included the following items of note: Amortization of intangibles of $63 million after tax (4 cents per share) compared with $65 million after tax (4 cents per share) in the second quarter a year ago A loss of $51 million after tax (3 cents per share) due to the change in fair value of derivatives hedging the reclassified available-for-sale securities portfolio compared to a gain of $15 million after tax (1 cent per share) in the second quarter a year ago Impairment of goodwill non-financial assets and other charges of $116 million after tax (6 cents per share) TORONTO May TD B ankgrou p("td " orthe "B ank")tod ay annou nc ed its financ ialres u lts forthe s ec ond qu arterend inga pril reflec ting growthin retailearnings on boths id es ofthe bord er "W e are pleas ed to reportad ju s ted earnings of$2 3 bilion u p5% from the s ec ond qu arterlas tyear " s aid B haratm as rani Grou pp res id entand C hief Exec u tive O ffic er "O u rperformanc e this qu arterd emons trates ou rd ivers ified bu s ines s s trategy and ability to generate s trongorganic growth " Canadian Retail C anad ian Retailnetinc ome was $1 5 bilion an inc reas e of2% overthe s ec ond qu arterlas tyear H igherearnings were the res u ltofloan d epos itand wealth as s etgrowth and lowerins u ranc e c laims partialy offs etby lowermargins inc reas ed provis ion forc red itlos s es and a highereffec tive tax rate US Retail U S Retailnetinc ome was $7 19 milion (US $537 milion)this qu arterc ompared with$594 milion (US $47 6 milion)on a reported bas is and $626 milion (US $50 2 milion)on an ad ju s ted bas is in the s ec ond qu arterlas tyear The U S RetailB ank whic hexc lu d es the B ank's inves tmentin TD A meritrad e generated netinc ome of$611 milion (US $459 milion) an inc reas e of20 % (13% in U S d o lars )on a reported bas is and 13% (6% in U S d o lars )on an ad ju s ted bas is c ompared withthe s ec ond qu arterlas tyear Earnings reflec tloan and d epos itvolu me growth partialy offs etby higherexpens es and provis ion forc red itlos s es TD A meritrad e c ontribu ted $10 8 milion (US $7 8 milion)in earnings to the s egment an inc reas e of27 % (13% in U S d o lars )c ompared withthe s ec ond qu arter las tyearreflec tingas s etgrowth and highertrad ingvolu me Wholesale Banking W holes ale B ankingnetinc ome was $219 milion a d ec reas e of11% c ompared to the s ec ond qu arterlas tyearprimarily d u e to higherc red itprovis ions C apital marketac tivity improved d u ringthe qu arterreflec tinga raly in c ommod itypric es and narrowingc red its pread s Capital TD 's C ommon Equ ity Tier1 C apitalratio on a B as eliiifu ly phas ed -in bas is was 10 1% c ompared with9 9% las tqu arter Conclusion "W e c ontinu e to innovate and ad aptto meetou rc u s tomers 'evolvingneed s and Iwas pleas ed withthe rec entlau nc hoftd M ys pend a new money management app whic hprovid es c u s tomers withreal-time ins ightinto theirs pend ing " s aid M as rani "L ookingahead we remain foc u s ed on provid ingou rc u s tomers and c lients withs eamles s legend ary experienc es ac ros s alofou rbu s ines s es and c hannels " The foregoingc ontains forward -lookings tatements P leas e referto the "C au tion Regard ingforward -L ookings tatements " on page 2 S EC O N D Q UA RTER M A N A GEM EN T'S D IS C US S IO N & A N A L YS IS P age 1 TD B A N K GRO UP S EC O N D Q UA RTER REP O RT TO S H A REH O L D ERS P age 1

2 CONTENTS 1 SECOND QUARTER FINANCIAL HIGHLIGHTS and 29 M anagingris k ADJUSTMENTS (ITEMS OF NOTE) 43 S ec u ritization and O ff-b alanc e S heeta rrangements 45 A c c ou ntingp olic ies and Es timates 46 C hanges in InternalC ontroloverfinanc ialreporting MANAGEMENT'S DISCUSSION AND ANALYSIS INTERIM CONSOLIDATED FINANCIAL STATEMENTS 3 Financ ialh ighlights 47 Interim C ons olid ated B alanc e S heet 4 H ow W e P erformed 48 Interim C ons olid ated S tatementofinc ome 6 Financ ialres u lts O verview 49 Interim C ons olid ated S tatementofc omprehens ive Inc ome 11 H ow O u rb u s ines s es P erformed 50 Interim C ons olid ated S tatementofc hanges in Equ ity 17 Q u arterly Res u lts 51 Interim C ons olid ated S tatementofc as hflows 18 B alanc e S heetreview 52 N otes to Interim C ons olid ated Financ ials tatements 19 C red itp ortfolio Q u ality 25 C apitalp os ition 76 SHAREHOLDER AND INVESTOR INFORMATION Caution Regarding Forward-Looking Statements From time to time the B ank(as d efined in this d oc u ment)makes writen and /ororalforward -lookings tatements inc lu d ingin this d oc u ment in otherfilings with C anad ian regu lators orthe United S tates (U S )S ec u rities and Exc hange C ommis s ion (S EC ) and in otherc ommu nic ations In ad d ition repres entatives ofthe B ankmaymake forward -lookings tatements oraly to analys ts inves tors the med ia and others A ls u c hs tatements are mad e pu rs u antto the "s afe harbou r" provis ions of and are intend ed to be forward -lookings tatements u nd er applic able C anad ian and U S s ec u rities legis lation inc lu d ingthe US Private Securities Litigation Reform Act of 1995 Forward -lookings tatements inc lu d e bu tare notlimited to s tatements mad e in this d oc u ment the M anagement's D is c u s s ion and A nalys is ("20 15 M D & A ")in the B ank's A nnu alreportu nd erthe head ing"ec onomic S u mmary and O u tlook" foreac hbu s ines s s egmentu nd erhead ings "B u s ines s O u tlookand Foc u s for20 16" and in others tatements regard ingthe B ank's objec tives and priorities for20 16 and beyond and s trategies to ac hieve them the regu latory environmentin whic h the B ankoperates and the B ank's antic ipated financ ialperformanc e Forward -lookings tatements are typic aly id entified by word s s u c has "wil" "s hou ld " "believe" "expec t" "antic ipate" "intend " "es timate" "plan" "may" and "c ou ld " B y theirvery natu re thes e forward -lookings tatements requ ire the B ankto make as s u mptions and are s u bjec tto inherentris ks and u nc ertainties generaland s pec ific Es pec ialy in lightofthe u nc ertainty related to the phys ic al financ ial ec onomic politic al and regu latory environments s u c hris ks and u nc ertainties many ofwhic hare beyond the B ank's c ontroland the effec ts ofwhic hc an be d iffic u ltto pred ic t may c au s e ac tu alres u lts to d iffermaterialyfrom the expec tations expres s ed in the forward -lookings tatements Ris kfac tors thatc ou ld c au s e ind ivid u aly orin the aggregate s u c hd ifferenc es inc lu d e: c red it market(inc lu d ing equ ity c ommod ity foreign exc hange and interes trate) liqu id ity operational(inc lu d ingtec hnology and infras tru c tu re) repu tational ins u ranc e s trategic regu latory legal environmental c apitalad equ ac y and otherris ks Examples ofs u c hris kfac tors inc lu d e the generalbu s ines s and ec onomic c ond itions in the regions in whic hthe B ankoperates ; the ability ofthe B ankto exec u te on key priorities inc lu d ingthe s u c c es s fu lc ompletion ofac qu is itions bu s ines s retention and s trategic plans and to a trac t d evelopand retain key exec u tives ; d is ru ptions in ora tac ks (inc lu d ingc yber-a tac ks )on the B ank's information tec hnology internet networkac c es s orothervoic e ord ata c ommu nic ations s ys tems ors ervic es ; the evolu tion ofvariou s types offrau d orotherc riminalbehaviou rto whic hthe B ankis expos ed ; the failu re ofthird parties to c omply withtheirobligations to the B ankorits affiliates inc lu d ingrelatingto the c are and c ontrolofinformation; the impac tof new and c hanges to orapplic ation of c u rrentlaws and regu lations inc lu d ingwithou tlimitation tax laws ris k-bas ed c apitalgu id elines and liqu id ity regu latory gu id anc e; the overald iffic u ltlitigation environment inc lu d ingin the U S ; inc reas ed c ompetition inc lu d ingthrou ghinternetand mobile bankingand non-trad itional c ompetitors ; c hanges to the B ank's c red itratings ; c hanges in c u rrenc y and interes trates (inc lu d ingthe pos s ibility ofnegative interes trates ); inc reas ed fu nd ing c os ts and marketvolatility d u e to marketiliqu id ity and c ompetition forfu nd ing; c ritic alac c ou ntinges timates and c hanges to ac c ou ntings tand ard s polic ies and method s u s ed by the B ank; exis tingand potentialinternationald ebtc ris es ; and the oc c u rrenc e ofnatu raland u nnatu ralc atas trophic events and c laims res u lting from s u c hevents The B ankc au tions thatthe prec ed inglis tis notexhau s tive ofalpos s ible ris kfac tors and otherfac tors c ou ld als o ad vers ely affec tthe B ank's res u lts Formore d etailed information pleas e referto the "Ris kfac tors and M anagement" s ec tion ofthe M D & A as may be u pd ated in s u bs equ ently filed qu arterly reports to s harehold ers and news releas es (as applic able)related to any trans ac tions orevents d is c u s s ed u nd erthe head ing "S ignific antevents " in the relevantm D & A whic happlic able releas es may be fou nd on www td c om A ls u c hfac tors s hou ld be c ons id ered c arefu ly as we las otheru nc ertainties and potentialevents and the inherentu nc ertainty offorward -lookings tatements when makingd ec is ions withres pec tto the B ankand the B ankc au tions read ers notto plac e u nd u e relianc e on the B ank's forward -lookings tatements M aterialec onomic as s u mptions u nd erlyingthe forward -lookings tatements c ontained in this d oc u mentare s etou tin the M D & A u nd erthe head ings "Ec onomic S u mmary and O u tlook" and foreac hbu s ines s s egment "B u s ines s O u tlookand Foc u s for20 16" eac has may be u pd ated in s u bs equ ently filed qu arterly reports to s harehold ers A ny forward -lookings tatements c ontained in this d oc u mentrepres entthe views ofmanagementonly as ofthe d ate hereofand are pres ented forthe pu rpos e of as s is tingthe B ank's s harehold ers and analys ts in u nd ers tand ingthe B ank's financ ialpos ition objec tives and priorities and antic ipated financ ialperformanc e as at and forthe period s end ed on the d ates pres ented and may notbe appropriate forotherpu rpos es The B ankd oes notu nd ertake to u pd ate any forward -looking s tatements whetherwriten ororal thatmay be mad e from time to time by oron its behalf exc eptas requ ired u nd erapplic able s ec u rities legis lation This document was reviewed by the Bank's Audit Committee and was approved by the Bank's Board of Directors on the Audit Committee's recommendation prior to its release S EC O N D Q UA RTER M A N A GEM EN T'S D IS C US S IO N & A N A L YS IS P age 2 TD B A N K GRO UP S EC O N D Q UA RTER REP O RT TO S H A REH O L D ERS P age 2

3 MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATING PERFORMANCE This M D & A is pres ented to enable read ers to as s es s materialc hanges in the financ ialc ond ition and operatingres u lts oftd B ankgrou p("td " orthe "B ank")for the three and s ix months end ed A pril c ompared withthe c orres pond ingperiod s s hown This M D & A s hou ld be read in c onju nc tion withthe B ank's u nau d ited Interim C ons olid ated Financ ials tatements and related N otes inc lu d ed in this Reportto S harehold ers and withthe C ons olid ated Financ ial S tatements and related N otes and M D & A This M D & A is d ated M ay Unles s otherwis e ind ic ated alamou nts are expres s ed in C anad ian d o lars and have been primarily d erived from the B ank's C ons olid ated Financ ials tatements and related N otes orinterim C ons olid ated Financ ials tatements and related N otes prepared in ac c ord anc e withifrs as is s u ed by the IA S B N ote thatc ertain c omparative amou nts have been res tated /rec las s ified to c onform with the pres entation ad opted in the c u rrentperiod A d d itionalinformation relatingto the B ank inc lu d ingthe B ank's A nnu alinformation Form is available on the B ank's webs ite athtp: /www td c om as we las on S ED A R athtp: /www s ed ar c om and on the S EC 's webs ite athtp: /www s ec gov (ED GA R filers s ec tion) TABLE 1: FINANCIAL HIGHLIGHTS (milions ofc anad ian d o lars exc eptas noted ) As at or for the three months ended As at or for the six months ended April 30 Janu ary 31 A pril30 April 30 A pril Results of operations Totalrevenu e $ 8259 $ $ $ $ P rovis ion forc red itlos s es Ins u ranc e c laims and related expens es N on-interes texpens es N etinc ome reported N etinc ome ad ju s ted Retu rn on c ommon equ ity reported 125 % 13 3 % 12 8 % 130 % 13 8 % Retu rn on c ommon equ ity ad ju s ted Financial position Totalas s ets $ $ $ $ $ Totalequ ity TotalC ommon Equ ity Tier1 C apitalris k-weighted as s ets Financial ratios Effic ienc y ratio reported 573 % 54 0 % 60 6 % 556 % 57 7 % Effic ienc y ratio ad ju s ted C ommon Equ ity Tier1 C apitalratio Tier1 C apitalratio TotalC apitalratio L everage ratio P rovis ion forc red itlos s es as a % ofnetaverage loans and ac c eptanc es Common share information reported (dollars) P ers hare earnings B as ic $ 107 $ 1 17 $ 0 98 $ 224 $ D ilu ted D ivid end s pers hare B ookvalu e pers hare C los ings hare pric e S hares ou ts tand ing(milions ) A verage bas ic A verage d ilu ted End ofperiod M arketc apitalization (bilions ofc anad ian d o lars ) $ 1035 $ 98 3 $ $ 1035 $ D ivid end yield 40 % 3 9 % 3 6 % 40 % 3 6 % D ivid end payou tratio P ric e-earnings ratio Common share information adjusted (dollars) 1 P ers hare earnings B as ic $ 120 $ 1 18 $ 1 15 $ 238 $ 2 27 D ilu ted D ivid end payou tratio 459 % 43 1 % 44 5 % 445 % 43 2 % P ric e-earnings ratio A d ju s ted meas u res are non-ga A P meas u res Referto the "H ow the B ankreports " s ec tion ofthis d oc u mentforan explanation ofreported and ad ju s ted res u lts 2 A d ju s ted retu rn on c ommon equ ity is a non-ga A P financ ialmeas u re Referto the "Retu rn on C ommon Equ ity" s ec tion ofthis d oc u mentforan explanation 3 Eac hc apitalratio has its own ris k-weighted as s ets (RW A )meas u re d u e to the O ffic e ofthe S u perintend entoffinanc ialins titu tions C anad a (O S FI)pres c ribed s c alarforinc lu s ion ofthe C red itvalu ation A d ju s tment(c VA ) The s c alars forinc lu s ion ofc VA forc ommon Equ ity Tier1 (C ET1 ) Tier1 and TotalC apitalrw A are 64% 7 1% and 7 7 % res pec tively 4 Exc lu d es ac qu ired c red it-impaired (A C I)loans and d ebts ec u rities c las s ified as loans Forad d itionalinformation on A C Iloans referto the "C red itp ortfolio Q u ality" s ec tion ofthe M D & A and N ote 5 ofthe Interim C ons olid ated Financ ials tatements Forad d itionalinformation on d ebts ec u rities c las s ified as loans referto the "Expos u re to N on-a genc y C o lateralized M ortgage O bligations " d is c u s s ion and tables in the "C red itp ortfolio Q u ality" s ec tion ofthe M D & A and N ote 5 ofthe Interim C ons olid ated Financ ials tatements S EC O N D Q UA RTER M A N A GEM EN T'S D IS C US S IO N & A N A L YS IS P age 3 TD B A N K GRO UP S EC O N D Q UA RTER REP O RT TO S H A REH O L D ERS P age 3

4 HOW WE PERFORMED Corporate Overview The Toronto-D ominion B ankand its s u bs id iaries are c o lec tively known as TD B ankgrou p TD is the s ixthlarges tbankin N ortha meric a by branc hes and s erves more than 24 milion c u s tomers in three key bu s ines s es operatingin a nu mberofloc ations in financ ialc entres arou nd the globe: C anad ian Retail U S Retail and W holes ale B anking TD als o ranks amongthe world 's lead ingonline financ ials ervic es firms withapproximately 10 7 milion ac tive online and mobile c u s tomers TD had $1 1 trilion in as s ets as ata pril The Toronto-D ominion B anktrad es u nd erthe s ymbol"td " on the Toronto and N ew YorkS toc kexc hanges How the Bank Reports The B ankprepares its Interim C ons olid ated Financ ials tatements in ac c ord anc e withifrs the c u rrentga A P and refers to res u lts prepared in ac c ord anc e with IFRS as "reported " res u lts The B ankals o u tilizes non-ga A P financ ialmeas u res referred to as "ad ju s ted " res u lts to as s es s eac hofits bu s ines s es and to meas u re the B ank's overalperformanc e To arrive atad ju s ted res u lts the B ankremoves "items ofnote" netofinc ome taxes from reported res u lts The items ofnote relate to items whic hmanagementd oes notbelieve are ind ic ative ofu nd erlyingbu s ines s performanc e The B ankbelieves thatad ju s ted res u lts provid e the read erwitha be teru nd ers tand ingofhow managementviews the B ank's performanc e The items ofnote are d is c los ed in Table 3 A s explained ad ju s ted res u lts d ifferfrom reported res u lts d etermined in ac c ord anc e withifrs A d ju s ted res u lts items ofnote and related terms u s ed in this d oc u mentare notd efined terms u nd erifrs and therefore may notbe c omparable to s imilarterms u s ed by otheris s u ers TABLE 2: OPERATING RESULTS Reported (milions ofc anad ian d o lars ) For the three months ended For the six months ended April 30 Janu ary 31 A pril30 April 30 A pril N etinteres tinc ome $ 4880 $ $ $ 9927 $ N on-interes tinc ome Totalrevenu e P rovis ion forc red itlos s es Ins u ranc e c laims and related expens es N on-interes texpens es Income before income taxes and equity in net income of an investment in TD Ameritrade P rovis ion forinc ome taxes Equ ity in netinc ome ofan inves tmentin TD A meritrad e Net income reported P referred d ivid end s Net income available to common shareholders and non-controlling interests in subsidiaries $ 2015 $ $ $ 4213 $ A tribu table to: Non-controlling interests $ 28 $ 29 $ 28 $ 57 $ 55 Common shareholders S EC O N D Q UA RTER M A N A GEM EN T'S D IS C US S IO N & A N A L YS IS P age 4 TD B A N K GRO UP S EC O N D Q UA RTER REP O RT TO S H A REH O L D ERS P age 4

5 The fo lowingtable provid es a rec onc iliation between the B ank's ad ju s ted and reported res u lts ; ; ; ; ; ; TABLE 3: NON-GAAP FINANCIAL MEASURES Reconciliation of Adjusted to Reported Net Income (milions ofc anad ian d o lars ) For the three months ended For the six months ended April 30 Janu ary 31 A pril30 April 30 A pril Operating results adjusted N etinteres tinc ome $ 4880 $ $ $ 9927 $ N on-interes tinc ome Totalrevenu e P rovis ion forc red itlos s es Ins u ranc e c laims and related expens es N on-interes texpens es Inc ome before inc ome taxes and equ ity in netinc ome ofan inves tmentin TD A meritrad e P rovis ion forinc ome taxes Equ ity in netinc ome ofan inves tmentin TD A meritrad e Net income adjusted P referred d ivid end s Net income available to common shareholders and non-controlling interests in subsidiaries adjusted Attributable to: N on-c ontro linginteres ts in s u bs id iaries netofinc ome taxes Net income available to common shareholders adjusted Adjustments for items of note net of income taxes A mortization ofintangibles 5 (63) (65) (65) (128) (128 ) Fairvalu e ofd erivatives hed gingthe rec las s ified available-for-s ale s ec u rities portfolio 6 (51) (10) 15 Impairmentofgood wil non-financ ialas s ets and otherc harges 7 (116) (116) Res tru c tu ringc harges 8 (228 ) (228 ) L itigation and litigation-related c harge/res erve 9 (32) (32) Total adjustments for items of note (230) (24) (310 ) (254) (37 3) Net income available to common shareholders reported $ 1987 $ $ $ 4156 $ A d ju s ted non-interes tinc ome exc lu d es the fo lowingitems ofnote: second quarter 2016 $58 milion los s d u e to c hange in fairvalu e ofd erivatives hed gingthe rec las s ified available-for-s ale (A FS )s ec u rities portfolio as explained in footnote 6; first quarter 2016 $46 milion gain d u e to c hange in fairvalu e ofd erivatives hed gingthe rec las s ified A FS s ec u rities portfolio; s econd quarter 2015 $17 milion gain d u e to c hange in fairvalu e ofd erivatives hed gingthe rec las s ified A FS s ec u rities portfolio 2 A d ju s ted non-interes texpens es exc lu d es the fo lowingitems ofnote: second quarter 2016 $69 milion amortization ofintangibles as explained in footnote 5; $111 milion impairmentof good wil c ertain intangibles othernon-financ ialas s ets and otherc harges as fu rtherexplained in footnote 7 first quarter 2016 $7 4 milion amortization ofintangibles s econd quarter 2015 $7 3 milion amortization ofintangibles $337 milion d u e to the initiatives to red u c e c os ts as explained in footnote 8 $52 milion oflitigation c harges as explained in footnote 9; first quarter 2015 $7 3 milion amortization ofintangibles 3 Fora rec onc iliation between reported and ad ju s ted provis ion forinc ome taxes referto the "N on-ga A P Financ ialm eas u res Rec onc iliation ofreported to A d ju s ted P rovis ion forinc ome Taxes " table in the "Inc ome Taxes " s ec tion ofthe M D & A 4 A d ju s ted equ ity in netinc ome ofan inves tmentin TD A meritrad e exc lu d es the fo lowingitems ofnote: second quarter 2016 $17 milion amortization ofintangibles as explained in footnote 5; first quarter 2016 $16 milion amortization ofintangibles second quarter 2015 $16 milion amortization ofintangibles first quarter 2015 $14 milion amortization of intangibles 5 A mortization ofintangibles relate to intangibles ac qu ired as a res u ltofas s etac qu is itions and bu s ines s c ombinations A lthou ghthe amortization ofs oftware and as s ets ervic ingrights are rec ord ed in amortization ofintangibles they are notinc lu d ed forpu rpos es ofthe items ofnote 6 The B ankc hanged its trad ings trategy withres pec tto c ertain trad ing d ebts ec u rities and rec las s ified thes e s ec u rities from trad ingto the A FS c ategory effec tive A u gu s t Thes e d ebts ec u rities are ec onomic aly hed ged primarily withc red itd efau lts wapand interes trate s wapc ontrac ts whic hare rec ord ed on a fairvalu e bas is withc hanges in fairvalu e rec ord ed in the period 's earnings M anagementbelieves thatthis as ymmetry in the ac c ou ntingtreatmentbetween d erivatives and the rec las s ified d ebts ec u rities res u lts in volatility in earnings from period to period thatis notind ic ative ofthe ec onomic s ofthe u nd erlyingbu s ines s performanc e in W holes ale B anking The B ankmay from time to time replac e s ec u rities within the portfolio to bes tu tilize the initial matc hed fixed term fu nd ing A s a res u lt the d erivatives are ac c ou nted foron an ac c ru albas is in W holes ale B ankingand the gains and los s es related to the d erivatives in exc es s ofthe ac c ru ed amou nts are reported in the C orporate s egment A d ju s ted res u lts ofthe B ankexc lu d e the gains and los s es ofthe d erivatives in exc es s ofthe ac c ru ed amou nt 7 In the s ec ond qu arterof20 16 the B ankrec ord ed impairmentlos s es on good wil c ertain intangibles othernon-financ ialas s ets and d eferred tax as s ets as we las otherc harges relating to the D irec tinves tingbu s ines s in Eu rope thathas been experienc ingc ontinu ed los s es Thes e amou nts are reported in the C orporate s egment 8 D u ring20 15 the B ankc ommenc ed its res tru c tu ring review and rec ord ed res tru c tu ringc harges of$337 milion ($228 milion aftertax)and $349 milion ($243 milion aftertax)on a net bas is in the s ec ond qu arterand fou rth qu arterof20 15 res pec tively The res tru c tu ringinitiatives were intend ed to red u c e c os ts and manage expens es in a s u s tainable mannerand to ac hieve greateroperationaleffic ienc ies Thes e meas u res inc lu d ed proc es s red es ign and bu s ines s res tru c tu ring retailbranc hand reales tate optimization and organizationalreview The res tru c tu ringc harges have been rec ord ed as an ad ju s tmentto netinc ome within the C orporate s egment 9 A s a res u ltofan ad vers e ju d gmentand evalu ation ofc ertain otherd evelopments and expos u res in the U S in the B anktookpru d ents teps to reas s es s its litigation provis ion H avingc ons id ered thes e fac tors inc lu d ing related oranalogou s c as es the B ankd etermined in ac c ord anc e withapplic able ac c ou ntings tand ard s thatan inc reas e of$52 milion ($32 in the s ec ond qu arterof20 15 TABLE 4: RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER SHARE (EPS) 1 (C anad ian d o lars ) For the three months ended For the six months ended April 30 Janu ary 31 A pril30 April 30 A pril Basic earnings per share reported $ 107 $ 1 17 $ 0 98 $ 224 $ A d ju s tments foritems ofnote Basic earnings per share adjusted $ 120 $ 1 18 $ 1 15 $ 238 $ 2 27 Diluted earnings per share reported $ 107 $ 1 17 $ 0 97 $ 224 $ A d ju s tments foritems ofnote Diluted earnings per share adjusted $ 120 $ 1 18 $ 1 14 $ 238 $ EP S is c ompu ted by d ivid ing netinc ome available to c ommon s harehold ers by the weighted -average nu mberofs hares ou ts tand ingd u ringthe period 2 Forexplanations ofitems ofnote referto the "N on-ga A P Financ ialm eas u res Rec onc iliation ofa d ju s ted to Reported N etinc ome" table in the "H ow W e P erformed " s ec tion ofthis d oc u ment S EC O N D Q UA RTER M A N A GEM EN T'S D IS C US S IO N & A N A L YS IS P age 5 TD B A N K GRO UP S EC O N D Q UA RTER REP O RT TO S H A REH O L D ERS P age 5

6 TABLE 5: AMORTIZATION OF INTANGIBLES NET OF INCOME TAXES 1 (milions ofc anad ian d o lars ) For the three months ended Forthe s ix months end ed April 30 Janu ary 31 A pril30 April 30 A pril TD B ank N ationala s s oc iation (TD B ank N A ) $ 28 $ 30 $ 30 $ 58 $ 59 TD A meritrad e H old ingc orporation (TD A meritrad e) M B N A C anad a A eroplan O ther S oftware and as s ets ervic ingrights Amortization of intangibles net of income taxes $ 140 $ 145 $ 137 $ 285 $ A mortization ofintangibles withthe exc eption ofs oftware and as s ets ervic ingrights are inc lu d ed as items ofnote Forexplanations ofitems ofnote referto the "N on-ga A P Financ ial M eas u res Rec onc iliation ofa d ju s ted to Reported N etinc ome" table in the "H ow W e P erformed " s ec tion ofthis d oc u ment 2 Inc lu d ed in equ ity in netinc ome ofan inves tmentin TD A meritrad e Return on Common Equity The B ank's method ology foraloc atingc apitalto its bu s ines s s egments is aligned withthe c ommon equ ity c apitalrequ irements u nd erb as eliii The c apital aloc ated to the bu s ines s s egments is bas ed on 9% C ET1 C apital A d ju s ted retu rn on c ommon equ ity (RO E)is ad ju s ted netinc ome available to c ommon s harehold ers as a perc entage ofaverage c ommon equ ity A d ju s ted RO E is a non-ga A P financ ialmeas u re as itis nota d efined term u nd erifrs Read ers are c au tioned thatearnings and othermeas u res ad ju s ted to a bas is otherthan IFRS d o nothave s tand ard ized meanings u nd erifrs and therefore may notbe c omparable to s imilarterms u s ed by otheris s u ers TABLE 6: RETURN ON COMMON EQUITY (milions ofc anad ian d o lars exc eptas noted ) For the three months ended For the six months ended April 30 Janu ary 31 A pril30 April 30 A pril A verage c ommon equ ity $ $ $ $ $ Net income available to common shareholders reported Items ofnote netofinc ome taxes Net income available to common shareholders adjusted Return on common equity adjusted 140 % 13 5 % 15 0 % 138 % 15 1 % 1 Forexplanations ofitems ofnote referto the "N on-ga A P Financ ialm eas u res Rec onc iliation ofa d ju s ted to Reported N etinc ome" table in the "H ow W e P erformed " s ec tion ofthis d oc u ment FINANCIAL RESULTS OVERVIEW Performance Summary O u tlined below is an overview ofthe B ank's performanc e on an ad ju s ted bas is forthe s ec ond qu arterof20 16 agains tthe financ ialperformanc e ind ic ators inc lu d ed in TD 's 20 15A nnu alreport S harehold erperformanc e ind ic ators helpgu id e and benc hmarkthe B ank's ac c omplis hments Forthe pu rpos es ofthis analys is the B anku tilizes ad ju s ted earnings whic hexc lu d es items ofnote from the reported res u lts thatare prepared in ac c ord anc e with IFRS Reported and ad ju s ted res u lts and items ofnote are explained in the "H ow the B ankreports " s ec tion ofthis d oc u ment A d ju s ted d ilu ted earnings pers hare forthe s ix months end ed A pril inc reas ed 5% from the s ame period las tyearreflec tinghigherearnings in the C anad ian Retailand U S Retails egments partialy offs etby lowerearnings in W holes ale B anking and a higherlos s in the C orporate s egment The B ank's goal is to ac hieve 7 to 10 % ad ju s ted earnings pers hare growthoverthe med iu m term A d ju s ted retu rn on C ET1 C apitalrw A forthe s ix months end ed A pril was 2 28 % A d ju s ted retu rn on c ommon equ ity forthe s ix months end ed A pril was 13 8 % Forthe twelve months end ed A pril the totals harehold erretu rn was 4 3% c ompared to the C anad ian peer 1 average of5 8 % Impact of Foreign Exchange Rate on US Retail Segment Translated Earnings U S Retails egmentearnings inc lu d ingthe c ontribu tion from the B ank's inves tmentin TD A meritrad e reflec tflu c tu ations in the U S d o larto C anad ian d o lar exc hange rate c ompared withthe s ame period las tyear D eprec iation ofthe C anad ian d o larhad a favou rable impac ton U S Retails egmentearnings forthe three and s ix months end ed A pril c ompared withthe s ame period las tyear as s hown in the fo lowingtable TABLE 7: IMPACT OF FOREIGN EXCHANGE RATE ON US RETAIL SEGMENT TRANSLATED EARNINGS (milions ofc anad ian d o lars exc eptas noted ) For the three months ended For the six months ended April vs April vs April April U S RetailB ankinc reas ed totalrevenu e $ 137 $ 500 U S RetailB ankinc reas ed non-interes texpens es U S RetailB ankinc reas ed netinc ome aftertax Inc reas ed equ ity in netinc ome on an inves tmentin TD A meritrad e US Retail segment increased net income after tax Increase in basic earnings per share (dollars) $ 003 $ 009 A one c entapprec iation/d eprec iation in the U S d o larto C anad ian d o larexc hange rate wilinc reas e/d ec reas e U S Retails egmentnetinc ome by approximately $40 milion 1 C anad ian peers inc lu d e B ankofm ontreal C anad ian ImperialB ankofc ommerc e RoyalB ankofc anad a and The B ankofn ova S c otia S EC O N D Q UA RTER M A N A GEM EN T'S D IS C US S IO N & A N A L YS IS P age 6 TD B A N K GRO UP S EC O N D Q UA RTER REP O RT TO S H A REH O L D ERS P age 6

7 Economic Summary and Outlook C alend aryear20 15 s aw ec onomic ac tivity in C anad a expand by ju s t1 2% the weakes tpac e rec ord ed s inc e the rec es s ion Growthis expec ted to rec overto 1 6% this c alend aryear as a rebou nd in growthin the firs tqu arterwilbe offs etby the impac ts ofthe FortM c M u rray wild fires in A lberta B eneaththe mod erately improvingpic tu re s ignific antregionald ifferenc es pers is t O il-prod u c ingregions s u c has A lberta and N ewfou nd land and L abrad orc ontinu e to s tru ggle withthe falou tfrom low oilpric es withthe d es tru c tion in FortM c M u rray and oilprod u c tion d is ru ptions ac tingas a fu rthers etbac kfora lberta In c ontras t growth c ontinu es apac e in B ritis hc olu mbia and O ntario Unlike C anad a the U S ec onomy had a weaks tartto c alend ar20 16 and realgd P growthis expec ted to reac h ju s t1 7 % forthe fu lyear A c ros s the globe the ou tlookforgrowthc ontinu es to vary wid ely by region Ec onomic rec overy c ontinu es in the Eu rozone where ou tpu tfinaly s u rpas s ed its pre-c ris is peakin the firs tqu arterof20 16 Expans ion in Japan is likely to be mod es tatbes tas aggres s ive monetary polic ymeas u res have s o farfailed to s park inflation and growth Emergingmarkets wilremain the main d riverofglobalgrowth bu ts ome c ou ntries c ontinu e to fac e c ha lenges B razilin partic u lars u ffered a s harpc ontrac tion in ec onomic ac tivity and fac es s evere politic alu nc ertainty whic hmay c au s e ec onomic weaknes s to pers is t W hile C hina remains a key s ou rc e of growth the pac e ofexpans ion c ontinu es to d ec elerate withnegative implic ations forc ou ntries within its s u pply c hains The ec onomic ou tlookforthe United S tates has s oftened s omewhat withthe ec onomy expand ingju s t0 5% atannu alrates from Janu ary to M arc h20 16 H owever momentu m appears pois ed to pic ku pmod erately in the s ec ond c alend arqu arterof2016 D omes tic d emand whic hexc lu d es the impac ts oftrad e is likely to expand by a bris k2 5% this year rou ghly in line withlas tyear's pac e Inves tmenthas been tepid in partd u e to c ontrac tion in the oiland gas s ec tor H owever withthe elevated d o larand weakglobalgrowth weighingon c orporate profits and exports the inves tmentou tlookremains res trained D es pite the s omewhatmu ted overalgrowthou tlook employmentc ontinu es to expand robu s tly withinc reas ings igns ofu pward pres s u re on wages A s s u c h we expec tthe U S c entralbankto nu d ge u pits key fed eralfu nd s interes trate by 25 bas is points (bps )in the s ec ond halfofthe year W ithin C anad a the ec onomy remains in the mid s tofa c omplex ad ju s tmentproc es s res u ltingfrom the marked d ec lines in c ommod ity pric es s inc e withthe FortM c M u rray wild fires in M ay provid ingan ad d itionals etbac kto growth D es pite a rec entu ptic kin the pric e ofc ru d e oil bu s ines s inves tmentis expec ted to c ontinu e c ontrac tingthrou ghthe firs tthree qu arters ofc alend ar20 16 as pric es remain below levels c ons is tentwithameaningfu lrec overy in oiland gas inves tment W hile the low interes trate environmentis helpingmaintain d ebts ervic e afford ability the highlevelofhou s ehold d ebtis likely to weighon c ons u mer s pend ing A s a res u lt c ons u mption growthis likely to d ec elerate from its pac e overthe las ts everalyears The fires thatbegan nearfortm c M u rray A lberta in early M ay have taken a s ignific anthu man and ec onomic to l S ignific ants ec tions ofthe c ity have been d es troyed and itis likely to be s ome time before c itizens are alowed to retu rn O ils and s operations in the area were als o s hu td own affec tingapproximately 1 milion barrels perd ay ofprod u c tion Thes e impac ts when c ons id ered alongs id e alread y s lowingmomentu m head inginto the A prilto Ju ne period are likely to res u ltin a s malpu l-bac kin ec onomic ac tivity in C anad a forthis period Thereafter a s trongrebou nd is expec ted as oiland gas prod u c tion c omes bac k online and the rebu ild ingproc es s begins in earnes t The low interes trate environmenthas been a key d riverofthe C anad ian hou s ingmarket whic his forec as tto c ontinu e to ad d to ec onomic growthin c alend ar albeitata d ec eleratingpac e L ookingahead fad ingmomentu m from pas tinteres trate c u ts s hou ld eventu aly lead to a mod es tc ontrac tion in ac tivity toward s the la terpartofthe c alend aryear W iththe d omes tic s ec tors ofthe ec onomy likely to be lac klu s tre C anad a's exports ec toris expec ted to be the majord riverofc anad ian growthoverc alend ar s u pported by ris ingu S d omes tic d emand and a relatively weakc anad ian d o lar Evid enc e ofthis has alread y been obs erved withs trongexportgrowth rec ord ed in Janu ary althou ghfebru ary s aw a mod es tpu lbac k and exports ofenergy prod u c ts wilbe affec ted bys u pply d is ru ptions in A lberta Forthe year as a whole c ond itions remain favou rable as pas tc u rrenc y movements are expec ted to c ontinu e d rivingexportgains Governments pend ings hou ld als o ad d to ac tivity as the fed eralbu d gethas c ommited to rou ghly $11 bilion in ad d itionalannu als pend ing A c c ou ntingfortimingis s u es this ad d itionals pend ing s hou ld boos tgrowthin c alend ar20 16 and by 0 1 and 0 3 perc entage points res pec tively A gains tthe bac kd ropofmod es tec onomic growthand a labou rmarketthatis expec ted to generate only meekemploymentgains inflationary pres s u res are likely to remain in line withthe B ankofc anad a's targetof2% A lthou ghoveralinflation is c u rrently below this target the impac ts ofpas tenergy pric e d ec lines are fad ing while importpric es are ris ing A s a res u lt we expec tinflation to c onverge bac ktoward s the c entralbank's preferred targetby the la terhalfofthe c alend aryear Given the mu ted inflationary pres s u res the B ankofc anad a is expec ted to maintain its polic y rate at0 50 % throu ghou tthe and c alend aryears This is c ons is tentwiththe A pril20 16 M onetary P olic y Report where the B ankofc anad a s u gges ted thatec onomic ac tivity is likely to retu rn to its potentiallevelonly in the la terhalfofthe c alend aryear Net Income Q u arterly c omparis on Q vs Q Reported netinc ome forthe q u arterwas $ m ilion an inc reas e of$1 93 m ilion or1 0 % c ompared with the s ec ond qu arterlas tyear A d ju s ted net inc ome forthe qu arterwas $ milion an inc reas e of$1 1 3 milion or5% The inc reas e in ad ju s ted netinc ome was d u e to higherearnings in the U S Retail and C anad ian Retails egments and lowerlos s es in the C orporate s egment partia ly offs etby a d ec reas e in the W holes ale B anking s egment U S Retailnetinc om e inc reas ed primarily d u e to loan and d epos itvolu me growth inc reas ed c ontribu tions from A meritrad e and the favou rable impac tofforeign c u rrenc y trans lation partialy offs etby higherexpens es and provis ion forc red itlos s es (P C L ) C anad ian Retailnetinc ome reflec ted loan and d epos itvolu me growth lowerins u ranc e c laims wealthas s etgrowth and higherfee-bas ed revenu e partialyoffs etby higherp C L inc reas ed non-interes texpens es and the impac tofa highereffec tive tax rate C orporate s egmentnetlos s d ec reas ed primarily d u e to pos itive tax items and higher revenu e from treas u ry and balanc e s heetmanagementac tivities partialy offs etby higherprovis ions forinc u rred bu tnotid entified c red itlos s es and highernet c orporate expens es W holes ale B ankingnetinc ome d ec reas ed d u e to lowerrevenu e and higherp C L partialy offs etby lowernon-interes texpens es and a lower effec tive tax rate Q u arterly c omparis on Q vs Q Reported netinc ome forthe qu arterd ec reas ed $17 1 milion or8 % c ompared withthe priorqu arter A d ju s ted netinc ome forthe qu arterinc reas ed $35 milion or 2% The inc reas e in ad ju s ted netinc ome was d u e to higherearnings in the W holes ale B ankings egmentand a lowerlos s in the C orporate s egment partialy offs et by d ec reas es in the C anad ian Retailand U S Retails egments W holes ale B ankingnetinc ome reflec ted higherrevenu e and a lowereffec tive tax rate partialy offs etby higherp C L and non-interes texpens es C orporate s egmentnetlos s d ec reas ed primarily d u e to pos itive tax items and lowernetc orporate expens es C anad ian Retailnetinc ome d ec reas ed primarily d u e to fewerc alend ard ays in the qu arter higherp C L and non-interes texpens e and ad ju s tments mad e to the rec ognition ofc ommis s ions paid to au to d ealers partialy offs etby higherins u ranc e earnings U S Retailnetinc ome d ec reas ed d u e to lowerrevenu e higher expens es lowerc ontribu tions from A meritrad e and the u nfavou rable impac tofforeign c u rrenc y trans lation partialyoffs etby lower P C L S EC O N D Q UA RTER M A N A GEM EN T'S D IS C US S IO N & A N A L YS IS P age 7 TD B A N K GRO UP S EC O N D Q UA RTER REP O RT TO S H A REH O L D ERS P age 7

8 Year-to-d ate c omparis on Q vs Q Reported netinc ome was $ milion an inc reas e of$356 milion or9% c ompared withthe s ame period las tyear A d ju s ted netinc ome was $4 529 milion an inc reas e of$237 milion or6% The inc reas e in ad ju s ted netinc ome was d u e to higherearnings in the U S Retailand C anad ian Retails egments partialy offs et by a d ec reas e in the W holes ale B ankingand a higherlos s in the C orporate s egment U S Retailnetinc ome inc reas ed primarily d u e to higherloan and d epos it volu mes c ontribu tion from the ac qu is ition in the s trategic c ard s portfolio inc reas ed c ontribu tions from impac tofforeign c u rrenc y trans lation partialy offs etby higherexpens es and P C L C anad ian Retailnetinc ome inc reas ed d u e to loan and d epos itvolu me growth lowerins u ranc e c laims higherfee-bas ed revenu e and wealthas s etgrowth partialy offs etby the impac tofa highereffec tive tax rate and higherp C L W holes ale B ankingnetinc ome d ec reas ed d u e to lowerrevenu e and higherp C L partialy offs etby lowernon-interes texpens es and a lowereffec tive tax rate C orporate s egmentnetlos s reflec ted highernetc orporate expens es and provis ions forinc u rred bu tnotid entified c red itlos s es partialy offs etby higherrevenu e from treas u ry and balanc e s heetmanagementac tivities Net Interest Income Q u arterly c omparis on Q vs Q N etinteres tinc ome forthe qu arterwas $ milion an inc reas e of$30 0 milion or7 % c ompared withthe s ec ond qu arterlas tyear N etinteres tinc om e inc reas ed in the U S Retail C orporate and C anad ian Retails egm ents partia ly offs etby a d ec reas e in the W holes ale B anking s egment U S Retailnet interes tinc ome reflec ted loan and d epos itvolu me growth c ontribu tion from the ac qu is ition in the s trategic c ard s portfolio an ad d itionalc alend ard ay this qu arter and the favou rable impac tofforeign c u rrenc y trans lation partialy offs etby lowermargins C orporate s egmentnetinteres tinc ome inc reas ed primarily d u e to the c ontribu tion from the ac q u is ition in the s trategic c ard s portfolio and highernetrevenu e from treas u ry and balanc e s heetmanagementac tivities C anad ian Retailnetinteres tinc ome inc reas ed d u e to loan and d epos itvolu me growth and an ad d itionalc alend ard ay this qu arter partialy offs etby lowermargins and a c red itmarkreleas e in the ac qu ired c red itc ard portfolios in the prioryear W holes ale B ankingreflec ted lowertrad ing-related netinteres tinc ome Q u arterly c omparis on Q vs Q N etinteres tinc ome forthe qu arterd ec reas ed $167 milion or3% c ompared withthe priorqu arter A ls egments experienc ed d ec reas es in netinteres tinc ome C anad ian Retails egmentnetinteres tinc ome d ec reas ed primarily d u e to fewerc alend ard ays in the c u rrentqu arterand ad ju s tments mad e to the rec ognition of c ommis s ions paid to au to d ealers in the priorqu arter C orporate s egmentnetinteres tinc ome d ec reas ed primarily d u e to lowerrevenu e from treas u ry and balanc e s heetmanagementac tivities U S Retailnetinteres tinc om e d ec reas ed d u e to fewerc alend ard ays in the c u rrentqu arterand the u nfavou rable impac tofforeign c u rrenc y trans lation partialy offs etby loan and d epos itvolu me growth and a fu lqu arterbenefitofthe D ec ember20 15 Fed rate inc reas e W holes ale B ankingnetinteres tinc ome d ec reas ed primarily d u e to lowertrad ing-related netinteres tinc ome Year-to-d ate c omparis on Q vs Q N etinteres tinc ome was $ milion an inc reas e of$7 8 7 milion or9% c ompared withthe s ame period las tyear N etinteres tinc ome inc reas ed in the U S Retail C orporate and C anad ian Retails egments partialy offs etby a d ec reas e in the W holes ale B ankings egment U S Retailnetinteres tinc ome inc reas ed d u e to loan and d epos itvolu me growth c ontribu tion from the ac qu is ition in the s trategic c ard s portfolio and the favou rable impac tofforeign c u rrenc y trans lation partialy offs etby lowermargins C orporate s egmentnetinteres tinc ome inc reas ed primarily d u e to the c ontribu tion from the ac qu is ition in the s trategic c ard s portfolio and higherrevenu e from treas u ry and balanc e s heetmanagementac tivities C anad ian Retailnetinteres tinc ome reflec ted loan and d epos itvolu me growth an ad d itionalc alend ard ay and ad ju s tments mad e to the rec ognition ofc ommis s ions paid to au to d ealers partialy offs etby lowermargins and a c red it markreleas e in the ac qu ired c red itc ard portfolios in the prioryear W holes ale B ankingnetinteres tinc ome d ec reas ed primarily d u e to lowertrad ing-related net interes tinc ome Non-Interest Income Q u arterly c omparis on Q vs Q Reported non-interes tinc ome forthe qu arterwas $ milion an inc reas e of$2 0 0 m ilion or6% c ompared with the s ec ond qu arterlas tyear A d ju s ted non-interes tinc ome forthe qu arterwas $3 437 milion an inc reas e of$2 7 5 m ilion or9% A lls egments experienc ed inc reas es in ad ju s ted noninteres tinc ome W holes ale B anking non-interes tinc ome inc reas ed prim arily d u e to higherad vis ory and c orporate lend ingfees partialy offs etby lower equ ity u nd erwritingfees C anad ian Retailnon-interes tinc ome inc reas ed d u e to wealthas s etgrowth higherfee-bas ed revenu e in pers onaland c ommerc ial banking and ins u ranc e premiu m growth C orporate s egm entnon-interes tinc ome inc reas ed primarily d u e to c ontribu tion from the ac q u is ition in the s trategic c ard s portfolio U S Retailnon-interes tinc ome inc reas ed primarily d u e to the favou rable impac tofforeign c u rrenc y trans lation Q u arterly c omparis on Q vs Q Reported non-interes tinc ome forthe qu arterd ec reas ed $18 4 milion or5% c ompared withthe priorqu arter A d ju s ted non-interes tinc ome forthe qu arter d ec reas ed $8 0 milion or2% The d ec reas e in ad ju s ted non-interes tinc ome was primarily d u e to a d ec reas e in the U S Retail C anad ian Retail and C orporate s egments partialy offs etby an inc reas e in the W holes ale B ankings egment U S Retailnon-interes tinc ome reflec ted a s eas onald ec line in fees weakermarket c ond itions and the u nfavou rable impac tofforeign c u rrenc y trans lation C anad ian Retailnon-interes tinc ome d ec reas ed d u e to lowerins u ranc e revenu es C orporate s egmentnon-interes tinc om e d ec reas ed primarily d u e to lowerrevenu e in the s trategic c ard s portfolio and treas u ry and balanc e s heet managementac tivities W holes ale B ankingnon-interes tinc ome inc reas ed d u e to higherequ ity and d ebtu nd erwritingfees and improved trad ingrevenu e Year-to-d ate c omparis on Q vs Q Reported non-interes tinc ome was $6 942 milion an inc reas e of$7 0 9 milion or11% c ompared withthe s ame period las tyear A d ju s ted non-interes tinc ome for the period was $6 954 milion an inc reas e of$7 38 milion or12% A ls egments experienc ed inc reas es in ad ju s ted non-interes tinc ome C orporate s egmentnoninteres tinc ome inc reas ed primarily d u e to c ontribu tion from the ac qu is ition in the s trategic c ard s portfolio and higherrevenu e from treas u ry and balanc e s heetmanagementac tivities W holes ale B ankingnon-interes tinc ome inc reas ed primarily d u e to higherad vis ory and c orporate lend ingfees U S Retail non-interes tinc ome reflec ted c u s tomerac c ou ntgrowth highertrans ac tion volu mes and the favou rable impac tofforeign c u rrenc y trans lation partialy offs etby weakermarketc ond itions C anad ian Retailnon-interes tinc ome reflec ted higherfee-bas ed revenu e wealth as s etgrowth and higherins u ranc e revenu es S EC O N D Q UA RTER M A N A GEM EN T'S D IS C US S IO N & A N A L YS IS P age 8 TD B A N K GRO UP S EC O N D Q UA RTER REP O RT TO S H A REH O L D ERS P age 8