Supplemental Financial Information For the Fourth Quarter Ended October, 06 For further information, please contact: Investor Relations Department Gillian Manning 46-08-900 www.td.com/investor
Basis of Presentation The supplemental information contained in this package is designed to improve the readers' understanding of the financial performance of TD Bank Group ("TD" or the "Bank"). This information should be used in conjunction with the Bank's fourth quarter 06 Earnings News Release (ENR) and Investor Presentation, the 06 Management's Discussion and Analysis (MD&A), and the Bank's Consolidated Financial Statements for the year ended October, 06. For financial and banking terms, and acronyms used in this package, refer to the "Glossary" and "Acronyms" pages, respectively. How the Bank Reports The Bank prepares its Consolidated Financial Statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), the current generally accepted accounting principles (GAAP), and refers to results prepared in accordance with IFRS as "reported" results. The Bank also utilizes non-gaap financial measures referred to as "adjusted" results to assess each of its businesses and to measure the Bank s overall performance. To arrive at adjusted results, the Bank removes "items of note", net of income taxes, from reported results. The items of note relate to items which management does not believe are indicative of underlying business performance. The Bank believes that adjusted results provide the reader with a better understanding of how management views the Bank s performance. The items of note are disclosed on page of this package. As explained, adjusted results differ from reported results determined in accordance with IFRS. Adjusted results, items of note, and related terms used in this package are not defined terms under IFRS and, therefore, may not be comparable to similar terms used by other issuers. A reconciliation between the Bank s reported and adjusted results is provided in the "How the Bank Reports" section of the Bank's 06 MD&A and fourth quarter 06 ENR. Segmented Information For management reporting purposes, the Bank reports its results under three key business segments: Canadian Retail, which includes the results of the Canadian personal and commercial banking, wealth, and insurance businesses; U.S. Retail, which includes the results of the U.S. retail and commercial banking operations, wealth management services, and the Bank s investment in TD Ameritrade; and Wholesale Banking. The Bank s other activities are grouped into the Corporate segment. The appendix page has been included to facilitate comparability with the reportable segments of the Bank's Canadian peers. Where applicable, the Bank measures and evaluates the performance of each segment based on adjusted results and adjusted return on common equity (ROE). Adjusted ROE is adjusted net income available to common shareholders as a percentage of average common equity. Adjusted ROE is a non-gaap financial measure as it is not a defined term under IFRS and, therefore, may not be comparable to similar terms used by other issuers. The capital allocated to the business segments is based on 9% Common Equity Tier (CET) Capital. The Bank determines its segments based on the view taken by the Chief Executive Officer to regularly evaluate performance and make key operating decisions, and is not necessarily comparable with other financial services companies. Results of each business segment reflect revenue, expenses, and assets generated by the businesses in that segment. Due to the complexity of the Bank, its management reporting model uses various estimates, assumptions, allocations, and risk-based methodologies for funds transfer pricing, inter-segment revenue, income tax rates, capital, indirect expenses, and cost transfers to measure business segment results. Transfer pricing of funds is generally applied at market rates. Inter-segment revenue is negotiated between each business segment and approximates the value provided by the distributing segment. Income tax provision or recovery is generally applied to each segment based on a statutory tax rate and may be adjusted for items and activities unique to each segment. Net income for the operating business segments is presented before any items of note not attributed to the operating segments. Net interest income within Wholesale Banking is calculated on a taxable equivalent basis (TEB), which means that the value of the non-taxable or tax-exempt income, including dividends, is adjusted to its equivalent before-tax value. Using TEB allows the Bank to measure income from all securities and loans consistently and makes for a more meaningful comparison of net interest income with similar institutions. The TEB increase to net interest income and provision for income taxes reflected in Wholesale Banking results is reversed in the Corporate segment. The presentation of the U.S. strategic cards portfolio revenues, provision for credit losses, and expenses in the U.S. Retail segment includes only the Bank's agreed portion of the U.S. strategic cards portfolio, while the Corporate segment includes the retailer program partners' share. There was no impact on the net income of the segments or on the presentation of gross and net results in the Bank's Consolidated Statement of Income. Basel III Reporting The Office of the Superintendent of Financial Institutions Canada (OSFI) has implemented a phased-in approach to the Credit Valuation Adjustment (CVA) component included in credit risk-weighted assets (RWA). The CVA capital charge phase-in is based on a scalar approach whereby a CVA capital charge of 57% applies in 04 for the CET calculation and will increase annually until 00% in 09. Effective the third quarter of 04, a different scalar applies to the CET, Tier, and Total Capital ratios. Therefore, each capital ratio has its own RWA measure. For the third and fourth quarters of 04, the scalars for inclusion of CVA for CET, Tier, and Total Capital RWA were 57%, 65%, and 77%, respectively. For fiscal 05 and 06, the corresponding scalars are 64%, 7%, and 77%, respectively. All three RWA measures are disclosed as part of the RWA disclosures on page 78, as well as the Capital Position disclosures on pages 79 to 80. Effective the third quarter of 06, OSFI approved the Bank i) to use the Advanced Measurement Approach (AMA), and ii) to calculate the majority of the retail portfolio credit RWAs in the U.S. Retail segment using the Advanced Internal Ratings Based (AIRB) approach.
Table of Contents Page Page Highlights Analysis of Change in Non-Controlling Interests in Subsidiaries and Shareholder Value Investment in TD Ameritrade 4 Adjustments for Items of Note, Net of Income Taxes Derivatives Notional 4-44 Segmented Results Summary 4 Credit Exposure 45-46 Canadian Retail Segment 5 Consolidated Balance Sheet Cross-Referenced to Credit Risk Exposures 47 U.S. Retail Segment Canadian Dollars 6 Gross Credit Risk Exposure 48-50 U.S. Dollars 7 Exposures Covered By Credit Risk Mitigation 5 Wholesale Banking Segment 8 Standardized Credit Risk Exposures 5 Corporate Segment 9 Retail Advanced IRB Exposures By Obligor Grade Residential Secured 5-6 Net Interest Income and Margin 0 Retail Advanced IRB Exposures By Obligor Grade Qualifying Non-Interest Income Revolving Retail 6-64 Non-Interest Expenses Retail Advanced IRB Exposures By Obligor Grade Other Retail 65-67 Balance Sheet Non-Retail Advanced IRB Exposures By Obligor Grade Corporate 68-69 Unrealized Gain (Loss) on Banking Book Equities and Assets Under Non-Retail Advanced IRB Exposures By Obligor Grade Sovereign 70-7 Administration and Management 4 Non-Retail Advanced IRB Exposures By Obligor Grade Bank 7-7 Goodwill, Other Intangibles, and Restructuring Charges 5 AIRB Credit Risk Exposures: Undrawn Commitments and EAD on On- and Off-Balance Sheet Loan Securitizations 6 Undrawn Commitments 74 Standardized Charges for Securitization Exposures in the Trading Book 7 AIRB Credit Risk Exposures: Loss Experience 75 Securitization Exposures in the Trading Book 8 AIRB Credit Risk Exposures: Actual and Estimated Parameters 76 Securitization Exposures in the Banking Book 9 Securitization and Resecuritization Exposures in the Banking Book 77 Third-Party Originated Assets Securitized by Bank Sponsored Conduits 0 Risk-Weighted Assets 78 Loans Managed Capital Position Basel III 79-80 Gross Loans and Acceptances by Industry Sector and Geographic Location - 4 Reconciliation with Balance Sheet Under Regulatory Scope of Consolidation 8 Impaired Loans 5 Flow Statement for Regulatory Capital 8 Impaired Loans and Acceptances by Industry Sector and Geographic Location 6-8 Leverage Ratio 8 Allowance for Credit Losses 9 Adjustments for Items of Note, Net of Income Taxes Footnotes 84 Allowance for Credit Losses by Industry Sector and Geographic Location 0 - Glossary 85 Provision for Credit Losses Acronyms 86 Provision for Credit Losses by Industry Sector and Geographic Location 4-6 Acquired Credit-Impaired Loans by Geographic Location 7-9 Appendix Analysis of Change in Equity 40 Canadian Personal and Commercial Banking A Change in Accumulated Other Comprehensive Income, Net of Income Taxes 4
Highlights ($ millions, except as noted) LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Income Statement Net interest income $ 5,07 $ 4,94 $ 4,880 $ 5,047 $ 4,887 $ 4,697 $ 4,580 $ 4,560 $ 4,457 $ 9,9 $ 8,74 $ 7,584 Non-interest income,67,777,79,56,60,09,79,054,995 4,9,70,77 Total revenue 8,745 8,70 8,59 8,60 8,047 8,006 7,759 7,64 7,45 4,5,46 9,96 Provision for (reversal of) credit losses (PCL) Loans 4 554 56 59 648 550 44 96 68 97,57,757,575 Debt securities classified as loans 5 (9) () () 4 (8) (6) Acquired credit-impaired loans 6 (7) (8) (9) (7) () (7) (0) (7) (4) () (6) () Total provision for (reversal of) credit losses 7 548 556 584 64 509 47 75 6 7,0,68,557 Insurance claims and related expenses 8 585 69 50 655 67 600 564 699 70,46,500,8 Non-interest expenses 9 4,848 4,640 4,76 4,65 4,9 4,9 4,705 4,65 4, 8,877 8,07 6,496 Income (loss) before provision for income taxes 0,764,8,409,660,990,677,5,88,00 0,646 9,70 9,075 Provision for (recovery of) income taxes 555 576 466 546 59 50 44 48 70,4,5,5 Income before equity in net income of an investment in TD Ameritrade,09,7,94,4,7,75,77,970,660 8,50 7,647 7,56 Equity in net income of an investment in TD Ameritrade 94 09 09 08 9 88 90 86 4 77 0 Net income reported 4,0,58,05,,89,66,859,060,746 8,96 8,04 7,88 Adjustment for items of note, net of income taxes 5 44 58 0 4 8 9 0 6 6 56 70 44 Net income adjusted 6,47,46,8,47,77,85,69,,86 9,9 8,754 8,7 Preferred dividends 7 4 6 7 5 6 5 4 4 4 99 4 Net income available to common shareholders and non-controlling interests in subsidiaries adjusted 8 $,04 $,80 $,45 $, $,5 $,60 $,45 $,099 $,80 $ 9,5 $ 8,655 $ 7,984 Attributable to: Common shareholders adjusted 9 $,75 $,5 $,7 $,9 $, $, $,7 $,07 $,80 $ 9,06 $ 8,54 $ 7,877 Non-controlling interests adjusted 0 9 9 8 9 9 8 8 7 7 5 07 Earnings per Share (EPS) ($) and Weighted-Average Number of Common Shares Outstanding (millions) Basic earnings: Reported $.0 $.4 $.07 $.7 $ 0.96 $.0 $ 0.98 $.09 $ 0.9 $ 4.68 $ 4. $ 4.5 Adjusted..7.0.8.5..5. 0.98 4.88 4.6 4.8 Diluted earnings: Reported.0.4.07.7 0.96.9 0.97.09 0.9 4.67 4. 4.4 Adjusted 4..7.0.8.4.0.4. 0.98 4.87 4.6 4.7 Weighted-average number of common shares outstanding Basic 5,855.4,85.4,850.9,854.,85.,85.,848.,844.,84.0,85.4,849.,89. Diluted 6,858.8,856.6,85.9,857.5,857.,855.7,85.4,849.7,848.,856.8,854.,845. Balance Sheet ($ billions) Total assets 7 $,77.0 $,8.4 $,4.8 $,7.6 $,04.4 $,099. $,0.0 $,080. $ 960.5 $,77.0 $,04.4 $ 960.5 Total equity 8 74. 7. 67.8 7.7 67.0 66.0 6.6 6.6 56. 74. 67.0 56. Risk Metrics ($ billions, except as noted) Common Equity Tier Capital risk-weighted assets, 9 $ 405.8 $ 88. $ 8.6 $ 99.6 $ 8.4 $ 69.5 $ 4.6 $ 55.6 $ 8.4 $ 405.8 $ 8.4 $ 8.4 Common Equity Tier Capital 0 4. 40.4 8.9 9.6 8.0 7. 4..6.0 4. 8.0.0 Common Equity Tier Capital ratio, 0.4 % 0.4 % 0. % 9.9 % 9.9 % 0. % 9.9 % 9.5 % 9.4 % 0.4 % 9.9 % 9.4 % Tier Capital $ 49.4 $ 46.4 $ 45.0 $ 45.7 $ 4.4 $ 4.6 $ 9.7 $ 9. $ 6.0 $ 49.4 $ 4.4 $ 6.0 Tier Capital ratio,. %.9 %.7 %.4 %. %.5 %.5 %.0 % 0.9 %. %. % 0.9 % Total Capital ratio, 4 5. 4.6 4.4.7 4.0.9.7.0.4 5. 4.0.4 Leverage ratio 4 5 4.0.8.8.7.7.7.7.5 n/a 4.0.7 n/a Liquidity coverage ratio (LCR) 5 6 0 8 4 6 n/a n/a n/a n/a n/a After-tax impact of % increase in interest rates on: Economic value of shareholders' equity ($ millions) 6 7 $ (4) $ (9) $ (64) $ (5) $ (4) $ (5) $ (89) $ (9) $ (68) $ (4) $ (4) $ (68) Net interest income ($ millions) 7 8 87 7 6 70 40 75 80 46 87 40 Net impaired loans personal, business, and government ($ millions) 8 9,785,786,908,4,660,5,8,48,44,785,660,44 Net impaired loans personal, business, and government as a % of net loans and acceptances 8 40 0.46 % 0.48 % 0.5 % 0.54 % 0.48 % 0.47 % 0.46 % 0.47 % 0.46 % 0.46 % 0.48 % 0.46 % Provision for credit losses as a % of net average loans and acceptances 8 4 0.7 0.9 0.4 0.45 0.40 0. 0. 0.9 0. 0.4 0.4 0.4 Rating of senior debt: Moody's 4 Aa Aa Aa Aa Aa Aa Aa Aa Aa Aa Aa Aa Standard and Poor's 4 AA- AA- AA- AA- AA- AA- AA- AA- AA- AA- AA- AA- 4 5 6 7 8 Basic EPS is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the period. For the calculation of diluted EPS, adjustments are made to the net income attributable to common shareholders to include the effect of dilutive securities. As a result, the sum of the quarterly basic and diluted EPS figures may not equal the year-to-date EPS. Amounts are calculated in accordance with the Basel III regulatory framework, and are presented based on the "all-in" methodology. The CVA capital charge is being phased in until the first quarter of 09. For the fourth quarter of 04, the scalars for inclusion of CVA for CET, Tier, and Total Capital RWA were 57%, 65%, and 77%, respectively. For fiscal 05 and 06, the corresponding scalars are 64%, 7%, and 77%, respectively. The leverage ratio is effective starting the first quarter of 05 and is calculated as Tier Capital, based on the "all-in" methodology, divided by leverage exposures. Refer to page 8 for further details. The LCR percentage is calculated as a simple average of the three month-ends in the quarter. This is also referred to as economic value at risk (EVaR), and the amounts represent the difference between the change in present value of the Bank's asset portfolio and the change in present value of the Bank's liability portfolio, including off-balance sheet instruments, resulting from an instantaneous change in interest rates. Amounts represent the -month net interest exposure to an instantaneous and sustained shift in interest rates. Excludes acquired credit-impaired (ACI) loans and debt securities classified as loans. For further details on ACI loans, refer to pages 7 to 9.
Shareholder Value ($ millions, except as noted) LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Business Performance Net income available to common shareholders and non-controlling interests in subsidiaries reported $,60 $, $,05 $,98 $,8 $,4 $,85 $,06 $,74 $ 8,795 $ 7,95 $ 7,740 Average common equity 66,769 64,595 64,56 64,64 6,57 58,89 57,744 54,580 5,5 65, 58,78 49,495 Return on common equity reported. % 4. %.5 %. %.4 % 4.9 %.8 % 4.6 %. %. %.4 % 5.4 % Return on common equity adjusted 4.6 4.5 4.0.5.5 5.0 5.0 5. 4.0.9 4.7 5.9 Return on Common Equity Tier Capital risk-weighted assets reported 5.4.6.06..88.46...07..0.45 Return on Common Equity Tier Capital risk-weighted assets adjusted 6.8.4.0..4.48.48.40...40.5 Efficiency ratio reported 7 55.4 5. 57. 54.0 6.0 5.6 60.6 54.7 58. 55.0 57.5 55. Efficiency ratio adjusted 8 54.8 5.6 54.8 5.5 55. 5.4 54.8 5.8 56. 5.9 54. 5.4 Effective tax rate Reported 9 0. 0.5 9. 0.5.0 8.8 6. 7.5 8. 0. 6.6 6.7 Adjusted (TEB) 0.7.9.0.9 0.0.6..4.6.4.5. Net interest margin as a % of average earning assets.96.98.05.06.0.0.07.0..0.05.8 Average number of full-time equivalent staff 8,975 8,978 80,05 79,97 80,554 8,5 8,85 8,8 8,48 8, 8,48 8,7 Common Share Performance Closing market price ($) $ 60.86 $ 56.89 $ 55.85 $ 5.5 $ 5.68 $ 5.77 $ 55.70 $ 50.60 $ 55.47 $ 60.86 $ 5.68 $ 55.47 Book value per common share ($) 4 6.7 5.68.89 5.99.8.5 0.90.60 8.45 6.7.8 8.45 Closing market price to book value 5.66.59.65.48.59.59.80.60.95.66.59.95 Price-earnings ratio Reported 6.0.8.7.4.8.7.7..4.0.8.4 Adjusted 7.5.9.8.4.7.9.7.7.0.5.7.0 Total shareholder return on common shareholders' investment 8 7.9 %. % 4. % 9. % 0.4 % (4.) % 9.4 % 8.8 % 0. % 7.9 % 0.4 % 0. % Number of common shares outstanding (millions) 9,857.,854.8,85.5,850.,855.,85.6,85.6,845.5,844.6,857.,855.,844.6 Total market capitalization ($ billions) 0 $.0 $ 05.5 $ 0.5 $ 98. $ 99.6 $ 97.8 $ 0. $ 9.4 $ 0. $.0 $ 99.6 $ 0. Dividend Performance Dividend per common share ($) $ 0.55 $ 0.55 $ 0.55 $ 0.5 $ 0.5 $ 0.5 $ 0.5 $ 0.47 $ 0.47 $.6 $.00 $.84 Dividend yield.7 %.8 % 4.0 %.9 %.9 %.7 %.6 %.5 %.4 %.9 %.8 %.5 % Common dividend payout ratio Reported 45.7 44.5 5. 4.6 5.0 4.7 5. 4. 5. 46. 47.4 44. Adjusted 4 44.8 4.4 45.9 4. 44.5 4. 44.5 4.8 48.0 44. 4. 4.0 Amounts are calculated in accordance with the Basel III regulatory framework, and are presented based on the "all-in" methodology. Return is calculated based on share price movement and dividends reinvested over a trailing one year period.
Adjustments for Items of Note, Net of Income Taxes LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Increase (Decrease) in Net Income Due to Items of Note ($ millions) Amortization of intangibles (Footnote ) $ 60 $ 58 $ 6 $ 65 $ 65 $ 6 $ 65 $ 6 $ 6 $ 46 $ 55 $ 46 Fair value of derivatives hedging the reclassified available-for-sale securities portfolio (Footnote ) (6) 5 (4) () (9) (5) (6) (55) (4) Impairment of goodwill, non-financial assets, and other charges (Footnote 4) 6 6 Restructuring charges (Footnote 5) 4 4 8 47 Charge related to the acquisition in U.S. strategic cards portfolio and related integration costs (Footnote 6) 5 5 5 Litigation and litigation-related charge(s)/reserve(s) (Footnote 7) 6 (4) 8 Integration charges and direct transaction costs relating to the acquisition of the credit card portfolio of MBNA Canada (Footnote 8) 7 54 5 Set-up, conversion and other one-time costs related to affinity relationship with Aimia and acquisition of Aeroplan Visa credit card accounts (Footnote 9) 8 Impact of Alberta flood on the loan portfolio (Footnote 0) 9 (9) Gain on sale of TD Waterhouse Institutional Services (Footnote ) 0 (96) Total $ 44 $ 58 $ 0 $ 4 $ 8 $ 9 $ 0 $ 6 $ 6 $ 56 $ 70 $ 44 Increase (Decrease) in Earnings per Share Due to Items of Note ($) (Footnote ) Amortization of intangibles (Footnote ) $ 0.0 $ 0.0 $ 0.04 $ 0.0 $ 0.0 $ 0.0 $ 0.04 $ 0.0 $ 0.04 $ 0.4 $ 0.4 $ 0. Fair value of derivatives hedging the reclassified available-for-sale securities portfolio (Footnote ) (0.0) 0.0 (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) Impairment of goodwill, non-financial assets, and other charges (Footnote 4) 4 0.06 0.06 Restructuring charges (Footnote 5) 5 0. 0. 0.5 Charge related to the acquisition in U.S. strategic cards portfolio and related integration costs (Footnote 6) 6 0.0 0.0 Litigation and litigation-related charge(s)/reserve(s) (Footnote 7) 7 (0.0) 0.0 0.0 Integration charges and direct transaction costs relating to the acquisition of the credit card portfolio of MBNA Canada (Footnote 8) 8 0.0 0.07 Set-up, conversion and other one-time costs related to affinity relationship with Aimia and acquisition of Aeroplan Visa credit card accounts (Footnote 9) 9 0.07 Impact of Alberta flood on the loan portfolio (Footnote 0) 0 (0.0) Gain on sale of TD Waterhouse Institutional Services (Footnote ) (0.0) Total $ 0.0 $ 0.0 $ 0. $ 0.0 $ 0.8 $ 0.0 $ 0.7 $ 0.0 $ 0.07 $ 0.0 $ 0.40 $ 0. For detailed footnotes to the items of note, refer to page 84.
Segmented Results Summary ($ millions, except as noted) LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Net Income (loss) Adjusted Canadian Retail $,50 $,509 $,464 $,5 $,496 $,557 $,46 $,449 $,58 $ 5,988 $ 5,98 $ 5,490 U.S. Retail 70 788 79 75 646 650 66 65 509,959,547,0 Total Retail,0,97,8,64,4,07,06,074,867 8,947 8,485 7,600 Wholesale Banking 4 8 0 9 6 96 9 46 9 60 90 87 8 Corporate 5 (94) (8) (0) (78) (6) (6) (9) (4) (65) (575) (604) (86) Total Bank 6 $,47 $,46 $,8 $,47 $,77 $,85 $,69 $, $,86 $ 9,9 $ 8,754 $ 8,7 Return on Common Equity Adjusted Canadian Retail 7 4.5 % 4.9 % 4.7 % 4.6 % 4. % 44.6 % 4. % 4.9 % 4.5 % 4.9 % 4.8 % 4.7 % U.S. Retail 8 8. 9.5 8.7 8.7 7.8 8. 8. 8.5 7.6 8.8 8. 8.4 Wholesale Banking 9 6. 0.4 4.8 0.6.0 7. 7.7.0.0 5.5 5. 7.5 Total Bank 0.6 4.5 4.0.5.5 5.0 5.0 5. 4.0.9 4.7 5.9 Percentage of Adjusted Net Income Mix Total Retail 90 % 88 % 9 % 9 % 9 % 90 % 89 % 9 % 9 % 9 % 9 % 90 % Wholesale Banking 0 9 7 8 0 8 8 9 9 0 Total Bank 00 % 00 % 00 % 00 % 00 % 00 % 00 % 00 % 00 % 00 % 00 % 00 % Geographic Contribution to Total Revenue 4 Canada 4 60 % 6 % 54 % 6 % 65 % 64 % 59 % 69 % 66 % 59 % 64 % 66 % United States 5 6 5 6 6 5 0 8 6 8 Other International 6 4 4 0 0 6 5 4 6 Total Bank 7 00 % 00 % 00 % 00 % 00 % 00 % 00 % 00 % 00 % 00 % 00 % 00 % 4 Capital allocated to the business segments was based on 8% CET Capital in fiscal 04 and 9% in fiscal 05 and 06. CVA is being included in accordance with the OSFI guidance. Percentages exclude the Corporate segment results. TEB amounts are not included. 4
Canadian Retail Segment RESULTS OF OPERATIONS ($ millions, except as noted) LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Net interest income $,55 $,59 $,48 $,49 $,497 $,480 $,69 $,45 $,45 $ 9,979 $ 9,78 $ 9,58 Non-interest income,599,6,469,540,500,5,409,464,485 0,0 9,904 9,6 Total revenue 5,50 5,4 4,887 5,0 4,997 5,0 4,778 4,899 4,90 0,09 9,685 9,6 Provision for (reversal of) credit losses 4 6 58 6 8 7 9 90 50,0 887 946 Insurance claims and other related expenses 5 585 69 50 655 67 600 564 699 70,46,500,8 Non-interest expenses 6,50,,095,079,4,04,075,085,4 8,557 8,407 8,48 Income (loss) before income taxes 7,05,058,000,069,996,070,900,95,76 8,79 7,89 6,944 Provision for (recovery of) income taxes 8 550 549 56 556 500 5 464 476 4,9,95,70 Net income reported 9,50,509,464,5,496,557,46,449,04 5,988 5,98 5,4 Adjustments for items of note, net of income taxes 0 54 56 Net income adjusted $,50 $,509 $,464 $,5 $,496 $,557 $,46 $,449 $,58 $ 5,988 $ 5,98 $ 5,490 Average common equity ($ billions) $ 4.4 $ 4. $ 4. $ 4. $ 4.0 $.8 $.9 $.7 $.7 $ 4. $.9 $.6 Return on common equity reported 4.5 % 4.9 % 4.7 % 4.6 % 4. % 44.6 % 4. % 4.9 % 40.8 % 4.9 % 4.8 % 4.7 % Return on common equity adjusted 4 4.5 4.9 4.7 4.6 4. 44.6 4. 4.9 4.5 4.9 4.8 4.7 Key Performance Indicators ($ billions, except as noted) Common Equity Tier Capital risk-weighted assets 5 $ 99 $ 99 $ 0 $ 08 $ 06 $ 07 $ 04 $ 0 $ 00 $ 99 $ 06 $ 00 Average loans personal Residential mortgages 6 88.0 85.6 85. 85. 8. 77. 75.0 75. 7.9 86.0 77.5 68. Consumer instalment and other personal Home Equity Line of Credit (HELOC) 7 64. 6.8 6. 6.0 60.8 60. 59.7 59. 59. 6. 60.0 59.9 Indirect auto 8 0.6 9.9 9. 9.0 8.5 7.7 7.0 6.6 5.9 9.7 7.4 5.0 Other 9 6.0 6. 5.8 6. 6. 6.7 6. 6. 6.0 6.0 6.4 5.5 Credit card 0 9. 9. 8.7 9. 9.0 8.7 8. 8.9 9. 9.0 8.7 8.7 Total average loans personal 07.8 0.6 00. 00.6 96.6 90.7 86. 86. 8. 0.0 90.0 77. Average loans and acceptances business 6.7 6.6 60.4 58. 57.0 55.9 54.5 5.8 5. 60.8 55.0 50.5 Average deposits Personal 76. 7. 68.9 67. 65. 6.4 59. 57.8 55.9 7. 60.9 5.9 Business 4 95.6 90.6 85.0 85. 84.4 84.0 8.4 8.6 80.6 89. 8. 78.0 Wealth 5.5. 0.5 9.4 8.9 8.5 8.5 7.7 7.5 0.9 8.4 7. Margin on average earning assets including securitized assets 6.78 %.79 %.77 %.80 %.84 %.88 %.89 %.88 %.9 %.78 %.87 %.95 % Assets under administration 7 $ 45 $ 7 $ $ 08 $ 0 $ 4 $ $ 0 $ 9 $ 45 $ 0 $ 9 Assets under management 8 68 65 54 47 45 49 44 4 7 68 45 7 Gross originated insurance premiums ($ millions) 9,0,09 97 870,046,04 977 86,06,965,988,89 Efficiency ratio reported 0 4.7 % 4.5 % 4.9 % 4. % 4.9 % 4.0 % 4.4 % 4.6 % 45. % 4. % 4.7 % 44.0 % Efficiency ratio adjusted 4.7 4.5 4.9 4. 4.9 4.0 4.4 4.6 4.7 4. 4.7 4. Non-interest expenses adjusted ($ millions) $,50 $, $,095 $,079 $,4 $,04 $,075 $,085 $,5 $ 8,557 $ 8,407 $ 8,09 Number of Canadian retail branches at period end,56,5,5,57,65,66,65,64,65,56,65,65 Average number of full-time equivalent staff 4 9,49 8,85 7,987 8,0 8,78 9,80 9, 9,60 9,67 8,575 9,8 9,89 Items of note relate primarily to integration charges and direct transaction costs relating to the acquisition of the credit card portfolio of MBNA Canada and set-up, conversion, and other one-time costs related to affinity relationship with Aimia and acquisition of Aeroplan Visa credit card accounts. Refer to footnotes 8 and 9, respectively, on page 84. Capital allocated to the business segments was based on 8% CET Capital in fiscal 04 and 9% in fiscal 05 and 06. Amounts are calculated in accordance with the Basel III regulatory framework, and are presented based on the "all-in" methodology. 5
U.S. Retail Segment Canadian Dollars RESULTS OF OPERATIONS ($ millions, except as noted) LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Net interest income $,8 $,755 $,77 $,769 $,658 $,57 $,56 $,40 $,0 $ 7,09 $ 6, $ 5,79 Non-interest income 59 59 55 60 49 576 59 5 469,66,098,986 Total revenue,44,46,90,99,50,0,05,94,789 9,459 8,9 7,65 Provision for (reversal of) credit losses Loans 4 99 75 70 7 5 59 77 609 454 Debt securities classified as loans 5 (9) () () 4 (8) (6) Acquired credit-impaired loans 6 (7) (8) (9) (7) () (7) (0) (7) (4) () (6) () Total provision for (reversal of) credit losses 7 9 68 6 74 5 0 07 86 744 55 46 Non-interest expenses 8,499,7,46,406,44,9,9,78,76 5,69 5,88 4,5 Income (loss) before income taxes 9 7 806 7 77 54 7 605 656 57,0,506,7 Provision for (recovery of) income taxes 0 4 4 0 0 48 9 96 0 498 94 4 U.S. Retail Bank net income reported 608 66 6 64 486 58 509 55 46,54,,805 Adjustments for items of note, net of income taxes 5 (4) 59 U.S. Retail Bank net income adjusted 608 66 6 64 57 558 54 55 46,54,7,805 Equity in net income of an investment in TD Ameritrade 4 4 9 5 08 09 09 9 85 90 8 45 76 05 Net income adjusted 5 70 788 79 75 646 650 66 65 509,959,547,0 Net income reported 6 $ 70 $ 788 $ 79 $ 75 $ 595 $ 674 $ 594 $ 65 $ 509 $,959 $,488 $,0 Average common equity ($ billions) 7 $.7 $.0 $.6 $ 4.4 $. $. $.0 $ 9. $ 6.4 $.7 $. $ 5. Return on common equity reported 5 8 8. % 9.5 % 8.7 % 8.7 % 7. % 8.6 % 7.9 % 8.5 % 7.6 % 8.8 % 8.0 % 8.4 % Return on common equity adjusted 5 9 8. 9.5 8.7 8.7 7.8 8. 8. 8.5 7.6 8.8 8. 8.4 Key Performance Indicators ($ billions, except as noted) Common Equity Tier Capital risk-weighted assets 6 0 $ $ $ 00 $ 6 $ 00 $ 90 $ 7 $ 80 $ 58 $ $ 00 $ 58 Average loans personal Residential mortgages 7. 6.8 7. 8.5 7.6 6. 6.4 4.6. 7.5 6..7 Consumer instalment and other personal HELOC.0.0.4 4..5.9.0..6.4.9.4 Indirect auto 7.5 6.6 6. 6.7 4.6..5 9.6 8. 6.8.0 7.5 Other 4 0.7 0.7 0.7 0.8 0.7 0.7 0.7 0.6 0.6 0.7 0.7 0.5 Credit card 5..7.9.8 0.6 8.9 8.7 8.5 7.6. 9. 7.5 Total average loans personal 6 8.7 79.8 80.6 8.9 77.0 7.0 70. 65.5 6. 8.6 70.9 59.6 Average loans and acceptances business 7 0.9 98.8 97.4 99.8 89.6 8.6 78. 70.6 64. 99.4 80.0 60. Average debt securities classified as loans 8.4.5.7.8.9.9....6.0. Average deposits Personal 9 04.6 0.4 0. 0.7 96.5 90.8 89.9 80.6 75. 0. 89.4 7.0 Business 7 0 85. 80. 8. 84.8 80. 7.0 7.8 66.6 6.0 8. 7.7 60.4 TD Ameritrade insured deposit accounts 6.8 08.9.4.9 04.5 94. 9. 87.4 8.4. 94.8 79.8 Margin on average earning assets 8. %.4 %. %. %.08 %.05 %.4 %.0 %.5 %. %. %.0 % Assets under administration $ 8 $ 6 $ 5 $ 7 $ 6 $ 5 $ $ 4 $ $ 8 $ 6 $ Assets under management 4 85 9 90 00 0 97 88 77 67 85 0 67 Efficiency ratio reported 5 6.8 % 58.5 % 6.8 % 58.6 % 67. % 58.9 % 65. % 60.7 % 65.7 % 60. % 6.0 % 6.0 % Efficiency ratio adjusted 6 6.8 58.5 6.8 58.6 64.5 60.8 6.8 60.7 65.7 60. 6. 6.0 Total revenue - adjusted ($ millions) 7 $,44 $,46 $,90 $,99 $, $,0 $,05 $,94 $,789 $ 9,459 $ 8,0 $ 7,65 Non-interest expenses adjusted ($ millions) 8,499,7,46,406,4,78,77,78,76 5,69 5,66 4,5 Number of U.S. retail stores as at period end 9 9,78,67,65,64,98,05,0,0,8,78,98,8 Average number of full-time equivalent staff 40 6,0 5,998 5,599 5,6 5,50 5,546 5,775 6,0 6,6 5,7 5,647 6,074 Includes all Federal Deposit Insurance Corporation (FDIC) covered loans and other ACI loans. Excludes TD Ameritrade. Items of note relate to the charge related to the acquisition in U.S. strategic cards portfolio and related integration costs, and litigation and litigation-related charge(s)/reserve(s). Refer to footnotes 6 and 7, respectively, on page 84. 4 Includes the net impact of internal management adjustments which are reclassified to other reporting lines in the Corporate segment. 5 Capital allocated to the business segments was based on 8% CET Capital in fiscal 04 and 9% in fiscal 05 and 06. 6 Amounts are calculated in accordance with the Basel III regulatory framework, and are presented based on the "all-in" methodology. 7 Effective the first quarter of 06, excludes the impact of intercompany deposits. 8 The margin on average earning assets a) includes the value of tax-exempt interest income, adjusted to its equivalent before-tax value, and b) excludes the impact related to the TD Ameritrade insured deposit accounts (IDA). Effective the second quarter of 05, this ratio a) excludes the impact of cash collateral deposited by affiliates with the U.S. banks, which has been eliminated at the U.S. Retail segment level, and b) the allocation to the IDA has been changed to reflect the Basel III liquidity rules. 9 Includes full service retail banking stores. 6
U.S. Retail Segment U.S. Dollars RESULTS OF OPERATIONS (US$ millions, except as noted) LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Net interest income $,96 $,54 $,08 $,88 $,60 $,4 $,5 $,6 $,9 $ 5,46 $ 4,95 $ 4,749 Non-interest income 45 456 47 459 7 46 45 48 45,784,689,8 Total revenue,848,80,75,747,6,687,60,664,68 7,0 6,64 6,57 Provision for (reversal of) credit losses Loans 4 5 5 9 64 64 7 98 99 0 579 488 46 Debt securities classified as loans 5 () (9) (0) 4 (9) (4) Acquired credit-impaired loans 6 (6) (6) (7) (5) (9) (6) (8) (6) () (4) (9) () Total provision for (reversal of) credit losses 7 46 0 60 8 94 78 559 40 40 Non-interest expenses 8,4,058,067,0,096 994,065,00,06 4,89 4,65 4,6 Income (loss) before income taxes 9 560 6 55 565 404 57 484 560 477,8,09,05 Provision for (recovery of) income taxes 0 95 0 76 95 6 0 77 0 9 76 8 78 U.S. Retail Bank net income reported 465 5 459 470 68 469 407 457 85,906,70,657 Adjustments for items of note, net of income taxes 9 (9) 6 46 U.S. Retail Bank adjusted 465 5 459 470 407 450 4 457 85,906,747,657 Equity in net income of an investment in TD Ameritrade 4 4 7 97 78 8 84 74 69 79 77 8 06 8 Net income adjusted 5 56 609 57 55 49 54 50 56 46,4,05,98 Net income reported 6 $ 56 $ 609 $ 57 $ 55 $ 45 $ 54 $ 476 $ 56 $ 46 $,4 $,007 $,98 Average common equity (US$ billions) 7 $ 5.7 $ 5.4 $ 5. $ 5. $ 5. $ 4.9 $ 4.9 $ 5.0 $.9 $ 5.4 $ 5.0 $.0 Key Performance Indicators (US$ billions, except as noted) Common Equity Tier Capital risk-weighted assets 5 8 $ 66 $ 6 $ 60 $ 54 $ 5 $ 45 $ 44 $ 4 $ 40 $ 66 $ 5 $ 40 Average loans personal Residential mortgages 9 0.7 0.6 0.6 0.7 0.9.0...0 0.7.0 0.8 Consumer instalment and other personal HELOC 0 9.9 0.0 0. 0. 0. 0.4 0.4 0.4 0.5 0. 0.4 0.4 Indirect auto.0 0.5 9.8 9.4 8.7 7.9 7. 6.8 6.6 0. 7.7 6. Other 0.6 0.6 0.6 0.5 0.6 0.5 0.5 0.6 0.5 0.6 0.6 0.5 Credit card 0. 9.8 9.7 0. 8.0 7. 7.0 7. 6.9 9.9 7. 6.9 Total average loans personal 4 6. 6.5 60.8 6.0 58.5 56.9 56. 56. 55.5 6.5 57.0 54.7 Average loans and acceptances business 5 77.7 76. 7. 7.6 68. 65.4 6.6 60.5 58.0 74.9 64. 55. Average debt securities classified as loans 6.....4.5.6.8.9..6. Average deposits Personal 7 79.7 79.0 77.8 74.7 7. 7.8 7.0 69. 68.0 77.8 7.8 66.9 Business 6 8 64.9 6.8 6.0 6.7 6.0 57.7 57.5 57. 57.0 6.6 58. 55.4 TD Ameritrade insured deposit accounts 9 89. 84.0 8.9 8.4 79.4 75.6 74.6 74.9 74.6 84.6 76. 7. Total revenue adjusted (US$ millions) 0,848,80,75,747,689,687,60,664,68 7,0 6,670 6,57 Non-interest expenses adjusted (US$ millions),4,058,067,0,089,04,0,00,06 4,89 4,46 4,6 4 5 6 Includes all FDIC covered loans and other ACI loans. Excludes TD Ameritrade. Items of note relate to the charge related to the acquisition in U.S. strategic cards portfolio and related integration costs, and litigation and litigation-related charge(s)/reserve(s). Refer to footnotes 6 and 7, respectively, on page 84. Includes the net impact of internal management adjustments which are reclassified to other reporting lines in the Corporate segment. Amounts are calculated in accordance with the Basel III regulatory framework, and are presented based on the "all-in" methodology. Effective the first quarter of 06, excludes the impact of intercompany deposits. 7
Wholesale Banking Segment RESULTS OF OPERATIONS ($ millions, except as noted) LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Net interest income (TEB) $ 96 $ 90 $ 440 $ 459 $ 550 $ 564 $ 584 $ 597 $ 57 $,685 $,95 $,0 Non-interest income 45 469 6 05 6 0 00 4 67,45 6 470 Total revenue 74 859 766 664 666 765 784 7 604,00,96,680 Provision for (reversal of) credit losses 4 50 4 () 74 8 Non-interest expenses 5 4 47 44 49 90 4 447 4 8,79,70,589 Income (loss) before income taxes 6 08 4 75 6 7 76 4,7,07,080 Provision for (recovery of) income taxes (TEB) 7 70 09 56 6 66 9 9 84 64 97 4 67 Net income (loss) reported 8 8 0 9 6 96 9 46 9 60 90 87 8 Net income (loss) adjusted 9 $ 8 $ 0 $ 9 $ 6 $ 96 $ 9 $ 46 $ 9 $ 60 $ 90 $ 87 $ 8 Average common equity ($ billions) 0 $ 5.9 $ 5.9 $ 6.0 $ 6. $ 6.0 $ 5.5 $ 5.7 $ 5.9 $ 4.9 $ 6.0 $ 5.8 $ 4.7 Return on common equity, 6. % 0.4 % 4.8 % 0.6 %.0 % 7. % 7.7 %.0 %.0 % 5.5 % 5. % 7.5 % Key Performance Indicators ($ billions, except as noted) Common Equity Tier Capital risk-weighted assets 4 $ 67 $ 67 $ 6 $ 65 $ 65 $ 6 $ 57 $ 64 $ 6 $ 67 $ 65 $ 6 Gross drawn 5 9 8 6 6 4 4 6 Efficiency ratio 4 58. % 50.9 % 57.6 % 64.6 % 58.6 % 56. % 57.0 % 60.9 % 6. % 57.4 % 58. % 59. % Average number of full-time equivalent staff 5,89,808,649,7,74,76,77,746,77,766,748,654 Trading-Related Income (Loss) (TEB) 6 Interest rate and credit 6 $ 59 $ 9 $ 7 $ 7 $ $ 90 $ 08 $ 90 $ 79 $ 74 $ 600 $ 59 Foreign exchange 7 56 49 6 54 09 04 0 4 0 6 467 85 Equity and other 8 65 59 94 55 95 96 56 6 7 478 46 Total trading-related income (loss) 9 $ 80 $ 447 $ 49 $ 80 $ 6 $ 45 $ 44 $ 80 $ 96 $,66 $,545 $,94 4 5 6 Includes the cost of credit protection incurred in hedging the lending portfolio. Capital allocated to the business segments was based on 8% CET Capital in fiscal 04 and 9% in fiscal 05 and 06. CVA is included in accordance with OSFI guidance. Amounts are calculated in accordance with the Basel III regulatory framework and are presented based on the "all-in" methodology. Includes gross loans and bankers' acceptances, excluding letters of credit, cash collateral, credit default swaps (CDS) and reserves for the corporate lending business. Includes trading-related income reported in net interest income and non-interest income. 8
Corporate Segment RESULTS OF OPERATIONS ($ millions) LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Net interest income (loss), $ 9 $ 60 $ 85 $ 8 $ 8 $ 6 $ $ 98 $ 65 $,66 $ 57 $ 657 Non-interest income (loss) 7 95 88 5 5 (5) (6) 45 69 98 Total revenue 40 55 6 56 4 7 6 6 9,67 586 955 Provision for (reversal of) credit losses, 4 9 9 0 8 00 45 5 6 6 50 4 64 Non-interest expenses 5 667 698 784 79 96 58 854 469 550,888,777,957 Income (loss) before income taxes and equity in net income of an investment in TD Ameritrade 6 (8) (46) (578) (404) (80) (46) (77) (469) (447) (,77) (,44) (,66) Provision for (recovery of) income taxes 7 (89) (5) (7) (0) (55) () (07) (6) (7) (84) (,58) (877) Equity in net income of an investment in TD Ameritrade 8 (4) () () () 5 Net income (loss) reported 9 (8) (4) (50) (0) (448) (04) (47) (06) (7) (9) (,75) (74) Adjustments for items of note, net of income taxes 4 0 44 58 0 4 87 4 78 6 6 56 67 () Net income (loss) adjusted $ (94) $ (8) $ (0) $ (78) $ (6) $ (6) $ (9) $ (4) $ (65) $ (575) $ (604) $ (86) Decomposition of Adjustments for Items of Note, Net of Income Taxes 4 Amortization of intangibles (Footnote ) $ 60 $ 58 $ 6 $ 65 $ 65 $ 6 $ 65 $ 6 $ 6 $ 46 $ 55 $ 46 Fair value of derivatives hedging the reclassified available-for-sale securities portfolio (Footnote ) (6) 5 (4) () (9) (5) (6) (55) (4) Impairment of goodwill, non-financial assets, and other charges (Footnote 4) 4 6 6 Restructuring charges (Footnote 5) 5 4 8 47 Impact of Alberta flood on the loan portfolio (Footnote 0) 6 (9) Gain on sale of TD Waterhouse Institutional Services (Footnote ) 7 (96) Total adjustments for items of note 8 $ 44 $ 58 $ 0 $ 4 $ 87 $ 4 $ 78 $ 6 $ 6 $ 56 $ 67 $ () Decomposition of Items included in Net Income (Loss) Adjusted Net corporate expenses 9 $ (5) $ () $ (96) $ (0) $ (9) $ (9) $ (77) $ (7) $ () $ (86) $ (74) $ (77) Other 0 9 0 48 (4) 4 0 4 46 8 4 Non-controlling interests 9 9 8 9 9 8 8 7 7 5 07 Net income (loss) adjusted $ (94) $ (8) $ (0) $ (78) $ (6) $ (6) $ (9) $ (4) $ (65) $ (575) $ (604) $ (86) Average number of full-time equivalent staff,80,0,790,688,78,890,995,84,588,60,870,00 4 Includes the elimination of TEB adjustments reported in Wholesale Banking results. Business segment results are presented excluding the impact of asset securitization programs, which are reclassified in the Corporate segment. Includes incurred but not identified PCL related to the products in the Canadian Retail and Wholesale Banking segments. For detailed footnotes to the items of note, refer to page 84. 9
Net Interest Income and Margin ($ millions, except as noted) LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Interest Income Loans $ 5,589 $ 5,4 $ 5,97 $ 5,4 $ 5,59 $ 5,44 $ 4,94 $ 5,075 $ 4,98 $,75 $ 0,9 $ 9,76 Securities,9,00,5,50,6,086,090,057,05 4,584 4,69 4,086 Deposits with banks 68 6 58 7 4 6 6 6 9 5 4 6 Total interest income 4 6,876 6,595 6,470 6,69 6,9 6,66 6,067 6,68 6,064 6,560 4,80,98 Interest Expense Deposits 5,40,94,6,098,0,069,09,,09 4,758 4,4 4, Securitization liabilities 6 0 4 0 4 47 7 84 45 59 777 Subordinated notes and debentures 7 07 04 96 88 0 9 94 00 00 95 90 4 Other 8 54 60 56 6 86 64 07 4 4,0 88 84 Total interest expense 9,804,67,590,57,44,569,487,608,607 6,67 6,06 6,44 Net Interest Income 0 5,07 4,94 4,880 5,047 4,887 4,697 4,580 4,560 4,457 9,9 8,74 7,584 TEB adjustment 86 79 8 65 95 9 9 40 76 47 48 Net Interest Income (TEB) $ 5,58 $ 5,00 $ 4,96 $ 5, $ 4,98 $ 4,788 $ 4,67 $ 4,700 $ 4,5 $ 0,5 $ 9,4 $ 8,0 Average total assets ($ billions) $,96 $,57 $,4 $,4 $, $,069 $,06 $,004 $ 96 $,59 $,06 $ 9 Average earning assets ($ billions) 4,0 989 969 975 958 95 906 86 8 99 94 808 Net interest margin as a % of average earning assets 5.96 %.98 %.05 %.06 %.0 %.0 %.07 %.0 %. %.0 %.05 %.8 % Impact on Net Interest Income due to Impaired Loans Net interest income recognized on impaired debt securities classified as loans 6 $ (0) $ () $ (7) $ (4) $ (7) $ (4) $ (6) $ (6) $ () $ (9) $ (0) $ (96) Net interest income foregone on impaired loans 7 9 7 7 7 5 9 0 04 Recoveries 8 () () () () () () () (4) () (4) Total 9 $ $ 9 $ 4 $ 7 $ $ $ $ $ $ $ 4 $ 4 0
Non-Interest Income ($ millions) LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Investment and Securities Services Broker dealer fees and commissions $ 9 $ 7 $ 7 $ 0 $ 07 $ 06 $ 09 $ 08 $ 0 $ 46 $ 40 $ 4 Full-service brokerage and other securities services 6 6 05 06 89 94 89 88 77 85 760 684 Underwriting and advisory 77 8 99 87 49 85 6 546 44 48 Investment management fees 4 0 6 6 6 8 4 08 505 48 4 Mutual fund management 5 40 40 90 40 40 404 88 75 6,6,569,55 Trust fees 6 7 40 8 8 6 9 40 5 9 5 50 50 Total investment and securities services 7,064,086,0 98 944 99 99 905 94 4,4,8,496 Credit fees 8 68 7 58 5 54 8 0,048 95 845 Net securities gain (loss) 9 8 7 () 4 () 57 0 54 79 7 Trading income (loss) 0 8 74 97 4 (99) (7) (65) (5) (9) 95 () (49) Service charges 656 64 6 64 68 65 57 55 558,57,76,5 Card services 58 59 54 596 480 4 46 48 96,,766,55 Insurance revenue 945 959 94 968 977 970 9 899,00,796,758,88 Other income Foreign exchange non-trading 4 8 40 59 40 46 6 56 9 Income (loss) from financial instruments designated at fair value through profit or loss Trading-related income (loss) 5 () 5 () () (4) (8) (9) () (6) Related to insurance subsidiaries 6 6 () 8 () (6) 80 8 45 40 Securitization liabilities 7 5 4 50 Loan commitments 8 (4) () () () () (4) () (48) (54) (4) Deposits 9 4 (6) 4 (5) Other 0 0 (5) (66) 59 (7) 9 5 (6) (6) (0) (5) Total other income (loss) 47 7 (86) 94 (45) 56 56 7 88 65 Total non-interest income $,67 $,777 $,79 $,56 $,60 $,09 $,79 $,054 $,995 $ 4,9 $,70 $,77 Effective the first quarter of 06, certain amounts relating to foreign exchange trading were reclassified from Other income to Trading income on a prospective basis. The results of the Bank s insurance business within Canadian Retail include both insurance revenue and the income from investments that fund policy liabilities which are designated at fair value through profit or loss within the Bank s property and casualty insurance subsidiaries.
Non-Interest Expenses ($ millions) LINE 06 05 04 Full Year For the period ended # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Salaries and Employee Benefits Salaries $,44 $,99 $,58 $,78 $,8 $,87 $,46 $,6 $,78 $ 5,576 $ 5,45 $ 5,7 Incentive compensation 58 546 56 5 479 49 56 55 446,70,057,97 Pension and other employee benefits 5 8 40 47 68 8 400 8 8,55,54,5 Total salaries and employee benefits 4,,6,,8,0,6,08,44,4 9,98 9,04 8,45 Occupancy Rent 5 8 5 6 5 0 95 887 800 Depreciation and impairment losses 6 7 07 0 00 00 94 9 89 85 47 76 4 Other 7 0 7 07 0 7 48 456 45 Total occupancy 8 48 4 45 459 447 47 48 47 99,85,79,549 Equipment Rent 9 48 44 45 45 46 45 44 7 8 7 47 Depreciation and impairment losses 0 5 49 5 49 49 54 55 54 58 0 09 Other 40 8 50 9 6 6 7 0 560 508 454 Total equipment 9 48 6 4 5 5 08 944 89 80 Amortization of Other Intangibles Software and asset servicing rights 8 5 04 0 98 97 9 85 98 48 7 Other 4 64 6 69 74 7 70 7 7 70 70 89 86 Total amortization of other intangibles 5 8 78 7 75 7 67 66 58 68 708 66 598 Marketing and Business Development 6 98 90 8 7 98 9 8 57 7 74 78 756 Restructuring charges 7 () (4) () 49 7 9 (8) 686 9 Brokerage-Related Fees 8 78 77 80 8 77 79 86 8 79 6 4 Professional and Advisory Services 9 79 00 8 7 05 58 8 4,,0 99 Other Expenses Capital and business taxes 0 7 9 4 6 6 9 45 76 9 60 Postage 50 54 64 57 5 56 59 55 58 5 Travel and relocation 55 45 49 4 47 4 4 4 5 9 75 85 Other 79 77 86 8 740 548 6 54 608,7,45,44 Total other expenses 4 969 909,009 94 900 67 756 658 76,89,987,99 Total non-interest expenses 5 $ 4,848 $ 4,640 $ 4,76 $ 4,65 $ 4,9 $ 4,9 $ 4,705 $ 4,65 $ 4, $ 8,877 $ 8,07 $ 6,496
Balance Sheet ($ millions) LINE 06 05 04 As at # Q4 Q Q Q Q4 Q Q Q Q4 ASSETS Cash and due from banks $,907 $,59 $,9 $,04 $,54 $,54 $,945 $,899 $,78 Interest-bearing deposits with banks 5,74 54,605 47,778 48,79 4,48 49,08 45,654 50,64 4,77 Trading loans, securities, and other 99,57 0,94 9,40 0,60 95,57 08,47 0,844 07,488 0,7 Derivatives 4 7,4 77,858 7,09 85,64 69,48 75,056 65,07 9, 55,796 Financial assets designated at fair value through profit or loss 5 4,8 4, 4,79 4,55 4,78 4,005,900 4,097 4,745 Available-for-sale securities 6 07,57 99,674 9,644 94,7 88,78 77,586 70,448 67,44 6,008 7 8,5 84,799 64,55 85,899 57,755 65,9 4,64 7, 4,7 Held-to-maturity securities 8 84,95 8,4 76,88 80,07 74,450 7,66 69,4 70,559 56,977 Securities purchased under reverse repurchase agreements 9 86,05 00,09 9,80 00,94 97,64 0,5 89,44 9,4 8,556 Loans Residential mortgages 0 7,6 5,050,98 5,456,7 08,86 0,55 0,8 98,9 Consumer instalment and other personal: HELOC 78,58 76,977 74,770 75,6 74,766 74,50 7,9 7,0 7,68 Indirect auto 48,947 47,508 44,888 46,700 4,90 4,4 8,575 8,785 5,6 Other 7,6 6,980 6,66 6,65 6,804 7,98 7,49 7,85 6,78 Credit card 4,94,099 9,755,76 0,5 7,047 5,807 6,404 5,570 Business and government 5 94,074 86,089 77,04 8,99 67,59 60,7 49,666 5,08,49 Debt securities classified as loans 6,674,707,80,7,87,97,5,778,695 7 589,59 575,40 556,980 570,754 547,775 5,97 508,446 5,94 48,97 Allowance for loan losses 8 (,87) (,77) (,66) (,76) (,44) (,44) (,50) (,6) (,08) Loans, net of allowance for loan losses 9 585,656 57,67 55,64 567,08 544,4 58,68 505,96 508,9 478,909 Other Customers' liability under acceptances 0 5,706 5,756 5,467 6,70 6,646 4,7 5,99,,080 Investment in TD Ameritrade 7,09 6,859 6,47 7,0 6,68 6,577 6,07 6,5 5,569 Goodwill 6,66 6,6 5,689 7,86 6,7 6,4 5, 5,848 4, Other intangibles,69,54,509,7,67,695,66,79,680 Land, buildings, equipment, and other depreciable assets 4 5,48 5,09 5,60 5,557 5,4 5,04 5,00 5,7 4,90 Deferred tax assets 5,084,850,987,,9,4,9,09,008 Amounts receivable from brokers, dealers and clients 6 7,46 5,057 6,05,94,996 6,794 7,64,94 7,0 Other assets 7,790,77,906,895,48,749,56,878,6 8 79,890 86,5 85,496 87,566 84,86 76,846 76,09 8,499 70,79 Total assets 9 $,76,967 $,8,46 $,4,786 $,7,584 $,04,7 $,099,0 $,00,954 $,080,55 $ 960,5 LIABILITIES Trading deposits 0 $ 79,786 $ 7,084 $ 66,40 $ 84,77 $ 74,759 $ 80,67 $ 67,68 $ 6,65 $ 59,4 Derivatives 65,45 69,70 67,8 7,0 57,8 6,0 60,57 80,674 5,09 Securitization liabilities at fair value,490,45,5 0,954 0,986 0,567 0,58,564,98 Other financial liabilities designated at fair value through profit or loss 90 4 76,04,45,78,8,75,50 4 57,89 55,6 45,78 67,67 44,78 56,4 40,65 58,54 4,99 Deposits Personal: Non-term 5 89,05 7,45 5,94 7,64 45,40 6,94,9 7,97 90,980 Term 6 50,80 50,0 50,085 50,744 50,45 5,508 5,68 5,559 5,60 Banks 7 7,0 8,959 4,479 6, 7,080 0,05,509 8,7 5,77 Business and government 8 7,7 6,99 96,77 97,9 8,678 77, 66,67 7,905 4,705 9 77,660 757,9 74,5 76,50 695,576 685,660 65,09 67,77 600,76 Other Acceptances 40 5,706 5,756 5,467 6,70 6,646 4,7 5,99,,080 Obligations related to securities sold short 4,5 44,564 40,76 4,876 8,80 4,6,474 4,878 9,465 Obligations related to securities sold under repurchase agreements 4 48,97 58,76 6,88 65,47 67,56 74,07 59,495 59,6 5, Securitization liabilities at amortized cost 4 7,98 9, 0,479,47,74,75,580 4,9 4,960 Amounts payable to brokers, dealers and clients 44 7,857 4,445 5,064,6,664 5,479 7,48,8 8,95 Insurance-related liabilities 45 7,046 7,5 6,505 6,586 6,59 6,85 6,67 6,9 6,079 Other liabilities 46 9,696 8,94 5,688 5,66 4, 5,07 5, 6,846 5,897 47 60, 89,07 87,757 90,58 88,754 8,980 69,664 78,6 70,788 Subordinated notes and debentures 48 0,89 8,94 8,89 7,695 8,67 8,456 6,95 7,777 7,785 Total liabilities 49,0,75,,,056,96,0,90,07,45,0,7 969,57,07,56 904,80 EQUITY Common shares 50 0,7 0,597 0,499 0,95 0,94 0,80 0,076 9,948 9,8 Preferred shares 5 4,400,400,400,400,700,700,800,700,00 Treasury shares: Common 5 () (4) (4) (5) (49) (7) () (79) (54) Preferred 5 (5) (5) (4) (4) () (4) (4) () () Contributed surplus 54 0 97 89 98 4 6 6 4 05 Retained earnings 55 5,45 4,87,44,585,05 0,764 9,6 8,7 7,585 Accumulated other comprehensive income (loss) 56,84,07 8,689,467 0,09 0,477 7,569 9,956 4,96 57 7,564 69,57 66, 69,990 65,48 64,6 60,008 6,009 54,68 Non-controlling interests in subsidiaries 58,650,6,6,684,60,69,589,60,549 Total equity 59 74,4 7,04 67,8 7,674 67,08 65,965 6,597 6,69 56, Total liabilities and equity 60 $,76,967 $,8,46 $,4,786 $,7,584 $,04,7 $,099,0 $,00,954 $,080,55 $ 960,5
Unrealized Gain (Loss) on Banking Book Equities and Assets Under Administration and Management ($ millions) LINE 06 05 04 As at # Q4 Q Q Q Q4 Q Q Q Q4 Banking Book Equities Publicly traded Balance sheet and fair value $ 6 $ 56 $ 55 $ 458 $ 48 $ 450 $ 509 $ 54 $ 654 Unrealized gain (loss) 45 7 (6) (9) () 4 4 5 Privately held Balance sheet and fair value,7,67,69,788,7,84,77,76,458 Unrealized gain (loss) 4 9 96 95 90 4 7 4 5 Total banking book equities Balance sheet and fair value 5,6,99,54,46,49,9,6,96, Unrealized gain (loss) 6 8 96 9 95 4 76 65 86 Assets Under Administration U.S. Retail 7 $ 7,698 $ 6,75 $ 5,4 $ 6,784 $ 5,55 $ 4,85 $,56 $ 4,9 $,858 Canadian Retail 8 44,607 7,4 0,9 08,6 0,5,766,668 0,996 9,88 Total 9 $ 6,05 $ 5,67 $ 6,5 $ 5,0 $ 5,904 $ 8,60 $ 5, $ 6,5 $ 05,74 Assets Under Management U.S. Retail 0 $ 85,9 $ 9,980 $ 89,797 $ 99,849 $ 00,56 $ 96,900 $ 87,649 $ 77,00 $ 66,84 Canadian Retail 67,65 65,8 5,75 46,884 45,4 48,607 44,70 4,0 6,99 Total $ 5,790 $ 58,6 $ 4,549 $ 46,7 $ 45,804 $ 45,507 $,89 $ 9,04 $ 9,76 Unrealized gain (loss) on publicly traded and privately held available-for-sale (AFS) securities are included in other comprehensive income (OCI). Unrealized gain (loss) on securities designated at fair value through profit or loss are included in the income statement. Excludes mortgage-backed securities (MBS) in the Canadian Retail segment, coming back on balance sheet as mortgages due to IFRS implementation, as they no longer meet OSFI s definition of assets under administration. 4
Goodwill, Other Intangibles, and Restructuring Charges ($ millions) LINE 06 05 04 Full Year As at # Q4 Q Q Q Q4 Q Q Q Q4 06 05 04 Goodwill Balance at beginning of period $ 6,6 $ 5,689 $ 7,86 $ 6,7 $ 6,4 $ 5, $ 5,848 $ 4, $,8 $ 6,7 $ 4, $,9 Arising during the period Other 5 Disposals () Foreign currency translation adjustments and other 4 400 57 (,697),049 (5),0 (76),65 4 5,04 948 Balance at end of period 5 $ 6,66 $ 6,6 $ 5,689 $ 7,86 $ 6,7 $ 6,4 $ 5, $ 5,848 $ 4, $ 6,66 $ 6,7 $ 4, Other Intangibles Balance at beginning of period 6 $,054 $,090 $,64 $,80 $,5 $,5 $,474 $,46 $,480 $,80 $,46 $,478 Arising during the period Aeroplan acquisition 7 () 46 Other 8 Amortized in the period 9 (64) (6) (69) (74) (7) (70) (7) (7) (70) (70) (89) (86) Foreign currency translation adjustments and other 0 8 7 (05) 58 70 (48) 9 () 77 Balance at end of period $,008 $,054 $,090 $,64 $,80 $,5 $,5 $,474 $,46 $,008 $,80 $,46 Deferred Tax Liability on Other Intangibles Balance at beginning of period $ (7) $ (6) $ (7) $ (75) $ (96) $ (9) $ (0) $ () $ () $ (75) $ () $ (68) Recognized in the period 8 8 0 0 0 0 77 8 8 Foreign currency translation adjustments and other 4 (5) (9) 7 (9) () 6 (7) (0) (6) (44) (6) Balance at end of period 5 $ (04) $ (7) $ (6) $ (7) $ (75) $ (96) $ (9) $ (0) $ () $ (04) $ (75) $ () Net Other Intangibles Closing Balance 6 $ 804 $ 87 $ 864 $ 99 $,005 $,057 $,060 $,44 $, $ 804 $,005 $, Total Goodwill and Net Other Intangibles Closing Balance 7 $ 7,466 $ 7,099 $ 6,55 $ 8,77 $ 7,4 $ 7,99 $ 6,8 $ 6,99 $ 5,56 $ 7,466 $ 7,4 $ 5,56 Restructuring Charges Balance at beginning of period 8 $ $ 40 $ 48 $ 486 $ 7 $ 0 $ 4 $ 55 $ 6 $ 486 $ 55 $ 05 Additions 9 6 4 96 7 40 0 7 40 Amount used 0 (9) (8) (80) (49) (6) (46) (76) () (0) (76) (6) (79) Release of unused amounts (5) () (4) (6) (47) () (8) (47) () Foreign currency translation adjustments and other 4 (4) (9) 7 () 6 6 Balance at end of period $ 98 $ $ 40 $ 48 $ 486 $ 7 $ 0 $ 4 $ 55 $ 98 $ 486 $ 55 Excludes the balance and amortization of software and asset servicing rights, which are otherwise included in other intangibles. 5