TD Bank 2002 Annual Report Download - page 66

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64
FINANCIAL RESULTS
(millions of dollars) 2002 2001
Carrying Estimated Carrying Estimated
Consolidated balance sheet value fair value value fair value
Assets
Securities $ 82,197 $ 82,696 $ 97,194 $ 98,092
Loans 122,627 123,591 119,673 121,736
Liabilities
Deposits 189,190 189,860 193,914 195,654
Subordinated notes and debentures 4,343 4,662 4,892 5,245
The aggregate of the estimated fair value amounts pre
sented
does not represent management’s estimate of the underlying
value of the Bank. Moreover, fair values
disclosed represent
estimates of value made at a specific
point in time and may not
be reflective of future fair values.
Fair values are based on the following methods of valuation
and assumptions:
For certain assets and liabilities which are short term in
nature or contain variable rate features, fair value is considered
to be equal to carrying value. These items are not listed above.
Details of the estimated fair value of derivative financial
instruments are provided in Note 15.
The estimated fair value of securities is determined as the
estimated market values reported in Note 2.
The estimated fair value of loans reflects changes in general
interest rates which have occurred since the loans were originated
and changes in the creditworthiness of individual borrowers. For
fixed rate loans, estimated fair value is determined by discounting
the expected future cash flows related to these loans at market
interest rates for loans with similar credit risks.
The estimated fair value of term deposits is determined
by
discounting the contractual cash flows using interest
rates
currently offered for deposits with similar terms.
The estimated fair value of the subordinated notes and deben-
tures is determined by reference to quoted market prices.
NOTE 13 Fair value of financial instruments
(millions of dollars) 2002 2001
Future income tax assets
Allowance for credit losses $ 1,047 $ 323
Premises and equipment 205 122
Deferred income 67 70
Securities 111 138
Employee benefits –30
Other 102 142
Total future income tax assets 1,532 825
Valuation allowance ––
Future income tax assets 1,532 825
Future income tax liabilities
Intangible assets (1,122) (1,486)
Employee benefits (34) –
Other (64) (44)
Future income tax liabilities (1,220) (1,530)
Net future income tax asset (liability) $ 312 $ (705)
Earnings of certain international subsidiaries would be taxed only
upon repatriation to Canada. The Bank has not recognized a
future income tax liability for these undistributed earnings since it
does not currently plan to repatriate them. If all the undistributed
earnings of the international operations of these subsidiaries were
repatriated, estimated taxes payable would be $235 million at
October 31, 2002 (2001 – $230 million).
The net future tax asset (liability) which is reported in other assets
(liabilities) is comprised of: