TD Bank 2002 Annual Report Download - page 75

73
FINANCIAL RESULTS
(a) Sale of mutual fund record keeping and
custody business
During the year, the Bank sold its mutual fund record keeping
and custody business and recorded a pre-tax gain of $40 million.
(b) Acquisition of Stafford and LETCO
On March 1, 2002, the Bank completed the acquisition of the
securities and trading technology platform and listed equity
options market-making businesses of the Stafford group of firms
(Stafford) and the LETCO group (LETCO). The purchase price
consisted of an initial cash payment of approximately
$428 million. The acquisition was accounted for by the purchase
method and the results of Stafford and LETCO’s operations have
been included in the consolidated statement of operations
from March 1, 2002. Goodwill arising from the acquisition was
$379 million.
(c) Acquisition of TD Waterhouse shares
On November 26, 2001, the Bank completed the acquisition of
the outstanding common shares of TD Waterhouse Group, Inc.
(TD Waterhouse) that it did not own for total consideration of
approximately $605 million. Goodwill arising from the
acquisition was $233 million. On November 1, 2001, the
Bank issued approximately 11 million common shares for cash
proceeds of $400 million to partially fund the transaction.
(d) Acquisition of R.J. Thompson Holdings, Inc.
On November 1, 2001, TD Waterhouse acquired R.J. Thompson
Holdings, Inc. (RJT), a direct access brokerage firm, for total
cash consideration of $122 million. Goodwill arising from
the acquisition was $120 million. The results of RJT have
been included in the consolidated statement of operations from
November 1, 2001. In addition, contingent purchase price pay-
ments of up to $24 million were payable upon achievement of
certain results. In the fourth quarter of 2002, $8 million was
paid relating to the contingent purchase price payments and
subsequent to October 31, 2002 an additional $14 million was
paid to satisfy the remaining contingent purchase price payments
required under the purchase agreement. These payments relate
to finite life intangible assets which are amortized on a straight-
line basis over the expected period of benefit of three years.
(e) Acquisition of Newcrest Holdings Inc.
The Bank acquired all of the outstanding Class A and Class B
common shares of Newcrest Holdings Inc. (Newcrest), a holding
company for the securities dealer Newcrest Capital Inc., effective
November 1, 2000. The total consideration in respect of this
purchase amounted to $225 million, paid in Bank common shares
of $181 million and cash of $44 million. The acquisition was
accounted for by the purchase method and the results of
Newcrest’s operations have been included in the consolidated
statement of operations from November 1, 2000. Until October
31, 2001, goodwill arising from the transaction of $160 million
was amortized on a straight-line basis over the expected period of
benefit of 10 years. Beginning November 1, 2001, the remaining
goodwill is tested for impairment as discussed in Note 1.
NOTE 19 Acquisitions and dispositions
(millions of dollars)
Income (loss)
Total before provision
revenue for income taxes
(on a taxable and non-
equivalent controlling Net income Total
2002 basis) interest (loss) assets
Canada $ 7,805 $ 1,072 $ 776 $ 171,562
International12,646 (1,520) (852) 106,478
Total $ 10,451 $ (448) $ (76) $ 278,040
2001
Canada $ 7,920 $ 365 $ 595 $ 171,587
International13,163 899 788 116,251
Total $ 11,083 $ 1,264 $ 1,383 $ 287,838
2000
Canada $ 6,810 $ 176 $ 185 $ 183,053
International13,394 1,222 840 81,765
Total $ 10,204 $ 1,398 $ 1,025 $ 264,818
1Includes United States total revenue (on a taxable equivalent basis) of
$1,563 million (2001 – $1,677 million; 2000 – $2,595 million).
Results by geographic distribution
The Bank earns revenue in Canada and in international locations.
Reporting of revenue is based on the geographic location of the
unit responsible for recording the revenue, while the reporting of
assets is based on the location where assets are recorded.