TD Bank 2007 Annual Report Download - page 123

TD BANK FINANCIAL GROUP ANNUAL REPORT 2007 Financial Results 119
NOTE 28 ACQUISITIONS, DISPOSITIONS AND OTHER
RESULTS BY GEOGRAPHY
For reporting of geographic results, segments are grouped
into Canada, United States and International. Transactions are
primarily recorded in the location responsible for recording
the revenue or assets. This location frequently corresponds
with the location of the legal entity through which the business
is conducted and the location of the customer.
(millions of Canadian dollars)
2007 Total revenue
Income before provision
for income taxes, non-
controlling interests, net of
tax & equity in net income
of associated company Net income Total assets
Canada $ 10,619 $ 2,992 $ 2,314 $ 275,931
United States 2,370 648 710 79,951
Other international 1,292 1,021 973 66,242
Total $ 14,281 $ 4,661 $ 3,997 $ 422,124
2006
Canada $ 9,721 $ 2,423 $ 1,802 $ 255,317
United States 2,564 2,538 2,182 83,059
Other international 907 566 619 54,538
Total $ 13,192 $ 5,527 $ 4,603 $ 392,914
2005
Canada $ 8,472 $ 1,408 $ 1,117 $ 232,783
United States 2,624 1,246 639 74,306
Other international 863 406 473 58,121
Total $ 11,959 $ 3,060 $ 2,229 $ 365,210
(a) Commerce Bancorp, Inc.
On October 2, 2007, the Bank announced a definitive agreement
to acquire 100% of Commerce Bancorp, Inc. (Commerce) for
share and cash consideration with an aggregate value, as of
the time of announcement of the transaction, of approximately
$8.5 billion. Commerce is a public company with approximately
US$50 billion in assets as at September 30, 2007. The acquisition
will be accounted for using the purchase method of accounting
and each share of Commerce will be exchanged for 0.4142 of
a Bank common share and US$10.50 in cash. The acquisition is
subject to approvals from Commerce shareholders and U.S. and
Canadian regulatory authorities as well as other customary closing
conditions. The transaction is currently expected to close in
February or March of 2008.
(b) TD Banknorth
Interchange Financial Services Corporation
TD Banknorth completed its acquisition of Interchange on
January 1, 2007 for a total cash consideration of $545 million
(US$468.1 million), financed primarily through TD Banknorth’s
sale of 13 million of its common shares to the Bank at a price
of US$31.17 per share for $472 million (US$405 million). The
acquisition of Interchange by TD Banknorth contributed the
following assets and liabilities of Interchange to the Bank’s
Consolidated Balance Sheet at the date of acquisition: $1,283
million of personal/business loans and mortgages, $495 million
of goodwill and intangibles, $123 million of other assets,
$1,332 million of deposits and $97 million of other liabilities.
TD Banknorth consolidates the financial results of Interchange.
As the Bank consolidates TD Banknorth on a one month lag,
Interchange's results for the nine months ended September 30,
2007 have been included in the Bank’s results for the year ended
October 31, 2007.
In 2006, TD Banknorth repurchased 8.5 million of its own
shares for $290 million (US$256 million) and the Bank acquired
1 million additional shares of TD Banknorth for $34 million
(US$30 million) in the course of open-market purchases. In
addition to the TD Banknorth shares acquired by the Bank in
relation to the Hudson transaction described above, the Bank
began reinvesting in TD Banknorth’s dividend reinvestment
program in November 2005 and acquired approximately
5.2 million shares of TD Banknorth pursuant to the program,
prior to the completion of the going-private transaction
described below.
Going-private Transaction
On April 20, 2007, the Bank completed its privatization of
TD Banknorth. Under this transaction, the Bank acquired all of
the outstanding common shares of TD Banknorth that it did not
already own for US$32.33 per TD Banknorth share for a total
cash consideration of $3.7 billion (US$3.3 billion). The acquisition
has been accounted for by the purchase method. On closing,
TD Banknorth became a wholly-owned subsidiary of the Bank
and TD Banknorth’s shares were delisted from the New York
Stock Exchange.
As a result of the transaction, there was a net increase in
goodwill and intangibles on the Bank’s Consolidated Balance
Sheet at the date of completion of the transaction of approxi-
mately $1.5 billion. Other purchase consideration allocation
adjustments were not significant. The allocation of the purchase
price is subject to finalization.
In the normal course of the Bank’s financial reporting,
TD Banknorth is consolidated on a one month lag basis.