TD Bank 2007 Annual Report Download - page 17

TD BANK FINANCIAL GROUP ANNUAL REPORT 2007 Management’s Discussion and Analysis 13TD BANK FINANCIAL GROUP ANNUAL REPORT 2007 Management’s Discussion and Analysis 13
MANAGEMENT’S DISCUSSION AND ANALYSIS
This Management’s Discussion and Analysis (MD&A) is presented to enable readers to assess material
changes in the nancial condition and operational results of TD Bank Financial Group (the Bank) for the
year ended October 31, 2007, compared with the corresponding periods. This MD&A should be read in
conjunction with our Consolidated Financial Statements and related Notes for the year ended October 31,
2007. This MD&A is dated November 28, 2007. Unless otherwise indicated, all amounts are expressed in
Canadian dollars and have been primarily derived from the Bank’s annual Consolidated Financial
Statements prepared in accordance with Canadian generally accepted accounting principles.
14 FINANCIAL RESULTS OVERVIEW
17 Net Income
18 Revenue
20 Expenses
21 Taxes
22 Quarterly Financial Information
BUSINESS SEGMENT ANALYSIS
24 Business Focus
28 Canadian Personal and Commercial Banking
32 Wealth Management
36 U.S. Personal and Commercial Banking
39 Wholesale Banking
42 Corporate
2006 FINANCIAL RESULTS OVERVIEW
43 Summary of 2006 Performance
44 2006 Financial Performance by Business Line
GROUP FINANCIAL CONDITION
46 Balance Sheet Review
47 Credit Portfolio Quality
54 Capital Position
56 Off-balance Sheet Arrangements
59 Financial Instruments
RISK FACTORS AND MANAGEMENT
59 Risk Factors that May Affect Future Results
60 Managing Risk
ACCOUNTING STANDARDS AND POLICIES
70 Critical Accounting Estimates
74 Future Accounting and Reporting Changes
75 Controls and Procedures
Certain comparative amounts have been restated to conform with the presentation adopted in the current year.
Additional information relating to the Bank, including the Bank’s Annual Information Form, is available on the Bank’s website at www.td.com, on SEDAR at www.sedar.com,
and on the U.S. Securities and Exchange Commission’s website at www.sec.gov (EDGAR filers section).
Caution regarding forward-looking statements
From time to time, the Bank makes written and oral forward-looking statements, including in this MD&A, in other filings with Canadian regulators or the U.S. Securities and
Exchange Commission (SEC), and in other communications. In addition, the Bank’s senior management may make forward-looking statements orally to analysts, investors, rep-
resentatives of the media and others. All such statements are made pursuant to the “safe harbour” provisions of the U.S. Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities legislation. Forward-looking statements include, among others, statements regarding the Bank’s objectives and targets for 2008 and beyond, and
strategies to achieve them, the outlook for the Bank’s business lines, and the Bank’s anticipated financial performance. The economic assumptions for 2008 for each of our
business segments are set out in this MD&A under the headings “Economic Outlook” and “Business Outlook and Focus for 2008”, as updated in the subsequently filed quar-
terly Reports to Shareholders. Forward-looking statements are typically identified by words such as “will”, “should”, “believe”, “expect”, “anticipate”, “intend”, “estimate”,
“plan”, “may” and “could”. By their very nature, these statements require us to make assumptions and are subject to inherent risks and uncertainties, general and specific,
which may cause actual results to differ materially from the expectations expressed in the forward-looking statements. Some of the factors – many of which are beyond our
control – that could cause such differences include: credit, market (including equity and commodity), liquidity, interest rate, operational, reputational, insurance, strategic, for-
eign exchange, regulatory, legal and other risks discussed in this MD&A and in other regulatory filings made in Canada and with the SEC; general business and economic condi-
tions in Canada, the U.S. and other countries in which the Bank conducts business, as well as the effect of changes in monetary policy in those jurisdictions and changes in the
foreign exchange rates for the currencies of those jurisdictions; the degree of competition in the markets in which the Bank operates, both from established competitors and
new entrants; the accuracy and completeness of information the Bank receives on customers and counterparties; the development and introduction of new products and servic-
es in markets; developing new distribution channels and realizing increased revenue from these channels; the Bank’s ability to execute its strategies, including its integration,
growth and acquisition strategies and those of its subsidiaries, particularly in the U.S.; changes in accounting policies and methods the Bank uses to report its financial condi-
tion, including uncertainties associated with critical accounting assumptions and estimates; the effect of applying future accounting changes; global capital market activity; the
Bank’s ability to attract and retain key executives; reliance on third parties to provide components of the Bank’s business infrastructure; the failure of third parties to comply
with their obligations to the Bank or its affiliates as such obligations relate to the handling of personal information; technological changes; the use of new technologies in
unprecedented ways to defraud the Bank or its customers; legislative and regulatory developments; change in tax laws; unexpected judicial or regulatory proceedings; contin-
ued negative impact of the U.S. securities litigation environment; unexpected changes in consumer spending and saving habits; the adequacy of the Bank’s risk management
framework, including the risk that the Bank’s risk management models do not take into account all relevant factors; the possible impact on the Bank’s businesses of interna-
tional conflicts and terrorism; acts of God, such as earthquakes; the effects of disease or illness on local, national or international economies; and the effects of disruptions to
public infrastructure, such as transportation, communication, power or water supply. A substantial amount of the Bank’s business involves making loans or otherwise commit-
ting resources to specific companies, industries or countries. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the
Bank’s financial results, businesses, financial condition or liquidity. The preceding list is not exhaustive of all possible factors. Other factors could also adversely affect the Bank’s
results. For more information, see the discussion starting on page 59 of this MD&A. All such factors should be considered carefully when making decisions with respect to the
Bank, and undue reliance should not be placed on the Bank’s forward-looking statements. The Bank does not undertake to update any forward-looking statements, whether
written or oral, that may be made from time to time by or on its behalf.