TD Bank 2007 Annual Report Download - page 18

TD BANK FINANCIAL GROUP ANNUAL REPORT 2007 Management’s Discussion and Analysis14
FINANCIAL RESULTS OVERVIEW
TD Bank Financial Group delivered exceptional
nancial results in 2007. All businesses posted
double-digit earnings growth for the year.
CORPORATE OVERVIEW
TD Bank Financial Group (the Bank) is one of the largest finan-
cial services providers in North America, offering comprehensive
retail and commercial banking, wealth management and whole-
sale banking products and services. The Bank’s operations and
activities are organized around operating groups: Canadian
Personal and Commercial Banking; Wealth Management; U.S.
Personal and Commercial Banking; and Wholesale Banking.
HOW THE BANK REPORTS
The Bank prepares its financial statements in accordance with
Canadian generally accepted accounting principles (GAAP) and
refers to results prepared in accordance with GAAP as the
”reported results”.
The Bank also utilizes non-GAAP financial measures referred
to as “adjusted” results to assess each of its businesses and to
measure overall Bank 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 man-
agement does not believe are indicative of underlying business
performance. The items of note are listed in Table 2. The items
of note include the Bank’s amortization of intangible assets,
which primarily relate to the Canada Trust acquisition in 2000,
the TD Banknorth Inc. (TD Banknorth) acquisition in 2005, and
the acquisitions by TD Banknorth of Hudson United Bancorp
(Hudson) in 2006 and Interchange Financial Services
Corporation (Interchange) in 2007, and the amortization of
intangibles included in equity in net income of TD Ameritrade
Holding Corporation (TD Ameritrade). The Bank believes that
adjusted results provide the reader with a better understanding
of how management views the Bank’s performance. As
explained, adjusted results are different from reported results
determined in accordance with GAAP. Adjusted results, items of
note and related terms used in this MD&A are not defined
terms under GAAP and, therefore, may not be comparable to
similar terms used by other issuers. Table 2 provides a reconcili-
ation between the Bank’s reported and adjusted results.
TABLE 1OPERATING RESULTS – REPORTED
(millions of Canadian dollars) 2007 2006 2005
Net interest income $ 6,924 $ 6,371 $ 6,008
Other income 7,357 6,821 5,951
Total revenue 14,281 13,192 11,959
Provision for credit losses (645)(409)(55)
Non-interest expenses (8,975)(8,815)(8,844)
Dilution gain, net –1,559 –
Income before provision for income taxes, non-controlling interests
in subsidiaries and equity in net income of associated company 4,661 5,527 3,060
Provision for income taxes (853)(874)(699)
Non-controlling interests, net of income taxes (95)(184)(132)
Equity in net income of an associated company, net of income taxes 284 134 –
Net income – reported 3,997 4,603 2,229
Preferred dividends (20)(22) –
Net income available to common shareholders – reported $ 3,977 $ 4,581 $ 2,229