TD Bank 2010 Annual Report Download - page 121

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TD BANK GROUP ANNUAL REPORT 2010 FINANCIAL RESULTS 119
changes in the fair value of derivative instruments designated as cash
flow hedges, all net of income taxes.
The following table summarizes the Bank’s accumulated other
comprehensive income (loss), net of income taxes, as at October 31.
with funding these assets and liabilities. Trading income includes
realized and unrealized gains and losses on trading assets and liabilities.
Realized and unrealized gains and losses on loans designated as trading
under the fair value option are included in non-interest income in the
Consolidated Statement of Income.
Trading-related income excludes underwriting fees and commissions on
securities transactions, which are shown separately in the Consolidated
Statement of Income.
Trading-related income by product line depicts trading income for
each major trading category.
Insurance claims and policy benefit liabilities represent current claims
and estimates for future insurance policy benefits, as determined by
the appointed actuary in accordance with accepted actuarial practice,
and are included in other liabilities. The effect of changes in actuarial
assumptions on policy benefit liabilities was not material during the
year. Liabilities for property and casualty insurance represent estimated
provisions for reported and unreported claims. Claims relating to
property and casualty insurance are expensed as incurred.
Comprehensive income is composed of the Bank’s net income and
other comprehensive income. Other comprehensive income consists
of unrealized gains and losses on available-for-sale securities, foreign
currency translation gains and losses on the net investment in self-
sustaining operations, net of net investment hedging activities, and
Trading assets and liabilities, including trading derivatives, certain loans
held within a trading portfolio that are designated as trading under
the fair value option, trading loans and trading deposits, are measured
at fair value, with gains and losses recognized in the Consolidated
Statement of Income.
Trading-related income comprises net interest income, trading
income, and income from loans designated as trading under the fair
value option that are managed within a trading portfolio. Net interest
income arises from interest and dividends related to trading assets and
liabilities, and is reported net of interest expense and income associated
The Bank is engaged in insurance businesses relating to property and
casualty insurance, life and health insurance, and reinsurance.
Premiums, net of reinsurance, for short-duration contracts, primarily
property and casualty, are deferred as unearned premiums and recog-
nized in other income on a pro rata basis over the terms of the policies.
Unearned premiums and ceded unearned premiums, representing the
portion of net written premiums that pertain to the unexpired term of
the policies in force, are recorded in other liabilities. Premiums, net of
reinsurance, from long-duration contracts, primarily life insurance, are
recognized when due in other income.
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
NOTE 20
TRADING-RELATED INCOME
NOTE 21
INSURANCE
NOTE 22
Accumulated Other Comprehensive Income (Loss), Net of Income Taxes
(millions of Canadian dollars) 2010 2009
Net unrealized gain (loss) on available-for-sale securities, net of hedging activities $ 1,193 $ 739
Net unrealized foreign currency translation gain (loss) on investments in subsidiaries, net of hedging activities (2,901) (1,539)
Net gain (loss) on derivative instruments designated as cash flow hedges 2,713 1,815
Total $ 1,005 $ 1,015
Trading-Related Income
(millions of Canadian dollars) 2010 2009 2008
Net interest income (loss) $ 827 $ 1,210 $ 379
Trading income (loss) 484 685 (794)
Loans designated as trading under the fair value option1 21 47 (165)
Total $ 1,332 $ 1,942 $ (580)
By product
Interest rate and credit portfolios $ 896 $ 1,292 $ (663)
Foreign exchange portfolios 418 573 481
Equity and other portfolios (3) 30 (233)
Loans designated as trading under the fair value option1 21 47 (165)
Total $ 1,332 $ 1,942 $ (580)
Insurance Income, Net of Claims
(millions of Canadian dollars) 2010 2009 2008
Net earned premiums and fees $ 3,102 $ 2,802 $ 2,701
Claims and related expenses, net of reinsurance 2,074 1,889 1,774
Total $ 1,028 $ 913 $ 927
1 Excludes amounts related to securities designated as trading under the fair
value option that are not managed within a trading portfolio, but which have
been combined with derivatives to form economic hedging relationships.