TD Bank 2001 Annual Report Download - page 62

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60
FINANCIAL RESULTS
(millions of dollars) 2001 2000
Carrying Estimated Carrying Estimated
Consolidated balance sheet value fair value value fair value
Assets
Securities $ 97,194 $ 98,092 $ 85,387 $ 86,183
Loans 119,673 121,736 120,721 120,461
Liabilities
Deposits 193,914 195,654 185,808 186,112
Subordinated notes and debentures 4,892 5,245 4,883 4,916
The aggregate of the estimated fair value amounts pre
sented
does not represent management’s estimate of the underlying
value of the Bank. Moreover, fair values
disclosed represent
estimates of value made at a specific
point in time and may not
be reflective of future fair values.
Fair values are based on the following methods of valuation
and assumptions:
For certain assets and liabilities which are short term in
nature or contain variable rate features, fair value is considered
to be equal to carrying value. These items are not listed above.
Details of the estimated fair value of derivative financial
instruments are provided in Note 14.
The estimated fair value of securities is determined as the
estimated market values reported in Note 2.
The estimated fair value of loans reflects changes in general
interest rates which have occurred since the loans were originated
and changes in the creditworthiness of individual borrowers. For
fixed rate loans, estimated fair value is determined by discounting
the expected future cash flows related to these loans at market
interest rates for loans with similar credit risks.
The estimated fair value of term deposits is determined
by
discounting the contractual cash flows using interest
rates
currently offered for deposits with similar terms.
The estimated fair value of the subordinated notes and deben-
tures is determined by reference to quoted market prices.
NOTE 12 Fair value of financial instruments
(millions of dollars) 2001 2000
Future income tax assets
Allowance for credit losses $ 323 $254
Premises and equipment 122 –
Deferred income 70 32
Securities 138 157
Employee future benefits 30 –
Other 142 98
Total future income tax assets 825 541
Valuation allowance ––
Future income tax assets 825 541
Future income tax liabilities
Intangible assets from business combinations (1,486) (2,338)
Premises and equipment –(46)
Employee future benefits –(36)
Other (44) (37)
Future income tax liabilities (1,530) (2,457)
Net future income tax liability $ (705) $ (1,916)
Earnings of certain international subsidiaries would be taxed only
upon repatriation to Canada. The Bank has not recognized a future
income tax liability for these undistributed earnings since it does not
currently plan to repatriate them. If all international subsidiaries’
undistributed earnings were repatriated, estimated taxes
payable would be $230 million at October 31, 2001 (2000 –
$186 million).
The net future tax liability which is reported in other liabilities
is comprised of: