TD Bank 2003 Annual Report Download - page 67

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TD BANK FINANCIAL GROUP ANNUAL REPORT 2003 • Financial Results 65
During the second quarter of fiscal 2003, the Bank reviewed the
value of goodwill assigned to the international unit of its wealth
management business and determined that an impairment in
value existed in this business given that the Bank’s ability to prof-
itably run a global brokerage business has been impacted by
declining volumes in the discount brokerage business worldwide.
As a result, a goodwill impairment loss of $274 million was
charged to the Consolidated Statement of Operations.
In addition, during the second quarter of fiscal 2003, the Bank
reviewed the value of goodwill assigned to its U.S. equity options
business in its Wholesale Banking segment and determined that
impairment in value existed in this business given the dramatic
volume and margin declines. The Bank determined that the bene-
fits of the U.S. equity options acquisition in fiscal 2002 had not
been realized. Consequently, a $350 million pre-tax goodwill
impairment loss was charged to the Consolidated Statement of
Operations and a related future income tax asset of $117 million
was recorded for a net of tax charge of $233 million.
Intangible assets
The following table presents details of the Bank’s intangible
assets as at October 31. Future income tax liabilities related to
these intangible assets are disclosed in Note 15.
Goodwill
The changes in the Bank’s carrying value of goodwill,
by business segment and in total, are as follows:
(millions of dollars)
Personal and
Commercial Wholesale Wealth
2003 Banking Banking Management Total
Carrying value of goodwill at beginning of year $841 $526 $1,767 $3,134
Goodwill acquired during the year ––––
Goodwill impairment – (350) (274) (624)
Foreign currency translation adjustments – (30) (217) (247)
Carrying value of goodwill at end of year $841 $146 $1,276 $2,263
2002
Carrying value of goodwill at beginning of year $841 $147 $1,310 $2,298
Goodwill acquired during the year – 372 477 849
Foreign currency translation adjustments – 7 (20) (13)
Carrying value of goodwill at end of year $841 $526 $1,767 $3,134
(millions of dollars) 2003 2002
Loans (net of Gross Net Loans (net of Gross Net
allowance for impaired write allowance for impaired write
credit losses) loans offs credit losses) loans offs
Type of loan
Residential mortgages $ 63,834 $ 51 $ 4 $ 60,857 $ 57 $ 2
Personal loans 48,988 125 380 42,886 151 389
Other loans 23,673 1,206 1,079 33,800 2,331 445
Total loans reported and securitized 136,495 1,382 1,463 137,543 2,539 836
Less: loans securitized 18,437 11 39 14,916 14 70
Loans held $118,058 $ 1,371 $1,424 $122,627 $2,525 $766
The following table presents information about gross impaired
loans and net write-offs for components of reported and
securitized financial assets as at October 31.
(millions of dollars) 2003 2002
Carrying Accumulated Net carrying Net carrying
value amortization value value
Finite life intangible assets
Core deposit intangible assets $1,993 $1,006 $ 987 $1,114
Other intangible assets 3,806 2,056 1,750 2,269
Total intangible assets $5,799 $3,062 $2,737 $3,383
NOTE 5Goodwill and intangible assets