TD Bank 2006 Annual Report Download - page 113

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TD BANK FINANCIAL GROUP ANNUAL REPORT 2006 Financial Results 109
Restructuring Costs
2006 2005 2004
Human Real
(millions of Canadian dollars) Resources Estate Technology Total Total Total
Balance at beginning of year $19 $ 6 $– $25 $7 $19
Restructuring costs arising (reversed) during the year:
Wholesale Banking 423 55043 (7)
Wealth Management ––––– –
Amount utilized during the year:
Personal and Commercial Banking –– ––––
Wholesale Banking 421 548254
Wealth Management ––––– 1
Balance at end of year $19 $8 $– $27 $25 $ 7
The Bank makes loans to its officers and directors and their affili-
ates. Loans to directors and certain officers are on market terms.
The amounts outstanding are as follows:
In addition, the Bank offers deferred share and other plans to
non-employee directors, executives and certain other key employ-
ees. See Note 14, Stock-based Compensation, for more details.
In the ordinary course of business, the Bank also provides vari-
ous banking services to associated and other related corporations
on terms similar to those offered to non-related parties.
(millions of Canadian dollars) 2006 2005
Personal Loans, including mortgages $11 $6
Business Loans 40 45
Total $51 $51
RELATED-PARTY TRANSACTIONS
NOTE 28
Diluted earnings per share is calculated using the same method
as basic earnings per share except that the weighted average
number of common shares outstanding includes the potential
dilutive effect of stock options granted by the Bank as deter-
mined under the treasury stock method. The treasury stock
method determines the number of additional common shares by
assuming that the outstanding stock options, whose exercise
price is less than the average market price of the Bank’s common
stock during the period, are exercised and then reduced by the
number of common shares assumed to be repurchased with the
exercise proceeds. Basic earnings per share is calculated by divid-
ing net income applicable to common shares by the weighted
average number of common shares outstanding for the period.
Such potential dilution is not recognized in a loss period.
Basic and diluted earnings per share at October 31 are as follows:
Basic and Diluted Earnings per Share
2006 2005 2004
Basic Earnings per Share
Net income available to common shares ($ millions) $4,581 $2,229 $2,232
Average number of common shares outstanding (millions) 716.8 691.3 654.5
Basic earnings per share ($) $6.39 $3.22 $ 3.41
Diluted Earnings perShare
Net income available to common shares ($ millions) $ 4,581 $2,229 $2,232
Average number of common shares outstanding (millions) 716.8 691.3 654.5
Stock options potentially exercisable as determined under the treasury stock method16.2 5.6 4.9
Average number ofcommon shares outstanding–diluted (millions)723.0 696.9 659.4
Diluted earnings per share1($) $6.34 $3.20 $ 3.39
1For 2006, the computation of diluted earningsper share excluded weight-
ed average options outstanding of 712 thousand with a weighted-average
exercise price of $60.02 as the option price was greater than the average
market price of the Bank's common shares. For 2005, the computation of
diluted earnings per share excluded weighted-average options outstanding
of 271 thousand with a weighted-average exercise price of $49.40 as
the optionprice was greater than the average market price of the Bank’s
common shares. For 2004, all options outstanding were included in the
computation of diluted earnings per share.
EARNINGS PER SHARE
NOTE 27
TRANSACTIONS WITH TD AMERITRADE
Pursuant to a Stockholders Agreement in relation to the Bank’s
equity investment in TD Ameritrade, the Bank designated five of
twelve members to TD Ameritrade’s Board of Directors. A descrip-
tion of significant transactions of the Bank and its affiliates with
TD Ameritrade is set forth below.
Money Market Deposit Account Agreement
The Bank is party to a money market deposit account (MMDA)
agreement with TD Ameritrade, pursuant to which the Bank
makes available to clients of TD Ameritrade money market
deposit accounts as designated sweep vehicles. TD Ameritrade
provides marketing and support services with respect to the
MMDAs. For providing these services, the Bank paid fees of
$260.6 million in 2006.