TD Bank 2006 Annual Report Download - page 115

TD BANK FINANCIAL GROUP ANNUAL REPORT 2006 Financial Results 111
Condensed Consolidated Balance Sheet
As at October 31
(millions of Canadian dollars) 2006 2005
Canadian Adjust- U.S. Canadian Adjust- U.S.
GAAP ments GAAP GAAP ments GAAP
Assets
Cash resources and other $ 10,782 $ – $ 10,782 $ 13,418 $ – $ 13,418
Securities
Trading 77,482 – 77,482 65,775 – 65,775
Investmentc,g 46,976 5,022 51,998 42,321 3,898 46,219
Securities purchased under reverse repurchase agreements 30,961 – 30,961 26,375 – 26,375
Loans (net) 160,608 – 160,608 152,243 – 152,243
Investment in TD Ameritrade 4,379 – 4,379 –––
Trading derivatives’ market revaluationd27,845 779 28,624 33,651 674 34,325
Goodwilla,g,h 7,396 1,537 8,933 6,518 1,604 8,122
Other intangiblesa,g 1,946 295 2,241 2,124 338 2,462
Other assetsa,c,d,e,g 24,539 69 24,608 22,785 22 22,807
Total assets $392,914 $7,702 $ 400,616 $365,210 $6,536 $371,746
Liabilities
Depositsd$260,907 $ 21 $ 260,928 $246,981 $ 21 $247,002
Trading derivatives’ market revaluationd29,337 537 29,874 33,498 598 34,096
Other liabilitiesa,c,d,e,g,h,i 71,905 5,070 76,975 60,224 4,037 64,261
Subordinated notes, debentures and other debt 6,900 – 6,900 5,138 – 5,138
Liabilities for preferred shares and capital trust securitiesf1,794 (1,794) – 1,795 (1,795) –
Total liabilities 370,843 3,834 374,677 347,636 2,861 350,497
Non-controlling interest in subsidiariesf,g 2,439 3,059 5,498 1,708 3,149 4,857
Shareholders’ equity
Preferred sharesf425 544 969 –545 545
Common sharesj6,334 39 6,373 5,872 39 5,911
Contributed surplus 66 – 66 40 – 40
Foreign currency translation adjustmentsk(918) 918 – (696) 696 –
Retained earningsa,c,d,e,g,h,j 13,725 (268) 13,457 10,650 (246) 10,404
Accumulated other comprehensive income
Net unrealized gains on available-for-sale securitiesc– 284 284 – 280 280
Foreign currency translation adjustmentsk– (918) (918) – (696) (696)
Derivative instrumentsd–232 232 –(54) (54)
Minimum pension liability adjustmenta– (22) (22) – (38) (38)
Total shareholders’ equity 19,632 809 20,441 15,866 526 16,392
Total liabilities and shareholders’equity $392,914 $7,702 $ 400,616 $365,210 $6,536 $371,746
(a)EMPLOYEE FUTURE BENEFITS
The Bank adopted current Canadian GAAP on employee future
benefits in 2001 on a retrospective basis without restatement.
Current Canadian GAAP requires the accrual of employee future
benefits. U.S. GAAP standards also require the accrual of employ-
ee future benefits; however, the U.S. GAAP standard was adopt-
ed by the Bank on a prospective basis. Consequently, differences
between U.S. and Canadian GAAP remain, as the transitional
impacts are amortized over the expected average remaining
service life of the employee group for U.S. GAAP. U.S. GAAP
also requires an additional minimum liability to be recorded if
the accumulated benefit obligation is greater than the fair value
of the plan assets. Canadian GAAP has no such requirement.
For U.S. GAAP purposes, the Bank recognized the amounts
in the following table in the Consolidated Balance Sheet:
(millions of Canadian dollars) 2006 2005
Prepaid pension expense (accrued benefit liability) $196 $299
Other intangibles 18 23
Accumulated other comprehensive income
before income taxes 36 57
Net amount recognized $250 $379
In 2006, U.S. GAAP adjustments for employee futurebenefits
increased non-interest expenses by $2 million before tax (2005 –
decreased by $7 million before tax).
(b) SECURITIZATIONS
U.S. GAAP and current Canadian GAAP requiregains on loan
securitizations be recognized in income immediately.Prior to
July 1, 2001, under previous Canadian GAAP, gains were deferred
and recorded over the life of the loans securitized. In fiscal 2006,
U.S. GAAP adjustments for securitizations were nil since all
the deferred gains relating to loans securitized prior to July 1,
2001 have been recorded in income. In 2005, U.S. GAAP
adjustments for securitizations decreased other income by
$4 million beforetax. Retained interests are classified as
available-for-sale securities.
(C) AVAILABLE-FOR-SALE SECURITIES
U.S. GAAP requires that investment securities be classified as
either available-for-sale or held to maturity. The Bank accounts
for the majority of investment securities as available-for-sale. U.S.
GAAP requires available-for-sale securities to be reported on the
Consolidated Balance Sheet at their estimated fair values and
requires unrealized gains and losses arising from the changes in
fair values to be reported net of income taxes in the Consolidated
Statement of Comprehensive Income. Other than temporary
declines in fair value are recorded by transferring the unrealized
loss from the Consolidated Statement of Comprehensive Income
to the Consolidated Statement of Income. Under Canadian GAAP,
investment securities are carried at cost or amortized cost, with
other than temporary declines in value recognized directly in
earnings based on expected net realizable values.
In addition, under U.S. GAAP certain non-cash collateral
received in securities lending transactions is recognized as an
asset and a liability is recorded for the obligation to return the
collateral. Under Canadian GAAP, non-cash collateral received as
part of a securities lending transaction is not recognized in the
Consolidated Balance Sheet.
In 2006, U.S. GAAP adjustments for available-for-sale securities
increased other income by $26 million before tax (2005 –
increased by $21 million beforetax).
(d) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
U.S. GAAP requires all derivative instruments be reported on the
Consolidated Balance Sheet at their fair values, with changes in
the fair value for derivatives that are not designated as hedges
reported through the Consolidated Statement of Income. U.S.
GAAP provides specific guidance on hedge accounting including