TD Bank 2006 Annual Report Download - page 15

TD BANK FINANCIAL GROUP ANNUAL REPORT 2006 Management’s Discussion and Analysis 11
12 FINANCIAL RESULTS OVERVIEW
16 Net Income
17 Revenues
20 Expenses
22 Taxes
23 Quarterly Financial Information
BUSINESS SEGMENT ANALYSIS
24 Business Focus
26 Canadian Personal and Commercial Banking
30 U.S. Personal and Commercial Banking
33 Wholesale Banking
36 Wealth Management
40 Corporate
2005 FINANCIAL RESULTS OVERVIEW
41 Summary of 2005 Performance
42 2005 Financial Performance by Business Line
GROUP FINANCIAL CONDITION
43 Balance Sheet Review
44 Credit Portfolio Quality
51 Capital Position
53 Off-balance Sheet Arrangements
56 Financial Instruments
RISK FACTORS AND MANAGEMENT
56 Risk Factors that May Affect Future Results
57 Managing Risk
ACCOUNTING STANDARDS AND POLICIES
67 Critical Accounting Estimates
70 Future Accounting and Reporting Changes
70 Controls and Procedures
MANAGEMENT’S DISCUSSION AND ANALYSIS
This Management’s Discussion and Analysis (MD&A) is presented to enable readers to assess material
changes in the financial condition and operational results of TD Bank Financial Group (the Bank) for
the year ended October 31, 2006, compared with the corresponding periods. This MD&A should be
read in conjunction with our Consolidated Financial Statements and related Notes. This MD&A is dated
December 7, 2006. Unless otherwise indicated, all amounts are expressed in Canadian dollars and have
been primarily derived from the Bank’s annual Consolidated Financial Statements prepared in accordance
with Canadian generally accepted accounting principles.
Certain comparative amounts have been restated to conform with the presentation adopted in the current year.
Additional information relating to the Bank, including the Bank’s Annual Information Form, is available on the Bank’s website at www.td.com, on SEDAR at www.sedar.com,
and on the U.S. Securities and Exchange Commission’s website at www.sec.gov (EDGAR filers section).
Caution regarding forward-looking statements
From time to time, the Bank makes written and oral forward-looking statements, including in this MD&A, in other filings with Canadian regulators or the U.S. Securities and
Exchange Commission (SEC), and in other communications. All such statements are made pursuant to the “safe harbour” provisions of the U.S. Private Securities Litigation
Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, among others, statements regarding the Bank’s objectives and targets
for 2007 and beyond, and strategies to achieve them, the outlook for the Bank’s business lines, and the Bank’s anticipated financial performance. The economic assumptions
for 2007 for each of our business segments are set out in this MD&A under the headings “Economic Outlook” and “Business Outlook and Focus for 2007”. Forward-looking
statements are typically identified by words such as “believe”, “expect”, “anticipate”, “intend”, “estimate”, “plan”, “may” and “could”. By their very nature, these state-
ments requireus to make assumptions and aresubject to inherent risks and uncertainties, general and specific, which may cause actual results to differ materially from the
expectations expressed in the forward-looking statements. Some of the factors that could cause such differences include: the credit, market, liquidity, interest rate, opera-
tional, reputational, insurance, strategic, foreign exchange, regulatory, legal and other risks discussed in this MD&A and in other regulatory filings made in Canada and with
the SEC;general business and economic conditions in Canada, the U.S. and other countries in which the Bank conducts business, as well as the effect of changes in monetary
policy in those jurisdictions and changes in the foreign exchange rates for the currencies of those jurisdictions; the degree of competition in the markets in which the Bank
operates, both from established competitors and new entrants; legislative and regulatory developments; the accuracy and completeness of information the Bank receives on
customers and counterparties; the development and introduction of new products and services in markets; developing new distribution channels and realizing increased rev-
enue from these channels, the Bank’s ability to execute its integration, growth and acquisition strategies, including those of its subsidiaries, particularly in the U.S.; changes
in accounting policies and methods the Bank uses to report its financial condition, including uncertainties associated with critical accounting assumptions and estimates; the
effect of applying futureaccounting changes; global capital market activity; the Bank’sability to attract and retain key executives; reliance on thirdparties to provide compo-
nents of the Bank’s business infrastructure; technological changes; change in tax laws; unexpected judicial or regulatory proceedings; continued negative impact of the U.S.
securities litigation environment; unexpected changes in consumer spending and saving habits; the possible impact on the Bank's businesses of international conflicts and ter-
rorism; acts of God, such as earthquakes; the effects of disease or illness on local, national or international economies; the effects of disruptions to public infrastructure, such
as transportation, communications, power or water supply; and management’s ability to anticipate and manage the risks associated with these factors and execute the Bank’s
strategies. A substantial amount of the Bank’s business involves making loans or otherwise committing resources to specific companies, industries or countries. Unforeseen
events affecting such borrowers, industries or countries could have a material adverse effect on the Bank’s financial results, businesses, financial condition or liquidity. The pre-
ceding list is not exhaustive of all possible factors. Other factors could also adversely affect the Bank’s results. For more information, see the discussion starting on page 56 of
this MD&A.All such factors should be considered carefully when making decisions with respect to the Bank, and undue reliance should not be placed on the Bank’s forward-
looking statements. The Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf.