TD Bank 2009 Annual Report Download - page 133

TD BANK FINANCIAL GROUP ANNUAL REPORT 2009 FINANCIAL RESULTS 129
Other non-interest expenses include the following:
i) A special assessment charge of $55 million before tax ($35 million
after tax) or US$49 million before tax (US$31 million after tax),
was finalized by the Federal Deposit Insurance Corporation (FDIC),
in the U.S., on May 22, 2009.
ii) A charge for settlement of TD Banknorth shareholder litigation.
Upon the announcement of the privatization of TD Banknorth
in November 2006, certain minority shareholders of TD Banknorth
initiated class action litigation alleging various claims against
the Bank, TD Banknorth and TD Banknorth officers and directors.
The parties agreed to settle the litigation in February 2009 for
$61.3 million (US$50 million) of which $3.7 million (US$3 million)
had been previously accrued on privatization. The Court of
Chancery in Delaware approved the settlement of the TD Banknorth
Shareholders’ Litigation effective June 24, 2009, and the settlement
became final.
iii) A charge for restructuring and integration of $429 million relating
to the acquisition of Commerce (2008 – $111 million; 2007 – nil).
Restructuring charges consisted of employee severance costs, the
costs of amending certain executive employment and award agree-
ments and the write-down of long-lived assets due to impairment.
Integration charges consisted of costs related to employee retention,
external professional consulting charges and marketing (including
customer communication and rebranding). In the Consolidated
Statement of Income, the restructuring and integration charges are
included in non-interest expenses.
iv) A charge for amortization of intangibles of $653 million (2008 –
$577 million; 2007 – $499 million).
v) A positive adjustment of $477 million resulted from the reversal of
a part of the Bank’s reserve related to Enron litigation in 2008.
OTHER NON-INTEREST EXPENSES
NOTE 27
The Bank recognizes both the current and future income tax of all
transactions that have been recognized in the 2009 Consolidated
Financial Statements. Future income tax assets and liabilities are deter-
mined based on the tax rates that are expected to apply when the
assets or liabilities are reported for tax purposes. The Bank records
a valuation allowance to the extent the future tax asset exceeds the
amount that is more likely than not to be realized.
INCOME TAXES
NOTE 28
Provision for (Recovery of) Income Taxes
(millions of Canadian dollars) 2009 2008 2007
Provision for income taxes – Consolidated Statement of Income
Current income taxes $ (95) $ 429 $ 974
Future income taxes 336 108 (121)
241 537 853
Provision for income taxes – Statement of Other Comprehensive Income
Current income taxes 688 (1,092) 980
Future income taxes 798 (598) (78)
1,486 (1,690) 902
Income taxes – other non-income related items including business combinations
and other transition adjustments
Current income taxes (18) – (10)
Future income taxes 348 (463) 442
330 (463) 432
Total provision for (recovery of) income taxes $ 2,057 $ (1,616) $ 2,187
Current income taxes
Federal $ 539 $ (529) $ 1,120
Provincial 297 (237) 598
Foreign (261) 103 226
575 (663) 1,944
Future income taxes
Federal 446 118 (37)
Provincial 238 57 (13)
Foreign 798 (1,128) 293
1,482 (953) 243
Total provision for (recovery of) income taxes $ 2,057 $ (1,616) $ 2,187
Reconciliation to Statutory Tax Rate
(millions of Canadian dollars, except as noted) 2009 2008 2007
Income taxes at Canadian statutory income tax rate $ 1,006 31.8% $ 1,342 32.7% $ 1,627 34.9%
Increase (decrease) resulting from:
Dividends received (333) (10.5) (345) (8.4) (423) (9.1)
Rate differentials on international operations (448) (14.1) (457) (11.1) (336) (7.2)
Future federal and provincial tax rate changes ––1 – 12 0.3
Other – net 16 0.4 (4) (0.1) (27) (0.6)
Provision for income taxes and effective income tax rate $ 241 7.6% $ 537 13.1% $ 853 18.3%