TD Bank 2012 Annual Report Download - page 159

TD BANK GROUP ANNUAL REPORT 2012 FINANCIAL RESULTS 157
RELATED-PARTY TRANSACTIONS
NOTE 29
Parties are considered to be related if one party has the ability to
directly or indirectly control the other party or exercise significant influ-
ence over the other party in making financial or operational decisions.
The Bank’s related parties include key management personnel, their
close family members and their related entities, subsidiaries,
associates, joint ventures, and post-employment benefit plans for
the Bank’s employees.
Results by Business Segment
(millions of Canadian dollars) 2012
Canadian U.S.
Personal and Personal and
Commercial Wealth and Commercial Wholesale
Banking1 Insurance1 Banking Banking Corporate Total
Net interest income (loss) $ 8,023 $ 583 $ 4,663 $ 1,805 $ (48) $ 15,026
Non-interest income (loss) 2,629 3,436 1,468 849 (286) 8,096
Provision for (reversal of) credit losses 1,151 – 779 47 (182) 1,795
Non-interest expenses 4,988 2,600 4,125 1,570 715 13,998
Income (loss) before income taxes 4,513 1,419 1,227 1,037 (867) 7,329
Provision for (recovery of) income taxes 1,209 261 99 157 (634) 1,092
Equity in net income of an investment in associate,
net of income taxes – 209 – – 25 234
Net income (loss) $ 3,304 $ 1,367 $ 1,128 $ 880 $ (208) $ 6,471
Total assets (billions of Canadian dollars)
as at October 31 $ 282.6 $ 26.4 $ 209.1 $ 260.7 $ 32.3 $ 811.1
2011
Net interest income (loss) $ 7,190 $ 542 $ 4,392 $ 1,659 $ (122) $ 13,661
Non-interest income (loss) 2,342 3,498 1,342 837 (18) 8,001
Provision for (reversal of) credit losses 824 – 687 22 (43) 1,490
Non-interest expenses 4,433 2,616 3,593 1,468 937 13,047
Income (loss) before income taxes 4,275 1,424 1,454 1,006 (1,034) 7,125
Provision for (recovery of) income taxes 1,224 317 266 191 (672) 1,326
Equity in net income of an investment in associate,
net of income taxes – 207 – – 39 246
Net income (loss) $ 3,051 $ 1,314 $ 1,188 $ 815 $ (323) $ 6,045
Total assets (billions of Canadian dollars)
as at October 31 $ 258.5 $ 26.7 $ 198.7 $ 220.3 $ 31.3 $ 735.5
1
Effective November 1, 2011, the insurance business was transferred from Canadian
Personal and Commercial Banking to Wealth and Insurance. The 2011 results have
been restated accordingly.
(millions of Canadian dollars) 2012
Income before
Total revenue income taxes Net income Goodwill Total assets
Canada $ 15,200 $ 5,358 $ 4,294 $ 1,549 $ 498,449
United States 6,101 474 472 10,713 241,996
Other international 1,821 1,497 1,705 49 70,661
Total $ 23,122 $ 7,329 $ 6,471 $ 12,311 $ 811,106
2011
Canada $ 13,824 $ 4,510 $ 3,428 $ 1,455 $ 452,334
United States 5,708 796 631 10,753 221,576
Other international 2,130 1,819 1,986 49 61,583
Total $ 21,662 $ 7,125 $ 6,045 $ 12,257 $ 735,493
performance in Wholesale Banking. As a result, the CDS are accounted
for on an accrual basis in Wholesale Banking and the gains and
losses on the CDS, in excess of the accrued cost, are reported in the
Corporate segment.
As discussed in Note 6, the Bank reclassified certain debt securities
from trading to the available-for-sale category effective August 1,
2008. As part of the Bank’s trading strategy, these debt securities are
economically hedged, primarily with CDS and interest rate swap
contracts. These derivatives are not eligible for reclassification and are
recorded on a fair value basis with changes in fair value recorded in
the period’s earnings. Management believes that this asymmetry in the
accounting treatment between derivatives and the reclassified debt
securities results in volatility in earnings from period to period that is
not indicative of the economics of the underlying business performance
in Wholesale Banking. As a result, the derivatives are accounted for on
an accrual basis in Wholesale Banking and the gains and losses related
to the derivatives, in excess of the accrued costs, are reported in the
Corporate segment.
The following table summarizes the segment results for the years
ended October 31, 2012 and October 31, 2011.
RESULTS BY GEOGRAPHY
For reporting of geographic results, segments are grouped into
Canada, United States and International. Transactions are primarily
recorded in the location responsible for recording the revenue or
assets. This location frequently corresponds with the location of the
legal entity through which the business is conducted and the location
of the customer.