TD Bank 2014 Annual Report Download - page 10

TD BANK GROUP ANNUAL REPORT 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS8
This Management’s Discussion and Analysis (MD&A) is presented to enable readers to assess material
changes in the financial condition and operating results of TD Bank Group (“TD” or the “Bank”) for the
year ended October 31, 2014, compared with the corresponding period in the prior years. This MD&A
should be read in conjunction with the audited Consolidated Financial Statements and related Notes for
the year ended October 31, 2014. This MD&A is dated December 3, 2014. 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 International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB). Note that certain comparative
amounts have been reclassified to conform to the presentation adopted in the current year.
Management’s Discussion and Analysis
Additional information relating to the Bank, including the Bank’s Annual Information Form, is available on the Bank’s website at http://www.td.com, on SEDAR
at http://www.sedar.com, and on the U.S. Securities and Exchange Commission’s website at http://www.sec.gov (EDGAR filers section).
Caution Regarding Forward-Looking Statements
From time to time, the Bank makes written and/or oral forward-looking statements, including in this document, in other filings with Canadian regulators or the U.S.
Securities and Exchange Commission, and in other communications. In addition, representatives of the Bank may make forward-looking statements orally to analysts,
investors, the media and others. All such statements are made pursuant to the “safe harbour” provisions of, and are intended to be forward-looking statements under,
applicable Canadian and U.S. securities legislation, including the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not
limited to, statements made in this document, including in the Management’s Discussion and Analysis (“2014 MD&A”) under the heading “Economic Summary and
Outlook”, for each business segment under headings “Business Outlook and Focus for 2015”, and in other statements regarding the Bank’s objectives and priorities
for 2015 and beyond and strategies to achieve them, and the Bank’s anticipated financial performance. Forward-looking statements are typically identified by words
such as “will”, “should”, “believe”, “expect”, “anticipate”, “intend”, “estimate”, “plan”, “may”, and “could”.
By their very nature, these forward-looking statements require the Bank to make assumptions and are subject to inherent risks and uncertainties, general and
specific. Especially in light of the uncertainty related to the physical, financial, economic, political, and regulatory environments, such risks and uncertainties – many of
which are beyond the Bank’s control and the effects of which can be difficult to predict – may cause actual results to differ materially from the expectations expressed
in the forward-looking statements. Risk factors that could cause such differences include: credit, market (including equity, commodity, foreign exchange, and interest
rate), liquidity, operational (including technology), reputational, insurance, strategic, regulatory, legal, environmental, capital adequacy, and other risks. Examples of
such risk factors include the general business and economic conditions in the regions in which the Bank operates; the ability of the Bank to execute on key priorities,
including to successfully complete acquisitions and strategic plans and to attract, develop and retain key executives; disruptions in or attacks (including cyber-attacks)
on the Bank’s information technology, internet, network access or other voice or data communications systems or services; the evolution of various types of fraud or
other criminal behaviour to which the Bank is exposed; the failure of third parties to comply with their obligations to the Bank or its affiliates, including relating to the
care and control of information; the impact of new and changes to current laws and regulations; the overall difficult litigation environment, including in the U.S.;
increased competition, including through internet and mobile banking; changes to the Bank’s credit ratings; changes in currency and interest rates; increased funding
costs for credit due to market illiquidity and competition for funding; changes to accounting policies and methods used by the Bank; and the occurrence of natural and
unnatural catastrophic events and claims resulting from such events. The Bank cautions that the preceding list is not exhaustive of all possible risk factors and other
factors could also adversely affect the Bank’s results. For more detailed information, please see the “Risk Factors and Management” section of the 2014 MD&A, as
may be updated in subsequently filed quarterly reports to shareholders and news releases (as applicable) related to any transactions discussed under the heading
“Significant Events” in the relevant MD&A, which applicable releases may be found on www.td.com. All such factors should be considered carefully, as well as other
uncertainties and potential events, and the inherent uncertainty of forward-looking statements, when making decisions with respect to the Bank and the Bank
cautions readers not to place undue reliance on the Bank’s forward-looking statements.
Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2014 MD&A under the headings “Economic
Summary and Outlook”, and for each business segment, “Business Outlook and Focus for 2015”, each as updated in subsequently filed quarterly reports to shareholders.
Any forward-looking statements contained in this document represent the views of management only as of the date hereof and are presented for the purpose of
assisting the Bank’s shareholders and analysts in understanding the Bank’s financial position, objectives and priorities and anticipated financial performance as at and
for the periods ended on the dates presented, and may not be appropriate for other purposes. The Bank does not undertake to update any forward-looking state-
ments, whether written or oral, that may be made from time to time by or on its behalf, except as required under applicable securities legislation.
FINANCIAL RESULTS OVERVIEW 9
Net Income 13
Revenue 14
Expenses 18
Taxes 20
Quarterly Financial Information 21
BUSINESS SEGMENT ANALYSIS
Business Focus 23
Canadian Retail 26
U.S. Retail 30
Wholesale Banking 34
Corporate 37
2013 FINANCIAL RESULTS OVERVIEW
Summary of 2013 Performance 38
2013 Financial Performance by Business Line 39
GROUP FINANCIAL CONDITION
Balance Sheet Review 41
Credit Portfolio Quality 41
Capital Position 57
Securitization and Off-Balance Sheet Arrangements 65
Related-Party Transactions 67
Financial Instruments 67
RISK FACTORS AND MANAGEMENT
Risk Factors That May Affect Future Results 68
Managing Risk 71
ACCOUNTING STANDARDS AND POLICIES
Critical Accounting Estimates 101
Current and Future Changes in Accounting Policies 104
Controls and Procedures 106
ADDITIONAL FINANCIAL INFORMATION 107