Leading the Way... P6
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TO OUR SHAREHOLDERS CORPORATE GOVERNANCE President and CEO’s Statement of Strategic Advice p7 Message p11 Corporate Governance Ed Clark comments on Practices from a Top TD’s 2007 performance and Information about our Three Dealer in its focus on being a different corporate governance structure kind of bank as he answers and our Board’s responsibilities, Canada the questions he was asked members and committees. most often this year by the investment community and MORE ABOUT US TD employees. Corporate Over the last five years, TD repositioned its Wholesale Bank p132 Responsibility at TD p2 to focus on areas where the risk/reward trade-off is clear. TD’s Performance A preview of TD’s upcoming The result? A business that’s better positioned to deliver high- Indicators 2007 Corporate Responsibility quality earnings. This focus on the future builds great p9 A look at the financial and Report that shares details about franchise businesses and has made us a top three dealer in non-financial indicators that our community, economic, Canada. TD Securities’ client Shaw Communications also focus our efforts and bench- social and environmental understands the value of forward thinking. They’ve been mark our performance. performance and commitments. blazing trails for over 40 years. Pursuing Chairman of the Board’s p10 Message Organic Growth John Thompson provides his thoughts on the Bank’s 2007 in the U.S. results and updates TD shareholders on the Board’s oversight and contributions Leading the way... during the year. 13 MANAGEMENT’S DISCUSSION p133 AND ANALYSIS FINANCIAL RESULTS 76 Consolidated Financial Statements Building an organic growth 82 Notes to Consolidated Financial engine in the U.S is a big part Statements of TD’s future. At TD 122 PRINCIPAL SUBSIDIARIES Ameritrade, this means 124 TEN-YEAR STATISTICAL REVIEW aggressively growing market 128 GLOSSARY share in the long-term investor MORE ABOUT US segment. At TD Banknorth, 129 Shareholder and Investor Information it’s about working hard to gain Delivering a 130 Senior Officers competitive advantage in the Great Customer U.S. Northeast. But this goal can’t come to life unless we’re Experience an outstanding banking partner. TD Banknorth client Building a Digital Design Inc., shares Wealth of how TD is contributing to TD Canada Trust’s leading its success. Experience retail branch network is built on convenience and service. p6 External surveys tell us we are the best at service in the industry. We’ve raised the bar again by opening more new p4 branches, and having longer hours than the competition. Just ask customer Dana Tilley what she thinks of this Combine a #1 discount brokerage with aggressively growing commitment to service. mutual fund and advice-based businesses and you get the power of TD’s diversified Canadian Wealth Management offering. TD Waterhouse’s success is a great example of how the Bank constantly reinvests in its businesses to create future growth. Investing in growth is something that Dr. Peter Wong, a long-standing discount brokerage client, also takes very seriously. 152nd Annual Report 2007 ghts LI GH TOTAL SHAREHOLDER RETURN DIVIDENDS PER SHARE I 1 H (percent) (Canadian dollars) FINANCIAL HIghLIghts 25% $3.0 INANCIAL INANCIAL 2.5 F 20 www.td.com 1 3 . 0 % 2.0 $2.11 NET INCOME EARNINGS PER SHARE available to common shareholders (Canadian dollars) 15 in 2007 (millions of Canadian dollars) The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Financial Group. TD Bank Financial Group serves more than Annual Report 152nd 2007 1.5 19% 14 million customers in four key businesses operating in a number of locations in key financial centres around the globe: Canadian Personal above Canadian in 2007 over 2006 and Commercial Banking, including TD Canada Trust; Wealth Management, including TD Waterhouse and an investment in TD Ameritrade; 10 $5,000 $7 peer average of 10.7% 1.0 $3,977 $5.48 U.S. Personal and Commercial Banking through TD Banknorth; and Wholesale Banking, including TD Securities. TD Bank Financial Group also reported 6 reported 5 4,000 ranks among the world’s leading online financial services firms, with more than 4.5 million online customers. TD Bank Financial Group had 0.5 CDN$422 billion in assets as of October 31, 2007. The Toronto-Dominion Bank trades on the Toronto and New York Stock Exchanges under 5 3,000 the symbol “TD”, as well as on the Tokyo Stock Exchange. 0 0 $4,169 4 $5.75 05 06 07 05 06 07 adjusted adjusted 3 2,000 Head Office Annual Meeting For all other shareholder inquiries, Address: April 3, 2008 please contact the Shareholder 24% 2 23% The Toronto-Dominion Bank 9:30 a.m. (Mountain) Relations Department at 1,000 TD BANK FINANCIAL GROUP in 2007 over 1 EPS growth in P.O. Box 1 Hyatt Regency Calgary 416-944-6367 or 1-866-756-8936 Toronto-Dominion Centre Calgary, Alberta or e-mail [email protected] 2006 adjusted 2007 adjusted 0 0 King St. W. and Bay St. TD is consistently growing earnings through 05 06 07 05 06 07 Toronto, Ontario Shareholder Services The annual report is available in M5K 1A2 For shareholder inquiries relating to: alternative formats by contacting the 416-982-8222 missing dividends, lost share Shareholder Relations Department. a focus on retail businesses and a transparent Fax: certificates, estate questions, 416-982-5671 address changes to the share Shareholders may communicate register, dividend bank account directly with the independent risk-reward oriented wholesale bank. (millions of Canadian dollars, except as noted) 2007 2006 2005 inc./(dec. ) Products and services: changes or the dividend directors through the Chairman 2007/2006 Contact TD Canada Trust, re-investment program, please of the Board, by writing to: 24 hours a day, seven contact our transfer agent: John M. Thompson RETURN ON RISK-WEIGHTED ASSETS td’S PREMIUM RETAIL EARNINgs MIX IN 2007 Results of operations Chairman of the Board days a week CIBC Mellon Trust Company (percent) Total revenues – reported $ 14,281 $ 13,192 $ 11,959 $ 1,089 1-866-567-8888 P.O. Box 7010 The Toronto-Dominion Bank P.O. Box 1 Net income loss available to common 3,977 4,581 2,229 (604) French: Adelaide Street Postal Station Toronto-Dominion Centre shareholders – reported 1-866-233-2323 Toronto, Ontario 3.0% U.S. Retail M5C 2W9 Toronto, Ontario Canadian Cantonese/Mandarin: Net income available to common 4,169 3,354 2,861 815 1-800-387-0825 M5K 1A2 1-800-328-3698 Retail shareholders – adjusted 416-643-5500 2.5 2 . 8 % 14% Telephone device for hearing www.cibcmellon.com or inquiries@ Financial mailing list: impaired: cibcmellon.com The Bank maintains a mailing list so 66% 1-800-361-1180 shareholders and other interested 2.0 12% Financial position at year end General information: Co-transfer agent and registrar: parties can receive quarterly financial in 2007 over 2006 Total assets $ 422,124 $ 392,914 $ 365,210 $ 29,210 Contact Corporate and Mellon Investor Services LLC statements and annual reports. To 1.5 Wholesale Total shareholders’ equity 21,404 19,632 15,866 1,722 Public Affairs P.O. Box 358015 add your name to this list, please adjusted 416-982-8578 Pittsburgh, Pennsylvania 15252-8015 contact the Bank’s transfer agent. Market capitalization 51,216 46,704 39,648 4,512 1.0 20% web site: or www.td.com 480 Washington Boulevard Jersey City, New Jersey 07310 Per common share (Canadian dollars) E-mail: 0.5 1-866-233-4836 [email protected] Diluted earnings – reported $ 5.48 $ 6.34 $ 3.20 $ (0.86) TDD for hearing impaired: 1-800-231-5469 0 Diluted earnings – adjusted 5.75 4.66 4.14 1.09 Foreign shareholders: 05 06 07 Dividends 2.11 1.78 1.58 0.33 201-680-6578 Book value 29.23 26.77 22.29 2.46 TDD foreign shareholders: 201-680-6610 Closing market price 71.35 65.10 55.70 6.25 www.melloninvestor.com Snapshot: TD Bank Financial Group Total shareholder return 13.0% 20.3% 17.2% (730)bps Shareholder service agent in Japan: Financial ratios (percent) Mizuho Trust & Banking Co., Ltd. 1–17–7, Saga, Koto-ku Return on total common equity – reported 19.3% 25.5% 15.3% (620)bps Tokyo, Japan Return on total common equity – adjusted 20.3 18.7 19.6 160 135-8722 Best-in-class Wholesale bank Focused Return on total assets 1.0 1.2 0.6 (20) Canadian retail delivering high U.S. growth Tier 1 capital to risk-weighted assets 10.3 12.0 10.1 (170) Common equity to total assets 5.0 4.9 4.3 10 operations return on invested strategy Efficiency ratio – reported 62.8 59.8 74.0 300 capital Efficiency ratio – adjusted 59.6 62.4 65.2 (280) Paper used for this annual report is certified by the Forest Stewardship Council (FSC). The cover and pages 1-12 contain 50% recycled content, including 25% post-consumer waste and is acid-free and elemental • A Top Bank in North America by Market Capitalization chlorine free. Pages 13-132 have 30% 10 post-consumer waste and are also acid and 1 elemental chlorine free. • Over 4.5 million Online Banking Customers Results prepared in accordance with GAAP are referred to as “reported”. Adjusted results (excluding “items of note”, net of tax, from reported results) and related terms are not defined terms under GAAP and therefore, may not be comparable to similar terms used by other issuers.