Message from our Chief Financial Officer

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  Overview

  In 2010, despite the lingering economic challenges, our adjusted net income was $5.2 billion. Our results are a testament to the franchise earnings power of our retail businesses in both Canada and the U.S.

  The highlights that follow tell a story of stability, strong leadership and growth, fuelled by our simple strategy – to produce long-term, profitable growth by building great franchises and delivering value to our customers, shareholders and communities.

• 2010 snapshot

  

  

  Net Income

  Earnings Per Share

  Return on Risk-Weighted Assets

  Total Assets

  Dividends Per Share

  Premium Retail Earnings Mix

  Total Shareholder Return

  • 

    
    

    12.0 %

    TD’s 5 year CAGR
    (adjusted)

  • 

    
    

    6.9 %

    TD’s 5 year CAGR
    (adjusted)

  • 

    
    

    2.63 %

    TD’s 2010 return on risk-weighted assets
    (adjusted)

  • 

    
    

    11.2 %

    TD’s 5 year CAGR

  • 

    
    

    9.1 %

    TD’s 5 year CAGR

    8.5 %

    Canadian peers
    5 year CAGR

    (45.1) %

    U.S. peers
    5 year CAGR

  • 

    
    

    83 %

    Retail

    17 %

    Wholesale

  • 

    
    

    7.7 %

    TD’s Canadian peers

    (8.9) %

    TD’s U.S. peers

  
  
  Please see disclaimers for additional information.

  
  

• Highlights

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  We’re proud of all we accomplished in business this year, from expanding our operational footprint to finding new ways to serve our customers and clients – and that’s just the beginning.

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  We’re proud of all we accomplished in business this year, from expanding our operational footprint to finding new ways to serve our customers and clients – and that’s just the beginning.

  Launched our mobile banking application across North America with more than 600,000 downloads		TD Bank, America’s Most Convenient Bank, grew its footprint by 23% through organic growth and acquisitions		TD named Best Bank in North America by Euromoney magazine for the second year in a row
  TD Canada Trust announced the introduction of 7 day banking to more than 300 branches in 90 communities across Canada		Our retail operations posted a record $4.8 billion in adjusted earnings for 2010		TD Waterhouse launched a global trading platform that provides direct online real-time access for clients to 10 leading European and Asia Pacific markets
  TD Securities maintained its top 3 dealer status in Canada - number 1 in M&A completed and equity block trading; number 2 in fixed income trading and underwriting		TD Insurance’s total premiums exceeded $3 billion - number 2 personal home and auto insurer in Canada		TD Canada Trust named Highest in Customer Satisfaction Among the Big Five Retail Banks for the 5th year in a row

  Please see disclaimers for additional information.

  
  

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• Key financial metrics

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  A summary of our 2010 results and financial position tells TD’s high-level business story.

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  A summary of our 2010 results and financial position tells TD’s high-level business story.

  (millions of Canadian dollars, except where noted)	2010	2009	2008
  Results of operations
  Total revenues - reported	$ 19,565	$ 17,860	$ 14,669
  Total revenues - adjusted	19,562	18,621	14,372
  Net income - reported	4,644	3,120	3,833
  Net income - adjusted	5,228	4,716	3,813
  Financial positions at year end
  Total assets	619,545	557,219	563,214
  Total deposits	429,971	391,034	375,694
  Total loans	272,329	255,496	221,160
  Per common share (Canadian dollars)
  Diluted earnings - reported	5.10	3.47	4.87
  Diluted earnings - adjusted	5.77	5.35	4.88
  Dividend payout ratio - adjusted	42.1%	45.6%	49.3%
  Closing market price	73.45	61.68	56.92
  Total shareholder return	23.3%	13.6%	(17.1)%
  Financial ratios
  Tier 1 capital ratio	12.2%	11.3%	9.8%
  Total capital ratio	15.5%	14.9%	12.0%
  Efficiency ratio - reported	62.2%	68.4%	64.8%
  Efficiency ratio - adjusted	58.6%	59.2%	64.6%

  
  

  Please see disclaimers for additional information.

  
  

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• Performance indicators

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  Performance indicators focus effort, communicate our priorities and benchmark TD’s performance as we strive to be The Better Bank. The following table highlights our performance against these indicators in 2010.

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  Performance indicators focus effort, communicate our priorities and benchmark TD’s performance as we strive to be The Better Bank. The following table highlights our performance against these indicators in 2010.

  2010 performance indicators		Results1
  Financial Deliver above-peer-average total shareholder return2 Grow earnings per share (EPS) by 7% to 10% Deliver above-peer-average return on risk-weighted assets		TD return: 23.4% vs. Canadian peer average of 22.2% 8% EPS growth TD return: 2.63% vs. Canadian peer average of 1.98%
  Business operations Grow revenue faster than expenses Invest in core businesses to improve efficiency and effectiveness		Revenue growth exceeded expense growth by 1% Refer to “Business Segment Analysis” in the MD&A for details
  Customer Focus on improving Customer Experience Index (CEI)3 Invest in core businesses to enhance the customer experience		CEI score 28.6% (target 25.5%) Refer to “Business Segment Analysis” in the MD&A for details
  Employee Improve employee engagement score year over year Enhance the employee experience by: Listening to our employees Building employment diversity Providing a healthy, safe and flexible work environment providing competitive pay, benefits and performance-based compensation investing in training and development		Employee engagement score4 was 4.15 in fall 2010 vs. 4.11 in fall 2009 See TD’s 2010 Corporate Responsibility Report available March 2011 $56.3 million invested in fiscal 2010
  Community Donate minimum of 1% of domestic pre-tax profits (five-year average) to charitable and not-for-profit organizations Make positive contributions by: supporting employees’ community involvement and fundraising efforts supporting advancements in our areas of focus5, which include: education and financial literacy, creating opportunities for young people, creating opportunities for affordable housing, and the environment protecting and preserving the environment		1.4%, or $38.4 million, in donations and community sponsorships in Canada vs. 1.3%, or $37.0 million, in 2009 US$19.8 million in donations and community sponsorships in the U.S. vs. US$20.0 million in 2009 £90,919 in donations and community sponsorships in the U.K. vs. £74,216 in 2009 $409,000 in domestic employee volunteer grants to 593 organizations (22% year-over-year increase in employees’ community involvement) $21.5 million, or 55.5% of our community giving, was directed to promote our areas of focus domestically In 2010, TD became the largest North American-based bank to be carbon neutral $3.5 million distributed to 970 community environmental projects through TD Friends of the Environment Foundation; an additional $3.4 million from TD‘s community giving budget was used to support environmental projects

  
  ¹ Performance indicators that include an earnings component are based on TD’s full-year adjusted results (except as noted) as explained in “How the Bank Reports” in the MD&A. For peers, earnings have been adjusted on a comparable basis to exclude identified non-underlying items.
  ² Total shareholder return is measured on a one-year basis from November 1, 2009, to October 31, 2010.
  ³ Customer Experience Index (CEI) replaces TD’s previous measure of customer satisfaction. CEI is a measurement program that tracks TD customers’ loyalty and advocacy.
  ⁴ Scale for employee engagement score is from one to five.
  ⁵ In fiscal 2010, our areas of focus were updated to reflect the findings of a global review of TD’s community giving strategy.
  
  

  
  

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• Disclaimers

  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.
  See “How the Bank Reports” in the Management’s Discussion and Analysis for further explanation, a list of the items of note and reconciliation of non-GAAP financial measures.
  “Five-year CAGR” is the compound annual growth rate calculated from 2005 to 2010, on an adjusted basis.
  “TD’s Premium Retail Earnings Mix” is based on adjusted results.
  “Canadian Retail” earnings are the total adjusted earnings of the Canadian Personal and Commercial Banking and Wealth Management segments.
  “U.S. Retail” earnings are the total adjusted earnings of the U.S. Personal and Commercial Banking segments.
  Canadian peers/Big Five Retail Banks include Royal Bank of Canada, Scotiabank, Bank of Montreal and Canadian Imperial Bank of Commerce.
  U.S. peers include Citigroup, Bank of America, J.P. Morgan, Wells Fargo, PNC Financial and U.S. Bancorp.
  For purposes of comparison with U.S. peers, dividends per share five-year compound growth rate are calculated on a year-to-date basis from Q3 2005 to Q3 2010.