TD Bank Financial Group Reports Strong Fourth Quarter, Excellent Fiscal 2007

------------------------------------------------------------------------- TD Bank Financial Group's audited Consolidated Financial Statements (including Notes to the Consolidated Financial Statements) for the year ended October 31, 2007 and accompanying Management's Discussion and Analysis is available at www.td.com. ------------------------------------------------------------------------- FULL YEAR FINANCIAL HIGHLIGHTS - Reported diluted earnings per share(1) for fiscal 2007 were $5.48 compared with $6.34 for fiscal 2006. - Adjusted diluted earnings per share(2) for fiscal 2007 were $5.75 compared with $4.66 for fiscal 2006. - Reported net income was $3,997 million for fiscal 2007, compared with $4,603 million for fiscal 2006. - Adjusted net income was $4,189 million for fiscal 2007, compared with $3,376 million for fiscal 2006. FOURTH QUARTER FINANCIAL HIGHLIGHTS compared with the fourth quarter a year ago: - Reported diluted earnings per share(1) were $1.50, up 44% from $1.04. - Adjusted diluted earnings per share(2) were $1.40, up 17% from $1.20. - Reported net income was $1,094 million, compared with $762 million. - Adjusted net income was $1,021 million, compared with $875 million. FOURTH QUARTER ADJUSTMENTS (ITEMS OF NOTE) The fourth quarter reported diluted earnings per share figures above include the following items of note: - A gain of $135 million after tax (19 cents per share) related to the estimated value of the shares the Bank received in Visa Inc. in exchange for its membership interest in Visa Canada Association as part of the Visa global restructuring. - A general loan loss provision release of $39 million after tax (5 cents per share) based on revised loss rate factors, utilizing internal experience in alignment with Basel II methodology. - Amortization of intangibles of $99 million after tax (14 cents per share), compared with $87 million after tax (12 cents per share) in the fourth quarter last year. - A loss of $2 million after tax due to the change in fair value of credit default swaps hedging the corporate loan book, compared with a loss of $8 million after tax (1 cent per share) in the fourth quarter last year. All dollar amounts are expressed in Canadian currency unless otherwise noted. 1 Reported results are prepared in accordance with Canadian generally accepted accounting principles (GAAP). 2 Adjusted earnings and reported results referenced in this News Release are explained in detail on page 5 under the "How the Bank Reports" section. The items of note include the Bank's amortization of intangible assets. TORONTO, Nov. 29 /CNW/ - TD Bank Financial Group (TDBFG or the Bank) today announced its financial results for the fourth quarter ended October 31, 2007. TDBFG saw broad-based contributions from all its business segments, which led to strong overall financial performance. The Bank today also released its 2007 audited Consolidated Financial Statements and Management's Discussion and Analysis. "A strong fourth quarter financial performance wrapped up a tremendous 2007. For the year, all TDBFG businesses posted double-digit earnings growth," said Ed Clark, TD Bank Financial Group President and Chief Executive Officer. "This quarter demonstrated the ongoing strength of our domestic businesses and good progress in our U.S. operations," Clark continued. "In a year of turbulent markets, clearly the successful altering of our risk-reward profile was a significant advantage for us. This year was also defined by the investments we made to expand our U.S. platform, and we're excited about growing as a leading North American financial institution," Clark added. FOURTH QUARTER BUSINESS SEGMENT PERFORMANCE Canadian Personal and Commercial Banking TD Canada Trust produced another strong quarter with earnings up 14% compared to the same quarter last year. Real estate secured lending, core banking, business banking and insurance businesses all contributed to earnings strength in the quarter. TD Canada Trust opened 38 new branches during the year, including its 100th branch in Quebec, to increase sales capacity and customer growth across its personal, small business and commercial banking businesses. The fourth quarter also saw TD Canada Trust rank No. 1 in overall quality of customer service in Canada by the Synovate survey, No. 1 in customer satisfaction in Canada by J.D. Power and Associates, and Best Consumer Internet Bank in Canada by Global Finance. "TD Canada Trust capped off another outstanding year by achieving its 20th consecutive quarter of double-digit earnings growth in the fourth quarter - an exceptional track record," said Clark. "We continued to build upon our award winning service and convenience brand, opening more branches and launching longer hours that see our branches open on average 50% longer than our Canadian peers," Clark said. Wealth Management Wealth Management, including the Bank's equity share in TD Ameritrade, produced another very strong quarter, with a 31% increase in earnings compared to the fourth quarter of 2006. In Canada, the quarter saw continued earnings strength in discount brokerage and the advice-based businesses, along with increased assets under management in TD Mutual Funds. During 2007, Canadian Wealth Management added 139 client-facing advisors to its network. TD Ameritrade's fourth quarter contributed $75 million in net income to the Bank's Wealth Management segment. Operating highlights from the quarter included record results in earnings, client assets and average client trades per day. "We've seen great growth in our Wealth Management segment again this year, a tribute to the continuing momentum within our Canadian wealth businesses and our investment in the world-class capabilities of TD Ameritrade," said Clark. "We have one of the fastest growing Canadian Wealth Management businesses amongst our peers. In the last five years, earnings have grown by 26% per year on average. That's an incredible achievement," Clark added. U.S. Personal and Commercial Banking TD Banknorth earned $124 million in the fourth quarter, a 97% increase over the same period last year, largely reflecting the privatization which closed in April 2007. On a US dollar basis, higher revenues combined with sustained expense control demonstrated continued progress in the core business. TD Banknorth's overall asset quality remained solid. "TD Banknorth's results exceeded expectations in the quarter despite the strengthening of the Canadian dollar," Clark said. "While we expect the U.S. operating environment to remain challenging next year, we're pleased with TD Banknorth's steady progress towards meeting its organic growth objectives," said Clark. During the quarter, TDBFG announced a definitive agreement to acquire New Jersey based Commerce Bancorp. The combination of Commerce and TD Banknorth would double the scale of the Bank's U.S. banking business, and increase the Bank's overall retail network to 2,000 branches in North America. The parties are now expecting to mail the proxy statement/prospectus to Commerce shareholders in December, and as a result, to close in February or March 2008 subject to shareholder approval and approvals from U.S and Canadian regulatory authorities. "Commerce perfectly complements TD Banknorth's geographic footprint, and together, they will provide us with extensive coverage of the biggest regional banking market in the U.S.," he added. Wholesale Banking Wholesale Banking posted a solid fourth quarter with notable contributions from its foreign exchange, fixed income and equity trading businesses, which more than offset weak credit trading results. Earnings in the quarter increased year over year to $157 million, up 8% compared with earnings in fourth quarter of 2006. On a full year basis, Wholesale Banking grew adjusted earnings 24%. "Looking at 2007, our Wholesale Bank produced terrific results, showing the strength of our domestic franchise businesses," said Clark. "We achieved top three dealer status in Canada and we continue to make progress on solidifying this position," Clark said. "Although trading results were mixed in the fourth quarter, our transparent risk-reward oriented business helped TD avoid the major pitfalls of recent market turmoil," added Clark. Conclusion "TDBFG's strong fourth quarter performance rounded out a fantastic 2007 and was a clear validation of the strategy we've been delivering on for the past five years," said Clark. "These great results speak to the commitment and spirit of our phenomenal team of employees across the Bank." "Overall, I have every confidence the underlying strength of all our businesses will continue to deliver shareholder value in both the short and long term," said Clark. "The success of our Canadian franchise has had a lot to do with our ability to pursue U.S expansion. Just like TD Canada Trust, Commerce shares our strong belief in convenience, service and relentless focus on the customer. We're tremendously excited about how this acquisition is set to transform our organization into a North American powerhouse," Clark concluded. CAUTION REGARDING FORWARD-LOOKING STATEMENTS From time to time, the Bank makes written and oral forward-looking statements, including in this press release, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission (SEC), and in other communications. In addition, the Bank's senior management may make forward-looking statements orally to analysts, investors, representatives of the media and others. All such statements are made pursuant to the "safe harbour" provisions of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, among others, statements regarding the Bank's objectives and targets for 2008 and beyond, and strategies to achieve them, the outlook for the Bank's business lines, and the Bank's anticipated financial performance. The economic assumptions for 2008 for each of our business segments are set out in the 2007 Annual Report under the headings "Economic Outlook" and "Business Outlook and Focus for 2008", as updated in the subsequently filed quarterly Reports to Shareholders. 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 statements require us to make assumptions and are subject to inherent risks and uncertainties, general and specific, which may cause actual results to differ materially from the expectations expressed in the forward-looking statements. Some of the factors - many of which are beyond our control - that could cause such differences include: credit, market (including equity and commodity), liquidity, interest rate, operational, reputational, insurance, strategic, foreign exchange, regulatory, legal and other risks discussed in the management discussion and analysis section of the Bank's 2007 Annual Report and in other regulatory filings made in Canada and with the SEC; general business and economic conditions in Canada, the U.S. and other countries in which the Bank conducts business, as well as the effect of changes in monetary policy in those jurisdictions and changes in the foreign exchange rates for the currencies of those jurisdictions; the degree of competition in the markets in which the Bank operates, both from established competitors and new entrants; the accuracy and completeness of information the Bank receives on customers and counterparties; the development and introduction of new products and services in markets; developing new distribution channels and realizing increased revenue from these channels; the Bank's ability to execute its strategies, including its integration, growth and acquisition strategies and those of its subsidiaries, particularly in the U.S.; changes in accounting policies and methods the Bank uses to report its financial condition, including uncertainties associated with critical accounting assumptions and estimates; the effect of applying future accounting changes; global capital market activity; the Bank's ability to attract and retain key executives; reliance on third parties to provide components of the Bank's business infrastructure; the failure of third parties to comply with their obligations to the Bank or its affiliates as such obligations relate to the handling of personal information; technological changes; the use of new technologies in unprecedented ways to defraud the Bank or its customers; legislative and regulatory developments; change in tax laws; unexpected judicial or regulatory proceedings; continued negative impact of the U.S. securities litigation environment; unexpected changes in consumer spending and saving habits; the adequacy of the Bank's risk management framework, including the risk that the Bank's risk management models do not take into account all relevant factors; the possible impact on the Bank's businesses of international conflicts and terrorism; acts of God, such as earthquakes; the effects of disease or illness on local, national or international economies; and the effects of disruptions to public infrastructure, such as transportation, communication, power or water supply. A substantial amount of the Bank's business involves making loans or otherwise committing resources to specific companies, industries or countries. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the Bank's financial results, businesses, financial condition or liquidity. The preceding list is not exhaustive of all possible factors. Other factors could also adversely affect the Bank's results. For more information, see the discussion starting on page 59 of the Bank's 2007 Management's Discussion and Analysis. All such factors should be considered carefully when making decisions with respect to the Bank, and undue reliance should not be placed on the Bank's forward-looking statements. The Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf. This document was reviewed by the Bank's Audit Committee and was approved by the Bank's Board of Directors, on the Audit Committee's recommendation, prior to its release. ANALYSIS OF OPERATING PERFORMANCE This analysis of operating performance is presented to enable readers to assess material changes in the operational results of TD Bank Financial Group (the Bank) for the quarter ended October 31, 2007, compared with the corresponding periods. This analysis should be read in conjunction with our unaudited interim Consolidated Financial Statements included in this News Release and with our 2007 audited Consolidated Financial Statements. This analysis is dated November 28, 2007. Unless otherwise indicated, all amounts are expressed in Canadian dollars and have been primarily derived from the Bank's annual or interim Consolidated Financial Statements prepared in accordance with Canadian generally accepted accounting principles (GAAP). Certain comparative amounts have been reclassified to conform with the presentation adopted in the current period. Additional information relating to the Bank is on the Bank's website www.td.com, as well as on SEDAR at www.sedar.com and on the U.S. Securities and Exchange Commission's website at www.sec.org (EDGAR filers section). FINANCIAL HIGHLIGHTS(1) (unaudited) ------------------------------------------------------------------------- For the twelve For the three months ended months ended (millions of ----------------------------- ------------------- Canadian dollars, Oct. 31 July 31 Oct. 31 Oct. 31 Oct. 31 except as noted) 2007 2007 2006 2007 2006 ------------------------------------------------------------------------- Results of operations Total revenue $3,550 $3,682 $3,318 $14,281 $13,192 Dilution gain, net - - - - 1,559 Provision for credit losses 139 171 170 645 409 Non-interest expenses 2,241 2,216 2,211 8,975 8,815 Net income - reported(2) 1,094 1,103 762 3,997 4,603 Net income - adjusted(2) 1,021 1,164 875 4,189 3,376 Economic profit(3) 430 578 326 1,876 1,309 Return on common equity - reported 20.8% 21.0% 15.7% 19.3% 25.5% Return on invested capital(3) 16.3% 18.7% 15.2% 17.1% 15.6% ------------------------------------------------------------------------- Financial position Total assets $422,124 $403,890 $392,914 $422,124 $392,914 Total risk-weighted assets 152,519 150,783 141,879 152,519 141,879 Total shareholders' equity 21,404 21,003 19,632 21,404 19,632 ------------------------------------------------------------------------- Financial ratios - reported (per cent) Efficiency ratio 63.1% 60.2% 66.6% 62.8% 59.8% Tier 1 capital to risk-weighted assets 10.3% 10.2% 12.0% 10.3% 12.0% Tangible common equity as a % of risk-weighted assets 7.4% 7.1% 9.1% 7.4% 9.1% Provision for credit losses as a % of net average loans 0.30 0.39 0.40 0.37 0.25 ------------------------------------------------------------------------- Common share information - reported (Canadian dollars) Per share Basic earnings $1.52 $1.53 $1.05 $5.53 $6.39 Diluted earnings 1.50 1.51 1.04 5.48 6.34 Dividends 0.57 0.53 0.48 2.11 1.78 Book value 29.23 28.65 26.77 29.23 26.77 Closing share price 71.35 68.26 65.10 71.35 65.10 Shares outstanding (millions) Average basic 717.3 719.5 719.7 718.6 716.8 Average diluted 724.4 726.9 726.0 725.5 723.0 End of period 717.8 718.3 717.4 717.8 717.4 Market capitalization (billions of Canadian dollars) $51.2 $49.0 $46.7 $51.2 $46.7 Dividend yield 3.0% 2.9% 2.8% 3.0% 2.9% Dividend payout ratio 37.6 34.6 45.8 38.1 27.9 Price to earnings multiple 13.0 13.6 10.3 13.0 10.3 ------------------------------------------------------------------------- Common share information - adjusted (Canadian dollars) Per share Basic earnings $1.42 $1.61 $1.21 $5.80 $4.70 Diluted earnings 1.40 1.60 1.20 5.75 4.66 Dividend payout ratio 40.3% 32.8% 39.9% 36.4% 38.1% Price to earnings multiple 12.4 12.3 14.0 12.4 14.0 ------------------------------------------------------------------------- (1) Certain comparative amounts have been restated and reclassified to confirm to the presentation adopted in the current period. (2) Reported and adjusted results are explained on page 5 under the "How the Bank Reports" section, which includes a reconciliation between reported and adjusted results. (3) Economic profit and return on invested capital are non-GAAP financial measures and are explained on page 8 under the "Economic Profit and Return on Invested Capital" section. HOW WE PERFORMED How the Bank Reports The Bank's financial results, as presented on pages 12 to 16 of this News Release, have been prepared in accordance with GAAP. The Bank refers to results prepared in accordance with GAAP as "reported" results. The Bank also utilizes non-GAAP financial measures referred to as "adjusted" results to assess each of its businesses and to measure overall Bank performance. To arrive at adjusted results, the Bank removes "items of note", net of income taxes, from reported results. The items of note are listed in the table on the following page. The items of note relate to items which management does not believe are indicative of underlying business performance. The items of note include the Bank's amortization of intangible assets which primarily relate to the Canada Trust acquisition in 2000, the TD Banknorth Inc. (TD Banknorth) acquisition in 2005, and the acquisitions by TD Banknorth of Hudson United Bancorp (Hudson) in 2006 and Interchange Financial Services Corporation (Interchange) in 2007, and the amortization of intangibles included in equity in net income of TD Ameritrade Holding Corporation (TD Ameritrade). The Bank believes that adjusted results provide the reader with a better understanding of how management views the Bank's performance. As explained, adjusted results are different from reported results determined in accordance with GAAP. Adjusted results and related terms used in this report are not defined terms under GAAP, and, therefore, may not be comparable to similar terms used by other issuers. Operating results - reported (unaudited)(1) ------------------------------------------------------------------------- For the twelve For the three months ended months ended ----------------------------- ------------------- (millions of Oct. 31 July 31 Oct. 31 Oct. 31 Oct. 31 Canadian dollars 2007 2007 2006 2007 2006 ------------------------------------------------------------------------- Net interest income $1,808 $1,783 $1,714 $6,924 $6,371 Other income 1,742 1,899 1,604 7,357 6,821 ------------------------------------------------------------------------- Total revenue 3,550 3,682 3,318 14,281 13,192 Provision for credit losses (139) (171) (170) (645) (409) Non-interest expenses (2,241) (2,216) (2,211) (8,975) (8,815) Dilution gain, net - - - - 1,559 ------------------------------------------------------------------------- Income before provision for income taxes, non-controlling interests in subsidiaries and equity in net income of associated company 1,170 1,295 937 4,661 5,527 Provision for income taxes (153) (248) (175) (853) (874) Non-controlling interests, net of tax (8) (13) (48) (95) (184) Equity in net income of associated company, net of tax 85 69 48 284 134 ------------------------------------------------------------------------- Net income - reported 1,094 1,103 762 3,997 4,603 Preferred dividends (5) (2) (5) (20) (22) ------------------------------------------------------------------------- Net income available to common shareholders - reported $1,089 $1,101 $757 $3,977 $4,581 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) Certain comparative amounts have been restated to conform with the presentation adopted in the current quarter. Reconciliation of non-GAAP measures(1) (unaudited) Adjusted net income to reported results ------------------------------------------------------------------------- Operating results For the twelve - adjusted For the three months ended months ended(2) ----------------------------- ------------------- (millions of Oct. 31 July 31 Oct. 31 Oct. 31 Oct. 31 Canadian dollars 2007 2007 2006 2007 2006 ------------------------------------------------------------------------- Net interest income $1,808 $1,783 $1,714 $6,924 $6,371 Other income(3) 1,582 1,853 1,616 7,148 6,862 ------------------------------------------------------------------------- Total revenues 3,390 3,636 3,330 14,072 13,233 Provision for credit losses(4) (199) (171) (142) (705) (441) Non-interest expenses(5) (2,103) (2,085) (2,085) (8,390) (8,260) ------------------------------------------------------------------------- Income before provision for income taxes, non-controlling interests in subsidiaries and equity in net income of associated company 1,088 1,380 1,103 4,977 4,532 Provision for income taxes(6) (156) (282) (236) (1,000) (1,107) Non-controlling interests, net of tax(7) (8) (14) (52) (119) (211) Equity in net income of associated company, net of tax(8) 97 80 60 331 162 ------------------------------------------------------------------------- Net income - adjusted 1,021 1,164 875 4,189 3,376 Preferred dividends (5) (2) (5) (20) (22) ------------------------------------------------------------------------- Net income available to common shareholders - adjusted $1,016 $1,162 $870 $4,169 $3,354 ------------------------------------------------------------------------- Items of note affecting net income, net of income taxes Amortization of intangibles $(99) $(91) $(87) $(353) $(316) Gain relating to restructuring of Visa(9) 135 - - 135 - TD Banknorth restructuring, privatization and merger related charges(10) - - - (43) - Dilution gain on Ameritrade transaction, net of costs - - - - 1,665 Dilution loss on the acquisition of Hudson United by TD Banknorth - - - - (72) Balance sheet restructuring charge in TD Banknorth - - - - (19) Wholesale Banking restructuring charge - - - - (35) Change in fair value of credit default swaps hedging the corporate loan book(11) (2) 30 (8) 30 7 General allowance release 39 - - 39 39 Other tax items - - - - (24) Initial set up of specific allowance for credit card and overdraft loans - - (18) - (18) ------------------------------------------------------------------------- Total items of note 73 (61) (113) (192) 1,227 ------------------------------------------------------------------------- Net income available to common shareholders - reported $1,089 $1,101 $757 $3,977 $4,581 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Reconciliation of reported earnings per share (EPS) to adjusted(5) (unaudited) ------------------------------------------------------------------------- For the twelve For the three months ended months ended ----------------------------- ------------------- Oct. 31 July 31 Oct. 31 Oct. 31 Oct. 31 (Canadian dollars) 2007 2007 2006 2007 2006 ------------------------------------------------------------------------- Diluted - reported $1.50 $1.51 $1.04 $5.48 $6.34 Items of note affecting income (as above) (0.10) 0.09 0.16 0.27 (1.70) Items of note affecting EPS only(12) - - - - 0.02 ------------------------------------------------------------------------- Diluted - adjusted $1.40 $1.60 $1.20 $5.75 $4.66 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic - reported $1.52 $1.53 $1.05 $5.53 $6.39 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 1. Certain comparative amounts have been restated and reclassified to conform to the presentation adopted in the current period. 2. Items of note in addition to those included in the fourth quarter of 2007 are as follows: first quarter 2006 - $82 million amortization of intangibles; dilution gain of $1.67 billion (U.S.$1.45 billion) on the Ameritrade transaction, net of costs; dilution loss of $72 million on the acquisition of Hudson by TD Banknorth; the Bank's share of TD Banknorth's balance sheet restructuring charge of $19 million (US$16 million); restructuring charge in connection with the previously announced decision to reposition the Bank's global structured products businesses of $35 million; $10 million gain due to the change in fair value of credit default swaps (CDS) hedging the corporate loan book; first quarter 2007 - $83 million amortization of intangibles; loss of $5 million due to the change in fair value of CDS hedging the corporate loan book; second quarter 2006 - $86 million amortization of intangibles; a reduction to the TD Ameritrade dilution gain of $5 million; gain of $10 million due to the change in fair value of CDS hedging the corporate loan book; $39 million general allowance release; second quarter 2007 - $80 million amortization of intangibles; $43 million TD Banknorth restructuring, privatization and merger-related charges; gain of $7 million due to the change in fair value of CDS hedging the corporate loan book; third quarter 2006 - $61 million amortization of intangibles; loss of $5 million due to the change in fair value of CDS hedging the corporate loan book; a tax loss of $24 million as a result of a higher tax rate applied to the future tax asset related to specific provisions; third quarter 2007 - $91 million amortization of intangibles; gain of $30 million due to the change in fair value of CDS hedging the corporate loan book; fourth quarter 2006 - $87 million amortization of intangibles; loss of $8 million due to the change in fair value of CDS hedging the corporate loan book; a one time loss of $18 million due to the initial set up of specific allowance for credit card and overdraft loans. 3. Adjusted other income excludes the following items of note: third quarter 2007 - $46 million gain/loss due to change in fair value of CDS hedging the corporate loan book; second quarter 2007 - $11 million gain due to change in fair value of CDS hedging the corporate loan book; first quarter 2007 - $8 million loss due to change in fair value of CDS hedging the corporate loan book; second quarter 2006 - $16 million gain due to change in fair value of CDS hedging the corporate loan book; first quarter 2006 - $15 million gain due to the change in fair value of CDS hedging the corporate loan book; and $52 million balance sheet restructuring charge at TD Banknorth. 4. Adjusted provision for credit losses excludes the following item of note: fourth quarter 2007 - $60 million general allowance release; second quarter 2006 - $60 million general allowance release. 5. Adjusted non-interest expenses excludes the following items of note: fourth quarter 2007 - $138 million amortization of intangibles; third quarter 2007 - $131 million amortization of intangibles; second quarter 2007 - $112 million amortization of intangibles; $86 million due to TD Banknorth restructuring, privatization and merger-related charges; first quarter 2007 - $118 million amortization of intangibles; second quarter 2006 - $125 million amortization of intangibles; first quarter 2006 - $128 million amortization of intangibles; and $50 million restructuring charge in connection with the decision to reposition the Bank's global structured products businesses. 6. For reconciliation between reported and adjusted provision for income taxes, see the table below. 7. Adjusted non-controlling interests excludes the following items of note: third quarter 2007 - $1 million amortization of intangibles; second quarter 2007 - $4 million amortization of intangibles; $15 million due to TD Banknorth restructuring, privatization and merger-related charges; first quarter 2007 - $4 million amortization of intangibles; second quarter 2006 - $3 million amortization of intangibles; first quarter 2006 - $15 million balance sheet restructuring charge at TD Banknorth. 8. Adjusted equity in net income of an associated company excludes the following items of note: fourth quarter 2007 - $12 million amortization of intangibles; third quarter 2007 - $11 million amortization of intangibles; second quarter 2007 - $12 million amortization of intangibles; first quarter 2007 - $12 million amortization of intangibles; second quarter 2006 - $7 million amortization of intangibles. 9. As part of the global restructuring of Visa USA Inc., Visa Canada Association and Visa International Service Association, which closed on October 3, 2007 (restructuring date), the Bank received shares of the new global entity (Visa Inc.) in exchange for the Bank's membership interest in Visa Canada Association. As required by the applicable accounting standards, the shares the Bank received in Visa Inc. were measured at fair value and an estimated gain of $135 million after tax was recognized in the Corporate segment, based on results of an independent valuation of the shares. The gain may be subject to further adjustment based on the finalization of the Bank's ownership percentage in Visa Inc. 10. The TD Banknorth restructuring, privatization and merger-related charges include the following: $31 million restructuring charge, primarily consisted of employee severance costs, the costs of amending certain executive employment and award agreements and write- down of long-lived assets due to impairment, included in U.S. Personal and Commercial Banking; $4 million restructuring charge related to the transfer of functions from TD Bank USA to TD Banknorth, included in the Corporate segment; $5 million privatization charges, which primarily consisted of legal and investment banking fees, included in U.S. Personal and Commercial Banking; and $3 million merger-related charges related to conversion and customer notices in connection with the integration of Hudson and Interchange with TD Banknorth, included in U.S. Personal and Commercial Banking. In the Consolidated Statement of Income, the restructuring charges are included in the restructuring costs while the privatization and merger-related charges are included in other non-interest expenses. 11. The Bank purchases CDS to hedge the credit risk in Wholesale Banking's corporate lending portfolio. These CDS do not qualify for hedge accounting treatment and are measured at fair value with changes in fair value recognized in current period's earnings. The related loans are accounted for at amortized cost. Management believes that this asymmetry in the accounting treatment between CDS and loans would result in periodic profit and loss volatility which is not indicative of the economics of the corporate loan portfolio or the underlying business performance in Wholesale Banking. As a result, the CDS are accounted for on an accrual basis in the Wholesale Banking segment and the gains and losses on the CDS, in excess of the accrued cost, are reported in the Corporate segment. Adjusted results exclude the gains and losses on the CDS in excess of the accrued cost. Previously, this item was described as "Hedging impact due to AcG-13". As part of the adoption of the new financial instruments standards, the guidance under Accounting Guideline 13: Hedging Relationships (AcG-13) was replaced by Canadian Institute of Chartered Accountants (CICA) Handbook Section 3865, Hedges. 12. Earnings per share (EPS) is computed by dividing income by the weighted average number of shares outstanding during the period. As a result, the sum of the quarterly EPS figures may not equal year-to- date EPS. Second quarter 2006 - one-time adjustment for the impact of TD Ameritrade earnings, due to the one month lag between fiscal quarter ends. The results of the Bank include its equity share in TD Ameritrade from January 25, 2006 to March 31, 2006. As a result of the one month lag, the impact on earnings per share was approximately 2 cents per share. Reconciliation of non-GAAP provision for income taxes(1) ------------------------------------------------------------------------- For the twelve For the three months ended months ended ----------------------------- ------------------- Oct. 31 July 31 Oct. 31 Oct. 31 Oct. 31 2007 2007 2006 2007 2006 ------------------------------------------------------------------------- Provision for income taxes - reported $153 $248 $175 $853 $874 Increase (decrease) resulting from items of note: Amortization of intangibles 51 50 47 184 205 Gain relating to restructuring of Visa (28) - - (28) - TD Banknorth restructuring privatization and merger related charges - - - 28 - Dilution gain on Ameritrade, net of costs - - - - 34 Balance sheet restructuring charge in TD Banknorth - - - - 18 Wholesale Banking restructuring charge - - - - 15 Change in fair value of credit default swaps hedging the corporate loan book 1 (16) 4 (16) (4) Other tax items - - - - (24) General allowance release (21) - - (21) (21) Initial setup of specific allowance for credit card and overdraft loans - - 10 - 10 ------------------------------------------------------------------------- Tax effect - items of note 3 34 61 147 233 ------------------------------------------------------------------------- Provision for income taxes - adjusted $156 $282 $236 $1,000 $1,107 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) Certain comparative amounts have been restated to conform with the presentation adopted in the current quarter. Economic Profit and Return on Invested Capital The Bank utilizes economic profit as a tool to measure shareholder value creation. Economic profit is adjusted net income available to common shareholders less a charge for average invested capital. Average invested capital is equal to average common equity for the period plus the average cumulative after-tax goodwill and intangible assets amortized as of the reporting date. The rate used in the charge for capital is the equity cost of capital calculated using the capital asset pricing model. The charge represents an assumed minimum return required by common shareholders on the Bank's invested capital. The Bank's goal is to achieve positive and growing economic profit. Return on invested capital (ROIC) is adjusted net income available to common shareholders divided by average invested capital. ROIC is a variation of the economic profit measure that is useful in comparison to the equity cost of capital. Both ROIC and the cost of capital are percentage rates, while economic profit is a dollar measure. When ROIC exceeds the equity cost of capital, economic profit is positive. The Bank's goal is to maximize economic profit by achieving ROIC that exceeds the equity cost of capital. Economic profit and ROIC are not defined terms under GAAP. Securities regulators require that companies caution readers that earnings and other measures adjusted to a basis other than GAAP do not have standardized meanings under GAAP and therefore, may not be comparable to similar terms used by other issuers. The following table reconciles between the Bank's economic profit, return on invested capital and adjusted net income. Adjusted earnings and related terms are discussed in the "How the Bank Reports" section. Reconciliation of Economic Profit, Return on Invested Capital and Adjusted Net Income ------------------------------------------------------------------------- For the twelve For the three months ended months ended ----------------------------- ------------------- Oct. 31 July 31 Oct. 31 Oct. 31 Oct. 31 2007 2007 2006 2007 2006 ------------------------------------------------------------------------- Average common equity $20,808 $20,771 $19,069 $20,572 $17,983 Average cumulative goodwill/intangible assets amortized, net of income taxes 3,941 3,857 3,641 3,825 3,540 ------------------------------------------------------------------------- Average invested capital $24,749 $24,628 $22,710 $24,397 $21,523 Rate charged for invested capital 9.4% 9.4% 9.5% 9.4% 9.5% ------------------------------------------------------------------------- Charge for invested capital $(586) $(584) $(544) $(2,293) $(2,045) ------------------------------------------------------------------------- Net income available to common shareholders - reported $1,089 $1,101 $757 $3,977 $4,581 Items of note impacting income, net of income taxes (73) 61 113 192 (1,227) ------------------------------------------------------------------------- Net income available to common shareholders - adjusted $1,016 $1,162 $870 $4,169 $3,354 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Economic profit $430 $578 $326 $1,876 $1,309 Return on invested capital 16.3% 18.7% 15.2% 17.1% 15.6% ------------------------------------------------------------------------- HOW OUR BUSINESSES PERFORMED For management reporting purposes, the Bank's operations and activities are organized around the following operating business segments: Canadian Personal and Commercial Banking, Wealth Management, including TD Ameritrade, U.S. Personal and Commercial Banking, and Wholesale Banking. The Bank's other activities are grouped into the Corporate segment. Results of each business segment reflect revenue, expenses, assets and liabilities generated by the business in that segment. The Bank measures and evaluates the performance of each segment based on adjusted results where applicable, and for those segments the Bank notes that the measure is adjusted. Amortization of intangible expense is included in the Corporate segment. Accordingly, net income for the operating business segments is presented before amortization of intangibles, as well as any other items of note not attributed to the operating segments. For further details, see the "How the Bank Reports" section on page 5, the "Business Focus" section in the 2007 Management's Discussion and Analysis and Note 27 to the 2007 audited Consolidated Financial Statements. For information concerning the Bank's measures of economic profit and return on invested capital, which are non-GAAP measures, see page 8. Segmented information also appears in Appendix A on page 16. Net interest income within Wholesale Banking is disclosed on a taxable equivalent basis (TEB), which means that the value of non-taxable or tax-exempt income, including dividends, is adjusted to its equivalent before-tax value. Using TEB allows the Bank to measure income from all securities and loans consistently and makes for a more meaningful comparison of net interest income with similar institutions. The TEB adjustment reflected in the Wholesale Banking segment is eliminated in the Corporate segment. The TEB adjustment for the quarter was $247 million, compared with $92 million in the fourth quarter last year, and $161 million in the prior quarter. On a full year basis, the TEB adjustment was $664 million, compared with $343 million in the last year. As noted in Note 4 to the 2007 Consolidated Financial Statements, the Bank securitizes retail loans and receivables held by Canadian Personal and Commercial Banking in transactions that are accounted for as sales. For the purpose of segmented reporting, Canadian Personal and Commercial Banking accounts for the transactions as though they are financing arrangements. Accordingly, the interest income earned on the assets sold net of the funding costs incurred by the purchaser trusts is recorded in net interest income and the provision for credit losses related to these assets is charged to provision for (reversal of) credit losses. This accounting is reversed in the Corporate segment and the gain recognized on sale which is in compliance with appropriate accounting standards together with income earned on the retained interests net of credit losses incurred are included in other income. Canadian Personal and Commercial Banking Canadian Personal and Commercial Banking net income for the quarter was $572 million, an increase of $71 million, or 14%, compared with the fourth quarter last year, and a decrease of $25 million, or 4%, compared with the prior quarter. The annualized return on invested capital for the quarter was 27%, compared with 25% in the fourth quarter last year and 28% in the prior quarter. Revenue grew by $204 million, or 10%, compared with the fourth quarter last year, primarily due to volume growth across most banking products, particularly in real-estate secured lending, credit cards and deposits. For similar reasons, revenue increased by $51 million, or 2%, compared with the prior quarter. Margin on average earning assets decreased by 4 bps from 3.07% to 3.03% compared with both the fourth quarter last year and the prior quarter. Volatility in credit markets that began in August this year impacted margins on the prime-based products. Escalating competition in high-yield saving deposit accounts continued to put pressure on margins. Compared with the fourth quarter last year, real-estate secured lending volume (including securitizations) grew by $14.2 billion or 11%, personal deposit volume grew by $3.4 billion or 3%, and consumer loan volume grew by $1.7 billion or 8%. Business deposits volume and business loans and acceptances volume both grew by 9%. Gross originated insurance premiums grew by $43 million or 7%. As at August 31, 2007, personal deposit market share was 20.9%, down 56 bps compared with last year and down 17 bps compared with the prior quarter, as a result of share decrease in term deposits. Personal lending market share was 19.9%, down 10 bps compared with last year and down 12 bps compared with the prior quarter. Small business lending (credit limits of less than $250,000) market share as at June 30, 2007 was 18.0%, up 44 bps compared with last year, and down 20 bps compared with the prior quarter. Credit card market share, for the month of August 2007, measured by the average outstanding balance, was 8.4%, up 35 bps compared with last year and down 1bp from the prior quarter. Provision for credit losses for the quarter increased by $44 million, or 33%, compared with the fourth quarter last year and by $25 million, or 17%, compared with the prior quarter. Personal banking provision for credit losses of $168 million was $54 million, or 47% higher than the fourth quarter last year and $21 million, or 14% higher quarter over quarter, primarily due to higher personal lending and credit card volumes and changes in credit granting criteria. Business banking provision for credit losses was $8 million for the quarter, a decrease of $10 million, or 56%, from the fourth quarter last year and an increase of $4 million from the prior quarter. Annualized provision for credit losses as a percentage of credit volume was 0.37%, an increase of 6 bps compared with the fourth quarter last year and 4 bps compared with the prior quarter, primarily due to higher personal lending and credit card volumes. Non-interest expenses increased by $46 million, or 4%, compared with the fourth quarter last year, primarily due to higher employee compensation and investments in new branches. Non-interest expenses increased by $64 million, or 6%, compared with the prior quarter, mainly due to higher expenses related to the preparation for longer branch hours starting November 1, 2007 as well as new branches, and business volume growth. The full time equivalent (FTE) staffing levels increased by 1,326, or 4%, compared with the fourth quarter last year, primarily due to the addition of sales and service personnel in branches and call centres, including the support for the launch of longer branch hours, as well as continued growth in the commercial and insurance businesses. FTE staffing levels increased by 511, or 2%, compared with the prior quarter, primarily due to the addition of sales and service personnel in branches and call centres. The efficiency ratio for the current quarter was 51.8%, compared with 54.8% in the fourth quarter last year and 50.0% in the prior quarter. The outlook for revenue growth is expected to moderate in 2008 as volume growth slows in the credit cards business and margins continue to be vulnerable to volatility in the credit markets. Volume growth is susceptible to a U.S.-led economic downturn. Revenue growth will benefit from increasing our leadership position in branch hours and new branch and marketing investments, as well as improved customer cross-sell and productivity improvements. PCL rates as a function of loan volumes are expected to reflect evolving conditions in the Canadian economy. Expense growth will be slightly higher relative to last year due to investments in new branches, longer hours and systems and infrastructure to maintain momentum in revenue growth. Wealth Management Wealth Management's net income for the quarter was $194 million, an increase of $46 million, or 31%, compared with the fourth quarter last year, and an increase of $9 million, or 5%, compared with the prior quarter. The Bank's investment in TD Ameritrade generated net income of $75 million, an increase of $22 million, or 42%, compared with the fourth quarter last year, and an increase of $16 million, or 27% compared with the prior quarter. The annualized return on invested capital increased to 19.8%, compared with 15.8% in the fourth quarter last year and increased by 1.2% from the prior quarter. Revenue grew by $77 million, or 15%, compared with the fourth quarter last year, primarily due to a combination of higher transaction volumes in discount and full service brokerage, higher net interest and fee-based income and strong growth in client assets. Commissions in the discount brokerage business were negatively impacted by a decline in commission per trade as a result of price reductions in the active trader and affluent household segments, though this was substantially offset by increased trade volumes. Revenue decreased by $6 million, or 1%, compared with the prior quarter, primarily due to lower volumes in mutual fund and advice-based businesses as a result of market volatility. Revenue was positively impacted by a new fixed administration fee in TD Asset Management (TDAM) for certain funds. Effective January 1, 2007, TDAM began absorbing the operating expenses of certain funds in return for a fixed administration fee. Previously, the operating costs were borne by the individual funds. This had the impact of increasing both revenue and expenses. Non-interest expenses increased by $42 million, or 12%, compared with the fourth quarter last year, primarily due to higher volume-related payments to sellers of the Bank's mutual funds, higher sales force compensation in advice-based businesses driven by increased revenues, and continued investment in client-facing advisors and related support staff. Non-interest expenses increased slightly by $4 million, or 1%, compared with the prior quarter. The efficiency ratio for the current quarter was 68.7%, compared with 70.8% in the fourth quarter last year and 67.3% in the prior quarter. Assets under management of $160 billion at October 31, 2007 increased $9 billion, or 6%, from October 31, 2006, due to market appreciation and the addition of net new client assets. Assets under administration totalled $185 billion at the end of the quarter, increasing $24 billion, or 15%, from October 31, 2006 due to market appreciation and the addition of net new client assets. TD Ameritrade reported record earnings of US$200 million for its quarter ended September 30, 2007 on average client trades per day of 278,000 and client assets of US$302.7 billion, up 15.7% or US$41 billion from last year. While volatility in the capital markets may impact short term results, the outlook remains favourable and growth in assets, advisors and earnings is expected to continue. Wealth Management ------------------------------------------------------------------------- For the twelve For the three months ended months ended ----------------------------- ------------------- (millions of Oct. 31 July 31 Oct. 31 Oct. 31 Oct. 31 Canadian dollars 2007 2007 2006 2007 2006 ------------------------------------------------------------------------- Canadian Wealth $119 $126 $ 95 $501 $410 TD Ameritrade/ TD Waterhouse U.S.A. 75 59 53 261 180 ------------------------------------------------------------------------- Net income $194 $185 $148 $762 $590 ------------------------------------------------------------------------- ------------------------------------------------------------------------- U.S. Personal and Commercial Banking U.S. Personal and Commercial Banking's reported net income for the fourth quarter was $124 million and the annualized return on invested capital was 5.1%. Net income increased by $61 million from the fourth quarter of 2006 and by $15 million from the prior quarter. Much of the increase in net income relates to an increased ownership percentage in TD Banknorth from the privatization transaction that was completed in April 2007. The average ownership percentage increased from 57% in the fourth quarter of last year and 91% in the prior quarter to 100% in the current quarter. In addition, since April 2007, the segment includes the banking operations of TD Bank USA which provides banking services to customers of TD Ameritrade (prior periods have not been restated to include the results of TD Bank USA as they were not significant). Revenue declined by $3 million, or 1% from the fourth quarter of last year, and declined by $8 million, or 2%, compared with the prior quarter, primarily due to a stronger Canadian dollar. Revenue in U.S. dollars increased by 6% from the fourth quarter of last year and by 3% over the prior quarter. Margin on average earning assets was largely unchanged compared with the fourth quarter last year, and increased 14 bps compared with the prior quarter. Net interest income remained under pressure from a flat yield curve and continued strong competition for deposits and high quality loans. Provision for credit losses for the quarter increased by $20 million, compared with the fourth quarter last year, and by $2 million from the prior quarter. The increased provision for credit losses compared with the fourth quarter last year was primarily due to higher levels of impaired loans. Net impaired loans increased by $99 million, up from $101 million in the fourth quarter last year, which was a historically low level, primarily due to a slowdown in the residential real-estate construction market. Net impaired loans were essentially flat with the prior quarter. Net impaired loans as a percentage of total loans and leases were 0.76%, compared with 0.35% as at the end of last year, and unchanged from the end of the prior quarter. Non-interest expenses declined by $31 million, or 11%, compared with the fourth quarter last year, primarily due to cost control initiatives and a stronger Canadian dollar. Non-interest expenses declined $12 million, or 4%, compared with the prior quarter due entirely to a stronger Canadian dollar. The average FTE staffing levels declined by 875 compared with the fourth quarter last year and by 249 from the prior quarter, primarily due to staff reductions related to improved business processes and branch closings. The efficiency ratio improved to 55.4%, compared with 61.5% in the fourth quarter last year, and 56.9% in the prior quarter. While the banking environment in the U.S. is expected to remain challenging, and there is uncertainty as to the continuing effects of the ongoing market issues related to subprime real estate lending, it is expected that the contribution of U.S. Personal and Commercial Banking should continue to increase modestly due to organic growth. Wholesale Banking Wholesale Banking reported net income for the quarter of $157 million, an increase of $11 million, or 8%, compared with the fourth quarter of last year, and a decrease of $96 million, or 38%, compared with the prior quarter. The annualized return on invested capital was 21% in the current quarter, compared with 24% in the fourth quarter last year and 37% in the prior quarter. Wholesale Banking revenue was derived primarily from capital markets, investing and corporate lending activities. Revenue for the quarter was $525 million, compared with $493 million in the fourth quarter last year and $692 million in the prior quarter. The capital markets businesses generate revenue from advisory, underwriting, trading, facilitation and execution services. Capital markets revenue increased from the fourth quarter last year due to stronger non-taxable transaction revenue in equity trading and stronger foreign exchange trading, due primarily to volatility in currency markets. These increases were partially offset by weaker credit trading due to volatility in the credit markets and a breakdown in traditional pricing relationships between corporate bonds and credit default swaps (CDS) during the quarter. Capital markets revenue decreased from the prior quarter, primarily due to weaker credit trading and lower underwriting and advisory revenue. The equity investment portfolio delivered lower security gains this quarter compared with the fourth quarter last year and the prior quarter. Corporate lending revenue was flat compared with the fourth quarter last year and was lower than the prior quarter. Provision for credit losses is comprised of allowances for credit losses and accrual costs for credit protection. Provision for credit losses was $4 million in the quarter, compared with $13 million in the fourth quarter of last year and $8 million in the prior quarter. The provision for the quarter includes the cost of credit protection and $9 million in recoveries. The prior quarter included the cost of credit protection and $3 million in recoveries. Wholesale Banking continues to proactively manage its credit risk and currently holds $2.6 billion in notional CDS protection, a decrease of $0.3 billion from the fourth quarter last year, and a decrease of $0.2 billion from the prior quarter. The decrease is due primarily to the strengthening of the Canadian dollar relative to the U.S. dollar, as most of the protection is denominated in U.S. currency. Expenses for the quarter were $274 million, a decrease of $19 million, or 6%, compared with the fourth quarter last year, due primarily to lower severance and variable compensation. Expenses decreased $52 million, or 16%, from the prior quarter due to lower variable compensation. The efficiency ratio for the current quarter was 52%, compared with 59% in the fourth quarter last year and 47% in the prior quarter. Overall the Wholesale Bank had a solid quarter. Increased volatility and reduced liquidity in the capital markets experienced in the fourth quarter is expected to continue into 2008 and may result in reduced levels of capital markets activity, but it may also present additional trading opportunities. For 2008, key priorities remain: solidifying our position as a top three dealer in Canada, seeking opportunities to grow proprietary trading in scalable and liquid markets, maintaining a superior rate of return on invested capital and enhancing the efficiency ratio through improved cost control. Corporate Corporate segment reported a net income of $47 million for the quarter, compared with a net loss of $96 million in the same quarter of last year and a net loss of $41 million in the prior quarter. The adjusted net loss for the quarter was $26 million, compared with an adjusted net income of $17 million in the same quarter last year and $20 million in the prior quarter. Compared with last year on an adjusted basis, the net loss was driven by lower securitization gains, a decrease in earnings on capital, lower gains on investments and the benefit of interest on income tax refunds in the prior year. The prior quarter benefited from favourable tax items and the gain on sale of TD Ameritrade shares. Adjusted net loss for the current quarter excluded a gain of $163 million ($135 million after tax) related to the estimated value of the shares the Bank received in Visa Inc. in exchange for its membership interest in Visa Canada Association as part of the global restructuring of Visa, and a general allowance release of $60 million ($39 million after tax) based on revised loss rate factors, utilizing internal experience in alignment with Basel II methodology. Losses in excess of accrued costs for the period in CDS hedging the corporate loan book were $9 million ($6 million after tax) lower than the prior year, while amortization of intangible assets increased $18 million ($12 million after tax). Adjusted prior year results also excluded an $18 million after tax expense relating to the initial set up of the specific allowance for credit card and overdraft loans that resulted from a change in the provisioning methodology applied by the Bank. Compared with the prior quarter, amortization of intangibles increased $12 million ($8 million after tax) and the gain in excess of accrued costs in CDS hedging the corporate loan book declined $49 million ($32 million after tax). BASIS OF PREPARATION OF FINANCIAL STATEMENTS The Bank's unaudited consolidated financial results, as presented on pages 12 to 16 of this News Release, have been prepared in accordance with GAAP. However, certain additional disclosures required by GAAP have not been presented in this document. These consolidated financial results should be read in conjunction with the Bank's audited consolidated financial statements for the year ended October 31, 2007. The accounting policies used in the preparation of these consolidated financial results are consistent with those used in the Bank's October 31, 2007 audited consolidated financial statements. INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) INTERIM CONSOLIDATED BALANCE SHEET (unaudited) ------------------------------------------------------------------------- As at --------------------- Oct. 31 Oct. 31 (millions of Canadian dollars) 2007 2006 ------------------------------------------------------------------------- ASSETS Cash and due from banks $ 1,790 $ 2,019 Interest-bearing deposits with banks 14,746 8,763 ------------------------------------------------------------------------- 16,536 10,782 ------------------------------------------------------------------------- Securities Trading 77,637 77,482 Designated as trading under the fair value option 2,012 - Available-for-sale 35,650 - Held-to-maturity 7,737 - Investment - 46,976 ------------------------------------------------------------------------- 123,036 124,458 ------------------------------------------------------------------------- Securities purchased under reverse repurchase agreements 27,648 30,961 ------------------------------------------------------------------------- Loans Residential mortgages 58,485 53,425 Consumer instalment and other personal 67,532 63,130 Credit card 5,700 4,856 Business and government 44,258 40,514 Business and government designated as trading under the fair value option 1,235 - ------------------------------------------------------------------------- 177,210 161,925 Allowance for credit losses (1,295) (1,317) ------------------------------------------------------------------------- Loans, net of allowance for credit losses 175,915 160,608 ------------------------------------------------------------------------- Other Customers' liability under acceptances 9,279 8,676 Investment in TD Ameritrade 4,515 4,379 Trading derivatives 36,052 27,845 Goodwill 7,918 7,396 Other intangibles 2,104 1,946 Land, buildings and equipment 1,822 1,862 Other assets 17,299 14,001 ------------------------------------------------------------------------- 78,989 66,105 ------------------------------------------------------------------------- Total assets $ 422,124 $ 392,914 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES ------------------------------------------------------------------------- Deposits Personal $ 147,561 $ 146,636 Banks 10,162 14,186 Business and government 73,322 100,085 Trading 45,348 - ------------------------------------------------------------------------- 276,393 260,907 ------------------------------------------------------------------------- Other Acceptances 9,279 8,676 Obligations related to securities sold short 24,195 27,113 Obligations related to securities sold under repurchase agreements 16,574 18,655 Trading derivatives 39,028 29,337 Other liabilities 23,829 17,461 ------------------------------------------------------------------------- 112,905 101,242 ------------------------------------------------------------------------- Subordinated notes and debentures 9,449 6,900 ------------------------------------------------------------------------- Liabilities for preferred shares and capital trust securities 1,449 1,794 ------------------------------------------------------------------------- Non-controlling interests in subsidiaries 524 2,439 ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Common shares (millions of shares issued and outstanding: Oct. 31, 2007 - 717.8; Oct. 31, 2006 - 717.4) 6,577 6,334 Preferred shares (millions of shares issued and outstanding: Oct. 31, 2007 - 17.0; Oct. 31, 2006 - 17.0) 425 425 Contributed surplus 119 66 Retained earnings 15,954 13,725 Accumulated other comprehensive income (1,671) (918) ------------------------------------------------------------------------- 21,404 19,632 ------------------------------------------------------------------------- Total liabilities and shareholders' equity $ 422,124 $ 392,914 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Certain comparative amounts have been reclassified to conform to the current period's presentation. INTERIM CONSOLIDATED STATEMENT OF INCOME (unaudited) ------------------------------------------------------------------------- For the three For the twelve months ended months ended ------------------------------------------- Oct. 31 Oct. 31 Oct. 31 Oct. 31 (millions of Canadian dollars) 2007 2006 2007 2006 ------------------------------------------------------------------------- Interest income Loans $ 3,310 $ 3,004 $ 12,729 $ 10,832 Securities Dividends 256 232 928 837 Interest 983 920 3,838 3,598 Deposits with banks 152 74 357 302 ------------------------------------------------------------------------- 4,701 4,230 17,852 15,569 ------------------------------------------------------------------------- Interest expense Deposits 2,223 1,957 8,247 7,081 Subordinated notes and debentures 127 96 484 388 Preferred shares and capital trust securities 28 31 109 126 Other liabilities 515 432 2,088 1,603 ------------------------------------------------------------------------- 2,893 2,516 10,928 9,198 ------------------------------------------------------------------------- Net interest income 1,808 1,714 6,924 6,371 ------------------------------------------------------------------------- Other income Investment and securities services 574 521 2,400 2,259 Credit fees 112 110 420 371 Net securities gains 60 87 326 305 Trading income (52) 98 591 797 Income (loss) from financial instruments designated as trading under the fair value option 36 - (55) - Service charges 263 246 1,019 937 Loan securitizations 80 97 397 346 Card services 120 113 457 383 Insurance, net of claims 243 214 1,005 896 Trust fees 31 31 133 130 Other 275 87 664 397 ------------------------------------------------------------------------- 1,742 1,604 7,357 6,821 ------------------------------------------------------------------------- Total revenues 3,550 3,318 14,281 13,192 ------------------------------------------------------------------------- Provision for credit losses 139 170 645 409 ------------------------------------------------------------------------- Non-interest expenses Salaries and employee benefits 1,119 1,116 4,606 4,485 Occupancy, including depreciation 188 187 736 701 Equipment, including depreciation 167 164 614 599 Amortization of other intangibles 138 126 499 505 Restructuring costs - - 67 50 Marketing and business development 115 114 445 470 Brokerage-related fees 61 51 233 222 Professional and advisory services 135 149 488 540 Communications 49 54 193 201 Other 269 250 1,094 1,042 ------------------------------------------------------------------------- 2,241 2,211 8,975 8,815 ------------------------------------------------------------------------- Dilution gain, net - - - 1,559 ------------------------------------------------------------------------- Income before provision for income taxes, non-controlling interests in subsidiaries and equity in net income of an associated company 1,170 937 4,661 5,527 Provision for income taxes 153 175 853 874 Non-controlling interests in subsidiaries, net of income taxes 8 48 95 184 Equity in net income of an associated company, net of income taxes 85 48 284 134 ------------------------------------------------------------------------- Net income 1,094 762 3,997 4,603 Preferred dividends 5 5 20 22 ------------------------------------------------------------------------- Net income available to common shareholders $ 1,089 $ 757 $ 3,977 $ 4,581 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Average number of common shares outstanding (millions) Basic 717.3 719.7 718.6 716.8 Diluted 724.4 726.0 725.5 723.0 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per share (in dollars) Basic $ 1.52 $ 1.05 $ 5.53 $ 6.39 Diluted 1.50 1.04 5.48 6.34 Dividends per share (in dollars) 0.57 0.48 2.11 1.78 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Certain comparative amounts have been reclassified to conform to the current period's presentation. INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) ------------------------------------------------------------------------- For the twelve months ended --------------------- Oct. 31 Oct. 31 (millions of Canadian dollars) 2007 2006 ------------------------------------------------------------------------- Common shares Balance at beginning of year $ 6,334 $ 5,872 Proceeds from shares issued on exercise of options 173 119 Shares issued as a result of dividend reinvestment plan 85 328 Impact of shares sold (acquired) in Wholesale Banking 30 (20) Repurchase of common shares (45) (35) Issued on acquisition of VFC - 70 ------------------------------------------------------------------------- Balance at end of year 6,577 6,334 ------------------------------------------------------------------------- Preferred shares Balance at beginning of year 425 - Share issues - 425 ------------------------------------------------------------------------- Balance at end of year 425 425 ------------------------------------------------------------------------- Contributed surplus Balance at beginning of year 66 40 Stock options 1 26 Conversion of TD Banknorth options on privatization 52 - ------------------------------------------------------------------------- Balance at end of year 119 66 ------------------------------------------------------------------------- Retained earnings Balance at beginning of year 13,725 10,650 Transition adjustment on adoption of Financial Instruments standards 80 - Net income 3,997 4,603 Common dividends (1,517) (1,278) Preferred dividends (20) (22) Premium paid on repurchase of common shares (311) (229) Other - 1 ------------------------------------------------------------------------- Balance at end of year 15,954 13,725 ------------------------------------------------------------------------- Accumulated other comprehensive income, net of income taxes Balance at beginning of year (918) (696) Transition adjustment on adoption of Financial Instrument standards 426 - Other comprehensive income for the period (1,179) (222) ------------------------------------------------------------------------- Balance at end of year (1,671) (918) ------------------------------------------------------------------------- Total shareholders' equity $ 21,404 $ 19,632 ------------------------------------------------------------------------- ------------------------------------------------------------------------- INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited) ------------------------------------------------------------------------- For the three For the twelve months ended months ended ------------------------------------------- Oct. 31 Oct. 31 Oct. 31 Oct. 31 (millions of Canadian dollars) 2007 2006 2007 2006 ------------------------------------------------------------------------- Net income $ 1,094 $ 762 $ 3,997 $ 4,603 ------------------------------------------------------------------------- Other comprehensive income (loss), net of income taxes Change in unrealized gains and (losses) on available- for-sale securities, net of hedging activities(1) 235 - 159 - Reclassification to earnings in respect of available- for-sale securities(2) (17) - (53) - Change in foreign currency translation gains and (losses) on investments in subsidiaries, net of hedging activities(3),(4) (604) 33 (1,155) (222) Change in gains and (losses) on derivative instruments designated as cash flow hedges(5) 140 - (170) - Reclassification to earnings of losses on cash flow hedges(6) 18 - 40 - ------------------------------------------------------------------------- Other comprehensive income for the period (228) 33 (1,179) (222) ------------------------------------------------------------------------- Comprehensive income for the period $ 866 $ 795 $ 2,818 $ 4,381 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) Net of income tax expense of $128 million and $94 million for the three and twelve months ended Oct. 31, 2007 respectively. (2) Net of income tax expense of $8 million and $32 million for the three and twelve months ended Oct. 31, 2007 respectively. (3) Net of income tax expense of $640 million for the three months ended Oct. 31, 2007 (three months ended Oct. 31, 2006 - tax expense of $35 million). Net of income tax expense of $909 million for the twelve months ended Oct. 31, 2007 (twelve months ended Oct. 31, 2006 - $209 million). (4) Includes $1,304 million of after-tax gains for the three months ended Oct. 31, 2007 (three months ended Oct. 31, 2006 - $62 million of after-tax gain) arising from hedges of the Bank's investment in foreign operations. Includes $1,864 million of after-tax gains for the twelve months ended Oct. 31, 2007 (twelve months ended Oct. 31, 2006 - $432 million of after-tax gains) arising from hedges of the Bank's investment in foreign operations. (5) Net of income tax expense of $64 million and tax benefit of $91 million for the three and twelve months ended Oct. 31, 2007 respectively. (6) Net of income tax benefit of $11 million and $22 million for the three and twelve months ended Oct. 31, 2007 respectively. Certain comparative amounts have been reclassified to conform to the current period's presentation. INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) ------------------------------------------------------------------------- For the three For the twelve months ended months ended ------------------------------------------- Oct. 31 Oct. 31 Oct. 31 Oct. 31 (millions of Canadian dollars) 2007 2006 2007 2006 ------------------------------------------------------------------------- Cash flows from (used in) operating activities Net income $ 1,094 $ 762 $ 3,997 $ 4,603 Adjustments to determine net cash from (used in) operating activities: Provision for credit losses 139 170 645 409 Restructuring costs - - 67 50 Depreciation 100 98 362 343 Amortization of other intangibles 138 126 499 505 Stock options 1 10 53 26 Dilution gain, net - - - (1,559) Net securities gains (60) (87) (326) (305) Net loss (gain) on securitizations (28) (46) (141) (119) Equity in net income of an associated company (85) (48) (284) (134) Non-controlling interests 8 48 95 184 Future income taxes 148 (76) 244 (17) Changes in operating assets and liabilities: Current income taxes payable 376 (14) 558 88 Interest receivable and payable 101 54 (296) (146) Trading securities (4,958) (3,749) (2,167) (11,707) Unrealized (gains) losses and amounts receivable on derivative contracts (6,532) 4,463 (8,207) 5,806 Unrealized losses and amounts payable on derivative contracts 9,969 (4,043) 9,691 (4,161) Other 384 2,831 (736) (252) ------------------------------------------------------------------------- Net cash from (used in) operating activities 795 499 4,054 (6,386) ------------------------------------------------------------------------- Cash flows from (used in) financing activities Change in deposits 8,657 5,120 14,154 9,246 Securities sold under repurchase agreements 416 (776) (2,081) 6,665 Securities sold short (2,429) 2,960 (2,918) 2,707 Issue of subordinated notes and debentures - - 4,072 2,341 Repayment of subordinated notes and debentures (525) (28) (1,399) (978) Subordinated notes and debentures (acquired) sold in Wholesale Banking 40 7 4 8 Liability for preferred shares and capital trust securities (349) - (345) (1) Translation adjustment on subordinated notes and debentures issued in a foreign currency (71) 6 (128) (45) Common shares issued on exercise of options 41 26 173 119 Common shares (acquired) sold in Wholesale Banking 4 (36) 30 (20) Repurchase of common shares (16) (35) (45) (35) Dividends paid in cash on common shares (386) (321) (1,432) (950) Premium paid on common shares repurchased (104) (229) (311) (229) Issuance of preferred shares - - - 425 Dividends paid on preferred shares (5) (5) (20) (22) ------------------------------------------------------------------------- Net cash from financing activities 5,273 6,689 9,754 19,231 ------------------------------------------------------------------------- Cash flows from (used in) investing activities Interest-bearing deposits with banks (3,403) 1,473 (5,983) 2,982 Activity in available-for-sale, held-to-maturity and investment securities: Purchases (6,475) (40,446) (96,846) (132,903) Proceeds from maturities 7,262 34,103 92,880 112,962 Proceeds from sales 2,264 2,996 10,372 18,599 Activity in lending activities: Origination and acquisitions (45,412) (39,358) (150,671) (132,864) Proceeds from maturities 39,932 31,737 122,509 113,477 Proceeds from sales 303 116 5,084 2,691 Proceeds from loan securitizations 1,223 5,473 9,937 9,939 Land, buildings and equipment (98) (95) (322) (494) Securities purchased under reverse repurchase agreements (1,743) (3,107) 3,313 (4,578) TD Banknorth share repurchase program - - - (290) Acquisitions and dispositions less cash and cash equivalents acquired - (13) (4,139) (1,980) ------------------------------------------------------------------------- Net cash from (used in) investing activities (6,147) (7,121) (13,866) (12,459) ------------------------------------------------------------------------- Effect of exchange rate changes on cash and cash equivalents (117) (6) (171) (40) ------------------------------------------------------------------------- Net (decrease) increase in cash and cash equivalents (196) 61 (229) 346 Cash and cash equivalents at beginning of period 1,986 1,958 2,019 1,673 ------------------------------------------------------------------------- Cash and cash equivalents at end of period, represented by cash and due from banks $ 1,790 $ 2,019 $ 1,790 $ 2,019 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Supplementary disclosure of cash flow information Amount of interest paid during the period $ 2,618 $ 2,272 $ 10,947 $ 9,085 Amount of income taxes paid during the period 325 290 1,099 968 ------------------------------------------------------------------------- Certain comparative amounts have been reclassified to conform to the current period's presentation. APPENDIX A The Bank's operations and activities are organized around the following businesses: Canadian Personal and Commercial Banking, Wealth Management, U.S. Personal and Commercial Banking and Wholesale Banking. Results for these segments for the three and twelve months ended October 31, 2007 and 2006 are presented in the following tables: Results by Business Segment ------------------------------------------------------------------------- Canadian Personal U.S. Personal (millions of and Commercial Wealth and Commercial Canadian dollars) Banking Management Banking(1) ------------------------------------------------------------------------- Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31 For the three months ended 2007 2006 2007 2006 2007 2006 ------------------------------------------------------------------------- Net interest income(3) $ 1,408 $ 1,295 $ 83 $ 69 $ 335 $ 337 Other income 744 653 498 435 140 141 ------------------------------------------------------------------------- Total revenue 2,152 1,948 581 504 475 478 Provision for (reversal of) credit losses(3) 176 132 - - 35 15 Non-interest expenses 1,114 1,068 399 357 263 294 ------------------------------------------------------------------------- Income (loss) before provision for (benefit of) income taxes 862 748 182 147 177 169 Provision for (benefit of) Income taxes 290 247 63 52 53 55 Non-controlling interests - - - - - 51 Equity in net income of associated company, net of tax - - 75 53 - - ------------------------------------------------------------------------- Net income (loss) $ 572 $ 501 $ 194 $ 148 $ 124 $ 63 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total assets (billions of Canadian dollars) - balance sheet $ 152.1 $ 138.7 $ 14.9 $ 13.6 $ 58.8 $ 43.5 - securitized 44.6 43.2 - - - - ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- (millions of Wholesale Canadian dollars) Banking(2) Corporate(2) Total ------------------------------------------------------------------------- Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31 ------------------------------------------------------------------------- For the three months ended 2007 2006 2007 2006 2007 2006 ------------------------------------------------------------------------- Net interest income(3) $ 310 $ 138 $ (328) $ (125) $ 1,808 $ 1,714 Other income 215 355 145 20 1,742 1,604 ------------------------------------------------------------------------- Total revenue 525 493 (183) (105) 3,550 3,318 Provision for (reversal of) credit losses(3) 4 13 (76) 10 139 170 Non-interest expenses 274 293 191 199 2,241 2,211 ------------------------------------------------------------------------- Income (loss) before provision for (benefit of) income taxes 247 187 (298) (314) 1,170 937 Provision for (benefit of) Income taxes 90 41 (343) (220) 153 175 Non-controlling interests - - 8 (3) 8 48 Equity in net income of associated company, net of tax - - 10 (5) 85 48 ------------------------------------------------------------------------- Net income (loss) $ 157 $ 146 $ 47 $ (96) $ 1,094 $ 762 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total assets (billions of Canadian dollars) - balance sheet $ 177.2 $ 163.9 $ 19.1 $ 33.2 $ 422.1 $ 392.9 - securitized - - (16.3) (15.2) 28.3 28.0 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Results by Business Segment ------------------------------------------------------------------------- Canadian Personal U.S. Personal (millions of and Commercial Wealth and Commercial Canadian dollars) Banking Management Banking(1) ------------------------------------------------------------------------- Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31 For the twelve months ended 2007 2006 2007 2006 2007 2006 ------------------------------------------------------------------------- Net interest income(3) $ 5,401 $ 4,879 $ 318 $ 377 $ 1,365 $ 1,290 Other income 2,848 2,573 1,995 1,883 583 490 ------------------------------------------------------------------------- Total revenue 8,249 7,452 2,313 2,260 1,948 1,780 Provision for (reversal of) credit losses(3) 608 413 - - 120 40 Non-interest expenses 4,256 4,086 1,551 1,575 1,221 1,087 Dilution gain, net - - - - - - ------------------------------------------------------------------------- Income (loss) before provision for (benefit of) income taxes 3,385 2,953 762 685 607 653 Provision for (benefit of) Income taxes 1,132 987 261 242 196 222 Non-controlling interests - - - - 91 195 Equity in net income of associated company, net of tax - - 261 147 - - ------------------------------------------------------------------------- Net income (loss) $ 2,253 $ 1,966 $ 762 $ 590 $ 320 $ 236 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- (millions of Wholesale Canadian dollars) Banking(2) Corporate(2) Total ------------------------------------------------------------------------- Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31 ------------------------------------------------------------------------- For the twelve months ended 2007 2006 2007 2006 2007 2006 ------------------------------------------------------------------------- Net interest income(3) $ 875 $ 479 $(1,035) $ (654) $ 6,924 $ 6,371 Other income 1,619 1,792 312 83 7,357 6,821 ------------------------------------------------------------------------- Total revenue 2,494 2,271 (723) (571) 14,281 13,192 Provision for (reversal of) credit losses(3) 48 68 (131) (112) 645 409 Non-interest expenses 1,261 1,312 686 755 8,975 8,815 Dilution gain, net - - - 1,559 - 1,559 ------------------------------------------------------------------------- Income (loss) before provision for (benefit of) income taxes 1,185 891 (1,278) 345 4,661 5,527 Provision for (benefit of) Income taxes 361 262 (1,097) (839) 853 874 Non-controlling interests - - 4 (11) 95 184 Equity in net income of associated company, net of tax - - 23 (13) 284 134 ------------------------------------------------------------------------- Net income (loss) $ 824 $ 629 $ (162) $ 1,182 $ 3,997 $ 4,603 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) Commencing May 1, 2007, the results of TD Bank U.S.A. Inc. (previously reported in the Corporate segment for the period from the second quarter 2006 to the second quarter 2007 and in Wealth Management segment prior to the second quarter of 2006) are included in the U.S. Personal and Commercial Banking segment prospectively. Prior periods have not been restated as the impact is not material. (2) The taxable equivalent basis (TEB) increase to net interest income and provision for income taxes reflected in the Wholesale Banking segment results is reversed in the Corporate segment. (3) The operating segment results are presented excluding the impact of asset securitization programs, which are reclassified in the Corporate segment. SHAREHOLDER AND INVESTOR INFORMATION ------------------------------------------------------------------------- Shareholder Services For shareholder inquiries relating to: missing dividends, lost share certificates, estate questions, address changes to the share register, dividend bank account changes or the dividend re-investment program, please contact our transfer agent: CIBC Mellon Trust Company, at P.O. Box 7010, Adelaide Street Postal Station, Toronto, Ontario, M5C 2W9, or 1-800-387-0825 or 416-643-5500 or (www.cibcmellon.com or inquiries@cibcmellon.com). For all other shareholder inquiries, please contact TD Shareholder Relations at 416-944-6367 or 1-866-756-8936 or email: tdshinfo@td.com. Internet website: www.td.com Internet e-mail: customer.service@td.com Designation of Eligible Dividends The Toronto-Dominion Bank for the purposes of the Income Tax Act, Canada and any similar provincial legislation advises that the dividend declared for the quarter ending January 31, 2008 and all future dividends will be eligible dividends unless indicated otherwise. Annual Report on Form 40-F (U.S.) A copy of the Bank's Annual Report on Form 40-F for fiscal 2007 will be filed with the Securities and Exchange Commission later today and will be available at www.td.com. You may obtain a printed copy of the Bank's Annual Report on Form 40-F free of charge upon request to TD Shareholder Relations at 416-944-6367 or 1-866-756-8936 or e-mail: tdshinfo@td.com. General Information Contact Corporate & Public Affairs at (416) 982-8578 Products and services: Contact TD Canada Trust, 24 hours a day, seven days a week: 1-866-567-8888 French: 1-866-233-2323 Cantonese/Mandarin: 1-800-328-3698 Telephone device for the deaf: 1-800-361-1180 On-line Investor Presentation: Full financial statements and a presentation to investors and analysts (available on November 29) are accessible from the home page of the TD Bank Financial Group website, www.td.com/investor/calendar.jsp. Quarterly Earnings Conference Call: Telephone replay of the teleconference is available from November 30, 2007 to December 30, 2007. Please call 1-877-289-8525 toll free, in Toronto (416) 640-1917, passcode 21251919 (pound key). Webcast of Call: A live audio and video internet webcast of TD Bank Financial Group's quarterly earnings conference call with investors and analysts is scheduled on November 29, 2007 at 3:00 p.m. ET. The call is webcast via the TD Bank Financial Group website at www.td.com. In addition, recordings of the presentations are archived on TD's website and will be available for replay for a period of one month. Annual Meeting Thursday April 3, 2008 Hyatt Regency Hotel Calgary Calgary, Alberta About TD Bank Financial Group The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Financial Group. TD Bank Financial Group serves more than 14 million customers in four key businesses operating in a number of locations in key financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust; Wealth Management, including TD Waterhouse and an investment in TD Ameritrade; U.S. Personal and Commercial Banking through TD Banknorth; and Wholesale Banking, including TD Securities. TD Bank Financial Group also ranks among the world's leading on-line financial services firms, with more than 4.5 million on-line customers. TD Bank Financial Group had CDN$422 billion in assets as of October 31, 2007. The Toronto-Dominion Bank trades on the Toronto and New York Stock Exchanges under the symbol "TD", as well as on the Tokyo Stock Exchange. For further information: Colleen Johnston, Executive Vice President and Chief Financial Officer, (416) 308-8279; Tim Thompson, Vice President, Investor Relations, (416) 982-6346; Simon Townsend, Senior Manager, Corporate Communications, (416) 944-7161

TD Bank Financial Group Reports Strong Fourth Quarter, Excellent Fiscal 2007

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