NOTE 27


EARNINGS PER SHARE


Basic earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period.


Diluted earnings per share is calculated using the same method as basic earnings per share except that certain adjustments are made to net income attributable to common shareholders and the weighted- average number of shares outstanding for the effects of all dilutive potential common shares that are assumed to be issued by the Bank.


Basic and Diluted Earnings Per Share (millions of Canadian dollars, except as noted)


2016 Basic earnings per share Net income attributable to common shareholders


Weighted-average number of common shares outstanding (millions) Basic earnings per share (dollars)


Diluted earnings per share Net income attributable to common shareholders


Net income available to common shareholders including impact of dilutive securities Weighted-average number of common shares outstanding (millions)


Effect of dilutive securities Stock options potentially exercisable (millions)1


Weighted-average number of common shares outstanding – diluted (millions) Diluted earnings per share (dollars)1


1


For the years ended October 31, 2016, October 31, 2015, and October 31, 2014, the computation of diluted earnings per share did not include any weighted- average options where the option price was greater than the average market price of the Bank’s common shares.


$


$ 8,680 1,853.4


$ 4.68


$ 8,680 8,680


1,853.4 3.4


1,856.8 4.67


$


$ 7,813 1,849.2


$ 4.22


$ 7,813 7,813


1,849.2 4.9


1,854.1 4.21


$ 7,633 1,839.1


$ 4.15


$ 7,633 7,633


1,839.1 6.2


1,845.3 $ 4.14


The following table presents the Bank’s basic and diluted earnings per share for the years ended October 31, and reflects the impact of the stock dividend on the Bank’s basic and diluted earnings per share, as if it was retrospectively applied to all periods presented.


For the years ended October 31 2015


2014


NOTE 28 PROVISIONS


The following table summarizes the Bank’s provisions. Provisions


(millions of Canadian dollars)


Balance as at November 1, 2015 Additions


Amounts used Release of unused amounts Foreign currency translation adjustments and other


Balance as of October 31, 2016, before allowance for credit losses for off-balance sheet instruments


Add: allowance for credit losses for off-balance sheet instruments3 Balance as of October 31, 2016


1 Includes provisions for onerous lease contracts. 2


Refer to Note 8 for further details. LITIGATION AND OTHER


3


Litigation and other primarily include provisions relating to legal reserves. In the ordinary course of business, the Bank and its subsidiaries are involved in various legal and regulatory actions. The Bank establishes legal provisions when it becomes probable that the Bank will incur a loss and the amount can be reliably estimated. The Bank also estimates the aggregate range of reasonably possible losses (RPL) in its legal and regulatory actions (that is, those which are neither probable nor remote), in excess of provisions. As at October 31, 2016, the Bank’s RPL is from zero to approximately $461 million. The Bank’s provisions and RPL represent the Bank’s best estimates based upon currently available information for actions for which estimates can be made,


Certain amounts were reclassified to conform with the presentation adopted in the current period.


but there are a number of factors that could cause the Bank’s provisions and/or RPL to be significantly different from its actual or reasonably possible losses. For example, the Bank’s estimates involve significant judgment due to the varying stages of the proceedings, the existence of multiple defendants in many of such proceedings whose share of liability has yet to be determined, the numerous yet-unresolved issues in many of the proceedings, some of which are beyond the Bank’s control and/or involve novel legal theories and interpretations, the attendant uncertainty of the various potential outcomes of such proceedings, and the fact that the underlying matters will change from time to time. In addition, some matters seek very large or indeterminate damages.


Restructuring1 $ 486


20


(276) (38) 6


$ 198


Litigation and Other2


$ 301 175


(101) (53) 5


$ 327 Total


$ 787 195


(377) (91) 11


$ 525 500


$ 1,025


PROVISIONS, CONTINGENT LIABILITIES, COMMITMENTS, GUARANTEES, PLEDGED ASSETS, AND COLLATERAL


186 TD BANK GROUP ANNUAL REPORT 2016 FINANCIAL RESULTS


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