In its simplest terms, net income is the “bottom line” – revenues less expenses, loan losses and income taxes.
In 2002, operating cash basis net income was $526 million, compared with $2,158 million in 2001 and $2,018 million in 2000. On an operating cash basis, basic earnings per share was $.69 in 2002 compared with $3.31 in 2001 and $3.16 in 2000. Diluted earnings per share on an operating cash basis was $.68 in 2002 compared with $3.27 in 2001 and $3.12 in 2000. Operating cash basis return on total common equity was 3.6% in 2002 compared with 18% in each of 2001 and 2000.
Reported net loss applicable to common shares was $160 million in 2002, compared with reported net income applicable to common shares of $1,300 million in 2001 and $969 million in 2000. Reported basic loss per share was $.25 in 2002 compared with reported basic earnings per share of $2.07 in 2001 and $1.56 in 2000. Reported diluted loss per share was $.25 in 2002 compared with reported diluted earnings per share of $2.05 in 2001 and $1.53 in 2000. Reported return on total common equity was (1.3)% in 2002 compared with 11.3% in 2001 and 8.9% in 2000.
Our total economic loss was $921 million in 2002 compared with total economic profit of $685 million in 2001 and $639 million in 2000. Beginning in fiscal 2000 we have utilized economic profit as a tool to measure shareholder value creation. Economic profit is our operating cash basis net income applicable to common shares after providing a charge for economic capital. For 2002, the rates applied for each of our businesses were 10% for TD Canada Trust, 12% for TD Securities and 14% for the discount brokerage business and 10% for the wealth management business within TD Wealth Management. For years prior to 2002, the rates applied for each of our businesses were 11% for TD Canada Trust, 13% for TD Securities, 15% for the discount brokerage business and 11% for the wealth management business within TD Wealth Management. The economic capital for each business includes a portion required for goodwill and net intangible assets, so that all of our common equity is allocated to our business segments.