Footnote 8

Dominion’s return on Enron-related structured finance transactions overwhelmingly exceeded itsinternal profitability goals. From late 1998 through 2000, Toronto Dominion’s Enron transactionssecured a Risk Adjusted Return on Capital of 39% – a rate almost double the return of 20% thatToronto Dominion targeted for its corporate customers. Exam. IV, App. G at 13.603. The Toronto Dominion prepays became, over time, an increasingly important partof Toronto Dominion’s Enron portfolio. The Examiner concluded: “The dramatic increase in theprofitability of the Enron relationship during the period 1998-2000 appears to have been driven bythe Toronto Dominion Prepays.” Exam. IV, App. G at 14 n.40. One former Toronto Dominionrelationship manager noted that the prepays were “highly profitable for us and well received by[Enron.]” TDB-EX(1) 000054-90 (quoted in Exam. IV, App. G at 14 n.40). From 1998 through2000, Toronto Dominion received approximately $5.5 million in fees from Enron from the prepays,in addition to the premium returns Toronto Dominion obtained from the capital it lent in thetransactions. Exam. IV, App. G at 31, 34, 35, 36, 39, 41, and 44.604. Because the prepay transactions were so profitable for Toronto Dominion, itcontinued to participate in them through 2000 despite a “concern regarding balance sheetmanipulation.” TDB-EX 002320 (quoted in Exam. IV, App. G at 47). In fact, the prepays were soimportant to Toronto Dominion’s profitability that the bank entered into the Hawaii transaction –a transaction that it otherwise would not have done – as a quid pro quo for the lucrative Londonprepay. See, e.g., TDB-EX 000082, TDB-EX000077 (quoted in Exam. IV, App. G at 14).605. Toronto Dominion aspired to become a “Tier 1” bank for Enron, on par with Citibankand JPMC. See TDB-EX(1) 020264 (cited in Exam. IV, App. G at 9). It continually sought toenhance its relationship with Enron by entering into transactions it knew were suspect, and it knewwere being used to manipulate Enron’s balance sheets and deceive rating agencies and others who604041v1/007457-205-