Bank of Montreal 2010 Annual Report Download - page 28

MANAGEMENT’S DISCUSSION AND ANALYSIS
MD&A
Management’s Discussion and Analysis
BMO’s President & Chief Executive Officer and Chief Financial Officer have signed a statement outlining management’s responsibility for financial
information in the annual consolidated financial statements and Management’s Discussion and Analysis (MD&A). The statement, which can be found
on page 108, also explains the roles of the Audit Committee and Board of Directors in respect of that financial information.
The MD&A comments on BMO’s operations and financial condition for the years ended October 31, 2010 and 2009. The MD&A should be read
in conjunction with our consolidated financial statements for the year ended October 31, 2010. The MD&A commentary is as of December 7, 2010.
Unless otherwise indicated, all amounts are stated in Canadian dollars and have been derived from financial statements prepared in accordance with
Canadian generally accepted accounting principles (GAAP).
Certain prior year data has been reclassified to conform with the current year’s presentation, including restatements arising from transfers
of certain businesses between operating groups. See pages 42 and 43.
Index
27 Who We Are provides an overview of BMO Financial Group,
explains the links between our objectives and our overall vision,
presents key performance data and outlines “Reasons to invest
in BMO.”
28 Enterprise-Wide Strategy outlines our enterprise-wide strategy
and the context in which it is developed, as well as our progress
in relation to our strategic priorities.
29 Caution Regarding Forward-Looking Statements advises
readers about the limitations and inherent risks and uncertainties
of forward-looking information.
29 Factors That May Affect Future Results outlines certain industry
and company-specific factors that investors should consider
when assessing BMO’s earnings prospects.
31 Economic Developments includes commentary on the impact of
economic developments on our businesses in 2010 and expectations
for the Canadian and U.S. economies in 2011.
Value Measures reviews financial performance on the four key
measures that assess or most directly influence shareholder return.
32 Total Shareholder Return
33 Earnings per Share Growth
34 Return on Equity
34 Net Economic Profit Growth
35 2010 Financial Performance Review provides a detailed review
of BMO’s consolidated financial performance by major income
statement category. It also includes the impact of business acquisi-
tions, changes in foreign exchange, and a summary of notable
items affecting results.
Operating Group Review outlines the strategies of our operating
groups, the paths they choose to differentiate their businesses
and the challenges they face, along with their strengths and key
value drivers. It also includes a summary of their achievements
in 2010, their priorities for 2011 and a review of their financial
performance for the year.
42 Summary
44 Personal and Commercial Banking
45 Personal and Commercial Banking Canada
48 Personal and Commercial Banking U.S.
51 Private Client Group
54 BMO Capital Markets
57 Corporate Services, including Technology and Operations
Financial Condition Review discusses our assets and
liabilities by major balance sheet category. It reviews our
capital adequacy and our approach to ensuring we optimize
our capital position to support our business strategies and
maximize returns to our shareholders. It discusses proposed
regulatory changes that are expected to impact capital
and liquidity management as well as certain business
operations. It also discusses off-balance sheet arrangements
and financial instruments.
57 Summary Balance Sheet
59 Enterprise-Wide Capital Management
63 Select Financial Instruments
67 U.S. Regulatory Developments
68 Off-Balance Sheet Arrangements
Accounting Matters and Disclosure and Internal Control
reviews critical accounting estimates and changes in accounting
policies in 2010 and for future periods. It also discusses our
evaluation of disclosure controls and procedures and internal
control over financial reporting.
68 Critical Accounting Estimates
71 Changes in Accounting Policies in 2010
71 Future Changes in Accounting Policies – IFRS
74 Disclosure Controls and Procedures and Internal Control
over Financial Reporting
74 Shareholders’ Auditors’ Services and Fees
75 Enterprise-Wide Risk Management outlines our approach to
managing the key financial risks and other related risks we face.
91 Non-GAAP Measures includes explanations of non-GAAP
measures and their reconciliation to their GAAP counterparts.
92 2009 Financial Performance Review, Review of Fourth
Quarter Performance and Quarterly Earnings Trends
provide commentary on results for relevant periods other
than fiscal 2010.
96 Supplemental Information presents many useful financial
tables and provides more historical detail.
Regulatory Filings
Our continuous disclosure materials, including our interim management’s discussion and analysis and interim financial statements, and annual audited consolidated
financial statements, Annual Information Form and Notice of Annual Meeting of Shareholders & Proxy Circular, are available on our website at www.bmo.com, on
the Canadian Securities Administrators’ website at www.sedar.com and on the EDGAR section of the SEC’s website at www.sec.gov. BMO’s President & Chief Executive
Officer and Chief Financial Officer each certify the appropriateness and fairness of BMO’s annual and interim consolidated financial statements and MD&A and
Annual Information Form, and the effectiveness of BMO’s disclosure controls and procedures and material changes in our internal control over financial reporting.
26 BMO Financial Group 193rd Annual Report 2010