Bank of Montreal 2007 Annual Report Download - page 138

(Canadian $ in millions) 2007 2006
Fair value Fair value
Book Fair over (under) Book Fair over (under)
value value book value value value book value
Assets
Cash resources $ 22,890 $ 22,890 $ – $ 19,608 $ 19,608 $ –
Securities 98,277 98,277 – 67,411 67,466 55
Loans and customers’ liability under acceptances,
net of the allowance for credit losses 201,188 199,970 (1,218) 190,994 189,731 (1,263)
Derivative instruments 32,585 32,585 – 30,411 30,481 70
Other assets 8,340 8,340 – 8,257 8,257 –
$ 363,280 $ 362,062 $(1,218) $ 316,681 $ 315,543 $(1,138)
Liabilities
Deposits $ 232,050 $ 232,202 $ 152 $ 203,848 $ 203,992 $ 144
Derivative instruments 33,584 33,584 – 31,446 31,555 109
Acceptances 12,389 12,389 – 7,223 7,223 –
Securities sold but not yet purchased 25,039 25,039 – 15,398 15,398 –
Securities lent or sold under repurchase agreements 31,263 31,263 – 31,918 31,918 –
Other liabilities 12,055 12,023 (32) 10,758 10,780 22
Subordinated debt 3,446 3,491 45 2,726 2,888 162
Preferred share liability 250 250 – 450 462 12
Capital trust securities 1,150 1,198 48 1,150 1,253 103
$ 351,226 $ 351,439 $ 213 $ 304,917 $ 305,469 $ 552
Total $(1,431) $(1,690)
Certain comparative figures have been reclassified to conform with the current year’s presentation.
Condensed Consolidated Statement of Income
For the Year Ended October 31 (Canadian $ in millions, except per share amounts) 2007 2006 2005 (1)
Net income, as reported under Canadian GAAP $ 2,131 $ 2,663 $ 2,396
Adjustments to arrive at United States GAAP:
Net Interest Income
Liabilities and equity (j) 99 99 97
Non-Interest Revenue
Merchant banking (k) 7(21) (83)
Fair value option (b) (8) ––
Variable interest entities (a) –– (13)
Derivatives (d) – (32) (66)
Non-Interest Expense
Stock-based compensation (e) (17) (31) (6)
Software development costs (f) (42) (42) (42)
Pension and related benefits (c) – 42
Goodwill and other assets (g) 555
Income taxes and net change in income taxes (h) (including adjustments due to items listed above) 19 40 65
Non-controlling interest in subsidiaries (j) (79) (79) (79)
Net income based on United States GAAP $ 2,115 $ 2,606 $ 2,276
Earnings per share: basic –Canadian GAAP net income $ 4.18 $ 5.25 $ 4.73
–United States GAAP net income 4.14 5.14 4.49
Earnings per share: diluted –Canadian GAAP net income $ 4.11 $ 5.15 $ 4.63
–United States GAAP net income 4.08 5.04 4.40
(1) Amounts have been restated to reflect the change in accounting policy described in Note 22.
134 BMO Financial Group 190th Annual Report 2007
Notes to Consolidated Financial Statements
Notes
Note 30: Reconciliation of Canadian and United States Generally Accepted Accounting Principles
We prepare our consolidated financial statements in accordance with
GAAP in Canada, including interpretations of GAAP by our regulator,
the Superintendent of Financial Institutions Canada.
We have included the significant differences that would result if
United States GAAP were applied in the preparation of our Consolidated
Statement of Income, Consolidated Statement of Comprehensive
Income, Consolidated Balance Sheet, and Consolidated Statement
of Accumulated Other Comprehensive Income. We have not included
our Consolidated Statement of Cash Flows as the differences
are immaterial.
Subordinated Debt, Preferred Share Liability
and Capital Trust Securities
The fair value of our subordinated debt, preferred share liability and
capital trust securities is determined by referring to current market
prices for similar instruments. Set out in the following table are the
amounts that would be reported if all of our financial instrument assets
and liabilities were reported at their fair values.