Bank of Montreal 2008 Annual Report Download - page 29

MD&A
BMO Financial Group 191st Annual Report 2008 | 25
Management’s Discussion and Analysis
BMO’s President & Chief Executive Officer and Interim Chief Financial Officer have signed a statement outlining management’s responsibility for
financial information in this Annual Report. The statement, which can be found on page 102, also explains the roles of the Audit Committee and
Board of Directors in respect of financial information in the Annual Report.
Management’s Discussion and Analysis (MD&A) comments on BMO’s operations and financial condition for the years ended October 31, 2008
and 2007. The MD&A should be read in conjunction with our consolidated financial statements for the year ended October 31, 2008. The MD&A
commentary is as of November 25, 2008, except for peer group comparisons, which are as of December 5, 2008. 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 reclassifications arising from transfers
of certain businesses between operating groups.
Regulatory Filings
Our continuous disclosure materials, including our interim filings, annual MD&A, audited consolidated financial statements, Annual Information Form and
Notice of Annual Meeting of Shareholders & Proxy Circular, are available on our web site at www.bmo.com, on the Canadian Securities Administrators’ web site
at www.sedar.com and on the EDGAR section of the SEC’s web site at www.sec.gov. BMO’s President and Chief Executive Officer and Interim 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 internal control over financial reporting.
Index
26 Financial Performance and Condition at a Glance provides a
snapshot of our results on 11 key financial performance and condition
measures used by management to monitor performance relative
to our peer groups.
28 Who We Are provides an overview of BMO Financial Group,
explains the links between our objectives and our overall vision
and presents key performance data to help answer the question
“Why invest in BMO?”
29 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.
30 Caution Regarding Forward-Looking Statements warns readers
about the limitations and inherent risks and uncertainties of forward-
looking information.
30 Factors That May Affect Future Results outlines certain industry and
company-specific factors that investors should consider when assessing
BMO’s earnings prospects.
32 Economic Developments includes commentary on the impact of
economic developments on our businesses in 2008 and expectations
for the Canadian and U.S. economies in 2009.
Value Measures reviews financial performance on the four key
measures that assess or most directly influence shareholder return.
33 Total Shareholder Return
34 Earnings per Share Growth
35 Return on Equity
35 Net Economic Profit Growth
36 2008 Financial Performance Review provides a detailed review
of BMO’s consolidated financial performance by major income state-
ment category. It also includes a summary of notable items affecting
results and the impacts of business acquisitions and sales and
changes in foreign exchange rates.
Operating Group Review outlines the visions and strategies of
our operating groups, the paths they choose to differentiate their
businesses and the major business risks they face, along with
their strengths, competencies and key value drivers. It also includes
a summary of their achievements in 2008, their priorities for 2009
and a review of their financial performance for the year.
44 Summary
45 Personal and Commercial Banking
46 Personal and Commercial Banking Canada
49 Personal and Commercial Banking U.S.
52 Private Client Group
55 BMO Capital Markets
58 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 also
discusses off-balance sheet arrangements and financial instruments.
58 Summary Balance Sheet
60 Enterprise-Wide Capital Management
62 Financial Instruments in the Difficult Credit Environment
68 Off-Balance Sheet Arrangements
Accounting Matters and Disclosure and Internal Control reviews
critical accounting estimates and changes in accounting policies
in 2008 and for future periods. It also discusses our evaluation of
disclosure controls and procedures and internal control over
financial reporting.
69 Critical Accounting Estimates
71 Changes in Accounting Policies in 2008
71 Future Changes in Accounting Policies
72 Disclosure Controls and Procedures and Internal Control
over Financial Reporting
72 Pre-Approval of Shareholders’ Auditors’ Services and Fees
73 Enterprise-Wide Risk Management outlines our approach to
managing the key financial risks and other related risks we face.
85 Non-GAAP Measures includes explanations of non-GAAP measures
and their reconciliation to their GAAP counterparts.
85 Review of Fourth Quarter Performance, Quarterly Earnings Trends
and 2007 Financial Performance Review provide commentary on
results for relevant periods other than fiscal 2008.
90 Supplemental Information presents many useful financial tables
and provides more historical detail.