TABLE 7 Non-Interest Expense and Expense-to-Revenue Rati os  ($ millions, except as noted) For the year ended October 31 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 Non-Interest Expense  Employee compensation Salaries 2,962 2,857 2,800 2,532 2,370 2,284 1,972 1,758 1,567 1,455 Employee benefits 441 355 265 288 204 251 238 241 228 209 Total employee compensation 3,403 3,212 3,065 2,820 2,574 2,535 2,210 1,999 1,795 1,664 Premises and equipment Rental of real estate 179 134 130 145 147 149 139 136 125 123 Premises, furniture and fixtures 286 289 272 275 256 234 215 206 188 177 Property taxes 52 52 47 52 51 40 40 41 39 40 Computers and equipment 763 678 622 651 518 493 333 296 248 240 Total premises and equipment 1,280 1,153 1,071 1,123 972 916 727 679 600 580 Communications 173 194 259 268 266 246 219 208 180 165 Other expenses Business and capital taxes 77 103 110 129 134 128 116 110 95 92 Professional fees 291 288 335 343 320 250 173 141 112 64 Travel and business development 261 248 236 227 234 238 199 161 144 122 Other (a) 458 430 202 216 261 226 251 239 195 199 Total other expenses 1,087 1,069 883 915 949 842 739 651 546 477 Amortization of intangible assets 87 43 23 21 24 28 18 15 16 11 Special charge — — — — — — — — 71 — Business process improvement initiative charge — — — — — — — 60 — — Restructuring charge — — (43) 141 — — — — — — Total non-interest expense 6,030 5,671 5,258 5,288 4,785 4,567 3,913 3,612 3,208 2,897 Year-over-year growth (%) 6.3 7.8 (0.6) 10.5 4.8 16.7 8.4 12.6 10.7 5.4 Non-recurring items 62 — (43) 141 — 75 23 60 71 — Total non-interest expense excluding non-recurring items 5,968 5,671 5,301 5,147 4,785 4,492 3,890 3,552 3,137 2,897 Year-over-year growth (%) 5.2 7.0 3.0 7.6 6.5 15.5 9.5 13.2 8.3 6.1 Government Levies and Taxes  (b) Government levies other than income taxes Payroll levies 150 148 133 127 128 123 109 106 95 88 Property taxes 52 52 47 52 51 40 40 41 39 40 Provincial capital taxes 69 93 100 121 120 104 89 84 71 71 Business taxes 8 10 10 8 14 24 27 26 24 21 Goods and services tax and sales tax 142 126 125 118 125 114 101 88 70 64 Total government levies other than income taxes 421 429 415 426 438 405 366 345 299 284 Provision for (recovery of) income taxes reported in: Statement of income Provision  424 501 989 736 810 845 758 662 560 487 Amortization of goodwill — (6) (5) (6) (6) (5) (1) — — — Statement of retained earnings (c) 77 (350) (153) 158 (237) (92) 10 9 (23) (46) Total income taxes (c) 501 145 831 888 567 748 767 671 537 441 Total government levies and taxes (c) 922 574 1,246 1,314 1,005 1,153 1,133 1,016 836 725 Total government levies and taxes as a % of net  income before taxes and government levies 40.8 24.0 38.3 51.8 38.8 45.2 49.4 51.0 49.6 49.0 Effective tax rate (teb) 26.4 29.1 36.9 37.6 39.8 41.0 41.5 41.9 42.4 43.0 Productivity Analysis Non-interest expense-to-revenue ratio (%) 68.1 64.0 60.7 66.7 65.8 63.7 62.8 63.7 61.7 59.6 Excluding non-recurring items (%) 67.4 65.1 62.8 64.7 65.8 62.7 62.5 62.7 60.4 59.6 (a) Effective 2001, processing fees paid to Symcor are included in other expenses. (b) Government levies are included in various non-interest expense categories.  (c) 2001 comparatives have been restated to correct the amount previously disclosed as the recovery of income taxes reported in the statement of retained earnings. BMO FINANCIAL GROUP ANNUAL REPORT 2002 55