FINANCIAL PERFORMANCE AND CONDITION ATAGLANCE Net Economic Profit (NEP) Growth b NEP declined 15% to $368 million and was reflective of reduced net income in 2002. NEP includes non-recurring items and the prior year benefited from these, particularly the gain on sale of investments in Bancomer. b Personal and Commercial Client Group was the only group to generate economic profit in 2002. Total Shareholder Return (TSR) b BMO’s average five-year TSR of 7.9% was better than the com- parable indices. The average return fell from a year ago due to the removal of the 55% return in 1997. b BMO’s 16.2% one-year TSR was better than the comparable indices and BMO’s negative 1.2% return in 2001.  Return on Equity (ROE) b ROE was 13.8%, up from 12.9% in 2001. b Cash ROE was 14.6%, within our target range of 14.0% to 15.0%. b On a GAAP basis, BMO’s ROE has exceeded 13% for each of the last 13 years. No other major North American bank has matched this record of consistency.  Revenue Growth b Revenue increased 2%, compared with 3% growth in 2001.  b Revenue declined 1% after adjusting for the additive effect of acquired businesses. b Solid growth in Personal and Commercial Client Group was offset by lower Investment Banking Group revenue. Earnings per Share (EPS) Growth b EPS rose 11% to $2.76 versus a decline of 15% a year ago. Improved Personal and Commercial Client Group performance, a lower loss provision, discontinued goodwill amortization and favourable tax rates and benefits drove the increase. b Cash EPS growth of 8.6% met our target. Expense-to-Revenue Ratio b The efficiency ratio was 67.4%, compared with 65.1% (a) in 2001.  b Expense growth was largely attributable to business acquisi- tions. b Excluding acquired businesses and severance costs, expenses were unchanged from a year ago. * Adjustments to GAAP results to derive cash results and results excluding non-recurring items are outlined on page 18, along with comments on the use of these measures. Unless indicated otherwise, all amounts and ratios exclude non-recurring items. See page 14 for further comments on peer group comparisons. Our Performance * Peer Group Comparison * BMO Financial Group Canadian Peer Group Average North American Peer Group Average Further details are provided on page 15. Further details are provided on page 16. Further details are provided on page 17. Further details are provided on page 17. Further details are provided on page 19. Further details are provided on page 22. Net Economic Profit (NEP)  Growth  (%) b Our NEP fell 15.2% in 2002 but perfor- mance was better than the Canadian  peer group average reduction of 97.0%. NEP of the North American peer group rose 24.5%. Five-Year Total Shareholder  Return (TSR)  (%) b BMOGLYPH<213>s average five-year TSR of 7.9% was just below the Canadian peer group aver- age of 8.2% but well above the North American peer group average of 3.3%.  b BMOGLYPH<213>s annual TSR in 2002 was the third best of both the Canadian and North American peer groups. Earnings per Share (EPS)  Growth  (%) b BMOGLYPH<213>s EPS growth of 11.3% in 2002  was above the Canadian peer group average of negative 16.1% but below the North American peer group aver- age of 16.4%.  Return on Equity (ROE)  (%) b ROE of 13.8% in 2002 was above the Canadian peer group average of 11.1% but below the North American peer group average of 15.0%. Revenue Growth  (%) b BMOGLYPH<213>s revenue growth of 1.7% in 2002 was below the Canadian and North American peer group averages of 2.5% and 7.6%, respectively. Expense-to-Revenue Ratio  (%) b BMOGLYPH<213>s expense-to-revenue ratio of 67.4% (a) was just above the Canadian peer group average of 67.0% and well above the North American peer group average of 58.4%. b Improving productivity is BMOGLYPH<213>s top  priority for 2003. 2002 2001 2000 1999 19 98 7.9 14.3 22.9 22.0 23 .3 2002 2001 2000 1999 19 98 11 ( 15 ) 16 10 ( 3 ) 2002 2001 2000 1999 19 98 13.8 12.9 16.1 15.1 15 .2 2002 2001 2000 1999 19 98 ( 15 ) ( 43 ) 90 ( 14 ) ( 5 ) 2002 2001 2000 1999 19 98 2 3 6 9 1 2002 2001 2000 1999 19 98 67.4 65.8 63.5 65.3 66 .5 (a) For consistency with our peer groups, the non-interest expense-to-revenue ratio for BMO and the peer groups reflected in the graphs for 1998 to 2001 includes goodwill amortization. 12 BMO FINANCIAL GROUP ANNUAL REPORT 2002