Revenue Growth Acquired Businesses BMO Financial Group has selectively acquired a number of businesses over the past two years in advancing its transnational growth strategy. These acquisitions have had minimal net effect on net income to date, largely due to non-cash amortization expenses and the difficult market environment for wealth man- agement businesses. The acquisitions have increased revenues and expenses. The accompanying table outlines the acquisitions and their additive effect on revenue, expense and net income by operating group for 2002 to assist in analyzing results. Total revenue declined $4 million in 2002 to $8,859 million. Excluding non-recurring items that had the effect of increasing the previous year’s results, revenue rose $151 million or 2%. After adjusting 2002 revenue for the additive effect of revenues of businesses acquired in 2001 and 2002, revenue declined  $102 million or 1%. Solid revenue growth in Personal and Com- mercial Client Group was more than offset by reductions in Investment Banking Group. Private Client Group revenue, which rose 13% overall, was relatively unchanged after adjusting for acquired businesses, in a very challenging environment. Cor- porate Support revenue rose, excluding non-recurring items, due to higher securitization revenue. Revenues reflected in our MD&A are presented on a taxable equivalent basis (teb). The teb basis increases revenues from certain tax-exempt securities to the equivalent amount of revenue that would attract tax, to facilitate comparisons. The effect is disclosed in Table 6 on page 54. (excluding non-recurring items) ($ millions) Revenue  Taxable Equivalent Basis (teb) Business Acquisitions  ($ millions) Above amounts exclude $62 million ($39 million after tax) of non-recurring acquisition-related costs of Private Client Group.  Additive effect on fiscal 2002 results Business acquired Revenue Expense Net income Personal and Commercial Client Group First National Bank of Joliet (Joliet) Acquired July 2001 for $337 million 55 43 7 Private Client Group Morgan Stanley Individual Investor Group online accounts  Acquired May 2002 for $153 million Northwestern Trust and Investment  Advisory Company  Acquired April 2002 for $19 million CSFB direct Acquired February 2002 for $854 million  Guardian Group of Funds Ltd.  Acquired July 2001 for $187 million Total Private Client Group  Purchases of $1,213 million 199 207 (6) BMO Financial Group  Purchases of $1,550 million 254 250 1 For the year ended October 31 2002 2001 2000 1999 1998 Net interest income (teb) 4,935 4,641 4,338 4,417 4,152 Year-over-year growth (%) 6 7 (2) 6 (1) Non-interest revenue 3,924 4,067 4,100 3,539 3,118 Year-over-year growth (%) (4) (1) 16 14 5 Total revenue 8,859 8,708 8,438 7,956 7,270 Year-over-year growth (%) 2 3 6 9 1 Revenue  ($ millions) GLYPH<CR> and Annual Growth  (%) (as reported)  7, 270 1 9 9 2 0 7,928 8,664 8,863 8,859 2002 2001 2000 1999 1998 Growth (%) Revenue  ($ millions)  GLYPH<CR> and Annual Growth  (%)  GLYPH<CR> (excluding non-recurring items)GLYPH<CR> 7, 270 1 9 6 3 2 7,956 8,438 8,708 8,859 2002 2001 2000 1999 1998 Growth (%) Revenue by Group 2002GLYPH<CR> (excluding non-recurring items) PCG 19% IBG 29% P&C 52% Revenue by Group 2001GLYPH<CR> (excluding non-recurring items) PCG 17% IBG 34% P&C 49% BMO FINANCIAL GROUP ANNUAL REPORT 2002 19