NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidated Statement of Income Consolidated Statement of Comprehensive Income For the Year Ended October 31 (Canadian $ in millions) 2002 2001 2000 Net income (under United States GAAP) $ 1,360 $ 1,515 $ 1,811 Other Comprehensive Income, net of tax: Unrealized gain (loss) on translation of net investments in foreign operations, net of hedg ing activities (a) (79) 179 143 Unrealized translation losses on disposition of an investment in a foreign operation — 18 — Unrealized holding gains (losses) arising on available for sale securities, net of hedging activities (b) (45) 3 307 Realized (gains) losses and write-downs on available for sale securities recognized in ne t income (c) 94 (57) (42) Net transition adjustment gain on derivatives designated as cash flow hedges (d) — 13 — Unrealized gains (losses) arising on derivatives designated as cash flow hedges (e) (22) 258 — Net (gains) losses on derivatives designated as cash flow hedges recognized in net inco me (f) 15 (22) — Total Other Comprehensive Income (37) 392 408 Comprehensive Income $ 1,323 $ 1,907 $ 2,219 (Canadian $ in millions except per share amounts) For the Year Ended October 31  20 02 2001 2000 Canadian Increase United St ates Canadian Increase United States Canadian Increase United States GAAP (Decrease) GAAP GAAP (Decrease) GAAP GAAP (Decrease) GAAP Interest, Dividend and Fee Income $ 9,135 $  — 9,135 $ 13,000 $ — $ 13,000  $ 14,303  $  — $ 14,303  Interest Expense 4,306 — 4,306 8,501  — 8,501 10,099 — 10,099  Net Interest Income 4,829 — 4,829 4,499  — 4,499 4,204 — 4,204  Provision for credit losses 820 — 820 980  — 980 358 — 358  Net Interest Income After Provision for Credit Losses 4,009 — 4,009 3,519  — 3,519 3,846 — 3,846  Non-Interest Revenue 3,924 (77) (2,3) 3,847 4,222 45 (2,3,7) 4,267 4,326 (19) (2) 4,307 Net Interest Income and Non-Interest Revenue 7,933 (77) 7,856 7,741 45 7,786 8,172 (19) 8,153 Total non-interest expense before restructuring charge 6,030 1 (4) 6,031 5,671 56 (4) 5,727 5,301 111 (4) 5,412 Restructuring charge — — — — — — (43) — (43) Total Non-Interest Expense 6,030 1 6,031 5,671 56 5,727 5,258 111 5,369 Income Before Provision for Income Taxes,  Non-Controlling Interest in Subsidiaries  and Goodwill Amortization 1,903 (78) 1,825 2,070 (11) 2,059 2,914 (130) 2,784 Income taxes 424 (21) (5) 403 501 1 (5) 502 989 (35) (5) 954 1,479 (57) 1,422 1,569 (12) 1,557 1,925 (95) 1,830 Non-controlling interest in subsidiaries  62 — 62 42  — 42 19 — 19  Net Income Before Goodwill Amortization 1,417 (57) 1,360 1,527 (12) 1,515 1,906 (95) 1,811 Amortization of goodwill, net of applicable income tax — — — 56 (56) (4[iv]) — 49 (49) (4[iv]) — Net Income  $ 1,417 $  (57) 1,360 $ 1,471  $  44  $ 1,515  $ 1,857  $ (46) $ 1,811  Earnings per share — Basic $ 2.73 $ (0.12) 2.61 $ 2.72 $ 0.09 $ 2.81 $ 3.30 $ (0.08) $ 3.22 — Diluted 2.68 (0.11) 2.57 2.66 0.09 2.75 3.25 (0.07) 3.18 (a) Net of income taxes of $81 ($178 in 2001, $153 in 2000).  (b) Net of income taxes of $30 ($2 in 2001, $222 in 2000). (c) Net of income taxes of $59 ($41 in 2001, $30 in 2000). ( d) Net of income taxes of nil ($9 in 2001). (e) Net of income taxes of $14 ($182 in 2001). (f) Net of income taxes of $9 ($16 in 2001). (i) Under United States GAAP, we have designated as available for sale securities all of our investment securities, other than invest- ment securities accounted for using the equity method. Available for sale securities are carried at fair value, with any unrealized gains or losses recorded in other comprehensive income. Under Canadian GAAP, investment securities are carried at cost or at am ortized cost. (ii) Under United States GAAP, derivatives designated as cash flow hedges are carried at fair value, with any unrealized gains or losses recorded in other comprehensive income, to the extent the hedge  is effective. Under Canadian GAAP, derivatives designated as cash flow hedges are accounted for on the accrual basis, with gains or losses deferred and recorded in income on the same basis as the underlying hedged item. The accumulated balances related to each component of other comprehensive income, net of tax, are as follows: (1) Accumulated other comprehensive income is recorded as a  separate component included in shareholders’ equity under United States GAAP. Canadian GAAP does not have other comprehen- sive income. 2002 2001 Unrealized gain on translation of net investments in foreign operations, net of hedging activities $ 421 $ 500  Net unrealized gains on available for sale securities (i) 78 29  Unrealized gains on derivatives designated as cash flow hedges (ii) 242 249  Total Accumulated Other Comprehensive Income $ 741 $ 778  92 BMO FINANCIAL GROUP ANNUAL REPORT 2002