As repatriation of such earnings is not planned in the foreseeable future, we have not recorded the related future income tax liability. Canadian and foreign taxes that would be payable if all of our foreign subsidiaries’ earnings were repatriated as at October 31, 2002, 2001 and 2000 are estimated to be $530, $501 and $434, respectively. Income which we earn in foreign countries, either through our branches or subsidiaries, is generally subject to tax in those coun- tries. We are also subject to Canadian taxation on the income earned in our foreign branches. Canada allows a credit for foreign taxes paid on this income. Upon repatriation of earnings from foreign sub- sidiaries,wewouldberequiredtopaytaxoncertainof theseearnings. We increase the average number of common shares outstanding by the number of shares that would have been issued if all stock options with a strike price  below the average share price for the year had been exercised. We also decrease the average number of common shares outstanding by the number of our com- mon shares that we could have repurchased if we had used the proceeds from the exercise of stock options to repurchase them on the open market at the average share price for the year. We do not adjust for stock options with a strike price above the average share price for the year because including them would increase our earnings per share, not dilute it. Our basic earnings per share is calculated by dividing our net income, after deducting total preferred share dividends, by the daily average number of fully paid common shares outstanding throughout the year. Employee Stock Options Basic Earnings per Share NOTE 19 Earnings Per Share  (Canadian $ in millions, except per share information) (Canadian $ in millions, except per share information) The earnings per share calculations for the year ended October 31, 2000 have been amended to reflect the stock dividend of one common share, with no value, for each outstanding common share declared on March 1, 2001. Diluted earnings per share represents what our earnings per share would have been if any convertible issuances had been converted into common shares during the year. We increase net income before goodwill amortization by dividends paid on con- vertible shares as these dividends would not have been paid if the shares had been converted at the beginning of the year. Similarly, we increase the average number of common shares outstanding by the number of shares that would have been issued had the conversion taken place at the beginning of the year. Our Series 3, 4, 6 and 10 Class B Preferred Shares, in certain circumstances,  are convertible into common shares. These conversions are not included in the calculation of diluted earnings per share as we have the option to settle in cash instead of common shares. The interest earned on these loans is recorded in interest, divi- dend and fee income in our Consolidated Statement of Income. The amounts outstanding under these loan agreements are: We provide banking services to our joint ventures and equity- accounted investments on the same terms that we offer to our customers.  NOTE 20 Related Party Transactions Convertible Shares Diluted Earnings per Share Beginning in fiscal 2002, we introduced a stock option plan for non- officer directors and issued 105,000 options at an exercise price of $36.01 per share. The terms of the stock option plan are the same as our 2000, 2001 and 2002 plans for designated officers and employees described in Note 16. Effective September 1, 1999, new loans and mortgages to execu- tive officers were no longer available at preferred rates, other than mortgages for Bank-initiated transfers; a select suite of customer loan and mortgage products is now offered to employees at rates normally accorded to preferred customers. Existing loans and mort- gages at preferred rates will be phased out by September 1, 2004. Prior to September 1, 1999, loans to executive officers for personal purposes, principally for consumer purchases, home improvement and sundry investments, were made available at an interest rate of one-half of the Bank’s prime rate to a maximum of $25,000. Loans in excess of this amount were available at prime rate. BMO FINANCIAL GROUP ANNUAL REPORT 2002 85 2002 2001 Mortgage loans $ 223 $ 344  Personal loans 106 285 Total $ 329 $ 629  Diluted earnings per share 2002 2001 2000 Net income before goodwill amortization  available to common shareholders $ 1,338 $ 1,447 $ 1,805 Dividends on convertible shares 1 2 2 Net income before goodwill amortization adjusted for dilution effect 1,339 1,449 1,807 Amortization of goodwill — (56) (49) Net income adjusted for dilution effect $ 1,339 $ 1,393 $ 1,758 Average number of common  shares outstanding (in thousands) 490,816 511,286 531,318 Convertible shares 1,278 2,213 3,125 Stock options potentially exercisable (a) 30,575 31,742 21,336 Shares potentially repurchased (23,205) (21,680) (14,964) Average diluted number of common  shares outstanding (in thousands) 499,464 523,561 540,815 Diluted earnings per share  before goodwill amortization $ 2.68  $ 2.77 $ 3.34 Diluted earnings per share $ 2.68  $ 2.66 $ 3.25 Basic earnings per share 2002 2001 200 0 Net income before goodwill amortization  $ 1,417 $ 1,527  1,906 Dividends on preferred shares  (79) (80) (101) Net income before goodwill amortization  available to common shareholders  1,338 1,447 1,805 Amortization of goodwill  — (56) (49) Net income available to common shareholders $ 1,338 $ 1,391  1,756 Average number of common  shares outstanding (in thousands) 490,816 511,286 531,318 Basic earnings per share  before goodwill amortization $ 2.73 $ 2.83 $ 3.40 Basic earnings per share  $ 2.73 $ 2.72 $ 3.30 (a)  In computing diluted earnings per share for the year ended October 31, 2002, we excluded  stock options with exercise prices in excess of $36.40. Refer to Note 16 for more information  on these options.