(Canadian $ in millions, except as noted) Q1-2020 Q4-2019 Q1-2019 --- Reported Results Revenue 6,747 6,087 6,517 Insurance claims, commissions and changes in policy benefit liabilities (CCPB) (716) (335) (926) --- Revenue, net of CCPB 6,031 5,752 5,591 Total provision for credit losses (349) (253) (137) Non-interest expense (3,669) (3,987) (3,557) --- Income before income taxes 2,013 1,512 1,897 Provision for income taxes (421) (318) (387) --- Net income 1,592 1,194 1,510 EPS ($) 2.37 1.78 2.28 === Adjusting Items (Pre-tax) (1) Acquisition integration costs (2) (3) (2) (6) Amortization of acquisition-related intangible assets (3) (29) (38) (31) Restructuring costs (4) (484) Reinsurance adjustment (5) (25) --- Adjusting items included in reported pre-tax income (32) (549) (37) === Adjusting Items (After tax) (1) Acquisition integration costs (2) (2) (2) (4) Amortization of acquisition-related intangible assets (3) (23) (29) (24) Restructuring costs (4) (357) Reinsurance adjustment (5) (25) Adjusting items included in reported net income after tax (25) (413) (28) Impact on EPS ($) (0.04) (0.65) (0.04) === Adjusted Results Revenue 6,747 6,087 6,517 Insurance claims, commissions and changes in policy benefit liabilities (CCPB) (716) (310) (926) --- Revenue, net of CCPB 6,031 5,777 5,591 Total provision for credit losses (349) (253) (137) Non-interest expense (3,637) (3,463) (3,520) --- Income before income taxes 2,045 2,061 1,934 Provision for income taxes (428) (454) (396) --- Net income 1,617 1,607 1,538 EPS ($) 2.41 2.43 2.32 ===
Adjusting items are generally included in Corporate Services, with the exception of the amortization of acquisition-related intangible assets and certain acquisition integration costs, which are charged to the operating groups, and the reinsurance adjustment, which is included in CCPB, in (1) BMO Wealth Management. KGS-Alpha and Clearpool acquisition integration costs are reported in BMO Capital Markets. Acquisition integration costs are recorded in non-interest (2) expense. These amounts were charged to the non- interest expense of the operating groups. Before-tax and after-tax amounts for each operating group are provided on pages 14, 15, 16, 18 and 20 of our First Quarter (3) 2020 Report to Shareholders. Q4-2019 reported net income included a restructuring charge of $357 million after-tax ($484 million pre-tax), related to severance and a small amount of real estate-related costs, to continue to improve our efficiency, including accelerating delivery against key bank- wide initiatives focused on digitization, organizational redesign and simplification of the way we do business. Restructuring costs are included in non-interest (4) expense in Corporate Services. Q4-2019 reported net income included a reinsurance adjustment of $25 million (pre-tax and after-tax) in CCPB for the net impact of major reinsurance claims from Japanese typhoons that were incurred after our announced decision to wind down our reinsurance business. This reinsurance adjustment is included in CCPB in BMO (5) Wealth Management. Adjusted results and measures in this table are non- GAAP amounts or non-GAAP measures.
Caution Regarding Forward-Looking Statements
Bank of Montreal's public communications often include written or oral forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements in this document may include, but are not limited to, statements with respect to our objectives and priorities for fiscal 2020 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price, the regulatory environment in which we operate and the results of or outlook for our operations or for the Canadian, U.S. and international economies, and include statements of our management. Forward-looking statements are typically identified by words such as "will", "would", "should", "believe", "expect", "anticipate", "project", "intend", "estimate", "plan", "goal", "target", "may" and "could."
By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct, and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements, as a number of factors - many of which are beyond our control and the effects of which can be difficult to predict - could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.
The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate; the Canadian housing market and consumer leverage; weak, volatile or illiquid capital and/or credit markets; interest rate and currency value fluctuations; changes in monetary, fiscal, or economic policy and tax legislation and interpretation; the level of competition in the geographic and business areas in which we operate; changes in laws or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; judicial or regulatory proceedings; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; failure of third parties to comply with their obligations to us; our ability to execute our strategic plans and to complete and integrate acquisitions, including obtaining regulatory approvals; critical accounting estimates and the effect of changes to accounting standards, rules and interpretations on these estimates; operational and infrastructure risks, including with respect to reliance on third parties; changes to our credit ratings; political conditions, including changes relating to or affecting economic or trade matters; global capital markets activities; the possible effects on our business of war or terrorist activities; outbreaks of disease or illness that affect local, national or international economies; natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply; technological changes; information, privacy and cyber security, including the threat of data breaches, hacking, identity theft and corporate espionage, as well as the possibility of denial of service resulting from efforts targeted at causing system failure and service disruption; and our ability to anticipate and effectively manage risks arising from all of the foregoing factors.
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