Third Quarter 2023 Financial Results Overview
Non-GAAP Measures
Third quarter 2023
We use a number of financial measures to assess the performance of our business lines. Some measures are calculated in accordance with International
Financial Reporting Standards (IFRS or GAAP), while other measures do not have a standardized meaning under GAAP, and accordingly, these measures may
not be comparable to similar measures used by other companies. Investors may find these non-GAAP measures, which include non-GAAP financial measures
and non-GAAP ratios as defined in National Instrument 52-112 "Non-GAAP and Other Financial Measures Disclosure", useful in understanding how
management views underlying business performance.
Management assesses results on a reported and adjusted basis and considers both as useful measures of performance. Adjusted measures, which include
adjusted total revenue, adjusted provision for credit losses, adjusted non-interest expenses, adjusted income before income taxes, adjusted income taxes,
adjusted net income and adjusted pre-provision, pre-tax earnings, in addition to the adjusted measures on slide 53, remove items of note from reported results
to calculate our adjusted results. Items of note include the amortization of intangible assets, and certain items of significance that arise from time to time which
management believes are not reflective of underlying business performance. Adjusted measures represent non-GAAP measures. We believe that adjusted
measures provide the reader with a better understanding of how management assesses underlying business performance and facilitates a more informed
analysis of trends. While we believe that adjusted measures may facilitate comparisons between our results and those of some of our Canadian peer banks,
which make similar adjustments in their public disclosure, it should be noted that there is no standardized meaning for adjusted measures under GAAP.
We also adjust our results to gross up tax-exempt revenue on certain securities to a TEB, being the amount of fully taxable revenue, which, were it to have
incurred tax at the statutory income tax rate, would yield the same after-tax revenue. See the "Strategic business units overview" section of our Q3/23 Report to
Shareholders, available on SEDAR+ at www.sedarplus.ca, and Note 30 to our consolidated financial statements included in our 2022 Annual Report for further
details, available on SEDAR+ at www.sedarplus.ca.
Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found in the "Non-GAAP measures"
section on pages 8 to 14 of our Q3/23 Report to Shareholders, available on SEDAR+ at www.sedarplus.ca, including the quantitative reconciliations therein of
reported GAAP measures to: adjusted total revenue, adjusted provision for credit losses, adjusted non-interest expenses, adjusted income before income taxes,
adjusted income taxes, and adjusted net income on pages 9 to 13; pre-provision, pre-tax earnings and adjusted pre-provision, pre-tax earnings on page 14.
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Third Quarter, 2023
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