Introduction We have prepared this Series Supplement to help you decide whether to invest in this series of BMO Fixed Cash Flow Plus Deposits issued under the Fixed Cash Flow Deposit Program. Fixed Cash Flow Deposits may be suitable for investors seeking long-term predictable cash flow during their retirement years. They also provide exposure to the returns of a portfolio of mutual funds managed by BMO Investments Inc. (the underlying funds ) referred to as the FCFP Portfolio as described below. To get all the information you should know about the Fixed Cash Flow Deposits, you will need to review the Master Information Statement we refer to at the top of this document. Capitalized terms used but not defined in this Series Supplement have the meanings given to them in the Master Information Statement. Product Details Price Per Fixed Cash Flow Deposit: $100 Minimum Purchase: $5,000 Issue Date: September 11, 2014 Maturity Date: September 12, 2029 Approximate Term: 15 years Available at any BMO Bank of Montreal branch until: FCFP Portfolio Underlying Funds Issue Date Weighting 4:00 PM (Toronto time) August 29, 2014 Maturity Date Weighting Equity Component BMO Dividend Fund 33.0% 20.0% BMO U.S. Equity Fund 13.5% 7.5% BMO International Value Class 13.5% 7.5% Total Equity Component 60.0% 35.0% Fixed Income Component BMO Bond Fund 33.0% 35.0% BMO Money Market Fund 7.0% 30.0% Total Fixed Income Component 40.0% 65.0% Total 100.0% 100.0% Allocations & Rebalancing The FCFP Portfolio table shows the weighting of each underlying fund in the FCFP Portfolio on the Issue Date and on the Maturity Date. On or about each anniversary of the Issue Date during the term of the Fixed Cash Flow Deposits, we will systematically rebalance the FCFP Portfolio by decreasing the percentage of the equity component and increasing the percentage of the fixed income component. We accomplish this by gradually changing the percentage weighting of each underlying fund in the FCFP Portfolio from the Issue Date Weighting shown in the middle column of the table to the Maturity Date Weighting shown in the last column of the table. Rebalancing between the equity component and the fixed income component is illustrated in the diagram below. Illustration of Rebalancing Fees & Expenses An Annual Fixed Cash Flow Deposit Fee of up to 2.75% per annum, calculated daily and payable monthly in arrears. The Annual Fixed Cash Flow Deposit Fee may change over the term of the Fixed Cash Flow Deposits but will never exceed 2.75% per year. We will publish the current Annual Fixed Cash Flow Deposit Fee at www.bmo.com/fixedcashflow 1 Investment Phases Growth Phase: Distribution Phase: Capital Distributions Not applicable 15 years Amount $6.00 (6.00%) per year of each Fixed Cash Flow Deposit (equivalent to $0.50 each month). Frequency Monthly, payable on 20th day of each month during the distribution phase (or, if that day is not a business day, on the next business day. See item 3 of Key Features of the Fixed Cash Flow Deposits.) First Payment Date October 20, 2014 Last Payment Date August 20, 2029 You may obtain copies of the Master Information Statement at www.bmo.com/fixedcashflow. If any information in this Series Supplement is different from information contained in the Master Information Statement, the information in this Series Supplement will be considered to be correct, but only for the series of Fixed Cash Flow Deposits described in this Series Supplement. The information in this Series Supplement will not apply to any other version and series of Fixed Cash Flow Deposits unless the same information is also contained in the Series Supplement for that other version and Series of Fixed Cash Flow Deposits.
The FCFP Portfolio Equity Component: BMO Dividend Fund Objective To achieve a high after-tax return, including dividend income and capital gains, from growth in the value of an investment primarily in dividend-yielding common and preferred shares of established Canadian companies BMO International Value Fund Objective To increase the value of an investment in the fund over the long-term by investing primarily in equity securities of established companies located outside of Canada and the United States. BMO U.S. Equity Fund Objective To increase the value of an investment in the fund over the long-term by investing in equities of wellestablished U.S. companies that may be undervalued by the marketplace. Fixed Income Component: BMO Bond Fund Objective To provide a high level of interest income and to provide some opportunity for growth in the value of an investment in the fund. As part of its investment objectives, the fund invests primarily in high quality fixed-income securities that are issued by governments and corporations in Canada and that mature in more than one year. BMO Money Market Fund Objective To preserve the value of an investment in the fund and to provide a high level of liquidity and interest income generally by investing in high quality money market instruments issued by governments and corporations in Canada, like treasury bills, bankers acceptances, and commercial paper. FCFP Portfolio Issue Date Weighting The information about the underlying funds is subject to any disclosure filed publicly by each underlying fund and could change. For further information about an underlying fund, including details of its investment strategies or further details of its investment objectives, please refer to the most recent simplified prospectus of that fund, and any amendments to its simplified prospectus, filed at www.sedar.com. A copy of the simplified prospectus, together with information about the performance and holdings of each underlying fund, may also be obtained at www.bmo.com/mutualfunds. Key Features Of The Fixed Cash Flow Deposits The important features of this series of Fixed Cash Flow Deposits are highlighted below for your reference. The Master Information Statement contains additional information about the Fixed Cash Flow Deposit Program and your investment in Fixed Cash Flow Deposits. Please read the Master Information Statement together with this For more information about Fixed Cash Flow Deposits: Please contact an investment professional at any BMO Bank of Montreal branch during normal business hours or call the BMO Investment Centre at 1-800-665-7700. FIXED CASH FLOW DEPOSITS SERIES 79 Series Supplement for a complete understanding of your investment in these Fixed Cash Flow Deposits. 1. The Fixed Cash Flow Deposits may be suitable for investors who desire long-term predictable cash flow during their retirement years. They are longterm deposits that provide investors with a steady and reliable stream of payments to meet ongoing spending needs. Fixed Cash Flow Deposits are intended to be held until maturity. 2. Fixed Cash Flow Deposits provide a variable return, if any, at maturity based on the performance of the underlying funds of the FCFP Portfolio. The FCFP Portfolio offers exposure to five (5) underlying funds managed by BMO Investments Inc. The Fixed Cash Flow Deposits will reflect the performance of the units of the underlying funds, subject to the Annual Fixed Cash Flow Deposit Fee described on the first page of this Series Supplement. 3. The value of the Fixed Cash Flow Deposits is calculated as if (i) the management expenses charged on the actual units of the underlying funds are not charged on the portfolio units (so that management fees are not duplicated) and (ii) the amount of any distributions on the actual units are credited to the FCFP Portfolio and notionally reinvested in more portfolio units of the relevant underlying fund. 2
The FCFP Portfolio 4. The FCFP Portfolio is divided into an equity component and a fixed income component, each of which will have notional weighted exposure to the underlying funds. The component to which each underlying fund belongs and its weighting within the FCFP Portfolio on the Issue Date is set out on the first page of this Series Supplement under FCFP Portfolio. The FCFP Portfolio will be systematically rebalanced to become progressively more conservative over the term of your Fixed Cash Flow Deposits by adjusting the weighting of each underlying fund. The initial equity component weighting set out on the first page of this Series Supplement will be gradually reduced from the Issue Date Weighting to the Maturity Date Weighting shown on the first page of this Series Supplement during the 15-year term. Accordingly, by the Maturity Date the FCFP Portfolio will be allocated 35% to the equity component and 65% to the fixed income component. The asset allocation of the FCFP Portfolio will be rebalanced on or about each anniversary of the Issue Date. You can find more information about the weighting of each underlying fund in the FCFP Portfolio and rebalancing in FCFP Portfolio and Allocation & Rebalancing above. Investment Phases and Payments 5. The entire 15-year term of your Fixed Cash Flow Deposits will be comprised of the distribution phase. There will be no growth phase. Accordingly, we will begin making monthly payments to you in the first year of the term of your Fixed Cash Flow Deposits in an amount equal to $6.00 per Fixed Cash Flow Deposit each year (6.00% of the amount you invested in your Fixed Cash Flow Deposits). We refer to these payments, which are repayments of a portion of the principal you invested in your Fixed Cash Flow Deposits, as capital distributions. 6. The first capital distribution will be made to you on October 20, 2014 and will continue on a monthly basis until the day your Fixed Cash Flow Deposits mature (September 12, 2029 for this series). 7. Capital distributions will be made on the 20th day of each month (or, if that day is not a business day, on the next business day). 8. Since capital distributions are repayments of a portion of the principal you invested in your Fixed Cash Flow Deposits, they will not be taxable but they will reduce the adjusted cost base of your Fixed Cash Flow Deposits. Payment at Maturity 9. On the Maturity Date of your Fixed Cash Flow Deposits, we will pay you the principal amount you invested in the Fixed Cash Flow Deposits ($100 per Fixed Cash Flow Deposit) less any capital distributions you received during the distribution phase. The principal amount you invested in the Fixed Cash Flow Deposits less any capital distributions you received on or before a particular date is the Remaining Deposit Balance on that date. You may also receive a variable return equal to the amount, if any, by which the Deposit Value on the third business day before the Fixed Cash Flow Deposit matures exceeds the Remaining Deposit Balance at maturity. If this Deposit Value does not exceed the Remaining Deposit Balance then you will not receive any variable return on your Fixed Cash Flow Deposit. Further information about how we determine the Deposit Value is set out in Part B of the Master Information Statement under Valuation of Fixed Cash Flow Deposits Calculating Deposit Value. 10. The performance of the underlying funds, measured from the Issue Date until the third business day before the Maturity Date, will affect the amount of variable return, if any, payable on your Fixed Cash Flow Deposits. Since the fees and expenses described in the Master Information Statement and on the first page of this Series Supplement will be deducted from the FCFP Portfolio, for you to receive a return at maturity, the value of the FCFP Portfolio must grow at a rate that exceeds those aggregate fees and expenses. It is possible that you will receive no return on your Fixed Cash Flow Deposits. 11. Unlike conventional fixed income investments whose return is based on a fixed, floating or other specified rate of interest that can be determined prior to the final valuation date, the return you receive on your Fixed Cash Flow Deposits at maturity, if any, will be based solely on the performance of the underlying funds in the FCFP Portfolio. 12. While you will receive the full amount you invested in Fixed Cash Flow Deposits if you hold them until they mature, it is possible that you will not receive any amount beyond the principal amount you invested with us. If the Deposit Value on the third business day prior to maturity is equal to or less than the Remaining Deposit Balance at maturity then you will not receive any return at maturity. 13. The deposit amount of $100 for each Fixed Cash Flow Deposit will be fully repaid to you only if your Fixed Cash Flow Deposit is held until the Maturity Date. You cannot elect to receive any amounts on your Fixed Cash Flow Deposits before they mature other than scheduled capital distributions. 14. This series of Fixed Cash Flow Deposits will mature on or about September 12, 2029 and will have a term of approximately 15 years. 15. On the Maturity Date, the Remaining Deposit Balance and any return payable on your Fixed Cash Flow Deposits will be transferred to a money market mutual fund managed by us or one of our affiliates. 3
Secondary Market for Fixed Cash Flow Deposits 16. BMO Capital Markets will use reasonable efforts to arrange a secondary market allowing you to sell your Fixed Cash Flow Deposits to BMO Capital Markets prior to maturity, but there may be circumstances where a secondary market may not exist for the Fixed Cash Flow Deposits. There will be no other way for you to liquidate your investment in a Fixed Cash Flow Deposit prior to maturity. 17. If you sell the Fixed Cash Flow Deposits in the secondary market prior to maturity, you may receive less than the Remaining Deposit Balance of your Fixed Cash Flow Deposits. Moreover, if you sell a Fixed Cash Flow Deposit in the secondary market within 120 days after the Issue Date, BMO Capital Markets may deduct an early trading charge of up to 2% of the amount paid for the Fixed Cash Flow Deposit when it was issued. The secondary market price of each series of Fixed Cash Flow Deposits can be found at www.bmo.com/fixedcashflow. 18. Bank of Montreal does not have the right to redeem the Fixed Cash Flow Deposits prior to maturity and you do not have the right to require Bank of Montreal to redeem (that is, repay and cancel) the Fixed Cash Flow Deposits prior to maturity. Other Important Information 19. Investments in Fixed Cash Flow Deposits can be held in a non-registered account, registered retirement savings plan (RRSP) or a registered retirement income fund (RRIF). 20. Monthly capital distributions paid on a Fixed Cash Flow Deposit held in a non-registered account will, based on your instructions at the time of purchase, either be deposited in a bank account you designate or paid to you by cheque. 21. Monthly capital distributions paid on Fixed Cash Flow Deposits held in a RRSP or RRIF will be invested in the BMO Money Market Fund or other money market mutual fund managed by us or one of our affiliates. Unless you specify otherwise, capital distributions will automatically be invested in the BMO Money Market Fund. 22. The Master Information Statement contains a discussion of the risks of investing in the Fixed Cash Flow Deposits. A summary list of these risks can be found on pages 4 and 5 of this Series Supplement. Please consider these risks carefully before investing in Fixed Cash Flow Deposits. 23. We can amend the terms of a series of Fixed Cash Flow Deposits without the consent of their holders if, in our reasonable opinion, the amendment would not materially and adversely affect the interests of holders of that series of Fixed Cash Flow Deposits. In all other cases, amendments of the terms of a series of Fixed Cash Flow Deposits must be approved at a meeting of holders of Fixed Cash Flow Deposits of that series. 24. Part D of the Master Information Statement entitled CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS contains a summary of the main tax considerations relating to an investment in Fixed Cash Flow Deposits. You should consult your own tax advisor for advice about the income tax consequences of an investment in Fixed Cash Flow Deposits in your particular circumstances. 25. In certain unusual circumstances, your Fixed Cash Flow Deposits may no longer be exposed to the performance of a particular underlying fund (or underlying funds) in the FCFP Portfolio or, in extreme cases, may be cancelled and repaid prior to maturity. A description of these circumstances is set out in Part B of the Master Information Statement under the heading Special Circumstances. 4 Are Fixed Cash Flow Deposits suitable for you? Fixed Cash Flow Deposits may be suitable for you if: you are preparing for or entering your retirement years, you are prepared to invest for the long-term and, in particular, are prepared to wait until your Fixed Cash Flow Deposits mature to receive any amounts other than a regular capital distribution payable before maturity, you are willing to accept greater equity exposure in the early years of the Fixed Cash Flow Deposit and reduce equity exposure in a disciplined and systematic manner over the long-term, you want to receive regular and predictable capital distributions for all of the term of your Fixed Cash Flow Deposits without paying income tax on these distributions when you receive them, you want to ensure that you receive at least the amount you invested in Fixed Cash Flow Deposits if your hold them until maturity, you are prepared to receive a variable return at maturity that (i) is based on the performance of the underlying funds in the FCFP Portfolio, (ii) will be uncertain until the Fixed Cash Flow Deposits mature, (iii) will not be paid until the Maturity Date, and (iv) may be zero, and you are prepared to assume the risks summarized below and described in the Master Information Statement. You should consult an investment professional at any BMO Bank of Montreal branch to discuss whether Fixed Cash Flow Deposits are suitable in your particular circumstances. What are the risks of investing in Fixed Cash Flow Deposits? An investment in Fixed Cash Flow Deposits is subject to the risks set out in Part A of the Master Information Statement under the heading What are the risks of investing in the Fixed Cash Flow Deposits?. The
following is a summary list of these risks. For a complete description of these risks, please refer to the Master Information Statement: Fixed Cash Flow Deposits may not be suitable for all investors, Fixed Cash Flow Deposits differ from conventional fixed income investments and may pay no return, There is currently no market for you to sell your Fixed Cash Flow Deposits prior to maturity and it is possible that no such market will be created, Capital distributions and fees will reduce the value of the FCFP Portfolio, Fixed Cash Flow Deposits are not rated by any ratings agency, and there is no guarantee that they would receive the same ratings as our other deposit liabilities if they were rated, Fixed Cash Flow Deposits are not insured by the Canada Deposit Insurance Corporation or any other entity, If certain unusual events occur beyond our control, we may eliminate exposure to a particular underlying fund (or funds) or, in extreme cases, cancel and repay your Fixed Cash Flow Deposits prior to maturity, The value of the Fixed Cash Flow Deposits is based on the value of the underlying funds, which may not be available, You have no rights of ownership in the underlying funds, their units or their investments, We and the manager or advisor of an underlying fund may have conflicts of interest in dividing our time and activities between the underlying funds and the Fixed Cash Flow Deposit Program and other entities and activities, We will not hire an independent person to make or confirm calculations and decisions for the Fixed Cash Flow Deposit Program, Payments on Fixed Cash Flow Deposits depend on our financial health and creditworthiness, Risk factors that apply to a direct investment in the underlying funds also apply to an investment in Fixed Cash Flow Deposits, The performance of an underlying fund s investments is unpredictable, An underlying fund may not meet its investment objectives, its investment strategies may be unsuccessful, and it may be unable to avoid losses or produce a positive return, Changes in laws and regulations or the administrative practices of government agencies, including with respect to taxation, could adversely affect your investment in Fixed Cash Flow Deposits. What are your rights to cancel an order or purchase of Fixed Cash Flow Deposits? As described under Part E Your Legal Rights in the Master Information Statement, you can cancel in writing an order to buy Fixed Cash Flow Deposits of a particular series under the Fixed Cash Flow Deposit Program (or you can cancel your purchase if the Fixed Cash Flow Deposits have been issued) within 48 hours of when you enter into an agreement to buy the Fixed Cash Flow Deposits or, if later, 48 hours after we consider you to have received the Master Information Statement and the Series Supplement for that series. If you purchase Fixed Cash Flow Deposits, we will send you the Master Information Statement by mail. You will also find the Master Information Statement on our public website at www.bmo.com/fixedcashflow. Where can I find out more about Fixed Cash Flow Deposits? More details can be found in the Master Information Statement, available at www.bmo.com/fixedcashflow. This document can be mailed to you at your request. During the term of the Fixed Cash Flow Deposits, you may inquire as to their value and the method for determining the variable return under a Fixed Cash Flow Deposit by contacting the BMO Investment Centre at 1-800-665-7700 or at any BMO Bank of Montreal branch during normal business hours or by visiting www.bmo.com/fixedcashflow. Recent net asset values of the units of the underlying funds are also available at www.bmo.com/mutualfunds. Fixed Cash Flow Deposits are available for sale only at BMO Bank of Montreal branches. No securities regulatory authority has expressed an opinion on the Fixed Cash Flow Deposits offered under this Series Supplement and it is an offence to claim otherwise. BMO (M-bar roundel symbol), BMO and BMO Capital Markets are registered trade-marks. 5