Great-West Lifeco reports fourth quarter 2013 results

TSX:GWO

Readers are referred to the cautionary notes regarding Forward-Looking Information and Non-IFRS Financial Measures at the end of this release.  All figures are expressed in Canadian dollars, except as noted.

WINNIPEG, Feb. 13, 2014 /CNW/ - Great-West Lifeco Inc. (Lifeco) has reported net earnings attributable to common shareholders of $717 million or $0.717 per common share for the three months ended December 31, 2013 compared to $351 million or $0.370 per common share a year ago.  For the twelve months ended December 31, 2013, Lifeco's net earnings attributable to common shareholders were $2,278 million or $2.340 per common share compared to $1,806 million or $1.902 per common share a year ago.  Net earnings include a litigation recovery of $226 million after-tax or $0.226 per common share in the fourth quarter of 2013.  Comparatively, net earnings in the fourth quarter of 2012 include a litigation provision of $140 million after-tax or $0.147 per common share related to the same legal matter.

Operating earnings, a non-IFRS measure, which exclude the impacts of litigation matters described above, were $491 million or $0.491 per common share in the fourth quarter of 2013. Excluding the impact of acquisition and restructuring costs associated with the Irish Life Group Limited (Irish Life) acquisition and mark-to-market losses on a macro capital hedge, operating earnings were $540 million or $0.540 per common share in the fourth quarter of 2013, up 10% from operating earnings of $491 million or $0.517 per common share for the same period in 2012.

For the twelve months ended December 31, 2013, Lifeco's operating earnings attributable to common shareholders were $2,052 million or $2.108 per common share, compared to $1,946 million or $2.049 per common share for the same period in 2012.

Consolidated assets under administration at December 31, 2013 grew to over $758 billion, up $212 billion from December 31, 2012, including $105 billion of Irish Life assets under administration.

Highlights - In Quarter

  • Lifeco premiums and deposits during the quarter were $22.6 billion, up 34% from a year ago, including $4.0 billion from Irish Life, reflecting continued strong persistency and growth.
  • Total Company sales in the fourth quarter of 2013 were up 61% from the same period in 2012:
    • Canada sales were $2.9 billion consistent with the fourth quarter of 2012.
    • Europe Insurance & Annuities sales were $4.8 billion, up 270% compared to the fourth quarter of 2012, including sales of $3.8 billion from Irish Life.
    • Putnam sales were US$8.3 billion, up 22% compared to the fourth quarter of 2012, driven by mutual fund sales of US$5.7 billion which were at their highest level since the third quarter of 2003.
    • Great-West Financial sales were US$5.3 billion, up 97% compared to the fourth quarter of 2012.
  • Irish Life contributed $44 million of net earnings to Lifeco in the fourth quarter of 2013.  Integration activities are progressing well and on track to achieve targeted cost synergies.
  • The Company maintained a strong ROE of 16.6% based on net earnings and 15.0% based on operating earnings. ROE based on adjusted operating earnings of $540 million, which exclude the impact of restructuring and acquisition costs associated with the Irish Life acquisition and a macro capital hedge, was 15.9%.
  • The Company's capital position remained very strong.  The Great-West Life Assurance Company reported a Minimum Continuing Capital and Surplus Requirements (MCCSR) ratio of 223% at December 31, 2013.
  • The Company declared a quarterly common dividend of $0.3075 per common share payable March 28, 2014.

OPERATING RESULTS

Consolidated net earnings of Lifeco include the net earnings of The Great-West Life Assurance Company (Great-West Life) and its operating subsidiaries London Life Insurance Company (London Life) and The Canada Life Assurance Company (Canada Life); Great-West Life & Annuity Insurance Company (Great-West Financial) and Putnam Investments, LLC (Putnam), together with Lifeco's Corporate operating results.  Irish Life results are included for the period subsequent to the acquisition date of July 18, 2013.

CANADA
The Canada segment of Lifeco includes the operating results of the Canadian businesses operated by Great-West Life, London Life and Canada Life.  The three primary business units included in this segment are Individual Insurance, Wealth Management and Group Insurance.  The Company provides accumulation, annuity, life, disability and critical illness insurance products to individual and group clients.

Net earnings attributable to common shareholders for the fourth quarter of 2013 were $270 million compared to $263 million in the fourth quarter of 2012.  For the twelve months ended December 31, 2013 net earnings attributable to common shareholders were up 11% to $1,148 million compared to $1,038 million for the same period in 2012.

Total sales in the fourth quarter of 2013 were $2.9 billion, consistent with the fourth quarter of 2012.   This reflects an 8% increase in Individual Insurance sales and an 8% increase in Wealth Management Group Retirement Services sales partially offset by a decrease in Group Insurance sales. Total sales for the twelve months ended December 31, 2013 were $10.8 billion compared to $9.9 billion in 2012.

Total Canada segment assets under administration at December 31, 2013 were $149 billion, compared to $138 billion at December 31, 2012.

UNITED STATES
The United States operating results for Lifeco include the results of Great-West Financial, Putnam and the insurance businesses in the United States branches of Great-West Life and Canada Life, together with an allocation of a portion of Lifeco's corporate results.

Great-West Financial provides an array of financial security products, including employer-sponsored defined contribution plans, administrative and record-keeping services, fund management and investment and advisory services.  It also provides individual retirement accounts, life insurance and annuity products and executive benefits products.  Putnam provides investment management, certain administrative functions, distributions and related services through a broad range of investment products.

Net earnings attributable to common shareholders for the fourth quarter of 2013 were $56 million compared to $76 million in the fourth quarter of 2012.  Great-West Financial reported net earnings of $81 million in the fourth quarter compared to $95 million for the same period last year.  Putnam reported a net loss of $25 million in the fourth quarter compared to a net loss of $19 million a year ago.  For the twelve months ended December 31, 2013 net earnings attributable to common shareholders were $276 million compared to $321 million in 2012.

Great-West Financial sales in the fourth quarter of 2013 were US$5.3 billion, up from US$2.7 billion in the fourth quarter of 2012 primarily due to a large public/non-profit plan sale and two large 401(k) client sales. Sales for the twelve months ended December 31, 2013 were US$12.5 billion compared to US$9.0 billion in 2012 primarily due to the large plan sale and an increase in new participants for public/non-profit and two large client sales and higher average assets per plan sold for 401(k).

Putnam assets under management as at December 31, 2013 were US$150 billion compared to US$128 billion a year ago, an increase of 17%. Net asset inflows for the fourth quarter of 2013 were US$0.3 billion compared to net asset outflows of US$0.2 billion for the same period in 2012, driven by mutual fund net inflows of US$1.8 billion, which were at their highest level since the first quarter of 2001.

Total United States segment assets under administration at December 31, 2013 were $421 billion compared to $333 billion at December 31, 2012.

EUROPE
The Europe segment comprises two distinct business units: Insurance & Annuities and Reinsurance, together with an allocation of Lifeco's corporate results.  Insurance & Annuities provides protection and wealth management products including payout annuities, through subsidiaries of Canada Life in the U.K., Isle of Man and Germany, and through Irish Life in Ireland.  Reinsurance operates primarily in the U.S., Barbados and Ireland, and is conducted through Canada Life, London Life and their subsidiaries. Irish Life results are included for the period subsequent to the acquisition date of July 18, 2013.

Net earnings attributable to common shareholders for the fourth quarter of 2013 were $202 million, which include the impact of $23 million of restructuring and acquisition costs related to the Irish Life acquisition.  Excluding these costs net earnings were $225 million for the quarter, compared to $151 million in the fourth quarter of 2012.  Irish Life contributed $44 million of net earnings in the fourth quarter of 2013.  For the twelve months ended December 31, 2013 net earnings attributable to common shareholders were $701 million compared to $615 million for the same period in 2012.

Insurance & Annuities sales for the fourth quarter of 2013 were $4.8 billion, including $3.8 billion related to Irish Life, up 270% as compared to $1.3 billion a year ago.  Total sales for the twelve months ended December 31, 2013, including Irish Life, were $9.9 billion compared to $3.7 billion in 2012.

Total Europe segment assets under administration at December 31, 2013 were $188 billion, up from $75 billion at December 31, 2012. Assets under administration include $105 billion of Irish Life assets.

CORPORATE
The Lifeco Corporate segment includes operating results for activities of Lifeco that are not associated with the major business units of the Company.

Lifeco Corporate segment net earnings attributable to common shareholders were $189 million in the fourth quarter of 2013 compared to a net loss of $139 million in the fourth quarter of 2012. Included in Lifeco corporate segment net earnings was a litigation recovery of $226 million in 2013 as compared to a litigation provision of $140 million in 2012.

For the twelve months ended December 31, 2013 Lifeco corporate segment net earnings attributable to common shareholders were $153 million compared to a net loss of $168 million in 2012, including the litigation items noted above.

Succession planning at Great-West Financial

After a distinguished 20-plus year career with our group of companies, Mitchell T.G. Graye, Chief Executive Officer of Great-West Financial, the Company's U.S. insurance subsidiary, has indicated his intention to retire following Great-West Lifeco's annual meeting on May 8, 2014. Meanwhile, succession planning is underway, with Mr. Graye's successor to be announced prior to the May annual meeting.

QUARTERLY DIVIDENDS

At its meeting today, the Board of Directors approved a quarterly dividend of $0.3075 per share on the common shares of the Company payable March 31, 2014 to shareholders of record at the close of business March 3, 2014.

For purposes of the Income Tax Act (Canada), and any similar provincial legislation, the dividends referred to above are eligible dividends.

In addition, the Directors approved quarterly dividends on:

  • Series F First Preferred Shares of $0.36875 per share;
  • Series G First Preferred Shares of $0.3250 per share;
  • Series H First Preferred Shares of $0.30313 per share;
  • Series I First Preferred Shares of $0.28125 per share;
  • Series L First Preferred Shares of $0.353125 per share;
  • Series M First Preferred Shares of $0.36250 per share;
  • Series N First Preferred Shares of $0.228125 per share;
  • Series P First Preferred Shares of $0.3375 per share;
  • Series Q First Preferred Shares of $0.321875 per share; and
  • Series R First Preferred Shares of $0.3000 per share

all payable March 31, 2014 to shareholders of record at the close of business March 3, 2014.

GREAT-WEST LIFECO

Great-West Lifeco Inc. (TSX:GWO) is an international financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses. Great-West Lifeco has operations in Canada, the United States, Europe and Asia through Great-West Life, London Life, Canada Life, Irish Life, Great-West Financial and Putnam Investments. Great-West Lifeco and its companies have $758 billion in assets under administration and are members of the Power Financial Corporation group of companies.

Cautionary note regarding Forward-Looking Information
This release contains some forward-looking statements about the Company, including its business operations, strategy and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" and similar expressions or negative versions thereof.  In addition, any statement that may be made concerning future financial performance (including revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future actions by the Company, including statements made with respect to the expected benefits of acquisitions and divestitures, are also forward-looking statements.  Forward-looking statements are based on expectations and projections about future events that were current at the time of the statements and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the financial services industry generally, including the insurance and mutual fund industries.  They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements.  Material factors and assumptions that were applied in formulating the forward-looking information contained herein include the assumption that the business and economic conditions affecting the Company's operations will continue substantially in their current state, including, without limitation, with respect to market prices for products provided, sales levels, premium income, fee income, expense levels, mortality experience, morbidity experience, policy lapse rates, taxes, inflation, information systems, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, and the Company's ability to complete strategic transactions and integrate acquisitions, and that there will be no unplanned material changes to the Company's facilities, customer and employee relations or credit arrangements.  Many of these assumptions are based on factors and events that are not within the control of the Company and there is no assurance that they will prove to be correct.  Other important factors that could cause actual results to differ materially from those contained in forward-looking statements include technological change, changes in local and international laws and regulations, changes in accounting policies and the effect of applying future accounting policy changes, unexpected judicial or regulatory proceedings and catastrophic events.  The reader is cautioned that the foregoing list of assumptions and factors is not exhaustive, and there may be other factors listed in other filings with securities regulators, including factors set out in the Company's 2013 Annual Management Discussion & Analysis (MD&A) under "Risk Management and Control Practices" and "Summary of Critical Accounting Estimates", which, along with other filings, is available for review at www.sedar.com.  The reader is also cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements.  Other than as specifically required by applicable law, the Company does not intend to update any forward-looking statements whether as a result of new information, future events or otherwise.

Cautionary note regarding Non-IFRS Financial Measures
This release contains some non-IFRS financial measures.  Terms by which non-IFRS financial measures are identified include, but are not limited to, "operating earnings", "constant currency basis", "premiums and deposits", "sales", and other similar expressions.  Non-IFRS financial measures are used to provide management and investors with additional measures of performance.  However, non-IFRS financial measures do not have standard meanings prescribed by IFRS and are not directly comparable to similar measures used by other companies.  Please refer to the appropriate reconciliation's of these non-IFRS financial measures to measures prescribed by IFRS.

Further information
Selected financial information is attached.

Great-West Lifeco's fourth quarter conference call and audio webcast will be held February 13, 2014 at 3:30 p.m. (ET).  The call and webcast can be accessed through www.greatwestlifeco.com or by phone at:

  • Participants in the Toronto area:  416-340-8061
  • Participants from North America: 1-866-225-0198
  • Participants from Overseas:  Dial international access code first, then 800-6578-9898

A replay of the call will be available from February 13, 2014, and can be accessed by calling 1-800-408-3053 or 905-694-9451 in Toronto (passcode: 8898149#). The archived webcast will be available on www.greatwestlifeco.com from February 13, 2014 until February 12, 2015.

Additional information relating to Lifeco, including the 2013 audited consolidated financial statements, MD&A, Annual Information Form (AIF), and CEO/CFO certification will be filed on SEDAR at www.sedar.com.

FINANCIAL HIGHLIGHTS (unaudited)
(in Canadian $ millions except per share amounts)
                               
    As at or for the three months ended   For the twelve months ended
      December 31     September 30     December 31     December 31     December 31
      2013     2013     2012(3)     2013     2012(3)
                               
Premiums and deposits:                              
Life insurance, guaranteed annuities and
 insured health products(2)
  $ 5,850   $ 4,859   $ 4,972   $ 20,236   $ 19,257
Self-funded premium equivalents
 (Administrative services only contracts)
          649           620           677           2,567           2,666
Segregated funds deposits:                              
  Individual products           2,757           2,352           2,072           8,308           6,557
  Group products           1,809           1,838           2,216           7,553           7,262
Proprietary mutual funds and institutional
 deposits
          11,491           10,309           6,880           36,119           24,496
Total premiums and deposits           22,556           19,978           16,817           74,783           60,238
                               
Fee and other income(2)           1,001           955           787           3,585           3,030
Paid or credited to policyholders(1)(2)           5,647           5,025           5,262           17,811           22,875
Operating earnings - common shareholders(3)           491           523           491           2,052           1,946
Net earnings - common shareholders(3)(4)           717           523           351           2,278           1,806
Per common share                              
  Operating earnings   $ 0.491   $ 0.527   $ 0.517   $ 2.108   $ 2.049
  Basic earnings(3)           0.717           0.527           0.370           2.340           1.902
  Dividends paid           0.3075           0.3075           0.3075           1.230           1.230
  Book value(3)           15.33           14.39           12.64            
Return on common shareholders' equity:                              
  Operating earnings(3)           15.0%           16.0%     16.5%            
  Net earnings(3)           16.6%           14.9%     15.3%            
  Total assets(3)   $ 325,905   $ 312,473   $ 253,850            
  Proprietary mutual funds and institutional net
 assets(2)
          185,243           167,619           134,598            
  Total assets under management(3)           511,148           480,092           388,448            
  Other assets under administration           247,139           225,187           157,455            
  Total assets under administration(3)   $ 758,287   $ 705,279   $ 545,903            
Total equity(3)   $ 19,999   $ 19,435   $ 17,011            
                               
The Company uses operating earnings, a non-International Financial Reporting Standards financial measure, which excludes the impact
of certain litigation provisions described in note 33 to the Company's December 31, 2013 consolidated financial statements.
 
(1)  Paid or credited to policyholders includes the impact of changes in fair values of assets supporting insurance and investment contract
liabilities.
(2)  During the year, the Company reclassified certain comparative figures for presentation adjustments.
(3)  Comparative figures, where impacted, have been restated for the retrospective impact of new and revised International Financial
Reporting Standards effective during 2013 most notably IAS 19R, Employee Benefits, and IFRS 10, Consolidated Financial Statements.
(4)  Impacts on Lifeco net earnings - common shareholders
   
              Three months
ended
Dec. 31, 2013
      Per
common
share
    Twelve
months ended
Dec. 31, 2013
      Per
common
share
      Net earnings     $ 717   $   0.717   $ 2,278   $   2.340
      Less:  Litigation recovery       (226)             (226)        
      Operating earnings             491             0.491           2,052             2.108
      Add:  Irish Life restructuring and acquisition costs             23                                97                     
      Add:  Macro capital hedge impact             26                   26        
      Sub Total             540             0.540           2,175             2.234
      Less:  Irish Life earnings             (44)                   (85)        
      Operating earnings excluding Irish Life and
 macro capital hedge impacts
    $ 496   $   0.496   $ 2,090   $   2.146
                                     

                           
CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
(in Canadian $ millions except per share amounts)
                           
      For the three months
ended December 31
  For the years
ended December 31
      2013   2012   2013   2012
                           
Income                          
  Premium income                          
    Gross premiums written     $ 6,739   $ 5,908   $ 23,441   $ 22,276
    Ceded premiums             (889)           (936)           (3,205)           (3,019)
  Total net premiums             5,850           4,972           20,236           19,257
  Net investment income                          
    Regular net investment income             1,430           1,339           5,604           5,642
    Changes in fair value through profit or loss             (225)           207           (2,979)           2,668
  Total net investment income             1,205           1,546           2,625           8,310
  Fee and other income             1,001           787           3,585           3,030
              8,056           7,305           26,446           30,597
Benefits and expenses                          
  Policyholder benefits                          
    Insurance and investment contracts                                
         Gross             4,835           4,548           18,464           17,854
         Ceded             (597)           (399)           (1,744)           (1,457)
  Total net policyholder benefits             4,238           4,149           16,720           16,397
  Policyholder dividends and experience refunds             312           292           1,371           1,437
  Changes in insurance and investment contract liabilities             1,097           821           (280)           5,041
  Total paid or credited to policyholders             5,647           5,262           17,811           22,875
                           
  Commissions             531           515           1,869           1,781
  Operating and administrative expenses             929           670           3,159           2,684
  Premium taxes             83           75           313           293
  Financing charges             76           74           292           299
  Amortization of finite life intangible assets             33           24           117           103
  Restructuring and acquisition expenses             27           -           104           -
Earnings before income taxes             730           685           2,781           2,562
Income taxes             128           97           463           364
Net earnings before non-controlling interests             602           588           2,318           2,198
Attributable to non-controlling interests             (148)           205           (90)           277
Net earnings             750           383           2,408           1,921
Preferred share dividends             33           32           130           115
Net earnings - common shareholders     $ 717   $ 351   $ 2,278   $ 1,806
                           
Earnings per common share                          
  Basic     $ 0.717   $ 0.370   $ 2.340   $ 1.902
  Diluted     $ 0.716   $ 0.369   $ 2.297   $ 1.891
                             
                         
 
CONSOLIDATED BALANCE SHEETS (unaudited)
(in Canadian $ millions)
                         
          December 31     December 31     January 1
          2013     2012     2012
Assets                        
Cash and cash equivalents       $ 2,791   $ 1,895   $   2,056
Bonds               89,914           82,581             78,355
Mortgage loans               19,063           17,875             17,432
Stocks               8,554           7,051             6,656
Investment properties               4,288           3,572             3,249
Loans to policyholders               7,332           7,082             7,162
                131,942           120,056             114,910
Funds held by ceding insurers               10,832           10,599             9,978
Goodwill               5,812           5,397             5,401
Intangible assets               3,456           3,115             3,154
Derivative financial instruments               593           997             968
Owner occupied properties               590           514             491
Fixed assets               211           154             137
Reinsurance assets               5,070           2,064             2,061
Premiums in course of collection, accounts and interest receivable               3,068           2,647             2,379
Other assets               2,220           1,571             1,393
Current income taxes               165           162             181
Deferred tax assets               1,167           1,142             1,163
Investments on account of segregated fund policyholders               160,779           105,432             96,985
Total assets       $ 325,905   $ 253,850   $   239,201
Liabilities                        
Insurance contract liabilities       $ 131,174   $ 119,973   $   114,785
Investment contract liabilities               889           739             782
Debentures and other debt instruments               5,740           4,283             4,313
Funds held under reinsurance contracts               270           335             169
Derivative financial instruments               744           342             316
Accounts payable               1,583           1,258             1,351
Other liabilities               2,807           2,956             2,662
Current income taxes               981           649             478
Deferred tax liabilities               776           708             810
Repurchase agreements               -           -             23
Capital trust debentures               163           164             815
Investment and insurance contracts on account of segregated
 fund policyholders
              160,779           105,432             96,985
Total liabilities               305,906           236,839             223,489
Equity                        
Non-controlling interests                        
  Participating account surplus in subsidiaries               2,354           2,451             2,187
  Non-controlling interests in subsidiaries               8           5             3
Shareholders' equity                        
  Share capital                        
    Preferred shares               2,314           2,544             1,894
    Common shares               7,112           5,848             5,828
  Accumulated surplus               8,067           7,035             6,417
  Accumulated other comprehensive income (loss)               87           (932)             (675)
  Contributed surplus               57           60             58
Total equity               19,999           17,011             15,712
Total liabilities and equity       $ 325,905   $ 253,850   $   239,201
                         

                                 
Segmented Information (unaudited)                                
                                 
Consolidated Net Earnings                                
For the three months ended December 31, 2013                          
              United           Lifeco      
        Canada     States     Europe (1)     Corporate     Total
Income:                                
  Premium income     $ 2,682   $ 924   $ 2,244   $ -   $ 5,850
  Net investment income                                
    Regular net investment income             637           302           527           (36)           1,430
    Changes in fair value through profit or loss             224           (117)           (332)           -           (225)
  Total net investment income             861           185           195           (36)           1,205
  Fee and other income             330           395           276           -           1,001
Total income             3,873           1,504           2,715           (36)           8,056
                                 
Benefits and expenses:                                
  Paid or credited to policyholders             2,629           927           2,091           -           5,647
  Other             980           454           330           (221)           1,543
  Financing charges             29           34           8           5           76
  Amortization of finite life intangible assets             13           13           7           -           33
  Restructuring and acquisition expenses             -           -           27           -           27
                                 
Earnings before income taxes             222           76           252           180           730
                                 
Income taxes             95           14           30           (11)           128
                                 
Net earnings before non-controlling
 interests
            127           62           222           191           602
                                 
Non-controlling interests             (146)           2           (4)           -           (148)
                                 
Net earnings             273           60           226           191           750
                                 
Preferred share dividends             27           -           6           -           33
                                 
Net earnings before capital allocation             246           60           220           191           717
Impact of capital allocation             24           (4)           (18)           (2)           -
Net earnings - common shareholders     $ 270   $ 56   $ 202   $ 189   $ 717

(1)  The Company completed the acquisition of Irish Life on July 18, 2013.  The Europe segment includes the results of
Irish Life from July 19, 2013 to December 31, 2013.
 

For the three months ended December 31, 2012                          
              United           Lifeco      
        Canada     States     Europe     Corporate     Total
Income:                                
  Premium income     $ 2,468   $ 984   $ 1,520   $ -   $ 4,972
  Net investment income                                
    Regular net investment income             606           301           441           (9)           1,339
    Changes in fair value through profit or loss             (97)           59           245           -           207
  Total net investment income             509           360           686           (9)           1,546
  Fee and other income             302           319           166           -           787
Total income             3,279           1,663           2,372           (9)           7,305
                                 
Benefits and expenses:                                
  Paid or credited to policyholders             2,171           1,163           1,928           -           5,262
  Other             521           375           221           143           1,260
  Financing charges             35           34           4           1           74
  Amortization of finite life intangible assets             12           10           2           -           24
                                 
Earnings before income taxes             540           81           217           (153)           685
                                 
Income taxes             69           (2)           52           (22)           97
                                 
Net earnings before non-controlling
 interests
       
      471
     
      83
     
      165
     
      (131)
     
      588
                                 
Non-controlling interests             206           4           (5)           -           205
                                 
Net earnings             265           79           170           (131)           383
                                 
Preferred share dividends             21           -           5           6           32
                                 
Net earnings before capital allocation             244           79           165           (137)           351
Impact of capital allocation             19           (3)           (14)           (2)           -
Net earnings - common shareholders     $ 263   $ 76   $ 151   $ (139)   $ 351
                                 

                   
For the twelve months ended December 31, 2013                    
              United           Lifeco      
        Canada     States     Europe (1)     Corporate     Total
Income:                                
  Premium income     $ 10,182   $ 3,180   $ 6,874   $ -   $ 20,236
  Net investment income                                
    Regular net investment income             2,514           1,311           1,819           (40)           5,604
    Changes in fair value through profit or loss             (1,125)           (706)           (1,148)           -           (2,979)
  Total net investment income             1,389           605           671           (40)           2,625
  Fee and other income             1,276           1,446           863           -           3,585
Total income             12,847           5,231           8,408           (40)           26,446
                                 
Benefits and expenses:                                
  Paid or credited to policyholders             8,345           3,067           6,399           -           17,811
  Other             2,983           1,616           944           (202)           5,341
  Financing charges             115           137           23           17           292
  Amortization of finite life intangible assets             50           51           16           -           117
  Restructuring and acquisition expenses             -           -           104           -           104
                                 
Earnings before income taxes             1,354           360           922           145           2,781
                                 
Income taxes             291           62           129           (19)           463
                                 
Net earnings before non-controlling
interests
       
      1,063
     
      298
     
      793
     
      164
     
      2,318
                                 
Non-controlling interests             (93)           7           (4)           -           (90)
                                 
Net earnings             1,156           291           797           164           2,408
                                 
Preferred share dividends             107           -           23           -           130
                                 
Net earnings before capital allocation             1,049           291           774           164           2,278
Impact of capital allocation             99           (15)           (73)           (11)           -
Net earnings - common shareholders     $ 1,148   $ 276   $ 701   $ 153   $ 2,278

(1)  The Company completed the acquisition of Irish Life on July 18, 2013.  The Europe segment includes the results of
Irish Life from July 19, 2013 to December 31, 2013.
 

                   
For the twelve months ended December 31, 2012                    
              United           Lifeco      
        Canada     States     Europe     Corporate     Total
Income:                                
  Premium income     $ 9,581   $ 3,390   $ 6,286   $ -   $ 19,257
  Net investment income                                
    Regular net investment income             2,556           1,284           1,814           (12)           5,642
    Changes in fair value through profit or loss             658           501           1,509           -           2,668
  Total net investment income             3,214           1,785           3,323           (12)           8,310
  Fee and other income             1,178           1,247           605           -           3,030
Total income             13,973           6,422           10,214           (12)           30,597
                                 
Benefits and expenses:                                
  Paid or credited to policyholders             9,770           4,437           8,668           -           22,875
  Other             2,495           1,398           705           160           4,758
  Financing charges             145           135           18           1           299
  Amortization of finite life intangible assets             45           48           10           -           103
                                 
Earnings before income taxes             1,518           404           813           (173)           2,562
                                 
Income taxes             211           66           114           (27)           364
                                 
Net earnings before non-controlling
interests
       
      1,307
     
      338
     
      699
     
      (146)
     
      2,198
                                 
Non-controlling interests             268           3           6           -           277
                                 
Net earnings             1,039           335           693           (146)           1,921
                                 
Preferred share dividends             79           -           22           14           115
                                 
Net earnings before capital allocation             960           335           671           (160)           1,806
Impact of capital allocation             78           (14)           (56)           (8)           -
Net earnings - common shareholders     $ 1,038   $ 321   $ 615   $ (168)   $ 1,806

.

Note: During the year, certain comparative figures have been restated or reclassified in the Lifeco December 31, 2013 financial statements.

 

 

 

 

 

 

SOURCE Great-West Lifeco Inc.

For further information:

Marlene Klassen, APR
Assistant Vice-President, Communication Services
204-946-7705