Great-West Lifeco reports second quarter 2014 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, Aug. 6, 2014 /CNW/ - Great-West Lifeco Inc. (Lifeco) has reported net earnings attributable to common shareholders of $615 million or $0.616 per common share for the three months ended June 30, 2014 compared to $521 million or $0.548 per common share for the same period in 2013, an increase of 18%. Net earnings for the second quarter of 2014 include $8 million of Irish Life Group Limited (Irish Life) related restructuring costs. Excluding these costs earnings per common share were $0.624.

For the six months ended June 30, 2014, net earnings attributable to common shareholders were $1,202 million, compared to $1,038 million a year ago.  This represents $1.203 per common share for the six months ended June 30, 2014, compared to $1.092 per common share for the same period in 2013. Net earnings for the six months ended June 30, 2014, include $13 million of Irish Life related restructuring costs. Excluding these costs earnings per common share were $1.216.

Consolidated assets under administration at June 30, 2014 grew to $805 billion, compared to $758 billion at December 31, 2013.

Highlights - In Quarter

  • Lifeco premiums and deposits during the quarter were $20.4 billion, up 33% from a year ago, including $2.4 billion from Irish Life Group Limited (Irish Life), reflecting continued strong persistency and growth.
    • Total Company sales in the second quarter of 2014 were up 30% compared to the same period in 2013: Canada sales were $2.9 billion, up 14%, reflecting a 19% increase in Individual Life insurance sales and a 14% increase in Individual Wealth Management sales.
    • Europe Insurance & Annuities sales were $2.8 billion, up 217%, including sales of $2.1 billion from Irish Life.
    • Putnam sales were US$7.4 billion, up 16% overall, which reflects a 43% increase in mutual fund sales.
    • Great-West Financial sales were US$2.2 billion, down 10%, as sales momentum gained in first quarter 2014 slowed somewhat in the Retirement Services market. Sales in Individual Markets were strong with a 68% increase year over year.
  • Irish Life contributed $57 million of net earnings to Lifeco in the second quarter of 2014, up from $52 million in the first quarter of 2014.
  • The Company maintained a strong ROE of 15.8% based on net earnings. ROE based on adjusted operating earnings was 15.0%, which excludes the impact of Irish Life related restructuring and acquisition costs and certain litigation provisions.
  • The Company's capital position remained very strong.  The Great-West Life Assurance Company, Lifeco's major operating subsidiary, reported a Minimum Continuing Capital and Surplus Requirements (MCCSR) ratio of 228% at June 30, 2014.
  • The Company declared a quarterly common dividend of $0.3075 per common share payable September 30, 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.

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 second quarter of 2014 were $304 million, up 8% compared to $281 million in the second quarter of 2013.  For the six months ended June 30, 2014 net earnings attributable to common shareholders were $598 million compared to $546 million for the same period in 2013.

Total sales in the second quarter of 2014 were $2.9 billion, compared to $2.5 billion in the second quarter of 2013.  This reflects strong growth in Individual Insurance sales of 16% and Wealth Management sales of 15%, partially offset by lower Group Insurance sales.  Total sales for the six months ended June 30, 2014 were $6.1 billion compared to $5.6 billion in 2013.

Total Canada segment assets under administration at June 30, 2014 were $157 billion, compared to $149 billion at December 31, 2013.

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 second quarter of 2014 were $69 million compared to $73 million in the second quarter of 2013.  Great-West Financial reported net earnings of $78 million in the second quarter compared to $87 million for the same period last year.  Putnam reported a net loss of $9 million in the second quarter compared to a net loss of $14 million a year ago. For the six months ended June 30, 2014 net earnings attributable to common shareholders were $110 million compared to $144 million in 2013.

Great-West Financial sales in the second quarter of 2014 were US$2.2 billion, down from US$2.5 billion in the second quarter of 2013 due to lower sales in Retirement Services.  This decrease was partially offset with strong growth in Individual Markets primarily due to higher executive benefit, retail bank, and IRA sales.  Sales for the six months ended June 30, 2014 were US$5.1 billion compared to US$5.0 billion in 2013.

Putnam assets under management as at June 30, 2014 were US$158.6 billion compared to US$133.7 billion a year ago, an increase of 19%. Net asset inflows for the second quarter of 2014 were US$0.2 billion compared to net asset outflows of US$0.4 billion for the same period in 2013, driven by mutual fund net inflows of US$1.7 billion, an increase of US$1.6 billion compared to the same period in 2013.

Total United States segment assets under administration at June 30, 2014 were $447 billion compared to $421 billion at December 31, 2013.

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.

Net earnings attributable to common shareholders for the second quarter of 2014 were $246 million compared to $178 million a year ago. Irish Life's contribution to in-quarter net earnings was $57 million. Restructuring costs related to the ongoing integration of Irish Life were $8 million in-quarter.  Second quarter 2013 net earnings include Irish Life acquisition related costs of $10 million. For the six months ended June 30, 2014 net earnings attributable to common shareholders were $505 million compared to $370 million for the same period in 2013. On a year-to-date basis, net earnings in 2014 include a contribution from Irish Life of $109 million and $13 million of restructuring costs related to the ongoing integration of Irish Life. For the six months ended June 30, 2013, net earnings include Irish Life acquisition related costs of $14 million.

Insurance & Annuities sales for the second quarter of 2014 were $2.8 billion, including $2.1 billion related to Irish Life, up 217% as compared to $889 million a year ago.  Total sales for the six months ended June 30, 2014 were $6.3 billion, including $4.7 billion related to Irish Life, compared to $1.9 billion for the same period in 2013.

Total Europe segment assets under administration at June 30, 2014 were $201 billion, up from $188 billion at December 31, 2013.

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

Net earnings in the Lifeco Corporate segment attributable to common shareholders were a net loss of $4 million in the second quarter of 2014 compared to a net loss of $11 million in the second quarter of 2013.  For the six months ended June 30, 2014 net earnings attributable to common shareholders was a net loss of $11 million compared to a net loss of $22 million for the same period in 2013.

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 September 30, 2014 to shareholders of record at the close of business September 2, 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 $0.3625 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;
  • Series R First Preferred Shares of $0.3000 per share; and
  • Series S First Preferred Shares of $0.47106 per share

all payable September 30, 2014 to shareholders of record at the close of business September 2, 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 $805 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, continuity and availability of personnel and third party service providers, 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 and assumptions that could cause actual results to differ materially from those contained in forward-looking statements include technological change, investment values, payments required under investment products, reinsurance, 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 reconciliations of these non-IFRS financial measures to measures prescribed by IFRS.

Further information
Selected financial information is attached.

Great-West Lifeco's second quarter conference call and audio webcast will be held August 7, 2014 at 11:30 a.m. (EDT).  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 August 7, 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 August 7, 2014 until August 6, 2015.

Additional information relating to Lifeco, including the most recent interim unaudited condensed consolidated financial statements, interim Management's Discussion and Analysis (MD&A), and CEO/CFO certificates 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 six months ended
  June 30   March 31   June 30   June 30   June 30
  2014   2014   2013*   2014   2013*
                             
Premiums and deposits:                            
Life insurance, guaranteed annuities
      and insured health products, net
$  5,764    $  5,267    $  4,596    $  11,031    $  9,527 
Self-funded premium equivalents
 (Administrative services only contracts)
  658      658      654      1,316      1,298 
Segregated funds deposits:                            
  Individual products   2,830      2,946      1,431      5,776      3,199 
  Group products   1,940      3,364      1,900      5,304      3,906 
Proprietary mutual funds and institutional deposits   9,160      11,662      6,677      20,822      14,319 
Total premiums and deposits   20,352      23,897      15,258      44,249      32,249 
                             
Fee and other income   1,110      1,059      831      2,169      1,629 
Paid or credited to policyholders(1)   7,580      7,489      1,579      15,069      7,139 
Operating earnings -
    common shareholders
  615      587      521      1,202      1,038 
Net earnings - common shareholders   615      587      521      1,202      1,038 
Per common share                            
  Basic earnings $  0.616    $  0.587    $  0.548    $  1.203    $  1.092 
  Dividends paid   0.3075      0.3075      0.3075      0.615      0.615 
  Book value   16.04      16.05      13.48             
Return on common shareholders' equity:                            
  Operating earnings   14.3%      14.5%      16.8%            
  Net earnings   15.8%      16.0%      15.6%            
  Total assets $  344,380    $  342,860    $  264,805             
  Proprietary mutual funds and institutional net assets        200,113      199,921      149,049             
  Total assets under management   544,493      542,781      413,854             
  Other assets under administration   260,079      263,113      182,247             
  Total assets under administration $  804,572    $  805,894    $  596,101             
Total equity $  21,122    $  20,964    $  17,843             
                             

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.
* Certain comparative figures have been reclassified for presentation adjustments.
   

 
CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
(in Canadian $ millions except per share amounts)
       
  For the three months ended   For the six months ended
  June 30   March 31   June 30   June 30   June 30
  2014   2014   2013   2014   2013
                             
Income                            
  Premium income                            
    Gross premiums written $  6,646    $  6,111    $  5,377    $  12,757    $  11,047 
    Ceded premiums   (882)      (844)      (781)      (1,726)      (1,520) 
  Total net premiums   5,764      5,267      4,596      11,031      9,527 
  Net investment income                            
    Regular net investment income   1,526      1,489      1,401      3,015      2,763 
    Changes in fair value through profit or loss   1,670      2,122      (3,200)      3,792      (2,735) 
  Total net investment income   3,196      3,611      (1,799)      6,807      28 
  Fee and other income   1,110      1,059      831      2,169      1,629 
    10,070       9,937      3,628      20,007      11,184 
Benefits and expenses                            
  Policyholder benefits                            
    Insurance and investment contracts                            
      Gross   4,592      4,801      4,215      9,393      9,242 
      Ceded   (476)      (475)      (362)      (951)      (736) 
  Total net policyholder benefits   4,116      4,326      3,853      8,442      8,506 
  Policyholder dividends and experience refunds   358      388      366      746      741 
  Changes in insurance and investment contract liabilities   3,106      2,775      (2,640)      5,881      (2,108) 
  Total paid or credited to policyholders   7,580      7,489      1,579      15,069      7,139 
                             
  Commissions   546      505      443      1,051      875 
  Operating and administrative expenses   915      933      720      1,848      1,416 
  Premium taxes   83      85      72      168      146 
  Financing charges   76      76      74      152      141 
  Amortization of finite life intangible assets   32      33      29      65      56 
  Restructuring and acquisition expenses   10          10      15      14 
Earnings before income taxes   828       811      701      1,639      1,397 
Income taxes   156      173      128      329      256 
Net earnings before non-controlling interests   672      638      573      1,310      1,141 
Attributable to non-controlling interests   28      22      20      50      38 
Net earnings   644      616      553      1,260      1,103 
Preferred share dividends   29      29      32      58      65 
Net earnings - common shareholders $  615    $  587    $  521    $  1,202    $  1,038 
                             
Earnings per common share                            
  Basic $  0.616    $  0.587    $  0.548    $  1.203    $  1.092 
  Diluted  $  0.615    $  0.587    $  0.547    $  1.202    $  1.091 

 

 
CONSOLIDATED BALANCE SHEETS (unaudited)
(in Canadian $ millions)
  June 30 December 31
  2014 2013
         
Assets        
Cash and cash equivalents $  3,109  $  2,791 
Bonds   95,959    89,914 
Mortgage loans   20,077    19,063 
Stocks   8,118    8,554 
Investment properties   4,503    4,288 
Loans to policyholders   7,428    7,332 
    139,194    131,942 
Funds held by ceding insurers    11,906    10,832 
Goodwill   5,810    5,812 
Intangible assets   3,468    3,456 
Derivative financial instruments   683    593 
Owner occupied properties   594    590 
Fixed assets   206    211 
Reinsurance assets   5,309    5,070 
Premiums in course of collection, accounts and interest receivable       3,250    3,068 
Other assets       2,229    2,220 
Current income taxes        205    165 
Deferred tax assets   1,144    1,167 
Investments on account of segregated fund policyholders   170,382    160,779 
         
Total assets $  344,380  $  325,905 
         
Liabilities        
Insurance contract liabilities $  138,965  $  131,174 
Investment contract liabilities   870    889 
Debentures and other debt instruments   5,608    5,740 
Funds held under reinsurance contracts   303    270 
Derivative financial instruments   696    744 
Accounts payable      1,450    1,583 
Other liabilities       3,181    2,807 
Current income taxes       776    981 
Deferred tax liabilities   865    776 
Capital trust debentures   162    163 
Investment and insurance contracts on account of segregated fund policyholders   170,382    160,779 
         
Total liabilities   323,258    305,906 
         
Equity        
Non-controlling interests        
  Participating account surplus in subsidiaries   2,423    2,354 
  Non-controlling interests in subsidiaries   165   
Shareholders' equity        
  Share capital        
    Preferred shares   2,514    2,314 
    Common shares   7,115    7,112 
  Accumulated surplus   8,634    8,067 
  Accumulated other comprehensive income   184    87 
  Contributed surplus   87    57 
Total equity   21,122    19,999 
         
Total liabilities and equity $  344,380  $  325,905 
             
             

Segmented Information (unaudited)

Consolidated Net Earnings   
For the three months ended June 30, 2014          
    United   Lifeco  
  Canada States Europe Corporate Total
Income:                    
  Total net premiums $  2,776  $  832  $  2,156  $  5,764 
  Net investment income                    
    Regular net investment income   643    352    529      1,526 
    Changes in fair value through profit or loss   780    302    588      1,670 
  Total net investment income   1,423    654    1,117      3,196 
  Fee and other income   356    436    318      1,110 
    4,555    1,922    3,591      10,070 
                     
Benefits and expenses:                    
  Paid or credited to policyholders   3,367    1,295    2,918      7,580 
  Other*   728    478    332      1,544 
  Financing charges   29    35    12      76 
  Amortization of finite life intangible assets   13    14        32 
  Restructuring and acquisition expenses       10      10 
                     
Earnings (loss) before income taxes   418    100    314    (4)    828 
                     
Income taxes   90    25    42    (1)    156 
                     
Net earnings (loss) before non-controlling interests   328    75    272    (3)    672 
                     
Non-controlling interests   24          28 
                     
Net earnings (loss)   304    73    270    (3)    644 
                     
Preferred share dividends   24          29 
                     
Net earnings (loss) before capital allocation   280    73    265    (3)    615 
Impact of capital allocation   24    (4)    (19)    (1)          
Net earnings (loss) - common shareholders $  304  $  69  $  246  $  (4)  615 

* Includes commissions, operating and administrative expenses and premium taxes.

For the three months ended June 30, 2013          
    United   Lifeco  
  Canada States Europe Corporate Total
Income:                    
  Total net premiums $ 2,469  $  700  $ 1,427  $ $  4,596 
  Net investment income                    
    Regular net investment income   620    342    436       1,401 
    Changes in fair value through profit or loss   (1,276)    (501)    (1,423)        (3,200) 
  Total net investment income   (656)    (159)    (987)          (1,799) 
  Fee and other income   316    349    166      831 
    2,129    890    606         3,628 
                     
Benefits and expenses:                    
  Paid or credited to policyholders   1,053    366    160      1,579 
  Other*   666    379    183      1,235 
  Financing charges   28    34        74 
  Amortization of finite life intangible assets   13    13        29 
  Restructuring and acquisition expenses       10      10 
                     
Earnings (loss) before income taxes   369    98    245    (11)    701 
                     
Income taxes   67    20    44    (3)    128 
                     
Net earnings (loss) before non-controlling interests   302    78    201    (8)    573 
                     
Non-controlling interests   19          20 
                     
Net earnings (loss)   283     77    201    (8)    553 
                     
Preferred share dividends   27          32 
                     
Net earnings (loss) before capital allocation   256    77    196    (8)    521 
Impact of capital allocation   25    (4)    (18)    (3)   
Net earnings (loss) - common shareholders $ 281  $ 73  $ 178  $ (11)  $  521 

* Includes commissions, operating and administrative expenses and premium taxes.

For the six months ended June 30, 2014          
    United   Lifeco  
  Canada States Europe Corporate Total
Income:                    
  Total net premiums $  5,389  1,644  $  3,998  $  -  $  11,031 
  Net investment income                    
    Regular net investment income   1,281    709    1,027    (2)    3,015 
    Changes in fair value through profit or loss   1,727    625    1,440      3,792 
  Total net investment income   3,008    1,334    2,467    (2)    6,807 
  Fee and other income   700    855    614      2,169 
    9,097    3,833    7,079    (2)    20,007 
                     
Benefits and expenses:                    
  Paid or credited to policyholders   6,732    2,593    5,744      15,069 
  Other*   1,443    972    642    10    3,067 
  Financing charges   58    70    24      152 
  Amortization of finite life intangible assets   26    29    10      65 
  Restructuring and acquisition expenses       15      15 
                     
Earnings (loss) before income taxes   838    169    644    (12)    1,639 
                     
Income taxes   195    48    89    (3)    329 
                     
Net earnings (loss) before non-controlling interests   643    121    555    (9)    1,310 
                     
Non-controlling interests   46          50 
                     
Net earnings (loss)   597    118    554    (9)    1,260 
                     
Preferred share dividends   47      11      58 
                     
Net earnings (loss) before capital allocation   550    118    543         (9)    1,202 
Impact of capital allocation   48    (8)    (38)    (2)   
Net earnings (loss) - common shareholders $  598  $  110  $  505  $  (11)  $  1,202 

* Includes commissions, operating and administrative expenses and premium taxes.

For the six months ended June 30, 2013          
    United   Lifeco  
  Canada States Europe Corporate Total
Income:                    
  Total net premiums $  4,984  $  1,329  $  3,214  $  -  $  9,527 
  Net investment income                    
    Regular net investment income   1,239    665    863    (4)    2,763 
    Changes in fair value through profit or loss   (1,220)    (507)    (1,008)      (2,735) 
  Total net investment income   19    158    (145)    (4)    28 
  Fee and other income   625    686    318      1,629 
    5,628    2,173    3,387    (4)    11,184 
                     
Benefits and expenses:                    
  Paid or credited to policyholders   3,509    1,126    2,504      7,139 
  Other*   1,319    757    351    10    2,437 
  Financing charges   57    68        141 
  Amortization of finite life intangible assets   25    26        56 
  Restructuring and acquisition expenses       14      14 
                     
Earnings (loss) before income taxes   718    196    504    (21)    1,397 
                     
Income taxes   134    40    87    (5)    256 
                     
Net earnings (loss) before non-controlling interests   584    156    417    (16)    1,141 
                     
Non-controlling interests   34          38 
                     
Net earnings (loss)   550    152    417    (16)    1,103 
                     
Preferred share dividends   54      11      65 
                     
Net earnings (loss) before capital allocation   496    152    406    (16)    1,038 
Impact of capital allocation   50    (8)    (36)    (6)   
Net earnings (loss) - common shareholders $  546  $  144  $  370  $  (22)  $  1,038 

* Includes commissions, operating and administrative expenses and premium taxes.

SOURCE Great-West Lifeco Inc.

For further information:

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