Great-West Lifeco reports 2008 results



    
    TSX:GWO

    Readers are referred to the cautionary note regarding Forward-Looking
    Information and Non-GAAP Financial Measures at the end of this Release.
    

    WINNIPEG, Feb. 12, 2009 /CNW/ - Great-West Lifeco Inc. (Lifeco) has
reported adjusted net income from continuing operations attributable to common
shareholders of $525 million for the three months ended December 31, 2008,
compared to $494 million reported a year ago, an increase of 6%. On a per
common share basis, this represents $0.586 per common share for the three
months ended December 31, 2008, compared to $0.553 per common share for 2007.
    For the twelve months ended December 31, 2008, adjusted net income from
continuing operations attributable to common shareholders was $2,018 million
compared to $1,950 million reported a year ago, an increase of 3%. On a per
common share basis, this represents $2.255 per common share for the twelve
months ended December 31, 2008, compared to $2.185 per common share for 2007.
    Adjusted net income from continuing operations attributable to common
shareholders excludes income from discontinued operations, and is before the
impact of certain items that totaled $(1,432) million after-tax, or $(1.597)
per common share for the three months ended December 31, 2008, and $(665)
million after-tax, or $(0.743) per common share for the twelve months ended
December 31, 2008. These items include a non-cash impairment charge of
$(1,353) million after-tax, or $(1.508) per common share in connection with
Putnam goodwill and intangible assets, and are described more fully in the
United States section of this Release.
    Net income attributable to common shareholders, as reported, was $(907)
million, or $(1.011) per common share for the fourth quarter, and $1,396
million, or $1.560 per common share for the twelve months ended December 31,
2008.

    
    Highlights

    -   Overall, operating results in the Company's Europe and Canada
        segments and in its United States Financial Services business were
        very encouraging in light of extremely difficult economic and
        financial market conditions that existed in 2008.
    -   Notwithstanding these market conditions, the Company's investment
        portfolio performed extraordinarily well in 2008 with only modest
        impairments which were mainly recognized in the third quarter.
    -   Lifeco's Canadian operating subsidiary, Great-West Life, reported a
        Minimum Continuing Capital and Surplus (MCCSR) ratio of 210% at
        December 31, 2008, which did not include any benefit from the $1,230
        million of common and preferred share capital that was raised by
        Lifeco in the fourth quarter.
    -   Adjusted return on common shareholders' equity was 19.0% for the
        twelve months ended December 31, 2008.
    -   Putnam added to its senior leadership team, enhanced its investment
        management operations and launched new products into the marketplace,
        while reducing costs.
    -   Quarterly dividends declared were $0.3075 per common share payable
        March 31, 2009. Dividends paid on common shares for the twelve
        months ended December 31, 2008 were 13% higher than a year ago.
    

    INVESTED ASSETS

    On a consolidated invested asset portfolio of $103.1 billion, total
impairment charges were $100 million after-tax for the twelve months ended
December 31, 2008, up slightly from $96 million after-tax for nine months.
    Gross unrealized bond losses were $6.1 billion at December 31, 2008.
These unrealized losses reflect the mark-to-market values at December 31st,
the magnitude of which is significantly impacted by the duration of the bonds.
These bonds are typically held in support of long-term policyholder
liabilities.
    Weaker investment markets have resulted in lower values at December 31,
2008 in connection with the Company's segregated and mutual fund assets. This
has resulted in lower investment management fee income. Policyholder reserves
required for segregated fund and variable contract guarantees were nominal at
December 31, 2008.

    OPERATING RESULTS

    Consolidated net income for Lifeco is comprised of the net income of The
Great-West Life Assurance Company (Great-West Life), Canada Life Financial
Corporation (CLFC), London Life Insurance Company (London Life), Great-West
Life & Annuity Insurance Company (GWL&A), and Putnam Investments, LLC
(Putnam), together with Lifeco's corporate results.

    CANADA

    Net income attributable to common shareholders for the fourth quarter of
2008 was $228 million compared to $246 million in 2007. For the twelve months
ended December 31, 2008, net income attributable to common shareholders was
$1,003 million compared to $973 million in 2007. Individual Insurance &
Investment Products earnings at $673 million were up 6% while Group Insurance
earnings of $391 million were up 2%.
    The 2008 results include invested asset impairment charges of $3 million
after-tax in the quarter, and $14 million after-tax for twelve months.
    Total sales for the twelve months ended December 31, 2008 were $8,115
million compared to $9,400 million in 2007, with the results reflecting lower
sales of segregated fund and mutual fund products. Sales of protection
products increased over 2007, however, with Individual Life sales and Living
Benefit sales up 10% and 5%, respectively. Sales of Group insurance products
increased 9% over 2007.
    Total assets under administration at December 31, 2008 were $93.4
billion, compared to $100.8 billion at December 31, 2007.

    UNITED STATES

    Adjusted net income from continuing operations attributable to common
shareholders for the fourth quarter of 2008 was $82 million compared to $98
million in 2007. For the twelve months ended December 31, 2008, adjusted net
income from continuing operations attributable to common shareholders was $309
million compared to $366 million in 2007.
    Adjusted net income from continuing operations excludes income from
Lifeco's U.S. healthcare business which had been designated as discontinued
operations prior to completion of its sale on April 1, 2008. Net income from
this discontinued business was nil in the fourth quarter of 2008, compared to
$43 million in 2007, and $43 million for the twelve months ended December 31,
2008, compared to $203 million in 2007.

    
    Adjusted net income attributable to common shareholders is before the
impact of certain items that totaled $(1,432) million after-tax for the three
months ended December 31, 2008, and $(665) million after-tax for the twelve
months ended December 31, 2008, as follows:

    -   In the first quarter, the Company realized a gain of $176 million
        after-tax in connection with the termination of a long-standing
        assumption reinsurance agreement under which GWL&A had reinsured a
        block of U.S. participating policies. The company also increased
        policy reserves by $58 million after-tax to provide for an increase
        in overhead costs expected to be absorbed as a result of the sale of
        Great-West Healthcare.

    -   In the second quarter, the Company realized a gain of $649 million
        after-tax in connection with the sale of its Great-West Healthcare
        business.

    -   In the fourth quarter, the Company recorded a non-cash impairment
        charge in connection with Putnam goodwill and intangible assets of
        $(1,353) million after-tax. In addition, the Company recorded a
        valuation allowance against a Putnam deferred tax asset of $(34)
        million after-tax, and a Putnam restructuring charge of $(45) million
        after-tax. The impairment charge primarily reflects the significant
        deterioration in financial markets since the acquisition by Lifeco in
        August 2007. This charge did not impact the regulatory capital ratios
        of Lifeco's operating subsidiaries, and it is not expected to impact
        the credit ratings of the Company. The restructuring charge was
        recorded in connection with cost reduction activities, which are part
        of broader strategic changes being made by Putnam management. These
        changes also include additions to the senior leadership team, to
        investment management personnel and processes, and to new product
        launches and new distribution initiatives.
    

    The 2008 results include invested asset impairment charges of $2 million
after-tax in the quarter, and $32 million after-tax for twelve months.
    Total sales for the twelve months ended December 31, 2008 were $42.7
billion compared to $16.2 billion in 2007. Putnam's asset management business
is included in the results from the August 3, 2007 date of acquisition.
    Total assets under administration at December 31, 2008 were $178.7
billion compared to $224.0 billion at December 31, 2007. Included in assets
under administration at December 31, 2008 were $129.0 billion of mutual fund
and institutional account assets managed by Putnam, compared to $176.7 billion
at December 31, 2007.

    EUROPE

    Net income attributable to common shareholders for the fourth quarter of
2008 was $224 million compared to $150 million for the fourth quarter of 2007.
    For the twelve months ended December 31, 2008, net income attributable to
common shareholders was $726 million compared to $611 million in 2007. The
2008 results include invested asset impairment charges of $54 million
after-tax.
    Total sales for the twelve months ended December 31, 2008 were $5,004
million compared to $6,087 million in 2007.
    Total assets under administration at December 31, 2008 were $66.8
billion, compared to $61.7 billion at December 31, 2007.

    CORPORATE

    Corporate net income for Lifeco attributable to common shareholders was a
charge of $9 million for the fourth quarter compared to nil in 2007, and a
charge of $20 million for the twelve months ended December 31, 2008 compared
to a charge of $97 million in 2007. The 2007 result reflects a provision for
certain Canadian retirement plans of $97 million after-tax.

    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, 2009 to shareholders of record at the close of business March 3,
2009.

    
    In addition, the Directors approved quarterly dividends on:
    -   Series D First Preferred Shares of $0.293750 per share;
    -   Series E First Preferred Shares of $0.30 per share;
    -   Series F First Preferred Shares of $0.36875 per share;
    -   Series G First Preferred Shares of $0.325 per share;
    -   Series H First Preferred Shares of $0.30313 per share;
    -   Series I First Preferred Shares of $0.28125 per share; and
    -   Initial dividend on Series J First Preferred Shares of $0.50959 per
        share
    
    all payable March 31, 2009 to shareholders of record at the close of
business March 3, 2009.
    For purposes of the Income Tax Act (Canada), and any similar provincial
legislation, the dividends referred to above are eligible dividends.

    GREAT-WEST LIFECO

    Great-West Lifeco Inc. (TSX:GWO) is a financial services holding company
with interests in the life insurance, health insurance, retirement savings,
investment management and reinsurance businesses. The Company has operations
in Canada, the United States, Europe and Asia through The Great-West Life
Assurance Company, London Life Insurance Company, The Canada Life Assurance
Company, Great-West Life & Annuity Insurance Company and Putnam Investments,
LLC. Lifeco and its companies have $339 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" or negative versions thereof and similar expressions.
In addition, any statement that may be made concerning future financial
performance (including revenues, earnings or growth rates), ongoing business
strategies or prospects, possible future Company action including statements
made by the Company with respect to the expected benefits of acquisitions or
divestitures are also forward-looking statements. Forward-looking statements
are based on current expectations and projections about future events 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 made by the Company due to, but not limited to, important factors
such as sales levels, premium income, fee income, expense levels, mortality
experience, morbidity experience, policy lapse rates and taxes, as well as
general economic, political and market factors in North America and
internationally, interest and foreign exchange rates, global equity and
capital markets, business competition, technological change, changes in
government regulations, unexpected judicial or regulatory proceedings,
catastrophic events, and the Company's ability to complete strategic
transactions and integrate acquisitions. The reader is cautioned that the
foregoing list of important factors is not exhaustive, and there may be other
factors, including factors set out under "Risk Management and Control
Practices" in the Company's 2008 Annual Management's Discussion and Analysis
and any listed in other filings with securities regulators, which are
available for review at www.sedar.com. The reader is also cautioned to
consider these and other factors carefully and to not place undue reliance on
forward-looking statements. Other than as specifically required by applicable
law, the Company has no intention to update any forward-looking statements
whether as a result of new information, future events or otherwise.

    Cautionary note regarding Non-GAAP Financial Measures

    This release contains some non-GAAP financial measures. Terms by which
non-GAAP financial measures are identified include but are not limited to
"earnings before restructuring charges", "adjusted net income", "adjusted net
income from continuing operations", "net income - adjusted", "earnings before
adjustments", "constant currency basis", "premiums and deposits", "sales", and
other similar expressions. Non-GAAP financial measures are used to provide
management and investors with additional measures of performance. However,
non-GAAP financial measures do not have standard meanings prescribed by GAAP
and are not directly comparable to similar measures used by other companies.
Please refer to the appropriate reconciliations of these non-GAAP financial
measures to measures prescribed by GAAP.

    
    Selected financial information is attached.

    Great-West Lifeco's fourth quarter conference call will be held Thursday,
February 12 at 3:00 p.m. (Eastern). The call can be accessed through
www.greatwestlifeco.com or by phone at:

    -   Participants in the Toronto area:  416-340-2220
    -   Participants from North America: 1-866-226-1798
    -   Participants from Overseas:  Dial international access code first,
        then 800-2787-2090
    

    A replay of the call will be available from February 12 to February 19,
2009, and can be accessed by calling 1-800-408-3053 or 416-695-5800 in Toronto
(passcode: 3280920 followed by the number sign).
    Additional information relating to Lifeco, including the 2008 audited
financial statements, Management's Discussion and Analysis (MD&A), Annual
Information Form (AIF), and CEO/CFO certificates will be filed on SEDAR at
www.sedar.com.



    
                       FINANCIAL HIGHLIGHTS (unaudited)
                   (in $ millions except per share amounts)

                           For the three months       For the years ended
                             ended December 31            December 31
                        -------------------------- --------------------------
                                             %                          %
                          2008      2007   Change    2008      2007   Change
    -------------------------------------------------------------------------
    Premiums and
     deposits:
    Life insurance,
     guaranteed annuities
     and insured health
     products            $  4,782  $  5,764   -17%  $ 30,007  $ 18,753    60%
    Self-funded premium
     equivalents (ASO
     contracts)               615       570     8%     2,410     2,233     8%
    Segregated funds
     deposits:
      Individual
       products             2,054     1,935     6%     7,825     9,183   -15%
      Group products        1,399     1,460    -4%     5,524     5,788    -5%
    Proprietary mutual
     funds and
     institutional net
     deposits(1)            6,484     6,177     5%    30,693    11,183     -
                        -----------------------------------------------------
    Total premiums and
     deposits              15,334    15,906    -4%    76,459    47,140    62%
                        -----------------------------------------------------

    Fee and other
     income                   743       861   -14%     3,124     2,703    16%
    Paid or credited to
     policyholders          4,815     6,840   -30%    26,774    19,122    40%

    Net income - common
     shareholders(4)
      Continuing
       operations -
       adjusted(3)            525       494     6%     2,018     1,950     3%
      Discontinued
       operations -
       adjusted(2)              -        43     -         43       203   -79%
                        -----------------------------------------------------
      Net income -
       adjusted(3)            525       537    -2%     2,061     2,153    -4%
      Adjustments
       after tax(3)        (1,432)        -     -       (665)      (97)    -
      Net income             (907)      537     -      1,396     2,056   -32%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Per common share
      Basic earnings -
       adjusted(3)       $  0.586  $  0.601    -2%  $  2.303  $  2.413    -5%
      Adjustments after
       tax(3)              (1.597)        -     -     (0.743)   (0.109)    -
      Basic earnings       (1.011)    0.601     -      1.560     2.304   -32%
      Dividends paid       0.3075     0.275    12%     1.200     1.060    13%
      Book value                                       12.61     10.98    15%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Return on common
     shareholders' equity
      Net income -
       adjusted(3)                                      19.0%     21.6%
      Net income                                        12.7%     20.7%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    At December 31
      Total assets                                  $130,074  $118,194    10%
      Segregated funds net
       assets                                         77,748    89,181   -13%
      Proprietary mutual
       funds and
       institutional net
       assets(5)                                     131,122   179,162   -27%
                                                   --------------------------
      Total assets under
       administration                               $338,944  $386,537   -12%
                                                   --------------------------
                                                   --------------------------
      Share capital and surplus                      $13,228  $ 10,908    21%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Includes Putnam Investments, LLC mutual funds deposits, excluding
        Prime Money Market Fund net deposits.

    (2) Represents the operating results of Great-West Life & Annuity
        Insurance Company's (GWL&A), an indirect wholly-owned subsidiary of
        Lifeco, health care business, which was sold effective, April 1,
        2008. Does not include the gain on sale of the health care business.

    (3) Net income, basic earnings per common share and return on common
        shareholders' equity are presented on an adjusted basis, as a non-
        GAAP financial measure of earnings performance, and reflect the
        following items in 2008:



                                     Net Income           Per common share
                               ----------------------  ----------------------
                                                              In    Year-to-
                                                         quarter        date
                                                       ----------------------
    Q1: Gain on termination of
         reinsurance agreement $     176               $       -   $   0.197
        Reserve strengthening
         in GWL&A                    (58)  $     118           -      (0.065)
    Q2: Gain on sale of GWL&A's
         health care business        649         649           -       0.725
    Q4: Intangible & goodwill
         impairment               (1,353)                 (1.508)     (1.511)
        Valuation allowance,
         income tax                  (34)                 (0.038)     (0.038)
        Restructuring costs          (45)     (1,432)     (0.051)     (0.051)
                                           ----------  ----------------------
                                           $    (665)  $  (1.597)  $  (0.743)
                                           ----------  ----------------------
                                           ----------  ----------------------

        During 2007, net income attributable to common shareholders was
        reduced by $97 after-tax ($0.109 per common share) as a result of a
        provision for certain Canadian retirement plans.

    (4) Net income for the year ended December 31, 2008 includes asset
        impairment charges of $100 after-tax and costs of $19 associated with
        the transfer of Putnam's Prime Money Market Fund to Federated
        Investors, Inc.

    (5) Excludes Putnam Prime Money Market Fund



               SUMMARIES OF CONSOLIDATED OPERATIONS (unaudited)
                   (in $ millions except per share amounts)

                                For the three months       For the years
                                 ended December 31       ended December 31
                               ----------------------  ----------------------
                                  2008        2007        2008        2007
                               ----------  ----------  ----------  ----------
    Income
      Premium income           $   4,782   $   5,764   $  30,007   $  18,753
      Net investment income
        Regular net investment
         income                    1,423       1,304       5,962       5,565
        Changes in fair value
         on held for trading
         assets                     (368)        821      (5,161)     (1,098)
                               ----------  ----------  ----------  ----------
      Total net investment
       income                      1,055       2,125         801       4,467
      Fee and other income           743         861       3,124       2,703
                               ----------  ----------  ----------  ----------
                                   6,580       8,750      33,932      25,923
                               ----------  ----------  ----------  ----------

    Benefits and expenses
      Policyholder benefits        4,929       4,208      16,784      16,186
      Policyholder dividends
       and experience refunds        332         343       1,348       1,137
      Change in actuarial
       liabilities                  (446)      2,289       8,642       1,799
                               ----------  ----------  ----------  ----------
      Total paid or credited
       to policyholders            4,815       6,840      26,774      19,122

      Commissions                    360         374       1,353       1,366
      Operating expenses             666         647       2,622       2,260
      Premium taxes                   69          57         223         225
      Financing charges               37          84         296         269
      Amortization of finite
       life intangible assets         11           8          41          32
      Restructuring costs             70           -          70           -
      Intangible and goodwill
       impairment                  2,178           -       2,178           -
                               ----------  ----------  ----------  ----------
    Net income from continuing
     operations before income
     taxes                        (1,626)        740         375       2,649

    Income taxes  - current         (101)        344         334         696
                  - future          (643)       (146)       (612)       (114)
                               ----------  ----------  ----------  ----------
    Net income from continuing
     operations before non-
     controlling interests          (882)        542         653       2,067

    Non-controlling interests         10          35        (108)        159
                               ----------  ----------  ----------  ----------
    Net income from continuing
     operations                     (892)        507         761       1,908

    Net income from discontinued
     operations                        -          43         692         203
                               ----------  ----------  ----------  ----------
    Net income                      (892)        550       1,453       2,111

    Perpetual preferred share
     dividends                        15          13          57          55
                               ----------  ----------  ----------  ----------
    Net income - common
     shareholders              $    (907)  $     537   $   1,396   $   2,056
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------
    Earnings per common share

      Basic                    $  (1.011)  $   0.601   $   1.560   $   2.304
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------
      Diluted                  $  (1.009)  $   0.597   $   1.553   $   2.287
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------



                   CONSOLIDATED BALANCE SHEETS (unaudited)
                               (in $ millions)


                                                            December 31
                                                       ----------------------
                                                          2008        2007
                                                       ----------  ----------

    Assets

    Bonds                                              $  66,554   $  65,069
    Mortgage loans                                        17,444      15,869
    Stocks                                                 5,394       6,543
    Real estate                                            3,188       2,547
    Loans to policyholders                                 7,622       6,317
    Cash and cash equivalents                              2,850       3,650
    Funds held by ceding insurers                         11,447       1,512
    Assets of operations held for sale                         -         697
    Goodwill                                               5,425       6,295
    Intangible assets                                      3,372       3,917
    Other assets                                           6,778       5,778
                                                       ----------  ----------
    Total assets                                       $ 130,074   $ 118,194
                                                       ----------  ----------
                                                       ----------  ----------

    Liabilities

    Policy liabilities
      Actuarial liabilities                            $  97,895   $  87,487
      Provision for claims                                 1,466       1,315
      Provision for policyholder dividends                   630         600
      Provision for experience rating refunds                310         310
      Policyholder funds                                   2,326       2,160
                                                       ----------  ----------
                                                         102,627      91,872

    Debentures and other debt instruments                  3,821       5,241
    Funds held under reinsurance contracts                   192         164
    Other liabilities                                      5,969       5,211
    Liabilities of operations for sale                         -         428
    Repurchase agreements                                    334         344
    Deferred net realized gains                              161         179
                                                       ----------  ----------
                                                         113,104     103,439

    Preferred shares                                         752         786
    Capital trust securities and debentures                  658         639
    Non-controlling interests
      Participating account surplus in subsidiaries        2,012       2,103
      Preferred shares issued by subsidiaries                157         157
      Perpetual preferred shares issued by subsidiaries      150         152
      Non-controlling interests in capital stock and
       surplus                                                13          10

    Share capital and surplus

    Share capital
      Perpetual preferred shares                           1,329       1,099
      Common shares                                        5,736       4,709
    Accumulated surplus                                    6,906       6,599
    Accumulated other comprehensive income                  (787)     (1,533)
    Contributed surplus                                       44          34
                                                       ----------  ----------
                                                          13,228      10,908
                                                       ----------  ----------
    Total liabilities, share capital and surplus       $ 130,074   $ 118,194
                                                       ----------  ----------
                                                       ----------  ----------



    Segmented Information (unaudited)
    Consolidated Operations

    For the three months ended December 31, 2008

                                                   2008
                            -------------------------------------------------
                                        United             Lifeco
                              Canada    States    Europe  Corporate    Total
                            --------- --------- --------- --------- ---------
    Income:
      Premium income        $  2,199  $    878  $  1,705  $      -  $  4,782
      Net investment income
        Regular net
         investment income       494       368       570        (9)    1,423
        Changes in fair
         value on held for
         trading assets         (608)     (281)      521         -      (368)
                            --------- --------- --------- --------- ---------
      Total net investment
       income                   (114)       87     1,091        (9)    1,055
      Fee and other income       230       335       178         -       743
                            --------- --------- --------- --------- ---------
    Total income               2,315     1,300     2,974        (9)    6,580
                            --------- --------- --------- --------- ---------
    Benefits and expenses:
      Paid or credited to
       policyholders           1,510       833     2,472         -     4,815
      Other                      531       382       217         2     1,132
      Amortization of
       finite life
       intangible assets           3         7         1         -        11
      Restructuring costs          -        70         -         -        70
      Intangible and
       goodwill impairment         -     2,178         -         -     2,178
                            --------- --------- --------- --------- ---------
    Net operating income
     before income taxes         271    (2,170)      284       (11)   (1,626)

    Income taxes                   9      (811)       60        (2)     (744)
                            --------- --------- --------- --------- ---------
    Net income before
     non-controlling
     interests                   262    (1,359)      224        (9)     (882)

    Non-controlling
     interests                    23        (9)       (4)        -        10
                            --------- --------- --------- --------- ---------
    Net income from
     continuing operations       239    (1,350)      228        (9)     (892)
    Net income from
     discontinued operations       -         -         -         -         -
                            --------- --------- --------- --------- ---------
    Net Income                   239    (1,350)      228        (9)     (892)
    Perpetual preferred
     share dividends              11         -         4         -        15
                            --------- --------- --------- --------- ---------
    Net income - common
     shareholders           $    228   $(1,350) $    224  $     (9) $   (907)
                            --------- --------- --------- --------- ---------
                            --------- --------- --------- --------- ---------


    For the three months ended December 31, 2007

                                                   2007
                            -------------------------------------------------
                                        United             Lifeco
                              Canada    States    Europe  Corporate    Total
                            --------- --------- --------- --------- ---------
    Income:
      Premium income        $  3,452  $    436  $  1,876  $      -  $  5,764
      Net investment income
        Regular net
         investment income       681       310       311         2     1,304
        Changes in fair
         value on held for
         trading assets          235        32       554         -       821
                            --------- --------- --------- --------- ---------
      Total net investment
       income                    916       342       865         2     2,125
      Fee and other income       266       414       181         -       861
                            --------- --------- --------- --------- ---------
    Total income               4,634     1,192     2,922         2     8,750
                            --------- --------- --------- --------- ---------
    Benefits and expenses:
      Paid or credited to
       policyholders           3,673       669     2,498         -     6,840
      Other                      556       398       207         1     1,162
      Amortization of
       finite life
       intangible assets           4         3         1         -         8
                            --------- --------- --------- --------- ---------
    Net operating income
     before income taxes         401       122       216         1       740
    Income taxes                 108        29        60         1       198
                            --------- --------- --------- --------- ---------
    Net income before
     non-controlling
     interests                   293        93       156         -       542

    Non-controlling interests     37        (5)        3         -        35
                            --------- --------- --------- --------- ---------
    Net income from continuing
     operations                  256        98       153         -       507
    Net income from
     discontinued operations       -        43         -         -        43
                            --------- --------- --------- --------- ---------
    Net Income                   256       141       153         -       550

    Perpetual preferred
     share dividends              10         -         3         -        13
                            --------- --------- --------- --------- ---------
    Net income - common
     shareholders           $    246  $    141  $    150  $      -  $    537
                            --------- --------- --------- --------- ---------
                            --------- --------- --------- --------- ---------



    For the year ended December 31, 2008

                                                   2008
                            -------------------------------------------------
                                        United             Lifeco
                              Canada    States    Europe  Corporate    Total
                            --------- --------- --------- --------- ---------
    Income:
      Premium income        $  8,197  $  2,683  $ 19,127  $      -  $ 30,007
      Net investment income
        Regular net
         investment income     2,367     1,345     2,262       (12)    5,962
        Changes in fair
         value on held for
          trading assets      (2,168)   (1,286)   (1,707)        -    (5,161)
                            --------- --------- --------- --------- ---------
      Total net investment
       income                    199        59       555       (12)      801
      Fee and other income     1,034     1,442       648         -     3,124
                            --------- --------- --------- --------- ---------
    Total income               9,430     4,184    20,330       (12)   33,932
                            --------- --------- --------- --------- ---------
    Benefits and expenses:
      Paid or credited to
       policyholders           5,748     2,366    18,660         -    26,774
      Other                    2,189     1,535       759        11     4,494
      Amortization of
       finite life
       intangible assets          14        23         4         -        41
      Restructuring costs          -        70         -         -        70
      Intangible and
       goodwill impairment         -     2,178         -         -     2,178
                            --------- --------- --------- --------- ---------
    Net operating income
     before income taxes       1,479    (1,988)      907       (23)      375

    Income taxes                 360      (799)      164        (3)     (278)
                            --------- --------- --------- --------- ---------
    Net income before
     non-controlling
     interests                 1,119    (1,189)      743       (20)      653

    Non-controlling
     interests                    73      (184)        3         -      (108)
                            --------- --------- --------- --------- ---------
    Net income from
     continuing
     operations                1,046    (1,005)      740       (20)      761
    Net income from
     discontinued
     operations                    -       692         -         -       692
                            --------- --------- --------- --------- ---------
    Net Income                 1,046      (313)      740       (20)    1,453

    Perpetual preferred
     share dividends              43         -        14         -        57
                            --------- --------- --------- --------- ---------
    Net income - common
     shareholders           $  1,003  $   (313) $    726  $    (20) $  1,396
                            --------- --------- --------- --------- ---------
                            --------- --------- --------- --------- ---------



    For the year ended December 31, 2007

                                                   2007
                            -------------------------------------------------
                                        United             Lifeco
                              Canada    States    Europe  Corporate    Total
                            --------- --------- --------- --------- ---------
    Income:
      Premium income        $  8,916  $  1,910  $  7,927  $      -  $ 18,753
      Net investment income
        Regular net
         investment income     2,546     1,337     1,663        19     5,565
        Changes in fair
         value on held for
         trading assets         (421)      (58)     (619)        -    (1,098)
                            --------- --------- --------- --------- ---------
      Total net investment
       income                  2,125     1,279     1,044        19     4,467
      Fee and other income     1,029     1,001       673         -     2,703
                            --------- --------- --------- --------- ---------
    Total income              12,070     4,190     9,644        19    25,923
                            --------- --------- --------- --------- ---------
    Benefits and expenses:
      Paid or credited to
       policyholders           8,397     2,631     8,094         -    19,122
      Other                    2,163     1,027       768       162     4,120
      Amortization of
       finite life
       intangible assets          14        14         4         -        32
                            --------- --------- --------- --------- ---------
    Net operating income
     before income taxes       1,496       518       778      (143)    2,649

    Income taxes                 353       138       137       (46)      582
                            --------- --------- --------- --------- ---------
    Net income before
     non-controlling
     interests                 1,143       380       641       (97)    2,067

    Non-controlling
     interests                   128        14        17         -       159
                            --------- --------- --------- --------- ---------
    Net income from
     continuing operations     1,015       366       624       (97)    1,908
    Net income from
     discontinued operations       -       203         -         -       203
                            --------- --------- --------- --------- ---------
    Net Income                 1,015       569       624       (97)    2,111

    Perpetual preferred
     share dividends              42         -        13         -        55
                            --------- --------- --------- --------- ---------
    Net income - common
     shareholders           $    973  $    569  $    611  $    (97) $  2,056
                            --------- --------- --------- --------- ---------
                            --------- --------- --------- --------- ---------
    





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