Great-West Lifeco reports 2009 results

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

TSX:GWO

WINNIPEG, Feb. 11, 2010 /CNW/ - Great-West Lifeco Inc. (Lifeco) has reported net income attributable to common shareholders of $443 million for the three months ended December 31, 2009, compared to $525 million in 2008. On a per common share basis, this represents $0.468 per common share for the three months ended December 31, 2009, compared to $0.586 per common share for 2008.

For the twelve months ended December 31, 2009, net income attributable to common shareholders was $1,627 million, compared to $2,018 million a year ago. On a per common share basis, this represents $1.722 per common share for the twelve months ended December 31, 2009, compared to $2.255 per common share for 2008.

Net income of $525 million and $2,018 million for the three months and twelve months ended December 31, 2008 represents adjusted net income from continuing operations and, as such, excludes certain items as described in the United States section of this Release. Net income attributable to common shareholders for 2008, as reported, was $(907) million, or $(1.011) per common share for the three month period, and $1,396 million, or $1.560 per common share for the twelve month period.

Consolidated assets under administration at December 31, 2009 were $458.6 billion, up $16.6 billion from December 31, 2008.

Highlights

    
    -   Sales in Canada of individual life insurance products in the quarter
        were 9% higher than 2008, and sales of participating whole life
        insurance increased 29% over 2008.
    -   During 2009, the Company launched Guaranteed Minimum Withdrawal
        Benefit (GMWB) products in Canada and Germany.
    -   Sales in the U.S. Financial Services business increased 97% in the
        quarter compared to 2008. Sales of public/non-profit and 401(k) plans
        were very strong.
    -   Putnam net asset flows in the fourth quarter improved by US$6 billion
        compared to 2008.
    -   Putnam was ranked No.1 out of 61 mutual fund companies in the 2010
        annual Lipper/Barron's Fund Families Survey based on its funds'
        performance during 2009. This survey ranks mutual fund companies
        based on their performance across a variety of asset types, both
        foreign and domestic. Putnam's strong move in the rankings follows
        improvements to the firm's investment platform designed to bolster
        long-term performance.
    -   The Company declared a quarterly common dividend of $0.3075 per
        common share payable March 31, 2010, unchanged from the previous
        quarter. Dividends paid on common shares for the twelve months ended
        December 31, 2009 were 2.5% higher than a year ago.
    -   Through a number of capital transactions undertaken in 2008 and 2009,
        the Company has improved its liquidity position at the holding
        company by approximately $1.0 billion, and has rebalanced the
        maturity profile of its outstanding capital instruments.
    -   The Company's capital position remains very strong. Lifeco's Canadian
        operating subsidiary, Great-West Life, reported a Minimum Continuing
        Capital and Surplus (MCCSR) ratio of 204% at December 31, 2009, and
        this did not include any benefit from capital raised in 2008 and
        2009 at the Lifeco level.
    

An improvement in equity market conditions in the fourth quarter, compared to 2008, contributed to an increase in net income attributable to common shareholders of $57 million, or $0.06 per common share as a result of higher investment management fee income, and lower reserves required in connection with equity market linked actuarial liabilities. Although improvement was observed in the quarter, equity market conditions for the twelve month period were significantly weaker in 2009 compared to 2008. As a result, net income for the twelve month period was negatively impacted by $139 million, or $0.15 per common share. Despite lower equity market levels, Great-West Life did not need to establish any actuarial reserves with respect to segregated fund guarantees at December 31, 2009.

Credit market conditions in the fourth quarter, compared to 2008, were characterized by a narrowing of credit spreads, and an increase in yields on government securities. Additionally, certain European financial institutions announced capital and restructuring plans that resulted in the deferral of coupon payments on certain capital instruments issued by those companies. For the three months ended December 31, 2009, the Company recognized investment impairment charges of $182 million, pre-tax. In addition, the Company increased actuarial asset default provisions by $75 million, pre-tax, as a result of credit rating downgrades and related basis changes. The Company also reduced actuarial asset default provisions by $111 million, pre-tax, in connection with the release of provisions previously established in connection with securities that were identified as impaired in the quarter. The impact of these credit-related items on net income attributable to common shareholders in the quarter was a charge of $82 million, or $0.09 per common share, after taking into account pass-through features and other actuarial reserve offsets.

At December 31, 2009, consolidated invested assets were $102.8 billion. The gross book value of impaired investments at that date was $733 million, against which the Company had recorded cumulative impairment provisions of $399 million. The $399 million impairment provisions against invested assets, together with $2,467 million provision for future credit losses included in actuarial liabilities represented 3.1% of bond and mortgage assets at December 31, 2009.

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 2009 was $246 million compared to $228 million in 2008, reflecting earnings growth in Individual Insurance & Investment Products. Included in the fourth quarter results in 2009 was a gain on the redemption of the Company's preferred shares, Series E, which increased net income attributable to common shareholders by $15 million. For the twelve months ended December 31, 2009, net income attributable to common shareholders was $883 million compared to $1,003 million in 2008.

Total sales for the twelve months ended December 31, 2009 were $9,031 million compared to $8,115 million in 2008. Sales of protection products increased over the twelve months ended December 31, 2008, driven by Individual Life sales, which were up 10% over 2008.

Total assets under administration at December 31, 2009 were $114.6 billion, compared to $103.9 billion at December 31, 2008.

UNITED STATES

Net income attributable to common shareholders for the fourth quarter of 2009 was $36 million compared to $82 million in 2008. For the twelve months ended December 31, 2009, net income attributable to common shareholders was $228 million compared to $309 million in 2008.

Investment impairment charges and provisions for future credit losses reduced net income attributable to common shareholders by $18 million in the quarter.

Net income of $82 million for the three months ended December 31, 2008 excludes charges for intangible asset and goodwill impairment, a valuation allowance on deferred tax assets, and restructuring costs totaling $1,432 million. In addition to these fourth quarter charges, net income of $309 million for the twelve months ended December 31, 2008 also excludes the gain on sale of GWL&A's health care business of $649 million, income from discontinued operations of $43 million, and two non-recurring items that contributed $118 million to earnings during the first quarter of 2008.

Total sales for the twelve months ended December 31, 2009 were $32.4 billion compared to $42.7 billion in 2008.

Total assets under administration at December 31, 2009 were $277.8 billion compared to $271.1 billion at December 31, 2008. Included in assets under administration at December 31, 2009 were $120.7 billion of mutual fund and institutional account assets managed by Putnam.

EUROPE

Net income attributable to common shareholders for the fourth quarter of 2009 was $165 million compared to $224 million in 2008. For the twelve months ended December 31, 2009, net income attributable to common shareholders was $529 million compared to $726 million in 2008.

Investment impairment charges and provisions for future credit losses reduced net income attributable to common shareholders by $64 million in the quarter.

Total sales for the twelve months ended December 31, 2009 were $3,976 million compared to $5,004 million in 2008.

Total assets under administration at December 31, 2009 were $66.2 billion, compared to $67.0 billion at December 31, 2008.

CORPORATE

Corporate net income for Lifeco attributable to common shareholders was a loss of $4 million for the fourth quarter of 2009 and a loss of $13 million for the twelve months ended December 31, 2009, compared to a loss of $9 million for the fourth quarter of 2008 and a loss of $20 million for the twelve months ended December 31, 2008.

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, 2010 to shareholders of record at the close of business March 3, 2010.

    
    In addition, the Directors approved quarterly dividends on:
    -   Series D First Preferred Shares of $0.293750 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;
    -   Series J First Preferred Shares of $0.3750 per share; and
    -   Series L First Preferred Shares of $0.353125 per share
    all payable March 31, 2010 to shareholders of record at the close of
    business March 3, 2010.
    

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 nearly $459 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 2009 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.

Further information

Selected financial information is attached.

Great-West Lifeco's fourth quarter conference call will be held Thursday, February 11 at 3:30 p.m. (Eastern). The call can be accessed through www.greatwestlifeco.com or by phone at:

    
    -   Participants in the Toronto area: 416-340-8018
    -   Participants from North America: 1-866-223-7781
    -   Participants from Overseas: Dial international access code first,
        then 800-6578-9898
    

A replay of the call will be available from February 11 to February 18, 2010, and can be accessed by calling 1-800-408-3053 or 416-695-5800 in Toronto (passcode: 1041674 followed by the number sign).

Additional information relating to Lifeco, including the 2009 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)

                               As at or for the               For the
                              three months ended             year ended
                       ------------------------------------------------------
                        December  September   December   December   December
                        31, 2009   30, 2009   31, 2008   31, 2009   31, 2008
    -------------------------------------------------------------------------
    Premiums and deposits:
    Life insurance,
     guaranteed
     annuities and
     insured health
     products          $   4,324  $   4,336  $   4,782  $  18,033  $  30,007
    Self-funded premium
     equivalents (ASO
     contracts)              632        610        615      2,499      2,410
    Segregated funds
     deposits:
      Individual
       products            2,036      1,236      2,054      6,229      7,825
      Group products       1,626      2,325      1,399      8,470      5,524
    Proprietary mutual
     funds and
     institutional
     deposits(1)           6,042      5,045      6,484     21,507     30,693
                       ------------------------------------------------------
    Total premiums
     and deposits         14,660     13,552     15,334     56,738     76,459
                       ------------------------------------------------------
    Fee and other
     income                  765        728        743      2,839      3,124
    Paid or credited
     to policyholders      4,283      8,687      4,812     23,809     26,774

    Net income-common
     shareholders(4)
      Continuing
       operations -
       adjusted(3)           443        445        525      1,627      2,018
      Discontinued
       operations -
       adjusted(2)             -          -          -          -         43
                       ------------------------------------------------------
      Net income -
       adjusted(3)           443        445        525      1,627      2,061
      Adjustments
       after tax(3)            -          -     (1,432)         -       (665)
                       ------------------------------------------------------
      Net income             443        445       (907)     1,627      1,396
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Per common share
      Basic earnings
       - adjusted(3)   $   0.468  $   0.471  $   0.586  $   1.722  $   2.303
      Adjustments after
       tax(3)                  -          -     (1.597)         -     (0.743)
      Basic earnings       0.468      0.471     (1.011)     1.722      1.560
      Dividends paid      0.3075     0.3075     0.3075      1.230      1.200
      Book value           12.17      12.21      12.61
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Return on common
     shareholders' equity
     (12 months):
      Net income -
       adjusted(3)         13.8%      13.7%      19.0%
      Net income           13.8%       2.4%      12.7%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Total assets     $ 128,369  $ 129,813  $ 130,074
      Segregated funds
       net assets         87,495     86,640     77,748
      Proprietary mutual
       funds and
       institutional
       net assets(5)     123,504    124,272    131,122
                       --------------------------------
      Total assets
       under
       management        339,368    340,725    338,944
      Other assets under
       administration(6) 119,207    114,145    103,015
                       --------------------------------
      Total assets under
       administration  $ 458,575  $ 454,870  $ 441,959
                       --------------------------------
                       --------------------------------
      Share capital and
       surplus         $  13,003  $  12,861  $  13,228
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Includes Putnam Investments, LLC mutual funds and institutional
        deposits, excluding Prime Money Market Fund net deposits.
    (2) Represents the operating results of GWL&A's 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:

                                                              Refer to Annual
                                          Per common share        Financial
                           Net         ------------------------   Statement
                         income        In quarter  Year-to-date     Notes
                         ----------------------------------------------------
        Q1: Gain on
             termination of
             reinsurance
             agreement    $ 176            $     -     $ 0.197      Note 15
            Reserve
             strengthening
             in GWL&A       (58) $  118          -      (0.065)     Note 2
        Q2: Gain on sale of
             GWL&A's health
             care business  649     649          -       0.725      Note 2
        Q4: Intangible and
             goodwill
             impairment  (1,353)            (1.508)     (1.511)     Note 8
            Valuation
             allowance,
             income tax     (34)            (0.038)     (0.038)     Note 23
            Restructuring
             costs          (45) (1,432)    (0.051)     (0.051)     Note 3
                                 ------------------------------
                                 $ (665)   $(1.597)    $(0.743)
                                 ------------------------------
                                 ------------------------------

        Return on common shareholders' equity is restated excluding non-
        recurring items from prior periods.
    (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.
    (6) Other assets under administration includes both retail and
        institutional assets in which the Company only performs
        administrative or recordkeeping type services for the end client. In
        general, fee income is based on the type of services performed per
        client and does not fluctuate with asset levels.



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

                                  For the three months      For the years
                                    ended December 31,    ended December 31,
                                  -------------------------------------------
                                     2009       2008       2009       2008
                                  -------------------------------------------
    Income
      Premium income              $   4,324  $   4,782  $  18,033  $  30,007
      Net investment income
        Regular net investment
         income                       1,461      1,423      6,179      5,962
        Changes in fair value on
         held for trading assets       (549)      (368)     3,490     (5,161)
                                  -------------------------------------------
      Total net investment income       912      1,055      9,669        801
      Fee and other income              765        743      2,839      3,124
                                  -------------------------------------------
                                      6,001      6,580     30,541     33,932
                                  -------------------------------------------
    Benefits and expenses
      Policyholder benefits           3,915      4,929     16,568     16,784
      Policyholder dividends and
       experience refunds               328        332      1,479      1,348
      Change in actuarial liabilities    40       (449)     5,762      8,642
                                  -------------------------------------------
      Total paid or credited to
       policyholders                  4,283      4,812     23,809     26,774

      Commissions                       391        358      1,370      1,342
      Operating expenses                673        659      2,600      2,591
      Premium taxes                      65         69        257        223
      Financing charges                  62         37        336        296
      Amortization of finite life
       intangible assets                 21         20         89         83
      Restructuring costs                 -         70          -         70
      Intangible and goodwill
       impairment                         -      2,178          -      2,178
                                  -------------------------------------------

    Income from continuing operations
     before income taxes                506     (1,623)     2,080        375
    Income taxes - current             (162)      (101)      (102)       334
                 - future               209       (640)       447       (612)
                                  -------------------------------------------
    Net income from continuing
     operations before non-controlling
     interests                          459       (882)     1,735        653
    Non-controlling interests            (4)        10         36       (108)
                                  -------------------------------------------
    Net income from continuing
     operations                         463       (892)     1,699        761
    Net income from discontinued
     operations                           -          -          -        692
                                  -------------------------------------------
    Net income                          463       (892)     1,699      1,453
    Perpetual preferred share
     dividends                           20         15         72         57
                                  -------------------------------------------
    Net income - common
     shareholders                 $     443  $    (907) $   1,627  $   1,396
                                  -------------------------------------------
                                  -------------------------------------------
    Earnings per common share
      Basic                       $   0.468  $  (1.011) $   1.722  $   1.560
                                  -------------------------------------------
                                  -------------------------------------------
      Diluted                     $   0.467  $  (1.009) $   1.719  $   1.553
                                  -------------------------------------------
                                  -------------------------------------------



                   CONSOLIDATED BALANCE SHEETS (unaudited)
                               (in $ millions)

                                                             December 31,
                                                        ---------------------
                                                           2009       2008
                                                        ---------------------
    Assets
    Bonds                                               $  66,147  $  66,554
    Mortgage loans                                         16,684     17,444
    Stocks                                                  6,442      5,394
    Real estate                                             3,099      3,188
    Loans to policyholders                                  6,957      7,622
    Cash and cash equivalents                               3,427      2,850
    Funds held by ceding insurers                          10,839     11,447
    Goodwill                                                5,406      5,425
    Intangible assets                                       3,238      3,523
    Other assets                                            6,130      6,627
                                                        ---------------------
    Total assets                                        $ 128,369  $ 130,074
                                                        ---------------------
                                                        ---------------------

    Liabilities
    Policy liabilities
      Actuarial liabilities                             $  98,059  $  97,895
      Provision for claims                                  1,308      1,466
      Provision for policyholder dividends                    606        630
      Provision for experience rating refunds                 317        310
      Policyholder funds                                    2,361      2,326
                                                        ---------------------
                                                          102,651    102,627

    Debentures and other debt instruments                   4,142      3,821
    Funds held under reinsurance contracts                    186        192
    Other liabilities                                       4,608      5,969
    Repurchase agreements                                     532        334
    Deferred net realized gains                               133        161
                                                        ---------------------
                                                          112,252    113,104

    Preferred shares                                          203        752
    Capital trust securities and debentures                   540        658
    Non-controlling interests
      Participating account surplus in subsidiaries         2,004      2,012
      Preferred shares issued by subsidiaries                 157        157
      Perpetual preferred shares issued by subsidiaries       147        150
      Non-controlling interests in capital stock and surplus   63         13

    Share capital and surplus
    Share capital
      Perpetual preferred shares                            1,497      1,329
      Common shares                                         5,751      5,736
    Accumulated surplus                                     7,367      6,906
    Accumulated other comprehensive loss                   (1,664)      (787)
    Contributed surplus                                        52         44
                                                        ---------------------
                                                           13,003     13,228
                                                        ---------------------
    Total liabilities, share capital and surplus        $ 128,369  $ 130,074
                                                        ---------------------
                                                        ---------------------



    Segmented Information (unaudited)
    Consolidated Operations

    For the three months ended December 31, 2009

                                    United               Lifeco
                         Canada     States     Europe   Corporate    Total
                       ------------------------------------------------------
    Income:
      Premium income   $   2,386  $     685  $   1,253  $       -  $   4,324
      Net investment
       income
        Regular net
         investment
         income              633        332        491          5      1,461
        Changes in fair
         value on held
         for trading assets (179)       (15)      (355)         -       (549)
                       ------------------------------------------------------
      Total net
       investment income     454        317        136          5        912
      Fee and other income   249        358        158          -        765
                       ------------------------------------------------------
    Total income           3,089      1,360      1,547          5      6,001
                       ------------------------------------------------------
    Benefits and expenses:
      Paid or credited to
       policyholders       2,233        853      1,197          -      4,283
      Other                  530        457        196          8      1,191
      Amortization of
       finite life
       intangible assets       8         11          2          -         21
                       ------------------------------------------------------
    Income from continuing
     operations before
     income taxes            318         39        152         (3)       506
    Income taxes              66         13        (28)        (4)        47
                       ------------------------------------------------------
    Net income before
     non-controlling
     interests               252         26        180          1        459
    Non-controlling
     interests                (5)       (10)        11          -         (4)
                       ------------------------------------------------------
    Net income from
     continuing operations   257         36        169          1        463
    Net income from
     discontinued operations   -          -          -          -          -
                       ------------------------------------------------------
    Net Income               257         36        169          1        463
    Perpetual preferred
     share dividends          11          -          4          5         20
                       ------------------------------------------------------
    Net income - common
     shareholders      $     246  $      36  $     165  $      (4) $     443
                       ------------------------------------------------------
                       ------------------------------------------------------


    For the three months ended December 31, 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      2,469          -      4,812
      Other                  528        376        217          2      1,123
      Amortization of
       finite life
       intangible assets       6         13          1          -         20
      Restructuring costs      -         70          -          -         70
      Intangible and
       goodwill impairment     -      2,178          -          -      2,178
                       ------------------------------------------------------
    Income from
     continuing operations
     before income taxes     271     (2,170)       287        (11)    (1,623)
    Income taxes               9       (811)        63         (2)      (741)
                       ------------------------------------------------------
    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 twelve months ended December 31, 2009

                                    United               Lifeco
                         Canada     States     Europe   Corporate    Total
                       ------------------------------------------------------
    Income:
      Premium income   $   8,946  $   2,973  $   6,114  $       -  $  18,033
      Net investment
       income
        Regular net
         investment
         income            2,610      1,521      2,025         23      6,179
        Changes in fair
         value on held
         for trading
         assets            1,316        981      1,193          -      3,490
                       ------------------------------------------------------
      Total net investment
       income              3,926      2,502      3,218         23      9,669
      Fee and other income   938      1,240        661          -      2,839
                       ------------------------------------------------------
    Total income          13,810      6,715      9,993         23     30,541
                       ------------------------------------------------------
    Benefits and expenses:
      Paid or credited to
       policyholders      10,354      4,778      8,677          -     23,809
      Other                2,205      1,594        746         18      4,563
      Amortization of
       finite life
       intangible assets      32         51          6          -         89
                       ------------------------------------------------------
    Income from
     continuing
     operations before
     income taxes          1,219        292        564          5      2,080
    Income taxes             268         68          7          2        345
                       ------------------------------------------------------
    Net income before
     non-controlling
     interests               951        224        557          3      1,735
    Non-controlling
     interests                26         (4)        14          -         36
                       ------------------------------------------------------
    Net income from
     continuing operations   925        228        543          3      1,699
    Net income from
     discontinued operations   -          -          -          -          -
                       ------------------------------------------------------
    Net Income               925        228        543          3      1,699
    Perpetual preferred
     share dividends          42          -         14         16         72
                       ------------------------------------------------------
    Net income - common
     shareholders      $     883  $     228  $     529  $     (13) $   1,627
                       ------------------------------------------------------
                       ------------------------------------------------------


    For the twelve months ended December 31, 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                2,175      1,507        759         11      4,452
      Amortization of
       finite life
       intangible assets      28         51          4          -         83
      Restructuring costs      -         70          -          -         70
      Intangible and
       goodwill
       impairment              -      2,178          -          -      2,178
                       ------------------------------------------------------
    Income from
     continuing operations
     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
                       ------------------------------------------------------
                       ------------------------------------------------------
    

SOURCE Great-West Lifeco Inc.

For further information: For further information: Marlene Klassen, APR, Assistant Vice-President, Communication Services, (204) 946-7705


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