Great-West Lifeco reports fourth quarter 2014 results and increases dividend by 6%

TSX:GWO

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

WINNIPEG, Feb. 12, 2015 /CNW/ - Great-West Lifeco Inc. (Lifeco) has reported net earnings attributable to common shareholders of $657 million or $0.658 per common share for the three months ended December 31, 2014 compared to $717 million or $0.717 per common share a year ago.  In the fourth quarter of 2013, net earnings included a litigation recovery of $226 million after-tax or $0.226 per common share.  Excluding the litigation recovery in 2013, the year-over-year growth in net earnings was 34%.

For the twelve months ended December 31, 2014, Lifeco's net earnings attributable to common shareholders were $2,546 million or $2.549 per common share, compared to $2,278 million or $2.340 per common share a year ago.  Excluding the litigation recovery in 2013, the year-over-year growth in net earnings was 24%.

Total assets under administration grew to approximately $1.1 trillion at December 31, 2014, up 40% from December 31, 2013.  This includes $207 billion of assets under administration related to the J.P. Morgan Retirement Plan Services large-market recordkeeping business, which was acquired in the third quarter of 2014, and reflects strong organic growth in all geographies.

Highlights

  • The Company declared a quarterly common dividend of $0.3260 per common share payable March 31, 2015, a 6% increase from the previous quarter.
  • Total Company premiums and deposits in the fourth quarter of 2014 of $24.0 billion were up 4% from the same quarter in 2013:
    • Canada premium and deposits were $5.9 billion, up over 9%, primarily driven by a 16% increase in Wealth Management premiums and deposits.
    • Europe premiums and deposits were $5.3 billion, down 21%, primarily as a result of lower Ireland fund management sales and lower U.K. payout annuity sales.
    • Great-West Financial premiums and deposits were US$2.0 billion, down 6% compared to the fourth quarter of 2013. Individual Market segment sales increased 15%, offset by a decrease in Retirement Services sales due to a large public/non-profit plan sale in the fourth quarter of 2013 that did not recur.
  • Lifeco sales during the quarter were $21.6 billion, down 1% from a year ago, as strong results in Canada and Putnam were offset by lower sales in Europe and Great-West Financial.
    • Putnam gross sales were US$9.2 billion, up 12% compared to the fourth quarter of 2013, driven by growth in both mutual funds and institutional products.
  • The Irish Life Group Limited (Irish Life) continued to generate strong earnings contributing $70 million to Lifeco's Q4 2014 earnings.  Year-to-date Irish Life contributed $261 million to Lifeco's full year 2014 results, reflecting strong investment performance and growth in underlying core earnings.
  • Significant elements of the Irish Life integration were completed in 2014 and annualized synergies of €40.8 million have now been achieved.  Lifeco expects to exceed the original €40 million synergy target by at least 10%.  While focused on integration, Irish Life exceeded sales targets and increased their market share.
  • Lifeco launched a new brand, Empower Retirement, following the acquisition of J.P. Morgan Retirement Plan Services (RPS) large-market recordkeeping business and its plan to consolidate RPS with the retirement services businesses of Great-West Financial and Putnam.
  • The Company maintained a strong ROE of 15.7% based on net earnings. 
  • The Company's capital position remained very strong. The Great-West Life Assurance Company reported a Minimum Continuing Capital Surplus Requirements (MCCSR) ratio of 224% at December 31, 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, together with an allocation of a portion of Lifeco's corporate results.  The three primary business units included in this segment are Individual Insurance, Wealth Management and Group Insurance.  The Company provides accumulation, annuity, life, disability and critical illness insurance products to individual and group clients.

Net earnings attributable to common shareholders for the fourth quarter of 2014 were $300 million, up 11% compared to $270 million in the fourth quarter of 2013.  For the twelve months ended December 31, 2014, net earnings attributable to common shareholders were $1,228 million, up 7% compared to $1,148 million for the same period in 2013. 

Total sales in the fourth quarter of 2014 were $3.3 billion, an increase of 16% compared to $2.9 billion in the fourth quarter of 2013.  The increase was primarily driven by a 19% increase in Wealth Management sales, partially offset by lower Individual life insurance sales.  Total sales for the twelve months ended December 31, 2014 were $12.2 billion compared to $10.8 billion in 2013.

Total Canada segment assets under administration at December 31, 2014 were $161 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 recordkeeping 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, distribution and retirement services through a broad range of investment products.

During the fourth quarter of 2014, as part of the acquisition of J.P. Morgan Retirement Plan Services large-market recordkeeping business completed on August 29, 2014, a new combined brand - Empower Retirement - was launched to consolidate and support the retirement services businesses of Great-West Financial, the acquired J.P. Morgan Retirement Plan Services and Putnam.  Effective January 1, 2015, these retirement services businesses have merged, creating the second largest recordkeeping provider in the U.S. with 7.1 million participant accounts.

Net earnings attributable to common shareholders for the fourth quarter of 2014 were $89 million compared to $56 million in the fourth quarter of 2013.  Great-West Financial reported net earnings of $93 million in the fourth quarter compared to $81 million for the same quarter last year.  Putnam reported a net loss of $1 million in the fourth quarter compared to a net loss of $25 million a year ago.  For the twelve months ended December 31, 2014 net earnings attributable to common shareholders were $306 million compared to $276 million in 2013.

Great-West Financial sales in the fourth quarter of 2014 were US$4.0 billion, down from US$5.3 billion in the fourth quarter of 2013.  Lower Retirement Services sales in 2014, as a result of a large public/non-profit plan sale in the prior year that was not repeated in current quarter, were partially offset by an increase in sales in Individual Markets.  Sales for the twelve months ended December 31, 2014 were US$15.3 billion compared to US$12.5 billion in 2013, a 22% increase.

Putnam assets under management as at December 31, 2014 were US$158 billion compared to US$150 billion a year ago, an increase of 5%.  Net asset outflows for the fourth quarter of 2014 were US$1.2 billion compared to net asset inflows of US$0.3 billion for the same quarter in 2013. Mutual funds net inflows of $0.7 billion were offset by institutional net outflows of US$1.9 billion. In January 2015, Jeffrey L. Gould became the Head of Putnam Global Institutional Management business.  As a deeply experienced, highly regarded industry leader, Mr. Gould is expected to benefit Putnam's presence and impact in the institutional asset management market going forward.

Putnam net asset inflows for the twelve months ended December 31, 2014 were US$1.3 billion compared to net inflows of US$0.7 billion in the prior year, driven by an improvement in mutual fund inflows of US$2.2 billion

Total United States segment assets under administration at December 31, 2014 were $697 billion compared to $422 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 fourth quarter of 2014 were $274 million compared to $202 million in the fourth quarter of 2013.  Restructuring costs related to the integration of Irish Life were $6 million in-quarter, compared to $23 million in the fourth quarter of 2013.  For the twelve months ended December 31, 2014 net earnings attributable to common shareholders were $1,038 million compared to $701 million for the same period in 2013.  On a year-to-date basis, net earnings in 2014 include $25 million of restructuring costs related to the integration of Irish Life, compared to $97 million of acquisition and restructuring costs for the same period in 2013.   The 2014 year-to-date results include twelve months of Irish Life results while 2013 year-to-date results include Irish Life results from the date of acquisition, July 18, 2013 (approximately six months).

Insurance & Annuities sales for the fourth quarter of 2014 were $3.2 billion, compared to $4.8 billion a year ago, a decrease of 34%, primarily driven by lower wealth and investment fund management sales and by a 72% reduction in U.K. payout annuity sales resulting from changes announced in the 2014 U.K. Budget.  Total sales for the twelve months ended December 31, 2014 were $12.4 billion, up 25%, compared to $9.9 billion in 2013.

Total Europe segment assets under administration at December 31, 2014 were $205 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.

Lifeco Corporate segment net losses attributable to common shareholders were $6 million in the fourth quarter of 2014 compared to net earnings of $189 million in the fourth quarter of 2013.  In the fourth quarter of 2013, Lifeco Corporate segment net earnings included a litigation recovery of $226 million.

For the twelve months ended December 31, 2014 Lifeco Corporate segment net losses attributable to common shareholders were $26 million compared to net earnings of $153 million in 2013, including the 2013 litigation recovery noted above.

QUARTERLY DIVIDENDS

At its meeting, the Board of Directors approved a quarterly dividend of $0.3260 per share on the common shares of the Company payable March 31, 2015 to shareholders of record at the close of business March 3, 2015.

In addition, the Directors approved quarterly dividends on:

  • Series F First Preferred Shares of $0.36875 per share;
  • Series G First Preferred Shares of $0.3250 per share;
  • Series H First Preferred Shares of $0.30313 per share;
  • Series I First Preferred Shares of $0.28125 per share;
  • Series L First Preferred Shares of $0.353125 per share;
  • Series M First Preferred Shares of $0.36250 per share;
  • Series N First Preferred Shares of $0.228125 per share;
  • Series P First Preferred Shares of $0.3375 per share;
  • Series Q First Preferred Shares of $0.321875 per share;
  • Series R First Preferred Shares of $0.3000 per share; and
  • Series S First Preferred Shares of $0.328125 per share

all payable March 31, 2015 to shareholders of record at the close of business March 3, 2015.

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 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 $1.1 trillion 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 this 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 to help assess results where no comparable IFRS measure exists.  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 fourth quarter conference call and audio webcast will be held February 12, 2015 at 4:00 p.m. (ET).  The call and webcast can be accessed through www.greatwestlifeco.com or by phone at:

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

A replay of the call will be available from February 13, 2015, and can be accessed by calling 1-800-408-3053 or 905-694-9451 in Toronto (passcode: 8898149#). The archived webcast will be available on www.greatwestlifeco.com from February 13, 2015 until February 11, 2016.

Additional information relating to Lifeco, including the 2014 audited consolidated financial statements, MD&A, Annual Information Form (AIF), and CEO/CFO certification will be filed on SEDAR at www.sedar.com.

FINANCIAL HIGHLIGHTS (unaudited)

(in Canadian $ millions, except for per share amounts)


As at or for the three months ended


For the twelve months ended


Dec. 31
2014

Sept. 30
2014

Dec. 31
2013


Dec. 31
2014

Dec. 31
2013

Premiums and deposits:












Net premium income (Life insurance, guaranteed annuities and insured health products)

$

5,501


$

4,690


$

5,850



$

21,222


$

20,236


Policyholder deposits (segregated funds):













Individual products

3,185


2,865


2,757



11,826


8,308



Group products

1,955


1,824


1,809



9,083


7,553

Premiums and deposits

10,641


9,379


10,416



42,131


36,097


Self-funded premium equivalents (Administrative services only contracts)(1)

654


633


649



2,603


2,567


Proprietary mutual funds & institutional deposits(1)(2)

12,729


10,690


11,968



45,306


38,046

Total premiums and deposits

24,024


20,702


23,033



90,040


76,710

Fee and other income

1,161


1,092


1,001



4,422


3,585

Paid or credited to policyholders(3)

8,125


5,966


5,647



29,160


17,811

Earnings











Operating earnings - common shareholders(4)

657


687


491



2,546


2,052

Net earnings - common shareholders

657


687


717



2,546


2,278


Per common share













Operating earnings(4)

$

0.658


$

0.687


$

0.491



$

2.549


$

2.108



Basic earnings


0.658



0.687



0.717




2.549



2.340



Dividends paid


0.3075



0.3075



0.3075




1.230



1.230



Book value(6)


16.80



16.36



15.16








Return on common shareholders' equity(5)(6)












Operating earnings

15.7

%

15.1

%

15.2

%






Net earnings

15.7

%

16.5

%

16.8

%





Total assets(6)

$

356,709


$

349,041


$

325,876







Proprietary mutual funds and institutional net assets(7)


216,271



207,451



185,243






Total assets under management(6)(7)

572,980


556,492


511,119







Other assets under administration(8)

490,353


465,264


247,139






Total assets under administration(6)

$

1,063,333


$

1,021,756


$

758,258






Total equity(6)

$

21,897


$

21,448


$

19,830







(1)

In addition to premiums and deposits per the financial statements, the Company includes premium equivalents on self-funded group insurance administrative services only (ASO) contracts and deposits on proprietary mutual funds and institutional accounts to calculate total premiums and deposits (a non-IFRS financial measure). This measure provides useful information as it is an indicator of top line growth.

(2)

Comparative figures for premiums and deposits (a non-IFRS financial measure) have been restated for consistency.

(3)

Paid or credited to policyholders includes the impact of changes in fair values of assets supporting insurance and investment contract liabilities.

(4)

Operating earnings (a non-IFRS financial measure) excludes the impact of certain litigation provisions described in note 32 to the Company's December 31, 2014 annual consolidated financial statements.

(5)

Return on shareholders' equity is detailed within the "Capital Allocation Methodology" section of the Company's December 31, 2014 Management's Discussion and Analysis.

(6)

Comparative figures have been restated as described in note 35 to the Company's December 31, 2014 annual consolidated financial statements.

(7)

Total assets under management (a non-IFRS financial measure) provides an indicator of the size and volume of the overall business of the Company.  Services provided in respect of assets under management include the selection of investments, the provision of investment advice and discretionary portfolio management on behalf of clients.  This includes internally and externally managed funds where the Company has oversight over the investment policies.

(8)

Other assets under administration (a non-IFRS financial measure) include assets where the Company only provides administration services for which the Company earns fee and other income.  These assets are beneficially owned by clients and the Company does not direct the investing activities.  Services provided relating to assets under administration include recordkeeping, safekeeping, collecting investment income, settling of transactions or other administrative services.  Administrative services are an important aspect of the overall business of the Company and should be considered when comparing volumes, size and trends.


CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)

(in Canadian $ millions except per share amounts)



For the three months

ended December 31


For the years

ended December 31


2014


2013


2014


2013










Income










Premium income











Gross premiums written

$

6,402


$

6,739



$

24,686


$

23,441



Ceded premiums


(901)



(889)




(3,464)



(3,205)


Total net premiums


5,501



5,850




21,222



20,236


Net investment income















Regular net investment income


1,516



1,430




6,010



5,604



Changes in fair value through profit or loss


2,545



(225)




7,527



(2,979)


Total net investment income


4,061



1,205




13,537



2,625


Fee and other income


1,161



1,001




4,422



3,585


10,723


8,056



39,181


26,446

Benefits and expenses










Policyholder benefits











Insurance and investment contracts












Gross

5,335


4,835



19,363


18,464




Ceded

(513)


(597)



(1,928)


(1,744)


Total net policyholder benefits

4,822


4,238



17,435


16,720


Policyholder dividends and experience refunds

369


312



1,496


1,371


Changes in insurance and investment contract liabilities

2,934


1,097



10,229


(280)


Total paid or credited to policyholders

8,125


5,647



29,160


17,811











Commissions

514


531



2,084


1,869


Operating and administrative expenses

1,005


929



3,741


3,159


Premium taxes

86


83



339


313


Financing charges

77


76



304


292


Amortization of finite life intangible assets

34


33



132


117


Restructuring and acquisition expenses

7


27



32


104

Earnings before income taxes

875


730



3,389


2,781

Income taxes

164


128



628


463

Net earnings before non-controlling interests

711


602



2,761


2,318

Attributable to non-controlling interests

23


(148)



93


(90)

Net earnings

688


750



2,668


2,408

Preferred share dividends

31


33



122


130

Net earnings - common shareholders

$

657


$

717



$

2,546


$

2,278










Earnings per common share










Basic

$

0.658


$

0.717



$

2.549


$

2.340


Diluted

$

0.657


$

0.716



$

2.546


$

2.297

CONSOLIDATED BALANCE SHEETS (unaudited)

(in Canadian $ millions)



December 31


2014


2013 (1)

Assets




Cash and cash equivalents

$

2,498


$

2,791

Bonds

103,168


89,914

Mortgage loans

20,546


19,063

Stocks

7,820


8,554

Investment properties

4,613


4,288

Loans to policyholders

7,711


7,332


146,356


131,942

Funds held by ceding insurers

12,154


10,832

Goodwill

5,855


5,812

Intangible assets

3,625


3,456

Derivative financial instruments

652


593

Owner occupied properties

619


590

Fixed assets

228


211

Reinsurance assets

5,151


5,070

Premiums in course of collection, accounts and interest receivable

3,056


3,068

Other assets   

2,368


2,220

Current income taxes

48


165

Deferred tax assets

1,631


1,138

Investments on account of segregated fund policyholders

174,966


160,779

Total assets

$

356,709


$

325,876





Liabilities




Insurance contract liabilities

$

145,198


$

131,174

Investment contract liabilities

857


889

Debentures and other debt instruments

5,355


5,740

Funds held under reinsurance contracts

313


270

Derivative financial instruments

1,195


744

Accounts payable

1,480


1,583

Other liabilities                             

3,099


2,807

Current income taxes

737


981

Deferred tax liabilities

1,450


916

Capital trust debentures

162


163

Investment and insurance contracts on account of segregated fund policyholders

174,966


160,779

Total liabilities

334,812


306,046





Equity




Non-controlling interests





Participating account surplus in subsidiaries

2,480


2,354


Non-controlling interests in subsidiaries

163


8

Shareholders' equity





Share capital






Preferred shares

2,514


2,314



Common shares

7,102


7,112


Accumulated surplus

9,134


7,899


Accumulated other comprehensive income

378


86


Contributed surplus

126


57

Total equity

21,897


19,830

Total liabilities and equity

$

356,709


$

325,876







(1)  Comparative figures have been restated as described in note 35 to the Company's December 31, 2014 annual consolidated financial statements.


 

Segmented Information (unaudited)

Consolidated Net Earnings


For the three months ended December 31, 2014


Canada

United

States

Europe

Lifeco

Corporate

Total

Income











Total net premiums

$

2,839


$

855


$

1,807


$


$

5,501


Net investment income

















Regular net investment income

638


371


507



1,516



Changes in fair value through profit or loss

695


217


1,633



2,545


Total net investment income

1,333


588


2,140



4,061


Fee and other income

349


522


290



1,161




4,521


1,965


4,237



10,723













Benefits and expenses











Paid or credited to policyholders

3,327


1,229


3,569



8,125


Other *

747


556


298


4


1,605


Financing charges

28


35


13


1


77


Amortization of finite life intangible assets

14


15


5



34


Restructuring and acquisition expenses



7



7











Earnings (loss) before income taxes

405


130


345


(5)


875











Income taxes

83


35


48


(2)


164











Net earnings (loss) before non-controlling interests

322


95


297


(3)


711











Non-controlling interests

24


2


(3)



23











Net earnings (loss)

298


93


300


(3)


688











Preferred share dividends

23



6


2


31











Net earnings (loss) before capital allocation

275


93


294


(5)


657











Impact of capital allocation

25


(4)


(20)


(1)












Net earnings (loss) - common shareholders

$

300


$

89


$

274


$

(6)


$

657

*

Includes commissions, operating and administrative expenses and premium taxes.

For the three months ended December 31, 2013


Canada

United

States

Europe

Lifeco

Corporate

Total

Income











Total net premiums

$

2,682


$

924


$

2,244


$


$

5,850


Net investment income

















Regular net investment income

637


302


527


(36)


1,430



Changes in fair value through profit or loss

224


(117)


(332)



(225)


Total net investment income

861


185


195


(36)


1,205


Fee and other income

330


395


276



1,001


3,873


1,504


2,715


(36)


8,056











Benefits and expenses











Paid or credited to policyholders

2,629


927


2,091



5,647


Other *

980


454


330


(221)


1,543


Financing charges

29


34


8


5


76


Amortization of finite life intangible assets

13


13


7



33


Restructuring and acquisition expenses



27



27











Earnings before income taxes

222


76


252


180


730











Income taxes

95


14


30


(11)


128











Net earnings before non-controlling interests

127


62


222


191


602











Non-controlling interests

(146)


2


(4)



(148)











Net earnings

273


60


226


191


750











Preferred share dividends

27



6



33











Net earnings before capital allocation

246


60


220


191


717











Impact of capital allocation

24


(4)


(18)


(2)












Net earnings - common shareholders

$

270


$

56


$

202


$

189


$

717

*

Includes commissions, operating and administrative expenses and premium taxes.

For the twelve months ended December 31, 2014


Canada

United

States

Europe

Lifeco

Corporate

Total

Income











Total net premiums

$

10,883


$

3,527


$

6,812


$


$

21,222


Net investment income












Regular net investment income

2,548


1,420


2,045


(3)


6,010



Changes in fair value through profit or loss

2,588


784


4,155



7,527


Total net investment income

5,136


2,204


6,200


(3)


13,537


Fee and other income

1,409


1,820


1,193



4,422


17,428


7,551


14,205


(3)


39,181











Benefits and expenses











Paid or credited to policyholders

12,676


4,901


11,583



29,160


Other *

2,916


1,994


1,237


17


6,164


Financing charges

115


140


48


1


304


Amortization of finite life intangible assets

55


57


20



132


Restructuring and acquisition expenses


3


29



32











Earnings (loss) before income taxes

1,666


456


1,288


(21)


3,389











Income taxes

355


128


150


(5)


628











Net earnings (loss) before non-controlling interests

1,311


328


1,138


(16)


2,761











Non-controlling interests

88


6


(1)



93











Net earnings (loss)

1,223


322


1,139


(16)


2,668











Preferred share dividends

93



23


6


122











Net earnings (loss) before capital allocation

1,130


322


1,116


(22)


2,546











Impact of capital allocation

98


(16)


(78)


(4)












Net earnings (loss) - common shareholders

$

1,228


$

306


$

1,038


$

(26)


$

2,546

*

Includes commissions, operating and administrative expenses and premium taxes.

For the twelve months ended December 31, 2013


Canada

United

States

Europe

Lifeco

Corporate

Total

Income











Total net premiums

$

10,182


$

3,180


$

6,874


$


$

20,236


Net investment income












Regular net investment income

2,514


1,311


1,819


(40)


5,604



Changes in fair value through profit or loss

(1,125)


(706)


(1,148)



(2,979)


Total net investment income

1,389


605


671


(40)


2,625


Fee and other income

1,276


1,446


863



3,585


12,847


5,231


8,408


(40)


26,446











Benefits and expenses











Paid or credited to policyholders

8,345


3,067


6,399



17,811


Other *

2,983


1,616


944


(202)


5,341


Financing charges

115


137


23


17


292


Amortization of finite life intangible assets

50


51


16



117


Restructuring and acquisition expenses



104



104











Earnings before income taxes

1,354


360


922


145


2,781











Income taxes

291


62


129


(19)


463











Net earnings before non-controlling interests

1,063


298


793


164


2,318











Non-controlling interests

(93)


7


(4)



(90)











Net earnings

1,156


291


797


164


2,408











Preferred share dividends

107



23



130











Net earnings before capital allocation

1,049


291


774


164


2,278











Impact of capital allocation

99


(15)


(73)


(11)












Net earnings - common shareholders

$

1,148


$

276


$

701


$

153


$

2,278

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

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