Great-West Lifeco reports second quarter 2018 net earnings of $831 million, up 17% from adjusted net earnings in the second quarter of 2017
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.
TORONTO, Aug. 1, 2018 /CNW/ - Great-West Lifeco Inc. (Lifeco or the Company) today announced net earnings attributable to common shareholders (net earnings) of $831 million or $0.839 per common share for the second quarter of 2018 compared to $585 million or $0.591 per common share for the same quarter last year. Excluding 2017 restructuring costs, Lifeco's adjusted net earnings in the second quarter of 2017 were $712 million. Net earnings in the second quarter of 2018 increased $119 million or 17% compared to adjusted net earnings of $712 million reflecting earnings growth in each segment. Lifeco's net earnings for the second quarter of 2018 included a net positive impact of $60 million after-tax, or $0.061 per common share, from the restructuring of U.S. financing as a consequence of U.S. tax reform and the refinancing of certain debt instruments.
For the six months ended June 30, 2018, Lifeco's net earnings were $1,562 million or $1.579 per common share compared to adjusted net earnings of $1,331 million or $1.345 per common share for the same period last year.
"The Company saw solid operating performances and strong earnings growth in the second quarter", said Paul Mahon, President and Chief Executive Officer, Great-West Lifeco. "We are accelerating investments in digital to drive customer experience and operational effectiveness and taking strategic actions across our businesses to bolster growth in core markets."
Highlights – In Quarter
Sales of $33.1 billion up 32%
- Sales for the second quarter of 2018 were $33.1 billion, up 32% from the second quarter of 2017, driven by a 45% increase in the U.S. and a 14% increase in Europe.
Fee and other income of $1.5 billion up 4%
- Fee and other income was $1.5 billion, up 4% from the second quarter of 2017, driven by business growth in all segments and market performance.
Capital strength and financial flexibility maintained
- The Great-West Life Assurance Company reported a Life Insurance Capital Adequacy Test (LICAT) ratio of 133% at June 30, 2018.
- Lifeco declared a quarterly common dividend of $0.3890 per common share payable September 28, 2018.
- During the second quarter of 2018, the Company, through its subsidiaries, issued $1,024 million (US$800 million) of senior notes and redeemed two tranches of subordinated debentures totaling $899 million.
- Adjusted return on equity (ROE) for the second quarter of 2018 was 14.2%. The adjusted ROE excludes the impact of U.S. tax reform, a net charge on the sale of an equity investment and restructuring costs included in the prior year results.
- Consolidated assets under administration at June 30, 2018 were over $1.4 trillion, a 5% increase from December 31, 2017.
SEGMENTED OPERATING RESULTS
For reporting purposes, Lifeco's consolidated operating results are grouped into four reportable segments - Canada, United States, Europe and Lifeco Corporate - reflecting geographic lines as well as the management and corporate structure of the Company. For more information, please refer to the Company's 2018 second quarter Management's Discussion and Analysis (MD&A).
CANADA
- Q2 Canada segment net earnings up 7% – Net earnings attributable to common shareholders for the second quarter of 2018 were $334 million compared to adjusted net earnings of $311 million in the second quarter of 2017, an increase of 7%, primarily reflecting strong Group Customer morbidity results and positive contributions from insurance contract liability basis changes. For the six months ended June 30, 2018, net earnings were $650 million compared to adjusted net earnings of $566 million for the same period last year. Adjusted net earnings in 2017 exclude restructuring costs of $126 million.
- Canada advances business transformation – The Canadian operations made progress on the previously announced targeted annual expense reductions of $200 million pre-tax. As of June 30, 2018, the Company has achieved approximately $170 million pre-tax in annualized expense reductions; approximately $131 million related to the common shareholders' account and $39 million related to the participating accounts.
UNITED STATES
- Q2 U.S. segment net earnings up 6% excluding impact of U.S. debt refinancing – Net earnings attributable to common shareholders for the second quarter of 2018, excluding the net positive impact of US$39 million related to U.S. debt refinancing activity, were US$66 million, up 6%, compared to US$62 million in the second quarter of 2017. The increase was primarily due to net growth in the business and the benefit of a lower U.S. corporate tax rate. For the six months ended June 30, 2018, net earnings were US$164 million, or US$125 million excluding the refinancing impact, compared to US$104 million for the same period last year.
- Q2 U.S. segment fee and other income up 3% – Fee and other income for the three months ended June 30, 2018 was US$508 million compared to US$491 million for the same quarter last year, an increase of 3%, due to growth in Empower Retirement participants and assets.
- Putnam average assets up 7% – Putnam average assets under management for the three months ended June 30, 2018 were US$172.8 billion compared to US$161.8 billion for the same quarter last year, an increase of 7%, primarily due to the cumulative impact of positive markets over the twelve month period. Putnam ending assets under management at June 30, 2018 were US$172.4 billion.
- Strong net asset inflows at Putnam – Putnam's net asset inflows for the three months ended June 30, 2018 were US$1.6 billion, which were the highest since the second quarter of 2011. Included in the net asset inflows for the three months ended June 30, 2018 of US$1.6 billion, were mutual fund net inflows of US$0.6 billion, which were the highest since the fourth quarter of 2014.
EUROPE
- Q2 Europe segment net earnings up 11% – Net earnings attributable to common shareholders for the second quarter of 2018 were $355 million, up 11%, compared to $321 million in the second quarter of 2017, primarily driven by a higher impact from insurance contract liability basis changes mainly reflecting longevity assumption updates, partially offset by lower contributions from investment experience. For the six months ended June 30, 2018, net earnings were $699 million compared to $610 million for the same period last year.
- Q2 Europe segment sales up 14% – Sales for the second quarter of 2018 were $5.5 billion, an increase of 14% compared to the same quarter last year reflecting the inclusion of Retirement Advantage sales and strong growth across most products.
- Acquisition of strategic holding in financial consultancy Invesco Ltd (Ireland) announced – On April 20, 2018, the Company announced that its subsidiary, Irish Life Group Limited, reached an agreement to acquire a strategic holding in Invesco Ltd (Ireland), Ireland's largest Irish-owned independent financial consultancy firm. The acquisition is subject to regulatory approval and customary closing conditions, and is expected to be completed in the third quarter of 2018.
- Sale of heritage policies to Scottish Friendly announced – Canada Life Limited, a U.K. subsidiary of the Company, agreed to sell a block of 155,000 heritage policies with assets and liabilities of £2.7 billion to Scottish Friendly. Canada Life Investments, a U.K. subsidiary of the Company, will continue to manage a substantial portion of the transferring unit-linked assets. The block has largely been closed to new business since 2003 and comprises individual life savings policies, individual pensions saving policies and individual protection policies. The transfer of these policies to Scottish Friendly is subject to regulatory approval and the satisfactory completion of certain closing conditions, and is expected to occur in late 2019. This sale, together with the integration of the Retirement Advantage business, will act as an enabler to help move forward in transforming the U.K. business to increase focus on the retirement market to serve the evolving needs of customers and support future growth.
QUARTERLY DIVIDENDS
At its meeting today, the Board of Directors approved a quarterly dividend of $0.3890 per share on the common shares of Lifeco payable September 28, 2018 to shareholders of record at the close of business August 31, 2018.
In addition, the Directors approved quarterly dividends on Lifeco's preferred shares, as follows:
| First Preferred Shares |
Record Date |
Payment Date |
Amount, per share |
| Series F |
August 31, 2018 |
September 28, 2018 |
$0.36875 |
| Series G |
August 31, 2018 |
September 28, 2018 |
$0.3250 |
| Series H |
August 31, 2018 |
September 28, 2018 |
$0.30313 |
| Series I |
August 31, 2018 |
September 28, 2018 |
$0.28125 |
| Series L |
August 31, 2018 |
September 28, 2018 |
$0.353125 |
| Series M |
August 31, 2018 |
September 28, 2018 |
$0.3625 |
| Series N |
August 31, 2018 |
September 28, 2018 |
$0.1360 |
| Series O |
August 31, 2018 |
September 28, 2018 |
$0.163835 |
| Series P |
August 31, 2018 |
September 28, 2018 |
$0.3375 |
| Series Q |
August 31, 2018 |
September 28, 2018 |
$0.321875 |
| Series R |
August 31, 2018 |
September 28, 2018 |
$0.3000 |
| Series S |
August 31, 2018 |
September 28, 2018 |
$0.328125 |
| Series T |
August 31, 2018 |
September 28, 2018 |
$0.321875 |
For purposes of the Income Tax Act (Canada), and any similar provincial legislation, the dividends referred to above are eligible dividends.
Selected financial information is attached.
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.
Lifeco has operations in Canada, the United States and Europe through 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). Lifeco and its companies have over $1.4 trillion in consolidated assets under administration and are members of the Power Financial Corporation group of companies. To learn more, visit www.greatwestlifeco.com.
Basis of presentation
The condensed consolidated interim unaudited financial statements of Lifeco have been prepared in accordance with International Financial Reporting Standards (IFRS) and are the basis for the figures presented in this release, unless otherwise noted.
Cautionary note regarding Forward-Looking Information
This release may contain forward-looking statements. 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 other similar expressions or negative versions thereof. These statements may include, without limitation, statements about the Company's operations, business, financial condition, expected 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. Forward-looking statements are based on expectations, forecasts, estimates, predictions, projections and conclusions 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 the reader is cautioned that 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 customer behaviour, the Company's reputation, market prices for products provided, sales levels, premium income, fee income, expense levels, mortality experience, morbidity experience, policy lapse rates, reinsurance arrangements, liquidity requirements, capital requirements, credit ratings, taxes, inflation, interest and foreign exchange rates, investment values, hedging activities, global equity and capital markets, business competition and other general economic, political and market factors in North America and internationally. 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 customer responses to new products, impairments of goodwill and other intangible assets, the Company's ability to execute strategic plans and changes to strategic plans, technological changes, breaches or failure of information systems and security (including cyber attacks), payments required under investment products, 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, catastrophic events, continuity and availability of personnel and third party service providers, the Company's ability to complete strategic transactions and integrate acquisitions and unplanned material changes to the Company's facilities, customer and employee relations or credit arrangements. The reader is cautioned that the foregoing list of assumptions and factors is not exhaustive, and there may be other factors listed in other filings with securities regulators, including factors set out in the Company's 2017 Annual 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, uncertainties and potential events 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", "adjusted net earnings", "adjusted return on equity", "core net earnings", "constant currency basis", "premiums and deposits", "sales", "assets under management", "assets under administration" 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. Refer to the appropriate reconciliations of these non-IFRS financial measures to measures prescribed by IFRS.
Second Quarter Conference Call
Lifeco's second quarter conference call and audio webcast will be held August 1, 2018 at 2:30 p.m. (ET). The call and webcast can be accessed through www.greatwestlifeco.com or by phone at:
- Participants in the Toronto area: 416-340-2218
- Participants from North America: 1-866-225-0198
- For International participants: Look up the dial-in information for your location at:
https://www.confsolutions.ca/ILT?oss=1P49R8662250198
A replay of the call will be available from August 1, 2018 to August 8, 2018, and can be accessed by calling 1-800-408-3053 or 905-694-9451 in Toronto (passcode: 3123659#). The archived webcast will be available on www.greatwestlifeco.com from August 1, 2018 to July 31, 2019.
Additional information relating to Lifeco, including the most recent interim unaudited consolidated financial statements, interim Management's Discussion and Analysis (MD&A) and CEO/CFO certification will be filed on SEDAR at www.sedar.com.
| FINANCIAL HIGHLIGHTS (unaudited) |
|||||||||||||
| (in Canadian $ millions except per share amounts) |
|||||||||||||
| As at or for the three months ended |
For the six months ended |
||||||||||||
| June 30 |
March 31 |
June 30 |
June 30 |
June 30 |
|||||||||
| Premiums and deposits: |
|||||||||||||
| Net premium income (Life insurance, guaranteed annuities |
|||||||||||||
| and insured health products) |
$ |
7,905 |
$ |
8,174 |
$ |
7,761 |
$ |
16,079 |
$ |
17,115 |
|||
| Policyholder deposits (segregated funds): |
|||||||||||||
| Individual products |
4,142 |
3,988 |
4,142 |
8,130 |
8,039 |
||||||||
| Group products |
1,954 |
2,422 |
2,020 |
4,376 |
4,205 |
||||||||
| Self-funded premium equivalents |
|||||||||||||
| (Administrative services only contracts)(1) |
774 |
748 |
720 |
1,522 |
1,436 |
||||||||
| Proprietary mutual funds and institutional deposits(1) |
19,196 |
17,794 |
13,767 |
36,990 |
31,153 |
||||||||
| Total premiums and deposits(1)(2) |
33,971 |
33,126 |
28,410 |
67,097 |
61,948 |
||||||||
| Fee and other income(2) |
1,483 |
1,433 |
1,421 |
2,916 |
2,769 |
||||||||
| Net policyholder benefits, dividends and |
|||||||||||||
| experience refunds |
7,588 |
7,829 |
7,377 |
15,417 |
15,920 |
||||||||
| Earnings |
|||||||||||||
| Net earnings - common shareholders |
$ |
831 |
$ |
731 |
$ |
585 |
$ |
1,562 |
$ |
1,176 |
|||
| Adjustments(7) |
— |
— |
127 |
— |
155 |
||||||||
| Adjusted net earnings - common shareholders(7) |
831 |
731 |
712 |
1,562 |
1,331 |
||||||||
| Per common share |
|||||||||||||
| Basic earnings |
0.839 |
0.740 |
0.591 |
1.579 |
1.189 |
||||||||
| Adjusted basic earnings(7) |
0.839 |
0.740 |
0.719 |
1.579 |
1.345 |
||||||||
| Dividends paid |
0.389 |
0.389 |
0.367 |
0.778 |
0.734 |
||||||||
| Book value |
21.22 |
21.01 |
19.95 |
||||||||||
| Return on common shareholders' equity(3) |
|||||||||||||
| Net earnings |
12.5% |
11.4% |
13.0% |
||||||||||
| Adjusted net earnings(7) |
14.2% |
13.8% |
13.9% |
||||||||||
| Total assets(4) |
$ |
430,695 |
$ |
432,651 |
$ |
409,511 |
|||||||
| Proprietary mutual funds and institutional |
|||||||||||||
| net assets(5) |
294,890 |
285,843 |
271,686 |
||||||||||
| Total assets under management(5) |
725,585 |
718,494 |
681,197 |
||||||||||
| Other assets under administration(6) |
697,680 |
673,597 |
627,633 |
||||||||||
| Total assets under administration |
$ |
1,423,265 |
$ |
1,392,091 |
$ |
1,308,830 |
|||||||
| Total equity |
$ |
26,620 |
$ |
26,435 |
$ |
25,428 |
|||||||
| (1) |
In addition to premiums and deposits reported in 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 have been reclassified to reflect presentation adjustments relating to the adoption of IFRS 15, Revenue from Contracts with Customers, as described in the "International Financial Reporting Standards" section of the Company's June 30, 2018 Management's Discussion and Analysis and in note 2 to the Company's condensed consolidated interim unaudited financial statements for the period ended June 30, 2018. |
| (3) |
Return on common shareholders' equity is detailed within the "Capital Allocation Methodology" section of the Company's June 30, 2018 Management's Discussion and Analysis. |
| (4) |
Comparative figures have been reclassified as described in note 2 and note 34 to the Company's December 31, 2017 annual consolidated financial statements. |
| (5) |
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 of the investment policies. |
| (6) |
Other assets under administration (a non-IFRS financial measure) includes 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 includes 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 volume, size and trends. |
| (7) |
Adjusted net earnings attributable to common shareholders and adjusted net earnings per common share (EPS) are non-IFRS measures of earnings performance. For the second quarter of 2018, adjustments were nil (nil for the first quarter of 2018). The following adjustments were made for the six months ending June 30, 2017: |
| Segment |
||||||||||||||||
| 2017 Adjustments: |
Canada |
United |
Europe |
Total |
EPS Impact |
|||||||||||
| Q1 Restructuring expenses |
$ |
— |
$ |
11 |
$ |
17 |
$ |
28 |
$ |
0.029 |
||||||
| Q2 Restructuring expenses |
126 |
— |
1 |
127 |
0.128 |
|||||||||||
| Total Adjustments |
$ |
126 |
$ |
11 |
$ |
18 |
$ |
155 |
$ |
0.156 |
||||||
| CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) |
||||||||||||||
| (in Canadian $ millions except per share amounts) |
||||||||||||||
| For the three months ended |
For the six months ended |
|||||||||||||
| June 30 2018 |
March 31 2018 |
June 30 2017(1) |
June 30 2018 |
June 30 2017(1) |
||||||||||
| Income |
||||||||||||||
| Premium income |
||||||||||||||
| Gross premiums written |
$ |
9,012 |
$ |
9,293 |
$ |
8,781 |
$ |
18,305 |
$ |
19,254 |
||||
| Ceded premiums |
(1,107) |
(1,119) |
(1,020) |
(2,226) |
(2,139) |
|||||||||
| Total net premiums |
7,905 |
8,174 |
7,761 |
16,079 |
17,115 |
|||||||||
| Net investment income |
||||||||||||||
| Regular net investment income |
1,575 |
1,573 |
1,591 |
3,148 |
3,060 |
|||||||||
| Changes in fair value through profit or loss |
(350) |
(1,487) |
304 |
(1,837) |
1,039 |
|||||||||
| Total net investment income |
1,225 |
86 |
1,895 |
1,311 |
4,099 |
|||||||||
| Fee and other income |
1,483 |
1,433 |
1,421 |
2,916 |
2,769 |
|||||||||
| 10,613 |
9,693 |
11,077 |
20,306 |
23,983 |
||||||||||
| Benefits and expenses |
||||||||||||||
| Policyholder benefits |
||||||||||||||
| Gross |
7,742 |
7,996 |
7,415 |
15,738 |
16,010 |
|||||||||
| Ceded |
(596) |
(625) |
(500) |
(1,221) |
(1,110) |
|||||||||
| Total net policyholder benefits |
7,146 |
7,371 |
6,915 |
14,517 |
14,900 |
|||||||||
| Policyholder dividends and experience refunds |
442 |
458 |
462 |
900 |
1,020 |
|||||||||
| Changes in insurance and investment contract |
||||||||||||||
| liabilities |
(32) |
(1,049) |
850 |
(1,081) |
2,169 |
|||||||||
| Total paid or credited to policyholders |
7,556 |
6,780 |
8,227 |
14,336 |
18,089 |
|||||||||
| Commissions |
596 |
594 |
609 |
1,190 |
1,422 |
|||||||||
| Operating and administrative expenses |
1,241 |
1,237 |
1,154 |
2,478 |
2,359 |
|||||||||
| Premium taxes |
124 |
121 |
107 |
245 |
230 |
|||||||||
| Financing charges |
11 |
71 |
79 |
82 |
155 |
|||||||||
| Amortization of finite life intangible assets |
50 |
49 |
47 |
99 |
92 |
|||||||||
| Restructuring expenses |
— |
— |
216 |
— |
253 |
|||||||||
| Earnings before income taxes |
1,035 |
841 |
638 |
1,876 |
1,383 |
|||||||||
| Income taxes |
153 |
77 |
51 |
230 |
147 |
|||||||||
| Net earnings before non-controlling interests |
882 |
764 |
587 |
1,646 |
1,236 |
|||||||||
| Attributable to non-controlling interests |
18 |
— |
(28) |
18 |
(1) |
|||||||||
| Net earnings |
864 |
764 |
615 |
1,628 |
1,237 |
|||||||||
| Preferred share dividends |
33 |
33 |
30 |
66 |
61 |
|||||||||
| Net earnings - common shareholders |
$ |
831 |
$ |
731 |
$ |
585 |
$ |
1,562 |
$ |
1,176 |
||||
| Earnings per common share |
||||||||||||||
| Basic |
$ |
0.839 |
$ |
0.740 |
$ |
0.591 |
$ |
1.579 |
$ |
1.189 |
||||
| Diluted |
$ |
0.839 |
$ |
0.739 |
$ |
0.590 |
$ |
1.578 |
$ |
1.187 |
||||
| (1) |
Certain comparative figures have been reclassified as described in note 2 to the Company's June 30, 2018 condensed consolidated interim unaudited financial statements. |
| CONSOLIDATED BALANCE SHEETS (unaudited) |
|||||||
| (in Canadian $ millions) |
|||||||
| June 30 2018 |
December 31 2017 |
||||||
| Assets |
|||||||
| Cash and cash equivalents |
$ |
3,794 |
$ |
3,551 |
|||
| Bonds |
122,437 |
120,204 |
|||||
| Mortgage loans |
24,206 |
22,185 |
|||||
| Stocks |
9,226 |
8,864 |
|||||
| Investment properties |
5,098 |
4,851 |
|||||
| Loans to policyholders |
8,611 |
8,280 |
|||||
| 173,372 |
167,935 |
||||||
| Assets held for sale |
— |
169 |
|||||
| Funds held by ceding insurers |
9,581 |
9,893 |
|||||
| Goodwill |
6,480 |
6,179 |
|||||
| Intangible assets |
3,821 |
3,732 |
|||||
| Derivative financial instruments |
382 |
384 |
|||||
| Owner occupied properties |
720 |
706 |
|||||
| Fixed assets |
372 |
303 |
|||||
| Other assets |
2,604 |
2,424 |
|||||
| Premiums in course of collection, accounts and interest receivable |
4,990 |
4,647 |
|||||
| Reinsurance assets |
6,095 |
5,045 |
|||||
| Current income taxes |
224 |
134 |
|||||
| Deferred tax assets |
937 |
930 |
|||||
| Investments on account of segregated fund policyholders |
221,117 |
217,357 |
|||||
| Total assets |
$ |
430,695 |
$ |
419,838 |
|||
| Liabilities |
|||||||
| Insurance contract liabilities |
$ |
163,898 |
$ |
159,524 |
|||
| Investment contract liabilities |
1,769 |
1,841 |
|||||
| Debentures and other debt instruments |
6,031 |
5,617 |
|||||
| Capital trust securities |
160 |
160 |
|||||
| Funds held under reinsurance contracts |
1,383 |
373 |
|||||
| Derivative financial instruments |
1,250 |
1,336 |
|||||
| Accounts payable |
3,314 |
2,684 |
|||||
| Other liabilities |
3,445 |
3,752 |
|||||
| Current income taxes |
495 |
464 |
|||||
| Deferred tax liabilities |
1,213 |
1,194 |
|||||
| Investment and insurance contracts on account of segregated fund policyholders |
221,117 |
217,357 |
|||||
| Total liabilities |
404,075 |
394,302 |
|||||
| Equity |
|||||||
| Non-controlling interests |
|||||||
| Participating account surplus in subsidiaries |
2,782 |
2,771 |
|||||
| Non-controlling interests in subsidiaries |
135 |
164 |
|||||
| Shareholders' equity |
|||||||
| Share capital |
|||||||
| Preferred shares |
2,714 |
2,714 |
|||||
| Common shares |
7,291 |
7,260 |
|||||
| Accumulated surplus |
12,742 |
12,098 |
|||||
| Accumulated other comprehensive income |
828 |
386 |
|||||
| Contributed surplus |
128 |
143 |
|||||
| Total equity |
26,620 |
25,536 |
|||||
| Total liabilities and equity |
$ |
430,695 |
$ |
419,838 |
|||
| Segmented Information (unaudited) |
|||||||||||||
| Consolidated Net Earnings |
|||||||||||||
| For the three months ended June 30, 2018 |
|||||||||||||
| Canada |
United |
Europe |
Lifeco |
Total |
|||||||||
| Income |
|||||||||||||
| Total net premiums |
$ |
3,141 |
$ |
894 |
$ |
3,870 |
$ |
— |
$ |
7,905 |
|||
| Net investment income |
|||||||||||||
| Regular net investment income |
666 |
462 |
445 |
2 |
1,575 |
||||||||
| Changes in fair value through profit or loss |
249 |
(260) |
(339) |
— |
(350) |
||||||||
| Total net investment income |
915 |
202 |
106 |
2 |
1,225 |
||||||||
| Fee and other income |
433 |
655 |
395 |
— |
1,483 |
||||||||
| 4,489 |
1,751 |
4,371 |
2 |
10,613 |
|||||||||
| Benefits and expenses |
|||||||||||||
| Paid or credited to policyholders |
3,184 |
894 |
3,478 |
— |
7,556 |
||||||||
| Other (1) |
812 |
686 |
458 |
5 |
1,961 |
||||||||
| Financing charges |
32 |
(31) |
10 |
— |
11 |
||||||||
| Amortization of finite life intangible assets |
20 |
22 |
8 |
— |
50 |
||||||||
| Restructuring expenses |
— |
— |
— |
— |
— |
||||||||
| Earnings (loss) before income taxes |
441 |
180 |
417 |
(3) |
1,035 |
||||||||
| Income taxes (recovery) |
92 |
31 |
31 |
(1) |
153 |
||||||||
| Net earnings (loss) before non-controlling |
|||||||||||||
| interests |
349 |
149 |
386 |
(2) |
882 |
||||||||
| Non-controlling interests |
17 |
1 |
— |
— |
18 |
||||||||
| Net earnings (loss) |
332 |
148 |
386 |
(2) |
864 |
||||||||
| Preferred share dividends |
29 |
— |
4 |
— |
33 |
||||||||
| Net earnings (loss) before capital allocation |
303 |
148 |
382 |
(2) |
831 |
||||||||
| Impact of capital allocation |
31 |
(3) |
(27) |
(1) |
— |
||||||||
| Net earnings (loss) - common shareholders |
$ |
334 |
$ |
145 |
$ |
355 |
$ |
(3) |
$ |
831 |
|||
| (1) Includes commissions, operating and administrative expenses and premium taxes. |
|||||||||||||
| For the three months ended June 30, 2017 |
|||||||||||||
| Canada(2) |
United |
Europe |
Lifeco |
Total(2) |
|||||||||
| Income |
|||||||||||||
| Total net premiums |
$ |
3,178 |
$ |
942 |
$ |
3,641 |
$ |
— |
$ |
7,761 |
|||
| Net investment income |
|||||||||||||
| Regular net investment income |
642 |
451 |
496 |
2 |
1,591 |
||||||||
| Changes in fair value through profit or loss |
282 |
274 |
(252) |
— |
304 |
||||||||
| Total net investment income |
924 |
725 |
244 |
2 |
1,895 |
||||||||
| Fee and other income |
417 |
658 |
346 |
— |
1,421 |
||||||||
| 4,519 |
2,325 |
4,231 |
2 |
11,077 |
|||||||||
| Benefits and expenses |
|||||||||||||
| Paid or credited to policyholders |
3,333 |
1,476 |
3,418 |
— |
8,227 |
||||||||
| Other (1) |
790 |
673 |
405 |
2 |
1,870 |
||||||||
| Financing charges |
31 |
37 |
10 |
1 |
79 |
||||||||
| Amortization of finite life intangible assets |
17 |
22 |
8 |
— |
47 |
||||||||
| Restructuring expenses |
215 |
— |
1 |
— |
216 |
||||||||
| Earnings (loss) before income taxes |
133 |
117 |
389 |
(1) |
638 |
||||||||
| Income taxes (recovery) |
(22) |
28 |
45 |
— |
51 |
||||||||
| Net earnings (loss) before non-controlling |
|||||||||||||
| interests |
155 |
89 |
344 |
(1) |
587 |
||||||||
| Non-controlling interests |
(31) |
3 |
— |
— |
(28) |
||||||||
| Net earnings (loss) |
186 |
86 |
344 |
(1) |
615 |
||||||||
| Preferred share dividends |
26 |
— |
4 |
— |
30 |
||||||||
| Net earnings (loss) before capital allocation |
160 |
86 |
340 |
(1) |
585 |
||||||||
| Impact of capital allocation |
25 |
(4) |
(19) |
(2) |
— |
||||||||
| Net earnings (loss) - common shareholders |
$ |
185 |
$ |
82 |
$ |
321 |
$ |
(3) |
$ |
585 |
|||
| (1) |
Includes commissions, operating and administrative expenses and premium taxes. |
| (2) |
Certain comparative figures have been reclassified as described in note 2 to the Company's June 30, 2018 condensed consolidated interim unaudited financial statements. |
| For the six months ended June 30, 2018 |
|||||||||||||
| Canada |
United |
Europe |
Lifeco |
Total |
|||||||||
| Income |
|||||||||||||
| Total net premiums |
$ |
6,292 |
$ |
1,968 |
$ |
7,819 |
$ |
— |
$ |
16,079 |
|||
| Net investment income |
|||||||||||||
| Regular net investment income |
1,278 |
903 |
962 |
5 |
3,148 |
||||||||
| Changes in fair value through profit or loss |
(85) |
(840) |
(912) |
— |
(1,837) |
||||||||
| Total net investment income |
1,193 |
63 |
50 |
5 |
1,311 |
||||||||
| Fee and other income |
871 |
1,286 |
759 |
— |
2,916 |
||||||||
| 8,356 |
3,317 |
8,628 |
5 |
20,306 |
|||||||||
| Benefits and expenses |
|||||||||||||
| Paid or credited to policyholders |
5,823 |
1,646 |
6,867 |
— |
14,336 |
||||||||
| Other (1) |
1,628 |
1,360 |
915 |
10 |
3,913 |
||||||||
| Financing charges |
64 |
(2) |
20 |
— |
82 |
||||||||
| Amortization of finite life intangible assets |
40 |
43 |
16 |
— |
99 |
||||||||
| Restructuring expenses |
— |
— |
— |
— |
— |
||||||||
| Earnings (loss) before income taxes |
801 |
270 |
810 |
(5) |
1,876 |
||||||||
| Income taxes (recovery) |
138 |
44 |
49 |
(1) |
230 |
||||||||
| Net earnings (loss) before non-controlling |
|||||||||||||
| interests |
663 |
226 |
761 |
(4) |
1,646 |
||||||||
| Non-controlling interests |
17 |
1 |
— |
— |
18 |
||||||||
| Net earnings (loss) |
646 |
225 |
761 |
(4) |
1,628 |
||||||||
| Preferred share dividends |
57 |
— |
9 |
— |
66 |
||||||||
| Net earnings (loss) before capital allocation |
589 |
225 |
752 |
(4) |
1,562 |
||||||||
| Impact of capital allocation |
61 |
(5) |
(53) |
(3) |
— |
||||||||
| Net earnings (loss) - common shareholders |
$ |
650 |
$ |
220 |
$ |
699 |
$ |
(7) |
$ |
1,562 |
|||
| (1) Includes commissions, operating and administrative expenses and premium taxes. |
|||||||||||||
| For the six months ended June 30, 2017 |
|||||||||||||
| Canada(2) |
United |
Europe |
Lifeco |
Total(2) |
|||||||||
| Income |
|||||||||||||
| Total net premiums |
$ |
6,462 |
$ |
2,171 |
$ |
8,482 |
$ |
— |
$ |
17,115 |
|||
| Net investment income |
|||||||||||||
| Regular net investment income |
1,255 |
906 |
898 |
1 |
3,060 |
||||||||
| Changes in fair value through profit or loss |
657 |
376 |
6 |
— |
1,039 |
||||||||
| Total net investment income |
1,912 |
1,282 |
904 |
1 |
4,099 |
||||||||
| Fee and other income |
822 |
1,277 |
670 |
— |
2,769 |
||||||||
| 9,196 |
4,730 |
10,056 |
1 |
23,983 |
|||||||||
| Benefits and expenses |
|||||||||||||
| Paid or credited to policyholders |
6,578 |
3,028 |
8,483 |
— |
18,089 |
||||||||
| Other (1) |
1,825 |
1,384 |
791 |
11 |
4,011 |
||||||||
| Financing charges |
61 |
71 |
22 |
1 |
155 |
||||||||
| Amortization of finite life intangible assets |
34 |
43 |
15 |
— |
92 |
||||||||
| Restructuring expenses |
215 |
17 |
21 |
— |
253 |
||||||||
| Earnings (loss) before income taxes |
483 |
187 |
724 |
(11) |
1,383 |
||||||||
| Income taxes (recovery) |
43 |
39 |
68 |
(3) |
147 |
||||||||
| Net earnings (loss) before non-controlling |
|||||||||||||
| interests |
440 |
148 |
656 |
(8) |
1,236 |
||||||||
| Non-controlling interests |
(2) |
2 |
(1) |
— |
(1) |
||||||||
| Net earnings (loss) |
442 |
146 |
657 |
(8) |
1,237 |
||||||||
| Preferred share dividends |
52 |
— |
9 |
— |
61 |
||||||||
| Net earnings (loss) before capital allocation |
390 |
146 |
648 |
(8) |
1,176 |
||||||||
| Impact of capital allocation |
50 |
(8) |
(38) |
(4) |
— |
||||||||
| Net earnings (loss) - common shareholders |
$ |
440 |
$ |
138 |
$ |
610 |
$ |
(12) |
$ |
1,176 |
|||
| (1) |
Includes commissions, operating and administrative expenses and premium taxes. |
| (2) |
Certain comparative figures have been reclassified as described in note 2 to the Company's June 30, 2018 condensed consolidated interim unaudited financial statements. |
SOURCE Great-West Lifeco Inc.
Media Relations Contact: Tim Oracheski, 204-946-8961, Email: [email protected]; Investor Relations Contact: Deirdre Neary, 416-552-3208, Email: [email protected]
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