IGM Financial Inc. Reports Fourth Quarter and 2012 Earnings

IGM Financial Inc. Reports Fourth Quarter and 2012 Earnings 
WINNIPEG, MANITOBA -- (Marketwire) -- 02/08/13 --  
Readers are referred to the disclaimer regarding Forward-Looking
Statements, Non-IFRS Financial Measures and Additional IFRS Measures
at the end of this Release. 
IGM Financial Inc. (IGM or the Company) (TSX:IGM) today announced
earnings results for the fourth quarter and for the year ended
December 31, 2012. 
Operating earnings available to common shareholders, excluding other
items(1), for the three months ended December 31, 2012 were $184.1
million or 73 cents per share compared to operating earnings
available to common shareholders, excluding other items(2), of $196.0
million or 76 cents per share in 2011.  
Net earnings available to common shareholders for the three months
ended December 31, 2012 were $202.9 million or 80 cents per share
compared to net earnings available to common shareholders of $230.6
million or 89 cents per share for the comparative period in 2011. 
Operating earnings available to common shareholders, excluding other
items(1), for the year ended December 31, 2012 were $749.7 million or
$2.94 per share compared to operating earnings available to common
shareholders, excluding other items(2), of $833.0 million or $3.22
per share in 2011.  
Net earnings available to common shareholders for the year ended
December 31, 2012 were $762.1 million or $2.99 per share compared to
net earnings available to common shareholders of $900.6 million or
$3.48 per share in 2011. 
Revenues for the three months ended December 31, 2012 were $632.7
million compared to $649.6 million in the fourth quarter of 2011.
Revenues for the year ended December 31, 2012 were $2.58 billion
compared to $2.73 billion a year ago. Expenses were $399.4 million
for the fourth quarter of 2012 compared to $392.6 million in the
fourth quarter of 2011 and $1.61 billion for the year ended December
31, 2012, compared to $1.64 billion a year ago.  
Total assets under management at December 31, 2012 were $120.7
billion. This compared with total assets under management of $118.7
billion at December 31, 2011.  
Shareholders' equity at December 31, 2012 was $4.5 billion, unchanged
from December 31, 2011. Return on average common equity based on
operating earnings for the year ended December 31, 2012 was 17.3%
compared to 19.7% for the comparative period in 2011. 
Investors Group Operations 
"Based on diversified portfolios and less volatile equity markets,
our clients' median asset growth for 2012 was 5.5%," said Murray J.
Taylor, President and Chief Executive Officer of Investors Group Inc.
"In 2012, insurance sales increased by 11%, and mortgage originations
increased by 45% as our Consultants assisted clients with their
overall financial planning needs." 
Mutual fund sales for the fourth quarter of 2012 were $1.42 billion
compared to $1.29 billion in the prior year, and mutual fund net
redemptions for the fourth quarter were $261 million compared to net
redemptions of $158 million a year ago.  
Mutual fund sales for the twelve months ended December 31, 2012 were
$5.78 billion compared to $6.02 billion in the prior year, and mutual
fund net redemptions were $724 million compared to net sales of $39
million a year ago.  
The twelve month trailing redemption rate (excluding money market
funds) was 10.0% at December 31, 2012, compared to 9.7% at September
30, 2012. 
Mutual fund assets under management at December 31, 2012 were $60.6
billion compared to $57.7 billion at December 31, 2011. 
Mackenzie Operations 
Total sales for the fourth quarter of 2012 were $2.84 billion
compared to $2.09 billion in the prior year. Total net redemptions
for the fourth quarter were $1.00 billion compared to total net
redemptions of $1.25 billion a year ago. 
Total sales for the twelve months ended December 31, 2012 were $9.97
billion compared to $10.30 billion in the prior year. Total net
redemptions were $4.24 billion compared to total net redemptions of
$2.50 billion a year ago. 
"Investment performance of our mutual fund family remained strong,
with 68% of our fund assets ranked in the first or second quartile of
their respective asset categories over the five year period ended
December 31, 2012," said Charles R. Sims, FCA, President and Chief
Executive Officer of Mackenzie Financial Corporation.  
Mackenzie's total assets under management at December 31, 2012 were
$61.5 billion compared with total assets under management of $61.7
billion at December 31, 2011. Mutual fund assets under management at
December 31, 2012 were $40.4 billion compared to $39.1 billion a year
ago. 
Dividends 
The Board of Directors has declared a dividend of 53.75 cents per
share on the Company's common shares and has declared a dividend of
$0.36875 per share on the Company's 5.90% Non-Cumulative First
Preferred Shares, Series "B". The common share dividend and the
preferred share dividend are payable on April 30, 2013 to
shareholders of record on March 28, 2013. 
Forward-Looking Statements 
Certain statements in this Release, other than statements of
historical fact, are forward-looking statements based on certain
assumptions and reflect IGM Financial's current expectations.
Forward-looking statements are provided to assist the reader in
understanding the Company's financial position and results of
operations as at and for the periods ended on certain dates and to
present information about management's current expectations and plans
relating to the future. Readers are cautioned that such statements
may not be appropriate for other purposes. These statements may
include, without limitation, statements regarding the operations,
business, financial condition, expected financial results,
performance, prospects, opportunities, priorities, targets, goals,
ongoing objectives, strategies and outlook of the Company, as well as
the outlook for North American and international economies, for the
current fiscal year and subsequent periods. 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", "plans", "believes", "estimates",
"seeks", "intends", "targets", "projects", "forecasts" or negative
versions thereof and other similar expressions, or future or
conditional verbs such as "may", "will", "should", "would" and
"could".  
This information is based upon certain material factors or
assumptions that were applied in drawing a conclusion or making a
forecast or projection as reflected in the forward-looking
statements, including the perception of historical trends, current
conditions and expected future developments, as well as other factors
that are believed to be appropriate in the circumstances. While the
Company considers these assumptions to be reasonable based on
information currently available to management, they may prove to be
incorrect.  
By its nature, this information is subject to inherent risks and
uncertainties that may be general or specific and which give rise to
the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate, that
assumptions may not be correct and that objectives, strategic goals
and priorities will not be achieved.  
A variety of material factors, many of which are beyond the Company's
and its subsidiaries' control, affect the operations, performance and
results of the Company, and its subsidiaries, and their businesses,
and could cause actual results to differ materially from current
expectations of estimated or anticipated events or results. These
factors include, but are not limited to: the impact or unanticipated
impact of general economic, political and market factors in North
America and internationally, interest and foreign exchange rates,
global equity and capital markets, management of market liquidity and
funding risks, changes in accounting policies and methods used to
report financial condition (including uncertainties associated with
critical accounting assumptions and estimates), the effect of
applying future accounting changes, operational and reputational
risks, business competition, technological change, changes in
government regulations and legislation, changes in tax laws,
unexpected judicial or regulatory proceedings, catastrophic events,
the Company's ability to complete strategic transactions, integrate
acquisitions and implement other growth strategies, and the Company's
and its subsidiaries' success in anticipating and managing the
foregoing factors.  
The reader is cautioned that the foregoing list is not exhaustive of
the factors that may affect any of the Company's forward-looking
statements. The reader is also cautioned to consider these and other
factors, uncertainties and potential events carefully and not place
undue reliance on forward-looking statements.   
Other than as specifically required by applicable Canadian law, the
Company undertakes no obligation to update any forward-looking
statements to reflect events or circumstances after the date on which
such statements are made, or to reflect the occurrence of
unanticipated events, whether as a result of new information, future
events or results, or otherwise.  
Additional information about the risks and uncertainties of the
Company's business and material factors or assumptions on which
information contained in forward-looking statements is based is
provided in its disclosure materials filed with the securities
regulatory authorities in Canada, available at www.sedar.com. 
Non-IFRS Financial Measures and Additional IFRS Measures 
This release contains non-IFRS financial measures and additional IFRS
measures. Net earnings available to common shareholders, which is an
additional measure in accordance with International Financial
Reporting Standards (IFRS), may be subdivided into two components
consisting of:  


 
--  Operating earnings available to common shareholders; and 
--  Other items, which include the after-tax impact of any item that
    management considers to be of a non-recurring nature or that could make
    the period-over-period comparison of results from operations less
    meaningful.  

 
Terms by which non-IFRS financial measures are identified include but
are not limited to "operating earnings available to common
shareholders", "operating earnings per share", "operating return on
average common equity" and other similar expressions. Non-IFRS
financial measures are used to provide management and investors with
additional measures to assess earnings performance. However, non-IFRS
financial measures do not have standard meanings prescribed by IFRS
and are not directly comparable to similar measures used by other
companies. Please refer to the attached Financial Highlights for the
appropriate reconciliations of these non-IFRS financial measures to
measures prescribed by IFRS.  
Terms by which additional IFRS measures are identified include
"earnings before income taxes and discontinued operations", "net
earnings from continuing operations" and "net earnings available to
common shareholders". Additional IFRS measures are used to provide
management and investors with additional measures to assess earnings
performance. These measures are considered additional IFRS measures
as they are in addition to the minimum line items required by IFRS
and are relevant to an understanding of the entity's financial
performance. 
The Consolidated Financial Statements and Management's Discussion and
Analysis (MD&A) of operating results are available on IGM Financial
Inc.'s website at www.igmfinancial.com.  
IGM Financial Inc. is one of Canada's premier personal financial
services companies, and one of the country's largest managers and
distributors of mutual funds and other managed asset products, with
over $123 billion in total assets under management as of January 31,
2013. Its activities are carried out principally through Investors
Group, Mackenzie Financial Corporation and Investment Planning
Counsel. IGM Financial Inc. is a member of the Power Financial
Corporation group of companies.  
Media Note: A live webcast of IGM's Analyst conference call for the
Fourth Quarter 2012 will be held Friday February 8, 2013 at 3:00 P.M.
(ET) at www.igmfinancial.com. Media and interested parties may
alternatively choose to listen to the live analyst teleconference
call by dialing 1-866-226-1792 or 416-340-2216. 
(1) Other items for the three and twelve months ended December 31,
2012 consisted of: 


 
--  A favourable change in income tax provision estimates of $24.4 million
    related to certain tax filings. 
--  An after-tax charge of $5.6 million representing the Company's
    proportionate share of net changes in Great-West Lifeco Inc.'s
    litigation provision.  

 
Other items for the twelve months ended December 31, 2012 also
included a non-cash income tax charge of $6.4 million resulting from
increases in Ontario corporate income tax rates and their effect on
the deferred income tax liability related to indefinite life
intangible assets arising from prior business acquisitions. 
(2) Other items for the three and twelve months ended December 31,
2011 consisted of:  


 
--  Net earnings from discontinued operations of $29.6 million and $62.6
    million, respectively, related to the sale of M.R.S. Trust Company and
    M.R.S. Inc. (MRS).  
--  An after-tax benefit of $5.0 million representing the Company's
    proportionate share of net changes in Great-West Lifeco Inc.'s
    litigation provision. 
 
                                                                            
IGM FINANCIAL INC.                                                          
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Consolidated Statements of Earnings                                         
                                                                            
                                             Three                    Twelve
(unaudited)                                 months                    months
(in thousands of Canadian                    ended                     ended
 dollars, except shares                December 31               December 31
 and per share amounts)          2012         2011         2012         2011
----------------------------------------------------------------------------
                                                                            
Revenues                                                                    
  Management fees           $ 434,691  $   444,177  $ 1,766,348  $ 1,892,728
  Administration fees          84,571       84,347      337,155      344,887
  Distribution fees            80,198       79,785      321,071      333,461
  Net investment income                                                     
   and other                   17,540       17,791       80,611       81,887
  Proportionate share of                                                    
   affiliate's earnings        15,749       23,536       72,322       79,489
                           -------------------------------------------------
                              632,749      649,636    2,577,507    2,732,452
                           -------------------------------------------------
                                                                            
Expenses                                                                    
  Commission                  213,387      214,027      858,248      894,860
  Non-commission              162,822      155,358      664,483      637,487
  Interest                     23,202       23,199       92,188      102,807
                           -------------------------------------------------
                              399,411      392,584    1,614,919    1,635,154
                           -------------------------------------------------
Earnings before income                                                      
 taxes and discontinued                                                     
 operations                   233,338      257,052      962,588    1,097,298
Income taxes                   28,198       53,902      191,604      250,497
                           -------------------------------------------------
Net earnings from                                                           
 continuing operations        205,140      203,150      770,984      846,801
Net earnings from                                                           
 discontinued operations            -       29,626            -       62,644
                           -------------------------------------------------
Net earnings                  205,140      232,776      770,984      909,445
Perpetual preferred share                                                   
 dividends                      2,212        2,212        8,850        8,850
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Net earnings available to                                                   
 common shareholders        $ 202,928  $   230,564  $   762,134  $   900,595
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Average number of common                                                    
 shares                                                                     
(in thousands)                                                              
  - Basic                     252,520      257,232      254,853      258,151
  - Diluted                   252,862      257,981      255,277      259,075
                                                                            
Earnings per share (in                                                      
 dollars)                                                                   
Net earnings available to                                                   
 common shareholders from                                                   
 continuing operations                                                      
  - Basic                   $    0.80  $      0.78  $      2.99  $      3.25
  - Diluted                 $    0.80  $      0.78  $      2.99  $      3.24
Net earnings available to                                                   
 common shareholders                                                        
  - Basic                   $    0.80  $      0.90  $      2.99  $      3.49
  - Diluted                 $    0.80  $      0.89  $      2.99  $      3.48
                                                                            
                                                                            
                                                                            
IGM FINANCIAL INC.                                                          
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Financial Highlights                                                        
                                                                            
                          For the three months    As at and for the twelve  
                             ended December 31    months ended December 31  
                        ----------------------   ---------------------------
(unaudited)                2012    2011 Change       2012     2011  Change  
----------------------------------------------------------------------------
                                                                            
Earnings available to                                                       
common shareholders                                                         
($ millions)                                                                
  Operating Earnings(1) $ 184.1 $ 196.0   (6.1)% $  749.7 $  833.0   (10.0)%
  Net Earnings            202.9   230.6  (12.0)     762.1    900.6   (15.4) 
                                                                            
Diluted earnings per                                                        
 share                                                                      
  Operating Earnings(1)    0.73    0.76   (3.9)      2.94     3.22    (8.7) 
  Net Earnings             0.80    0.89  (10.1)      2.99     3.48   (14.1) 
                                                                            
Return on equity                                                            
  Operating Earnings(1)                              17.3%    19.7%         
  Net Earnings                                       17.6%    21.3%         
                                                                            
Dividends per share      0.5375  0.5375      -     2.1500   2.1000     2.4  
                                                                            
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Total assets under                                                          
 management(2)                                                              
($ millions)                                     $120,694 $118,713     1.7% 
Investors Group                                                             
  Mutual funds                                     60,595   57,735     5.0  
Mackenzie                                                                   
  Mutual funds                                     40,394   39,141          
  Sub-advisory,                                                             
   institutional and                                                        
   other accounts                                  21,083   22,511          
  Total                                            61,477   61,652    (0.3) 
Counsel                                                                     
  Mutual funds                                      2,950    2,811     4.9  
                                                                            
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Mutual Funds and                                                            
 Institutional Sales              Investors                                 
($ millions)                          Group   Mackenzie  Counsel   Total(3) 
                                                                            
For the three months ended                                                  
 December 31, 2012                                                          
  Gross sales                    $    1,418  $    2,842 $     98  $   4,063 
  Net sales (redemptions)              (261)     (1,004)     (16)    (1,314)
                                                                            
For the twelve months ended                                                 
 December 31, 2012                                                          
  Gross sales                    $    5,778  $    9,969 $    401  $  14,693 
  Net sales (redemptions)              (724)     (4,238)     (24)    (5,617)
                                                                            
                                                                            
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(1) Non-IFRS Financial Measures:                        
                    
    2012 operating earnings excluded:                                       
    - A favourable change in income tax provision estimates of $24.4        
      million, recorded in the fourth quarter, related to certain tax       
      filings.                                                              
    - An after-tax charge of $5.6 million, recorded in the fourth quarter,  
      representing the Company's proportionate share of net changes in      
      Great-West Lifeco Inc.'s litigation provisions.                       
    - A non-cash income tax charge of $6.4 million, recorded in the second  
      quarter, resulting from increases in Ontario corporate income tax     
      rates and their effect on the deferred income tax liability related to
      indefinite life intangible assets arising from prior business         
      acquisitions. There is no expectation that the deferred tax liability 
      will become payable as the Company has no intention of disposing of   
      these assets.                                                         
    2011 operating earnings excluded:                                       
    - Net earnings from discontinued operations.                            
    - An after-tax benefit of $5.0 million, recorded in the fourth quarter, 
      representing the Company's proportionate share of net changes in      
      Great-West Lifeco Inc.'s litigation provisions.                       
(2) Total assets under management excluded $4.3 billion of assets sub-      
    advised by Mackenzie on behalf of Investors Group and Investment        
    Planning Counsel ($3.5 billion at December 31, 2011).                   
(3) Total Gross Sales and Net Sales for the three months ended December 31, 
    2012 excluded $295 million and $33 million respectively in accounts sub-
    advised by Mackenzie on behalf of Investors Group and Investment        
    Planning Counsel.                                                       
    Total Gross Sales and Net Sales for the twelve months ended December 31,
    2012 excluded $1.5 billion and $631 million respectively in accounts    
    sub-advised by Mackenzie on behalf of Investors Group and Investment    
    Planning Counsel.                                                       

Contacts:
IGM Financial Inc.
Ron Arnst
Media Relations
(204) 956-3364
ron.arnst@igmfinancial.com
www.igmfinancial.com
 
 
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