Great-West Lifeco reports first quarter 2013 results

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, May 2, 2013 /CNW/ - Great-West Lifeco Inc. (Lifeco) has reported net 
earnings attributable to common shareholders of $517 million for the three 
months ended March 31, 2013, an increase of 15% compared to $449 million in 
the first quarter of 2012. On a per common share basis, this represents 
$0.544 per common share for the three months ended March 31, 2013, compared to 
$0.474 per common share for the same period in 2012. 
Highlights - Operating Results 


    --  Consolidated assets under administration at March 31, 2013 were
        $582 billion, up $36 billion from December 31, 2012.
    --  Total Company premiums and deposits were $16.6 billion, up 15%
        from the first quarter of 2012, reflecting continued strong
        sales in each of its operating segments.
    --  Total Company sales in the first quarter of 2013 grew by 23%


    from first quarter 2012, notably the following:
  o Canada sales were $3 billion, up 13% compared to the first quarter 
of 2012.
  o Great-West Financial sales were US$2.5 billion, up 13% compared to 
the first quarter of 2012.
  o Europe sales were $961 million up 27% compared to the first quarter 
of 2012.
  o Putnam sales were US$7.4 billion, up 28% compared to the first 


    quarter of 2012. Net asset outflows in first quarter 2013 were
    US$314 million compared to net outflows of US$1,969 million for the
    same period in 2012.
    --  The Company maintained a strong ROE of 16.8% based on operating
        earnings and 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 and Surplus Requirements (MCCSR) ratio of 210% at March
        31, 2013.
    --  Credit experience remained favourable with minimal impacts from
        credit downgrade and impairment activity.
    --  The Company declared a quarterly common dividend of $0.3075 per
        common share payable June 28, 2013.

Highlights - Proposed Acquisition and Capital Markets Activity

On February 19, 2013 the Company announced that it had reached an agreement 
with the Government of Ireland to acquire, through its subsidiary Canada Life 
Limited, all of the shares of Irish Life Group Limited (Irish Life) for $1.75 
billion (€1.3 billion). In conjunction with the proposed acquisition, the 
Company has successfully completed two significant capital market transactions:
    --  On March 12, 2013, the Company completed an issuance of
        subscription receipts in both public and private offerings with
        aggregate gross proceeds to Lifeco of approximately $1.25
        billion.
    --  On April 18, 2013, the Company issued €500 million of
        euro denominated ten year bonds, at an annual coupon of 2.50%,
        which were rated A+ by Standard & Poor's Ratings Services.

The Company has now raised all the funding required to complete the 
acquisition of Irish Life Group and has hedged all related euro currency 
exposures associated with the €1.3 billion purchase price.

OPERATING RESULTS

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

CANADA

Net earnings attributable to common shareholders for the first quarter of 2013 
were $265 million compared to $242 million in the first quarter of 2012.

Total sales in the first quarter of 2013 were $3.0 billion compared to $2.7 
billion in 2012, an increase of 13%. Sales of Group insurance products were 
up significantly for the quarter at $288 million from $134 million a year ago 
reflecting strong large case creditor/direct marketing sales.  Wealth 
Management sales were $2.6 billion for the quarter, up 8% from a year ago, 
reflecting a 30% increase in sales of group retirement products. Wealth 
Management net cash flows for the quarter were $542 million. Individual 
Insurance product sales were down 8% year over year reflecting lower universal 
life sales.

Total Canada segment assets under administration at March 31, 2013 were $143 
billion, compared to $138 billion at December 31, 2012.

UNITED STATES

Net earnings attributable to common shareholders for the first quarter of 2013 
were $71 million compared to $74 million in the first quarter of 2012. 
Great-West Financial reported net earnings of $85 million in the first quarter 
compared to $86 million for the same period last year. Putnam reported a net 
loss of $14 million in the first quarter compared to a net loss of $12 million 
a year ago.

Great-West Financial sales in the first quarter of 2013 were US$2.5 billion, 
up 13% compared to the first quarter of 2012 reflecting strong sales in 
Retirement Services.

Putnam assets under management as at March 31, 2013 were US$135 billion 
compared to US$124 billion a year ago. Sales in the first quarter were US$7.4 
billion, up 28% from a year ago, however redemptions at US$7.7 billion were at 
the same level as a year ago. Net asset outflows in first quarter 2013 were 
US$314 million compared to net outflows of US$1,969 million for the same 
period in 2012.

Total United States segment assets under administration at March 31, 2013 were 
$365 billion compared to $333 billion at December 31, 2012.

EUROPE

Net earnings attributable to common shareholders for the first quarter of 2013 
were $192 million compared to $140 million in the first quarter of 2012.

Sales for the first quarter of 2013 were $961 million, up 27% compared to $755 
million a year ago, reflecting strong sales of single premium savings products 
in the Isle of Man and payout annuities in the United Kingdom.

Total Europe segment assets under administration at March 31, 2013 were $74 
billion, down slightly from $75 billion at December 31, 2012 primarily due to 
the strengthening of the Canadian dollar against the British pound.

CORPORATE

Net earnings in the Lifeco corporate segment attributable to common 
shareholders were a net loss of $11 million in the first quarter of 2013 
compared to a net loss of $7 million in the first quarter of 2012.

QUARTERLY DIVIDENDS

At its meeting today, the Board of Directors approved a quarterly dividend of 
$0.3075 per share on the common shares of the Company payable June 28, 2013 to 
shareholders of record at the close of business May 31, 2013.

For purposes of the Income Tax Act (Canada), and any similar provincial 
legislation, the dividends referred to above are eligible dividends.

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 J First Preferred Shares of $0.3750 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; and
    --  Series R First Preferred Shares of $0.3000 per share

all payable June 28, 2013 to shareholders of record at the close of business 
May 31, 2013.

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 The Great-West Life Assurance Company, London Life Insurance Company, 
The Canada Life Assurance Company, Great-West Life & Annuity Insurance Company 
and Putnam Investments, LLC. Great-West Lifeco and its companies have $582 
billion in assets under administration and are members of the Power Financial 
Corporation group of companies.

Cautionary note regarding Forward-Looking Information 
This release contains some forward-looking statements about the Company, 
including its business operations, strategy and expected financial performance 
and condition. Forward-looking statements include statements that are 
predictive in nature, depend upon or refer to future events or conditions, or 
include words such as "expects", "anticipates", "intends", "plans", 
"believes", "estimates" 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 due to, but not limited to, important factors such as sales levels, 
premium income, fee income, expense levels, mortality experience, morbidity 
experience, policy lapse rates and taxes, as well as general economic, 
political and market factors in North America and internationally, interest 
and foreign exchange rates, global equity and capital markets, business 
competition, technological change, changes in government regulations, changes 
in accounting policies and the effect of applying future accounting policy 
changes, unexpected judicial or regulatory proceedings, catastrophic events, 
and the Company's ability to complete strategic transactions and integrate 
acquisitions. The reader is cautioned that the foregoing list of important 
factors is not exhaustive, and there may be other factors, including factors 
set out under "Risk Management and Control Practices" in the Company's Annual 
Management's Discussion and Analysis and any listed in other filings with 
securities regulators, which are available for review at www.sedar.com. The 
reader is also cautioned to consider these and other factors carefully and to 
not place undue reliance on forward-looking statements. Other than as 
specifically required by applicable law, the Company has no intention to 
update any forward-looking statements whether as a result of new information, 
future events or otherwise.

Cautionary note regarding Non-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. 
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 first quarter conference call and audio webcast will be 
held May 2, 2013 at 3:30 p.m.(ET). The call and webcast can be accessed 
through www.greatwestlifeco.com or by phone at:
    --  Participants in the Toronto area:  416-340-8527
    --  Participants from North America: 1-877-240-9772
    --  Participants from Overseas:  Dial international access code
        first, then 800-2787-2090

A replay of the call will be available from May 2, 2013, 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 May 2, 2013 
until May 3, 2014.

Additional information relating to Lifeco, including the most recent interim 
unaudited condensed consolidated financial statements, interim Management's 
Discussion and Analysis (MD&A), and CEO/CFO certificates 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
                             March 31      December 31       March 31
                                2013            2012            2012

Premiums and deposits:                                                 

Life insurance,                                                        
guaranteed annuities

  and insured health      $       4,580    $      4,827   $       4,529
  products

Self-funded premium                                        
equivalents

 (Administrative                    644             677             685
services only
contracts)

Segregated funds                                                       
deposits:

  Individual products             1,768           2,072           1,559

  Group products                  2,006           2,216           1,770

Proprietary mutual                7,642           6,880           5,939
funds and institutional
deposits

Total premiums and               16,640          16,672          14,482
deposits
                                                                       

Fee and other income                778             767             724

Paid or credited to               5,215           5,122           4,743
policyholders

Operating earnings -                                       

  common shareholders               517             491             449

Net earnings - common               517             351             449
shareholders

Per common share                                                       

  Operating earnings      $       0.544    $      0.517    $      0.474

  Basic earnings                  0.544           0.370           0.474

  Dividends paid                 0.3075          0.3075          0.3075

  Book value                      12.87           12.64           12.28

Return on common                                           
shareholders' equity
(trailing four
quarters*):  

  Operating earnings              16.8%           16.5%           16.6%

  Net earnings                    15.7%           15.3%           17.6%

  Total assets            $     261,338    $    253,612    $    243,759

  Proprietary mutual            146,031         134,598         131,140
  funds and
  institutional net
  assets

  Total assets under            407,369         388,210         374,899
  management

  Other assets under            174,487         157,455         148,068
  administration

  Total assets under      $     581,856    $    545,665    $    522,967
  administration

Total equity              $      17,268    $     17,011    $     15,974
                                                                       

The Company uses operating earnings, a non-International Financial Reporting 
Standards financial measure, which excludes the impact of certain litigation 
provisions described in note 30 to the Company's December 31, 2012 
consolidated financial statements.

*Return on common shareholders' equity is the trailing four quarter 
calculation of net earnings divided by common shareholders' equity.

Comparative figures throughout this document, where impacted, have been 
restated for the retroactive impact of new and revised International Financial 
Reporting Standards effective during 2013 most notably IAS 19R, Employee 
Benefits.
                  CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
                (in Canadian $ millions except per share amounts)
                                           For the three months ended
                              March 31      December 31       March 31
                                 2013            2012            2012
                                                                       

Income                                                                 

  Premium income                                                       
    Gross premiums         $     5,319    $       5,763    $     5,198 
    written
    Ceded premiums               (739)            (936)          (669) 

  Total net premiums             4,580            4,827          4,529 

  Net investment income                                                
    Regular net                  1,362            1,364          1,443 
    investment income
    Changes in fair                465              182          (196) 
    value through profit
    or loss

  Total net investment           1,827            1,546          1,247 
  income

  Fee and other income             778              767            724 
                                 7,185            7,140          6,500 

Benefits and expenses                                                  

  Policyholder benefits                                                
    Insurance and                                                      
    investment contracts
      Gross                      4,755            4,377          4,606 
      Ceded                      (374)            (399)          (387) 

  Total net policyholder         4,381            3,978          4,219 
  benefits

  Policyholder dividends           367              292            364 
  and experience refunds

  Change in insurance              467              852            160 
  and investment
  contract liabilities

  Total paid or credited         5,215            5,122          4,743 
  to policyholders
                                                                       

  Commissions                      432              515            410 

  Operating and                    674              645            643 
  administrative
  expenses

  Premium taxes                     74               75             72 

  Financing charges                 67               74             76 

  Amortization of finite            27               24             26 
  life intangible assets

Earnings before income             696              685            530 
taxes

Income taxes                       128               97             56 

Net earnings before                568              588            474 
non-controlling
interests

Attributable to                     18              205              - 
non-controlling
interests

Net earnings                       550              383            474 

Preferred share                     33               32             25 
dividends

Net earnings - common      $       517    $         351    $       449 
shareholders
                                                                       

Earnings per common                                                    
share

  Basic                    $     0.544    $       0.370    $     0.474 

  Diluted                  $     0.544    $       0.369    $     0.471 
                           CONSOLIDATED BALANCE SHEETS (unaudited)
                                   (in Canadian $ millions)
                              March 31       December 31       January 1
                              2013             2012             2012
                                                                       

Assets                                                                 

Cash and cash          $       2,084    $       1,895    $       2,056 
equivalents

Bonds                         85,895           82,581           78,355 

Mortgage loans                17,853           17,875           17,432 

Stocks                         7,296            7,051            6,656 

Investment                     3,456            3,572            3,249 
properties

Loans to                       7,140            7,082            7,162 
policyholders
                             123,724          120,056          114,910 

Funds held by ceding           9,759           10,537            9,923 
insurers 

Goodwill                       5,400            5,397            5,401 

Intangible assets              3,152            3,115            3,154 

Derivative financial             862              997              968 
instruments

Owner occupied                   518              514              491 
properties

Fixed assets                     153              154              137 

Reinsurance assets             2,097            2,064            2,061 

Other assets                   5,247            4,688            4,062 

Deferred tax assets            1,170            1,142            1,163 

Investments on               109,256          104,948           96,582 
account of
segregated fund
policyholders

Total assets           $     261,338    $     253,612    $     238,852 
                                                                       

Liabilities                                                            

Insurance contract     $     119,609    $     119,919    $     114,730 
liabilities

Investment contract              726              739              782 
liabilities

Debentures and other           4,483            4,283            4,313 
debt instruments

Funds held under                 333              335              169 
reinsurance
contracts

Derivative financial             477              342              316 
instruments

Other liabilities              6,387            5,163            4,600 

Deferred tax                     688              708              810 
liabilities

Repurchase                     1,948                -               23 
agreements

Capital trust                    163              164              815 
debentures

Investment and                109,256         104,948           96,582 
insurance contracts
on account of
segregated fund
policyholders

Total liabilities            244,070          236,601          223,140 
                                                                       

Equity                                                                 

Non-controlling                                                        
interests

  Participating                2,477            2,451            2,187 
  account surplus in
  subsidiaries

  Non-controlling                  6                5                3 
  interests in
  subsidiaries

Shareholders' equity                                                   

  Share capital                                                        
    Preferred shares           2,544            2,544            1,894 
    Common shares              5,868            5,848            5,828 

  Accumulated                  7,260            7,035            6,417 
  surplus

  Accumulated other            (949)            (932)            (675) 
  comprehensive loss

  Contributed                     62               60               58 
  surplus

Total equity                  17,268           17,011           15,712 

Total liabilities      $     261,338    $     253,612    $     238,852 
and equity



Segmented Information (unaudited)
                                                                 

Consolidated Net Earnings

For the three months ended March                                                       
31, 2013
                                     United                      Lifeco                
                      Canada         States         Europe     Corporate        Total

Income:                                                                                

  Premium         $     2,515    $       629    $     1,436    $      -    $     4,580 
  income

  Net                                                                                  
  investment
  income
    Regular net           619            323            427                      1,362 
    investment                                                      (7) 
    income
    Changes in             56            (6)            415           -            465 
    fair value
    through
    profit or
    loss

  Total net               675            317            842                      1,827 
  investment                                                        (7) 
  income

  Fee and other           289            331            158           -            778 
  income

Total income            3,479          1,277          2,436                      7,185 
                                                                    (7) 
                                                                                       

Benefits and                                                                           
expenses:

  Paid or               2,456            760          1,999           -          5,215 
  credited to
  policyholders

  Other                   633            372            172           3          1,180 

  Financing                29             34              4           -             67 
  charges

  Amortization             12             13              2           -             27 
  of finite
  life
  intangible
  assets
                                                                                       

Earnings before           349             98            259                        696 
income taxes                                                       (10) 
                                                                                       

Income taxes               67             20             43                        128 
                                                                    (2) 
                                                                                       

Net earnings                                                                           
before
non-controlling

  interests               282             78            216                        568 
                                                                    (8) 
                                                                                       

Non-controlling            15              3              -           -             18 
interests
                                                                                       

Net earnings              267             75            216                        550 
                                                                    (8) 
                                                                                       

Preferred share            27              -              6           -             33 
dividends
                                                                                       

Net earnings              240             75            210                        517 
before capital                                                      (8) 
allocation

Impact of                  25            (4)           (18)                          - 
capital                                                             (3) 
allocation

Net earnings -    $       265    $        71    $       192    $   (11)    $       517 
common
shareholders


For the three                                                                          
months ended
March 31, 2012 
                                 United                      Lifeco                 


                      Canada         States         Europe     Corporate        Total

Income:                                                                                

  Premium         $     2,365    $       821    $     1,343    $      -    $     4,529 
  income

  Net                                                                                  
  investment
  income
    Regular net           658            324            463                      1,443 
    investment                                                      (2) 
    income
    Changes in          (150)             21           (67)           -          (196) 
    fair value
    through
    profit or
    loss

  Total net               508            345            396                      1,247 
  investment                                                        (2) 
  income

  Fee and other           277            302            145           -            724 
  income

Total income            3,150          1,468          1,884                      6,500 
                                                                    (2) 
                                                                                       

Benefits and                                                                           
expenses:

  Paid or               2,185          1,003          1,555           -          4,743 
  credited to
  policyholders

  Other                   648            331            142           4          1,125 

  Financing                38             33              5           -             76 
  charges

  Amortization             11             13              2           -             26 
  of finite
  life
  intangible
  assets
                                                                                       

Earnings before           268             88            180                        530 
income taxes                                                        (6) 
                                                                                       

Income taxes               33              9             16                         56 
                                                                    (2) 
                                                                                       

Net earnings                                                                           
before
non-controlling

  interests               235             79            164                        474 
                                                                    (4) 
                                                                                       

Non-controlling           (6)              2              4           -              - 
interests
                                                                                       

Net earnings              241             77            160                        474 
                                                                    (4) 
                                                                                       

Preferred share            18              -              6           1             25 
dividends
                                                                                       

Net earnings              223             77            154                        449 
before capital                                                      (5) 
allocation

Impact of                  19            (3)           (14)                          - 
capital                                                             (2) 
allocation

Net earnings -    $       242    $        74    $       140    $    (7)    $       449 
common
shareholders











Marlene Klassen, APR Assistant Vice-President, Communication Services 
204-946-7705 

SOURCE: Great-West Lifeco Inc.

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CO: Great-West Lifeco Inc.
ST: Manitoba
NI: INS ERN CONF 

-0- May/02/2013 14:24 GMT


 
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