Great-West Lifeco reports first quarter 2014 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 8, 2014 /CNW/ - Great-West Lifeco Inc. (Lifeco) has reported net 
earnings attributable to common shareholders of $587 million or $0.587 per 
common share for the three months ended March 31, 2014 compared to $517 
million or $0.544 per common share for the same period in 2013, an increase of 
13.5%. 
Consolidated assets under administration at March 31, 2014 grew to $806 
billion, up $48 billion from December 31, 2013. 
Highlights - In Quarter 


        --  Lifeco premiums and deposits during the quarter were $23.9
            billion, up 41% from a year ago, including $2.9 billion from
            Irish Life Group Limited (Irish Life), reflecting continued
            strong persistency and growth.
        --  Total Company sales in the first quarter of 2014 were up 43%
            compared to the same period in 2013:
            o Canada sales were $3.2 billion, up 6%.
            o Europe Insurance & Annuities sales were $3.5 billion, up
              265%, including sales of $2.6 billion from Irish Life.
            o Putnam sales were US$9.1 billion, up 23%, driven by an
              increase in mutual fund sales of US$2.7 billion which were at
              their highest level since the first quarter of 2003.
            o Great-West Financial sales were US$2.9 billion, up 16%.
        --  Irish Life contributed $52 million of net earnings to Lifeco in
            the first quarter of 2014 up from $44 million in the fourth
            quarter of 2013.
        --  On April 3, 2014, the Company announced that Great-West
            Financial reached an agreement to acquire the J.P. Morgan
            Retirement Plan Services large-market recordkeeping business.
            The transaction is scheduled to close in the third quarter of
            2014, subject to regulatory approval in the U.S.
        --  The Company maintained a strong ROE of 16.0% based on net
            earnings. ROE based on adjusted operating earnings was 15.2%,
            which excludes the impact of Irish Life related restructuring
            and acquisition costs and certain litigation provisions.
        --  The Company's capital position remained very strong.  The
            Great-West Life Assurance Company, Lifeco's major operating
            subsidiary, reported a Minimum Continuing Capital and Surplus
            Requirements (MCCSR) ratio of 230% at March 31, 2014.
        --  The Company declared a quarterly common dividend of $0.3075 per
            common share payable June 30, 2014.

OPERATING RESULTS

Consolidated net earnings of Lifeco include the net earnings of The Great-West 
Life Assurance Company (Great-West Life) and its operating subsidiaries London 
Life Insurance Company (London Life) and The Canada Life Assurance Company 
(Canada Life); Great-West Life & Annuity Insurance Company (Great-West 
Financial),  and Putnam Investments, LLC (Putnam), together with Lifeco's 
Corporate operating results.

CANADA
The Canada segment of Lifeco includes the operating results of the Canadian 
businesses operated by Great-West Life, London Life and Canada Life.  The 
three primary business units included in this segment are Individual 
Insurance, Wealth Management and Group Insurance.  The Company provides 
accumulation, annuity, life, disability and critical illness insurance 
products to individual and group clients.

Net earnings attributable to common shareholders for the first quarter of 2014 
were $294 million, up 11% compared to $265 million in the first quarter of 
2013.

Total sales in the first quarter of 2014 were $3.2 billion, compared to $3.0 
billion in the first quarter of 2013.   This reflects a 14% increase in 
Individual Insurance sales and a 12% increase in Wealth Management sales 
partially offset by lower Group creditor sales.

Total Canada segment assets under administration at March 31, 2014 were $153 
billion, compared to $149 billion at December 31, 2013.

UNITED STATES
The United States operating results for Lifeco include the results of 
Great-West Financial, Putnam and the insurance businesses in the United States 
branches of Great-West Life and Canada Life, together with an allocation of a 
portion of Lifeco's corporate results.

Great-West Financial provides an array of financial security products, 
including employer-sponsored defined contribution plans, administrative and 
record-keeping services, fund management and investment and advisory services. 
 It also provides individual retirement accounts, life insurance and annuity 
products and executive benefits products.  Putnam provides investment 
management, certain administrative functions, distributions and related 
services through a broad range of investment products.

Net earnings attributable to common shareholders for the first quarter of 2014 
were $41 million compared to $71 million in the first quarter of 2013.  
Great-West Financial reported net earnings of $94 million in the first quarter 
compared to $85 million for the same period last year.  Putnam reported a net 
loss of $53 million in the first quarter compared to a net loss of $14 million 
a year ago.

Great-West Financial sales in the first quarter of 2014 were US$2.9 billion, 
up from US$2.5 billion in the first quarter of 2013 due to positive results 
from both Retirement Services and Individual Markets.  Retirement Services 
experienced higher sales from the Institutional market's group annuity product 
and higher transferred assets from plan mergers and participants of existing 
plans.  Individual Markets experienced sales increases in the individual 
retirement account and the executive benefits markets.

Putnam assets under management as at March 31, 2014 were US$153.4 billion 
compared to US$134.7 billion a year ago, an increase of 14%. Net asset inflows 
for the first quarter of 2014 were US$1.1 billion compared to net asset 
outflows of US$0.3 billion for the same period in 2013, driven by mutual fund 
net inflows of US$2.4 billion, which were their highest level since the first 
quarter of 2001.

Total United States segment assets under administration at March 31, 2014 were 
$453 billion compared to $421 billion at December 31, 2013.

EUROPE
The Europe segment comprises two distinct business units: Insurance & 
Annuities and Reinsurance, together with an allocation of Lifeco's corporate 
results.  Insurance & Annuities provides protection and wealth management 
products including payout annuities, through subsidiaries of Canada Life in 
the U.K., Isle of Man and Germany, and through Irish Life in Ireland.  
Reinsurance operates primarily in the U.S., Barbados and Ireland, and is 
conducted through Canada Life, London Life and their subsidiaries.

Net earnings attributable to common shareholders for the first quarter of 2014 
were $259 million, which includes the impact of $5 million of restructuring 
costs related to the Irish Life acquisition.  Excluding these costs net 
earnings were $264 million for the quarter, including a $52 million 
contribution from Irish Life, compared to $192 million in the first quarter of 
2013.

Insurance & Annuities sales for the first quarter of 2014 were $3.5 billion, 
including $2.6 billion related to Irish Life, up 265% as compared to $961 
million a year ago.

Total Europe segment assets under administration at March 31, 2014 were $200 
billion, up from $188 billion at December 31, 2013.

LIFECO CORPORATE
The Lifeco Corporate segment includes operating results for activities of 
Lifeco that are not associated with the major business units of the Company.

Net earnings in the Lifeco Corporate segment attributable to common 
shareholders were a net loss of $7 million in the first quarter of 2014 
compared to a net loss of $11 million in the first quarter of 2013.

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 30, 2014 to 
shareholders of record at the close of business June 2, 2014.

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 L First Preferred Shares of $0.353125 per share;
        --  Series M First Preferred Shares of $0.3625 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 30, 2014 to shareholders of record at the close of business 
June 2, 2014.

.…4/

GREAT-WEST LIFECO

Great-West Lifeco Inc. (TSX:GWO) is an international financial services 
holding company with interests in life insurance, health insurance, retirement 
and investment services, asset management and reinsurance businesses. 
Great-West Lifeco has operations in Canada, the United States, Europe and Asia 
through Great-West Life, London Life, Canada Life, Irish Life, Great-West 
Financial and Putnam Investments. Great-West Lifeco and its companies have 
$806 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.  Material factors and assumptions that 
were applied in formulating the forward-looking information contained herein 
include the assumption that the business and economic conditions affecting the 
Company's operations will continue substantially in their current state, 
including, without limitation, with respect to market prices for products 
provided, sales levels, premium income, fee income, expense levels, mortality 
experience, morbidity experience, policy lapse rates, taxes, inflation, 
information systems, general economic, political and market factors in North 
America and internationally, interest and foreign exchange rates, global 
equity and capital markets, business competition, continuity and availability 
of personnel and third party service providers, and the Company's ability to 
complete strategic transactions and integrate acquisitions, and that there 
will be no unplanned material changes to the Company's facilities, customer 
and employee relations or credit arrangements.  Many of these assumptions are 
based on factors and events that are not within the control of the Company and 
there is no assurance that they will prove to be correct.  Other important 
factors and assumptions that could cause actual results to differ materially 
from those contained in forward-looking statements include technological 
change, investment values, payments required under investment products, 
reinsurance, changes in local and international laws and regulations, changes 
in accounting policies and the effect of applying future accounting policy 
changes, unexpected judicial or regulatory proceedings and catastrophic 
events.  The reader is cautioned that the foregoing list of assumptions and 
factors is not exhaustive, and there may be other factors listed in other 
filings with securities regulators, including factors set out in the Company's 
2013 Annual Management Discussion & Analysis (MD&A) under "Risk Management and 
Control Practices" and "Summary of Critical Accounting Estimates", which, 
along with other filings, is available for review at www.sedar.com.  The 
reader is also cautioned to consider these and other factors carefully and not 
to place undue reliance on forward-looking statements.  Other than as 
specifically required by applicable law, the Company does not intend to update 
any forward-looking statements whether as a result of new information, future 
events or otherwise.

Cautionary note regarding Non-IFRS Financial Measures
This release contains some non-IFRS financial measures.  Terms by which 
non-IFRS financial measures are identified include, but are not limited to, 
"operating earnings", "constant currency basis", "premiums and deposits", 
"sales", and other similar expressions.  Non-IFRS financial measures are used 
to provide management and investors with additional measures of performance.  
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 8, 2014 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:  416-340-8061
        --  Participants from North America: 1-866-225-0198
        --  Participants from Overseas:  Dial international access code
            first, then 800-6578-9898

A replay of the call will be available from May 8, 2014, 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 8, 2014 
until May 7, 2015.

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
                                                             2014           2013            2013*
                                                                                                    
    Premiums and deposits:                                                                          
    Life insurance, guaranteed annuities and insured    $
    health products                                            5,267    $     5,850      $    4,931 
    Self-funded premium equivalents (Administrative      
    services only contracts)                                     658            649             644 
    Segregated funds deposits:                                                                      
        Individual products                                    2,946          2,757           1,768 
        Group products                                         3,364          1,809           2,006 
    Proprietary mutual funds and institutional           
    deposits                                                  11,662         11,491           7,642 
    Total premiums and deposits                               23,897         22,556          16,991 
                                                                                                    
    Fee and other income                                       1,059          1,001             798 
    Paid or credited to policyholders(1)                       7,489          5,647           5,560 
    Operating earnings - common shareholders                     587            491             517 
    Net earnings - common shareholders                           587            717             517 
    Per common share                                                                                
      Operating earnings                                $      0.587    $     0.491      $    0.544 
      Basic earnings                                           0.587          0.717           0.544 
      Dividends paid                                          0.3075         0.3075          0.3075 
      Book value                                               16.05          15.33           12.87 
    Return on common shareholders' equity:                                                          
      Operating earnings                                       14.5%          15.0%           16.8% 
      Net earnings                                             16.0%          16.6%           15.7% 
      Total assets                                      $    342,860    $   325,905      $  261,954 
      Proprietary mutual funds and institutional net  
      assets                                                 199,921        185,243         145,838 
      Total assets under management                          542,781        511,148         407,792 
      Other assets under                              
      administration                                         263,113        247,139         174,487 
      Total assets under administration                 $    805,894    $   758,287      $  582,279 
    Total equity                                        $     20,964    $    19,999      $   17,268 
                                                                                                    
    The Company uses operating earnings, a non-International Financial
    Reporting Standards financial measure, which excludes
    the impact of certain litigation provisions described in note 33 to the
    Company's December 31, 2013 consolidated financial
    statements.
     
    (1) Paid or credited to policyholders includes the impact of changes in
        fair values of assets supporting insurance and
        investment contract liabilities.
    *   Certain comparative figures have been reclassified for presentation
        adjustments.
    
                                     
                      CONSOLIDATED STATEMENTS OF EARNINGS(unaudited)
                    (in Canadian $ millions except per share amounts)
                                     
                                             For the three months ended
                                    March 31     December 31      March 31
                                      2014          2013            2013
                                                                   
    Income                                                                 
      Premium income                                                       
        Gross premiums            $   6,111    $      6,739     $    5,670 
        written
        Ceded premiums                (844)           (889)          (739) 
      Total net premiums              5,267           5,850          4,931 
      Net investment income                                                
        Regular net                   1,489           1,430          1,362 
        investment income
        Changes in fair value         2,122           (225)            465 
        through profit or
        loss
      Total net investment            3,611           1,205          1,827 
      income
      Fee and other income            1,059           1,001            798 
                                      9,937           8,056          7,556 
    Benefits and expenses                                                  
      Policyholder benefits                                                
        Insurance and                                                      
        investment contracts
          Gross                       4,801           4,835          5,027 
          Ceded                       (475)           (597)          (374) 
      Total net policyholder          4,326           4,238          4,653 
      benefits
      Policyholder dividends            388             312            375 
      and experience refunds
      Changes in insurance            2,775           1,097            532 
      and investment contract
      liabilities
      Total paid or credited          7,489           5,647          5,560 
      to policyholders
                                                                   
      Commissions                       505             531            432 
      Operating and                     933             929            696 
      administrative expenses
      Premium taxes                      85              83             74 
      Financing charges                  76              76             67 
      Amortization of finite             33              33             27 
      life intangible assets
      Restructuring and                   5              27              4 
      acquisition expenses
    Earnings before income              811             730            696 
    taxes
    Income taxes                        173             128            128 
    Net earnings before                 638             602            568 
    non-controlling interests
    Attributable to                      22           (148)             18 
    non-controlling interests
    Net earnings                        616             750            550 
    Preferred share dividends            29              33             33 
    Net earnings - common         $     587    $        717     $      517 
    shareholders
                                                                           
    Earnings per common share                                      
      Basic                       $   0.587    $      0.717     $    0.544 
      Diluted                     $   0.587    $      0.716     $    0.544 
                                                                   
                            CONSOLIDATED BALANCE SHEETS (unaudited)
                                       (in Canadian $ millions)
                                                                
                                                 March 31      December 31
                                                   2014            2013
                                                                           
    Assets                                                                 
    Cash and cash equivalents                $      3,196       $    2,791 
    Bonds                                          95,368           89,914 
    Mortgage loans                                 19,882           19,063 
    Stocks                                          7,843            8,554 
    Investment properties                           4,481            4,288 
    Loans to policyholders                          7,552            7,332 
                                                  138,322          131,942 
    Funds held by ceding insurers                  11,322           10,832 
    Goodwill                                        5,831            5,812 
    Intangible assets                               3,548            3,456 
    Derivative financial instruments                  547              593 
    Owner occupied properties                         601              590 
    Fixed assets                                      213              211 
    Reinsurance assets                              5,444            5,070 
    Premiums in course of collection,               3,526            3,068 
    accounts and interest receivable
    Other assets                                    2,398            2,220 
    Current income taxes                              193              165 
    Deferred tax assets                             1,225            1,167 
    Investments on account of segregated          169,690          160,779 
    fund policyholders
                                                                   
    Total assets                             $    342,860       $  325,905 
                                                                   
    Liabilities                                                            
    Insurance contract liabilities           $    137,675       $  131,174 
    Investment contract liabilities                   851              889 
    Debentures and other debt                       5,778            5,740 
    instruments
    Funds held under reinsurance                      297              270 
    contracts
    Derivative financial instruments                  952              744 
    Accounts payable                                1,788            1,583 
    Other liabilities                               3,035            2,807 
    Current income taxes                              825              981 
    Deferred tax liabilities                          842              776 
    Capital trust debentures                          163              163 
    Investment and insurance contracts            169,690          160,779 
    on account of segregated fund
    policyholders
                                                                   
    Total liabilities                             321,896          305,906 
                                                                   
    Equity                                                                 
    Non-controlling interests                                              
      Participating account surplus in              2,390            2,354 
      subsidiaries
      Non-controlling interests in                    220                8 
      subsidiaries
    Shareholders' equity                                                   
      Share capital                                                        
        Preferred shares                            2,314            2,314 
        Common shares                               7,115            7,112 
      Accumulated surplus                           8,328            8,067 
      Accumulated other comprehensive                 514               87 
      income
      Contributed surplus                              83               57 
    Total equity                                   20,964           19,999 
                                                                   
    Total liabilities and equity             $    342,860       $  325,905 
                                                                                              
    Segmented
    Information                                                                               
    (unaudited)
                                                                                              
    Consolidated Net                                                                                    
    Earnings
    For the three
    months ended
    March 31, 2014
                                            United                           Lifeco                
                          Canada            States            Europe       Corporate            Total
    Income:                                                                                             
      Premium       $       2,613       $        812       $     1,842      $       -      $      5,267 
      income
      Net                                                                                               
      investment
      income
        Regular net           638                357               498                            1,489 
        investment                                                                (4) 
        income
        Changes in            947                323               852              -             2,122 
        fair value
        through
        profit or
        loss
      Total net             1,585                680             1,350            (4)             3,611 
      investment
      income
      Fee and other           344                419               296              -             1,059 
      income
    Total income            4,542              1,911             3,488            (4)             9,937 
                                                                                                        
    Benefits and                                                                                        
    expenses:
      Paid or               3,365              1,298             2,826              -             7,489 
      credited to
      policyholders
      Other*                  715                494               310              4             1,523 
      Financing                29                 35                12              -                76 
      charges
      Amortization             13                 15                 5              -                33 
      of finite
      life
      intangible
      assets
      Restructuring             -                  -                 5              -                 5 
      and
      acquisition
      expenses
                                                                                                        
    Earnings before           420                 69               330                              811 
    income taxes                                                                  (8) 
                                                                                                        
    Income taxes              105                 23                47            (2)               173 
                                                                                                        
    Net earnings              315                 46               283            (6)               638 
    before
    non-controlling
    interests
                                                                                                        
    Non-controlling            22                  1               (1)              -                22 
    interests
                                                                                                        
    Net earnings              293                 45               284            (6)               616 
                                                                                                        
    Preferred share            23                  -                 6              -                29 
    dividends
                                                                                                        
    Net earnings              270                 45               278            (6)               587 
    before capital
    allocation
    Impact of                  24                (4)              (19)            (1)                 - 
    capital
    allocation
    Net earnings -  $         294       $         41       $       259      $     (7)      $        587 
    common
    shareholders
     
    * Includes commissions, operating and administrative expenses and premium taxes.
                                                                                        
    For the three                                                                                       
    months ended
    March 31, 2013
                                            United                           Lifeco                
                          Canada            States            Europe       Corporate            Total
    Income:                                                                                             
      Premium       $       2,515       $        629       $     1,787      $       -      $      4,931 
      income
      Net                                                                                               
      investment
      income
        Regular net           619                323               427            (7)             1,362 
        investment
        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           309                337               152              -               798 
      income
    Total income            3,499              1,283             2,781            (7)             7,556 
                                                                                                        
    Benefits and                                                                                        
    expenses:
      Paid or               2,456                760             2,344              -             5,560 
      credited to
      policyholders
      Other*                  653                378               168              3             1,202 
      Financing                29                 34                 4              -                67 
      charges
      Amortization             12                 13                 2              -                27 
      of finite
      life
      intangible
      assets
      Restructuring             -                  -                 4              -                 4 
      and
      acquisition
      expenses
                                                                                                        
    Earnings before           349                 98               259                              696 
    income taxes                                                                 (10) 
                                                                                                        
    Income taxes               67                 20                43                              128 
                                                                                  (2) 
                                                                                                        
    Net earnings              282                 78               216            (8)               568 
    before
    non-controlling
    interests
                                                                                                        
    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)                              (3)                 - 
    capital                                                       (18) 
    allocation
    Net earnings -  $         265       $         71       $       192      $    (11)      $        517 
    common
    shareholders
    * Includes commissions, operating and administrative expenses and
    premium taxes.



SOURCE  Great-West Lifeco Inc. 
Marlene Klassen, APR Assistant Vice-President, Communication Services 
204-946-7705 
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CO: Great-West Lifeco Inc.
ST: Manitoba
NI: INS ERN  
-0- May/08/2014 15:03 GMT
 
 
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