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  To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/May2014/08/c6577.html  CO: Great-West Lifeco Inc. ST: Manitoba NI: INS ERN  
Press spacebar to pause and continue. Press esc to stop.