News Press Releases

Great-West Lifeco reports fourth quarter 2013 results

T.GWO | February 13, 2014

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, Feb. 13, 2014 /CNW/ - Great-West Lifeco Inc. (Lifeco) has reported net earnings attributable to common shareholders of $717 million or $0.717 per common share for the three months ended December 31, 2013 compared to $351 million or $0.370 per common share a year ago. For the twelve months ended December 31, 2013, Lifeco's net earnings attributable to common shareholders were $2,278 million or $2.340 per common share compared to $1,806 million or $1.902 per common share a year ago. Net earnings include a litigation recovery of $226 million after-tax or $0.226 per common share in the fourth quarter of 2013. Comparatively, net earnings in the fourth quarter of 2012 include a litigation provision of $140 million after-tax or $0.147 per common share related to the same legal matter.

Operating earnings, a non-IFRS measure, which exclude the impacts of litigation matters described above, were $491 million or $0.491 per common share in the fourth quarter of 2013. Excluding the impact of acquisition and restructuring costs associated with the Irish Life Group Limited (Irish Life) acquisition and mark-to-market losses on a macro capital hedge, operating earnings were $540 million or $0.540 per common share in the fourth quarter of 2013, up 10% from operating earnings of $491 million or $0.517 per common share for the same period in 2012.

For the twelve months ended December 31, 2013, Lifeco's operating earnings attributable to common shareholders were $2,052 million or $2.108 per common share, compared to $1,946 million or $2.049 per common share for the same period in 2012.

Consolidated assets under administration at December 31, 2013 grew to over $758 billion, up $212 billion from December 31, 2012, including $105 billion of Irish Life assets under administration.

Highlights - In Quarter

Lifeco premiums and deposits during the quarter were $22.6 billion, up 34% from a year ago, including $4.0 billion from Irish Life, reflecting continued strong persistency and growth.
Total Company sales in the fourth quarter of 2013 were up 61% from the same period in 2012:
- Canada sales were $2.9 billion consistent with the fourth quarter of 2012.
- Europe Insurance & Annuities sales were $4.8 billion, up 270% compared to the fourth quarter of 2012, including sales of $3.8 billion from Irish Life.
- Putnam sales were US$8.3 billion, up 22% compared to the fourth quarter of 2012, driven by mutual fund sales of US$5.7 billion which were at their highest level since the third quarter of 2003.
- Great-West Financial sales were US$5.3 billion, up 97% compared to the fourth quarter of 2012.

Irish Life contributed $44 million of net earnings to Lifeco in the fourth quarter of 2013. Integration activities are progressing well and on track to achieve targeted cost synergies.
The Company maintained a strong ROE of 16.6% based on net earnings and 15.0% based on operating earnings. ROE based on adjusted operating earnings of $540 million, which exclude the impact of restructuring and acquisition costs associated with the Irish Life acquisition and a macro capital hedge, was 15.9%.
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 223% at December 31, 2013.
The Company declared a quarterly common dividend of $0.3075 per common share payable March 28, 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. Irish Life results are included for the period subsequent to the acquisition date of July 18, 2013.

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 fourth quarter of 2013 were $270 million compared to $263 million in the fourth quarter of 2012. For the twelve months ended December 31, 2013 net earnings attributable to common shareholders were up 11% to $1,148 million compared to $1,038 million for the same period in 2012.

Total sales in the fourth quarter of 2013 were $2.9 billion, consistent with the fourth quarter of 2012. This reflects an 8% increase in Individual Insurance sales and an 8% increase in Wealth Management Group Retirement Services sales partially offset by a decrease in Group Insurance sales. Total sales for the twelve months ended December 31, 2013 were $10.8 billion compared to $9.9 billion in 2012.

Total Canada segment assets under administration at December 31, 2013 were $149 billion, compared to $138 billion at December 31, 2012.

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 fourth quarter of 2013 were $56 million compared to $76 million in the fourth quarter of 2012. Great-West Financial reported net earnings of $81 million in the fourth quarter compared to $95 million for the same period last year. Putnam reported a net loss of $25 million in the fourth quarter compared to a net loss of $19 million a year ago. For the twelve months ended December 31, 2013 net earnings attributable to common shareholders were $276 million compared to $321 million in 2012.

Great-West Financial sales in the fourth quarter of 2013 were US$5.3 billion, up from US$2.7 billion in the fourth quarter of 2012 primarily due to a large public/non-profit plan sale and two large 401(k) client sales. Sales for the twelve months ended December 31, 2013 were US$12.5 billion compared to US$9.0 billion in 2012 primarily due to the large plan sale and an increase in new participants for public/non-profit and two large client sales and higher average assets per plan sold for 401(k).

Putnam assets under management as at December 31, 2013 were US$150 billion compared to US$128 billion a year ago, an increase of 17%. Net asset inflows for the fourth quarter of 2013 were US$0.3 billion compared to net asset outflows of US$0.2 billion for the same period in 2012, driven by mutual fund net inflows of US$1.8 billion, which were at their highest level since the first quarter of 2001.

Total United States segment assets under administration at December 31, 2013 were $421 billion compared to $333 billion at December 31, 2012.

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. Irish Life results are included for the period subsequent to the acquisition date of July 18, 2013.

Net earnings attributable to common shareholders for the fourth quarter of 2013 were $202 million, which include the impact of $23 million of restructuring and acquisition costs related to the Irish Life acquisition. Excluding these costs net earnings were $225 million for the quarter, compared to $151 million in the fourth quarter of 2012. Irish Life contributed $44 million of net earnings in the fourth quarter of 2013. For the twelve months ended December 31, 2013 net earnings attributable to common shareholders were $701 million compared to $615 million for the same period in 2012.

Insurance & Annuities sales for the fourth quarter of 2013 were $4.8 billion, including $3.8 billion related to Irish Life, up 270% as compared to $1.3 billion a year ago. Total sales for the twelve months ended December 31, 2013, including Irish Life, were $9.9 billion compared to $3.7 billion in 2012.

Total Europe segment assets under administration at December 31, 2013 were $188 billion, up from $75 billion at December 31, 2012. Assets under administration include $105 billion of Irish Life assets.

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

Lifeco Corporate segment net earnings attributable to common shareholders were $189 million in the fourth quarter of 2013 compared to a net loss of $139 million in the fourth quarter of 2012. Included in Lifeco corporate segment net earnings was a litigation recovery of $226 million in 2013 as compared to a litigation provision of $140 million in 2012.

For the twelve months ended December 31, 2013 Lifeco corporate segment net earnings attributable to common shareholders were $153 million compared to a net loss of $168 million in 2012, including the litigation items noted above.

Succession planning at Great-West Financial

After a distinguished 20-plus year career with our group of companies, Mitchell T.G. Graye, Chief Executive Officer of Great-West Financial, the Company's U.S. insurance subsidiary, has indicated his intention to retire following Great-West Lifeco's annual meeting on May 8, 2014. Meanwhile, succession planning is underway, with Mr. Graye's successor to be announced prior to the May annual meeting.

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 March 31, 2014 to shareholders of record at the close of business March 3, 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 $0.36250 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 March 31, 2014 to shareholders of record at the close of business March 3, 2014.

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 $758 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, 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 that could cause actual results to differ materially from those contained in forward-looking statements include technological change, 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 reconciliation's of these non-IFRS financial measures to measures prescribed by IFRS.

Further information
Selected financial information is attached.

Great-West Lifeco's fourth quarter conference call and audio webcast will be held February 13, 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 February 13, 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 February 13, 2014 until February 12, 2015.

Additional information relating to Lifeco, including the 2013 audited consolidated financial statements, MD&A, Annual Information Form (AIF), and CEO/CFO certification will be filed on SEDAR at www.sedar.com.

FINANCIAL HIGHLIGHTS (unaudited) (in Canadian $ millions except per share amounts)

		As at or for the three months ended						For the twelve months ended
			December 31		September 30		December 31		December 31		December 31
			2013		2013		2012⁽³⁾		2013		2012⁽³⁾

Premiums and deposits:
Life insurance, guaranteed annuities and insured health products⁽²⁾		$	5,850	$	4,859	$	4,972	$	20,236	$	19,257
Self-funded premium equivalents (Administrative services only contracts)			649		620		677		2,567		2,666
Segregated funds deposits:
	Individual products		2,757		2,352		2,072		8,308		6,557
	Group products		1,809		1,838		2,216		7,553		7,262
Proprietary mutual funds and institutional deposits			11,491		10,309		6,880		36,119		24,496
Total premiums and deposits			22,556		19,978		16,817		74,783		60,238

Fee and other income⁽²⁾			1,001		955		787		3,585		3,030
Paid or credited to policyholders⁽¹⁾⁽²⁾			5,647		5,025		5,262		17,811		22,875
Operating earnings - common shareholders⁽³⁾			491		523		491		2,052		1,946
Net earnings - common shareholders⁽³⁾⁽⁴⁾			717		523		351		2,278		1,806
Per common share
	Operating earnings	$	0.491	$	0.527	$	0.517	$	2.108	$	2.049
	Basic earnings⁽³⁾		0.717		0.527		0.370		2.340		1.902
	Dividends paid		0.3075		0.3075		0.3075		1.230		1.230
	Book value⁽³⁾		15.33		14.39		12.64
Return on common shareholders' equity:
	Operating earnings⁽³⁾		15.0%		16.0%		16.5%
	Net earnings⁽³⁾		16.6%		14.9%		15.3%
	Total assets⁽³⁾	$	325,905	$	312,473	$	253,850
	Proprietary mutual funds and institutional net assets⁽²⁾		185,243		167,619		134,598
	Total assets under management⁽³⁾		511,148		480,092		388,448
	Other assets under administration		247,139		225,187		157,455
	Total assets under administration⁽³⁾	$	758,287	$	705,279	$	545,903
Total equity⁽³⁾		$	19,999	$	19,435	$	17,011

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.
⁽²⁾	During the year, the Company reclassified certain comparative figures for presentation adjustments.
⁽³⁾	Comparative figures, where impacted, have been restated for the retrospective impact of new and revised International Financial Reporting Standards effective during 2013 most notably IAS 19R, Employee Benefits, and IFRS 10, Consolidated Financial Statements.
⁽⁴⁾	Impacts on Lifeco net earnings - common shareholders

		Three months ended Dec. 31, 2013		Per common share		Twelve months ended Dec. 31, 2013		Per common share
Net earnings	$	717	$	0.717	$	2,278	$	2.340
Less: Litigation recovery		(226)				(226)
Operating earnings		491		0.491		2,052		2.108
Add: Irish Life restructuring and acquisition costs		23				97
Add: Macro capital hedge impact		26				26
Sub Total		540		0.540		2,175		2.234
Less: Irish Life earnings		(44)				(85)
Operating earnings excluding Irish Life and macro capital hedge impacts	$	496	$	0.496	$	2,090	$	2.146


CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (in Canadian $ millions except per share amounts)

			For the three months ended December 31				For the years ended December 31
			2013		2012		2013		2012

Income
	Premium income
		Gross premiums written	$	6,739	$	5,908	$	23,441	$	22,276
		Ceded premiums		(889)		(936)		(3,205)		(3,019)
	Total net premiums			5,850		4,972		20,236		19,257
	Net investment income
		Regular net investment income		1,430		1,339		5,604		5,642
		Changes in fair value through profit or loss		(225)		207		(2,979)		2,668
	Total net investment income			1,205		1,546		2,625		8,310
	Fee and other income			1,001		787		3,585		3,030
				8,056		7,305		26,446		30,597
Benefits and expenses
	Policyholder benefits
		Insurance and investment contracts
		Gross		4,835		4,548		18,464		17,854
		Ceded		(597)		(399)		(1,744)		(1,457)
	Total net policyholder benefits			4,238		4,149		16,720		16,397
	Policyholder dividends and experience refunds			312		292		1,371		1,437
	Changes in insurance and investment contract liabilities			1,097		821		(280)		5,041
	Total paid or credited to policyholders			5,647		5,262		17,811		22,875

	Commissions			531		515		1,869		1,781
	Operating and administrative expenses			929		670		3,159		2,684
	Premium taxes			83		75		313		293
	Financing charges			76		74		292		299
	Amortization of finite life intangible assets			33		24		117		103
	Restructuring and acquisition expenses			27		-		104		-
Earnings before income taxes				730		685		2,781		2,562
Income taxes				128		97		463		364
Net earnings before non-controlling interests				602		588		2,318		2,198
Attributable to non-controlling interests				(148)		205		(90)		277
Net earnings				750		383		2,408		1,921
Preferred share dividends				33		32		130		115
Net earnings - common shareholders			$	717	$	351	$	2,278	$	1,806

Earnings per common share
	Basic		$	0.717	$	0.370	$	2.340	$	1.902
	Diluted		$	0.716	$	0.369	$	2.297	$	1.891



CONSOLIDATED BALANCE SHEETS (unaudited) (in Canadian $ millions)

				December 31		December 31		January 1
				2013		2012		2012
Assets
Cash and cash equivalents			$	2,791	$	1,895	$		2,056
Bonds				89,914		82,581			78,355
Mortgage loans				19,063		17,875			17,432
Stocks				8,554		7,051			6,656
Investment properties				4,288		3,572			3,249
Loans to policyholders				7,332		7,082			7,162
				131,942		120,056			114,910
Funds held by ceding insurers				10,832		10,599			9,978
Goodwill				5,812		5,397			5,401
Intangible assets				3,456		3,115			3,154
Derivative financial instruments				593		997			968
Owner occupied properties				590		514			491
Fixed assets				211		154			137
Reinsurance assets				5,070		2,064			2,061
Premiums in course of collection, accounts and interest receivable				3,068		2,647			2,379
Other assets				2,220		1,571			1,393
Current income taxes				165		162			181
Deferred tax assets				1,167		1,142			1,163
Investments on account of segregated fund policyholders				160,779		105,432			96,985
Total assets			$	325,905	$	253,850	$		239,201
Liabilities
Insurance contract liabilities			$	131,174	$	119,973	$		114,785
Investment contract liabilities				889		739			782
Debentures and other debt instruments				5,740		4,283			4,313
Funds held under reinsurance contracts				270		335			169
Derivative financial instruments				744		342			316
Accounts payable				1,583		1,258			1,351
Other liabilities				2,807		2,956			2,662
Current income taxes				981		649			478
Deferred tax liabilities				776		708			810
Repurchase agreements				-		-			23
Capital trust debentures				163		164			815
Investment and insurance contracts on account of segregated fund policyholders				160,779		105,432			96,985
Total liabilities				305,906		236,839			223,489
Equity
Non-controlling interests
	Participating account surplus in subsidiaries			2,354		2,451			2,187
	Non-controlling interests in subsidiaries			8		5			3
Shareholders' equity
	Share capital
		Preferred shares		2,314		2,544			1,894
		Common shares		7,112		5,848			5,828
	Accumulated surplus			8,067		7,035			6,417
	Accumulated other comprehensive income (loss)			87		(932)			(675)
	Contributed surplus			57		60			58
Total equity				19,999		17,011			15,712
Total liabilities and equity			$	325,905	$	253,850	$		239,201

Segmented Information (unaudited)

Consolidated Net Earnings

For the three months ended December 31, 2013

United

Lifeco

Canada

States

Europe ⁽¹⁾

Corporate

Total

Income:

Premium income

$

2,682

$

924

$

2,244

$

-

$

5,850

Net investment income

Regular net investment income

637

302

527

(36)

1,430

Changes in fair value through profit or loss

224

(117)

(332)

-

(225)

Total net investment income

861

185

195

(36)

1,205

Fee and other income

330

395

276

-

1,001

Total income

3,873

1,504

2,715

(36)

8,056

Benefits and expenses:

Paid or credited to policyholders

2,629

927

2,091

-

5,647

Other

980

454

330

(221)

1,543

Financing charges

29

34

8

5

76

Amortization of finite life intangible assets

13

7

-

33

Restructuring and acquisition expenses

-

27

-

27

Earnings before income taxes

222

76

252

180

730

Income taxes

95

14

30

(11)

128

Net earnings before non-controlling
interests

127

62

222

191

602

Non-controlling interests

(146)

2

(4)

-

(148)

Net earnings

273

60

226

191

750

Preferred share dividends

27

-

6

-

33

Net earnings before capital allocation

246

60

220

191

717

Impact of capital allocation

24

(4)

(18)

(2)

-

Net earnings - common shareholders

$

270

$

56

$

202

$

189

$

717

⁽¹⁾	The Company completed the acquisition of Irish Life on July 18, 2013. The Europe segment includes the results of Irish Life from July 19, 2013 to December 31, 2013.

For the three months ended December 31, 2012
						United				Lifeco
				Canada		States		Europe		Corporate		Total
Income:
	Premium income		$	2,468	$	984	$	1,520	$	-	$	4,972
	Net investment income
		Regular net investment income		606		301		441		(9)		1,339
		Changes in fair value through profit or loss		(97)		59		245		-		207
	Total net investment income			509		360		686		(9)		1,546
	Fee and other income			302		319		166		-		787
Total income				3,279		1,663		2,372		(9)		7,305

Benefits and expenses:
	Paid or credited to policyholders			2,171		1,163		1,928		-		5,262
	Other			521		375		221		143		1,260
	Financing charges			35		34		4		1		74
	Amortization of finite life intangible assets			12		10		2		-		24

Earnings before income taxes				540		81		217		(153)		685

Income taxes				69		(2)		52		(22)		97

Net earnings before non-controlling interests				471		83		165		(131)		588

Non-controlling interests				206		4		(5)		-		205

Net earnings				265		79		170		(131)		383

Preferred share dividends				21		-		5		6		32

Net earnings before capital allocation				244		79		165		(137)		351
Impact of capital allocation				19		(3)		(14)		(2)		-
Net earnings - common shareholders			$	263	$	76	$	151	$	(139)	$	351

For the twelve months ended December 31, 2013

United

Lifeco

Canada

States

Europe ⁽¹⁾

Corporate

Total

Income:

Premium income

$

10,182

$

3,180

$

6,874

$

-

$

20,236

Net investment income

Regular net investment income

2,514

1,311

1,819

(40)

5,604

Changes in fair value through profit or loss

(1,125)

(706)

(1,148)

-

(2,979)

Total net investment income

1,389

605

671

(40)

2,625

Fee and other income

1,276

1,446

863

-

3,585

Total income

12,847

5,231

8,408

(40)

26,446

Benefits and expenses:

Paid or credited to policyholders

8,345

3,067

6,399

-

17,811

Other

2,983

1,616

944

(202)

5,341

Financing charges

115

137

23

17

292

Amortization of finite life intangible assets

50

51

16

-

117

Restructuring and acquisition expenses

-

104

-

104

Earnings before income taxes

1,354

360

922

145

2,781

Income taxes

291

62

129

(19)

463

Net earnings before non-controlling
interests

1,063

298

793

164

2,318

Non-controlling interests

(93)

7

(4)

-

(90)

Net earnings

1,156

291

797

164

2,408

Preferred share dividends

107

-

23

-

130

Net earnings before capital allocation

1,049

291

774

164

2,278

Impact of capital allocation

99

(15)

(73)

(11)

-

Net earnings - common shareholders

$

1,148

$

276

$

701

$

153

$

2,278

⁽¹⁾	The Company completed the acquisition of Irish Life on July 18, 2013. The Europe segment includes the results of Irish Life from July 19, 2013 to December 31, 2013.


For the twelve months ended December 31, 2012
						United				Lifeco
				Canada		States		Europe		Corporate		Total
Income:
	Premium income		$	9,581	$	3,390	$	6,286	$	-	$	19,257
	Net investment income
		Regular net investment income		2,556		1,284		1,814		(12)		5,642
		Changes in fair value through profit or loss		658		501		1,509		-		2,668
	Total net investment income			3,214		1,785		3,323		(12)		8,310
	Fee and other income			1,178		1,247		605		-		3,030
Total income				13,973		6,422		10,214		(12)		30,597

Benefits and expenses:
	Paid or credited to policyholders			9,770		4,437		8,668		-		22,875
	Other			2,495		1,398		705		160		4,758
	Financing charges			145		135		18		1		299
	Amortization of finite life intangible assets			45		48		10		-		103

Earnings before income taxes				1,518		404		813		(173)		2,562

Income taxes				211		66		114		(27)		364

Net earnings before non-controlling interests				1,307		338		699		(146)		2,198

Non-controlling interests				268		3		6		-		277

Net earnings				1,039		335		693		(146)		1,921

Preferred share dividends				79		-		22		14		115

Net earnings before capital allocation				960		335		671		(160)		1,806
Impact of capital allocation				78		(14)		(56)		(8)		-
Net earnings - common shareholders			$	1,038	$	321	$	615	$	(168)	$	1,806