Great-west Lifeco Inc. · TSX:GWO
Great-west Lifeco — Q3 2004 Earnings Presentation
36 slides from Great-west Lifeco's earnings presentation, November 2004
Slide 1: Quarterly Information Q3 2004 For Analysts and Investors
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors QUARTERLY INFORMATION Q3 2004 For Analysts and Investors
Slide 2: Forward Looking Statements
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Forward Looking Statements This presentation may contain forward-looking statements about the Company, including its business operations, strategy and expected financial performance and condition. Forward-looking statements include statements th
Slide 3: Non-GAAP Financial Measures
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Non-GAAP Financial Measures This Report may also contain non-GAAP financial measures. Terms by which non-GAAP financial measures are identified include "adjusted earnings", “earnings before one-time charges" and "net income before restructuring
Slide 4: Great-West Lifeco Consolidated Earnings
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Great-West Lifeco 3 Months Ended Sept 30, 9 Months Ended Sept 30, Consolidated Earnings 2003 2004 Change 2003 2004 Change (C$MM) Net Income - Common (1) 336 417 24% 850 1,207 42% Net Income - Common (2) 324 414 28% 838 1,191 42% Earnings Per Sha
Slide 5: Great-West Lifeco Net Income - Common
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Great-West Lifeco 3 Months Ended Sept 30, 9 Months Ended Sept 30, Net Income - Common 2003 2004 Change 2003 2004 Change (C$MM) Canada 144 168 17% 371 496 34% Europe 35 92 163% 58 245 322% United States 163 157 (4%) 427 470 10% Lifeco Corporate (
Slide 6: Canada Life Acquisition Expense Synergies (Annualized)
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Canada Life Acquisition Expense Synergies (Annualized) Sep-03 Dec-03 Sep-04 (C$MM) Expense Synergy Target Canada 210 210 210 United States 80 80 80 Europe - 40 40 290 330 330 Expense Reduction Realized Cumulative Total Canada 47 111 203 United S
Slide 7: Canada Life Acquisition Restructuring & Exit Program Costs
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Canada Life Acquisition Restructuring & Exit Program Costs (C$MM) Program Amount Utilized in Balance Costs 2003 2004 Total 09/30/04 Canada 356 95 127 222 134 US 45 17 19 36 9 Europe 47 13 11 24 23 448 125 157 282 166 Capitalized 350 94 131 225 1
Slide 8: Consolidated Assets
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors As at Sept 30, Consolidated Assets 2003 2004 Change (C$MM) General Fund Canada 47,071 48,993 4% Europe 19,892 18,837 (5%) United States 32,120 28,875 (10%) 99,083 96,705 (2%) Segregated Fund Canada 27,580 32,590 18% Europe 14,378 16,494 15% Unit
Slide 9: Capital - MCCSR
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors CAPITAL December Sept • MCCSR 2003 2004 Great-West Life (Consolidated) 190% 201% London Life 252% 249% Canada Life Assurance 204% 206% • Issued $300mm non-cumulative 5.20% Series G Preferred shares • Announced redemption of Class A Series 1 Pref
Slide 10: Sales
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Sales 2003 2004 Change 2003 2004 Change (C$MM) New Annualized Premium Canada 862 959 11% 2,481 3,444 39% Europe 1,156 1,410 22% 3,304 5,219 58% United States 600 640 7% 2,068 2,505 21% 2,618 3,009
Slide 11: Expenses
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Expenses 2003 2004 2003 2004 (C$MM) Operating Expenses Canada 239 220 560 705 Europe 92 79 107 250 United States 274 236 770 736 Corporate 2 8 2 8 Operating Expenses 607 543 1,439 1,699 Investment
Slide 12: Canada Operations
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Canada Operations 11
Slide 13: Canada Sales - New Annualized Premium
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Sales 3 Months Ended Sept 30, 9 Months Ended Sept 30, New Annualized Premium 2003 2004 Change 2003 2004 Change (C$MM) Individual Insurance & Investment Products Participating Policyholder 21 17 (19%) 57 53 (7%) Individual Life 19 17 (11%) 37 54
Slide 14: Canada Revenue Premium & Equivalents
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Revenue Premium & Equivalents 2003 2004 Change 2003 2004 Change (C$MM) Individual Insurance & Investment Products Participating Policyholder 418 422 1% 1,135 1,292 14% Individual Life 100 114 14% 2
Slide 15: Canada Fee Income
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Fee Income 2003 2004 Change 2003 2004 Change (C$MM) Canada Segregated Funds 104 127 22% 264 384 45% Administrative Services Only 27 27 0% 65 85 31% Assets under Administration 16 15 (6%) 35 40 14%
Slide 16: Individual Segregated Funds - Canada
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Individual Segregated Funds - Canada 2,500 Quadrus 2,000 1,500 $Millions 1,000 500 - 2003A 2004A 2003A 2004A 2003A 2004A 2003A 2004A 2003A 2004A Deposits Withdrawals Net Cash Flow Market Gain Asset Change 2003A 1,252 1,002 250 515 765 2004A 1,93
Slide 17: Individual Retail Segregated Funds Market Share
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Individual Retail Segregated Funds Market Share* ($ Millions) Sep.30, 2004 Dec.31, 2003 Sep.30, 2003 % Chg in Net Assets Net Assets Mkt Share Rank Net Assets Mkt Share Rank Net Assets Mkt Share Rank Yr Over Yr Yr-to-Date Great-West 14,790 31.3%
Slide 18: Canada Expenses
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Expenses 2003 2004 2003 2004 (C$MM) Individual Insurance & Investment Products Participating Policyholder 35 36 99 101 Individual Life & Living Benefits 36 29 68 86 Retirement & Investment Services
Slide 19: Canada Net Income
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Net Income 2003 2004 Change 2003 2004 Change (C$MM) Individual Insurance & Investment Products Individual Life 31 41 32% 79 110 39% Living Benefits 9 16 78% 29 47 62% Retirement & Investment Servic
Slide 20: Canada / Europe Invested Assets
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors As At As At Canada / Europe December 31, 2003 September 30, 2004 Invested Assets $ % $ % (C$MM) Bonds 34,815 64% 36,797 65% Cash & CD's 1,944 4% 2,005 4% Mortgages 11,882 22% 12,058 21% Stocks 2,627 5% 2,588 5% Real Estate 1,396 3% 1,420 2% Poli
Slide 21: Canada / Europe Non-Performing Loans
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Canada / Europe December Sept Non-Performing Loans 2003 2004 (C$MM) Bonds 108 92 Mortgages 4 6 112 98 Specific Provisions (67) (61) (1) Net Non-Performing Loans 45 37 1. Excludes $14mm of general provisions. 20 Canada
Slide 22: Europe Operations
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Europe Operations Note: FX Translation rates are as follows: 2003 2004 British Pound Sterling Net Income (Including Hedge) 2.317 Balance Sheet 2.240 2.290 Transactions 2.221 2.420 Euro 2003 2004 Net Income (Including Hedge) 1.630 Balance Sheet 1
Slide 23: Europe Sales
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Sales 2003 2004 Change 2003 2004 Change (C$MM) New Annualized Premium Insurance & Annuity 783 798 2% 783 2,931 274% Reinsurance 373 612 64% 2,521 2,288 (9%) 1,156 1,410 22% 3,304 5,219 58% Revenue
Slide 24: Europe Expenses and Net Income
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Expenses 2003 2004 Change 2003 2004 Change Operating Expenses 92 79 (14%) 107 250 134% Investment Expenses 3 4 33% 3 11 267% Total Europe Expenses 95 83 (13%) 110 261 137% Net Income Insurance & An
Slide 25: U.S. Operations (US$)
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors U.S. OPERATIONS (US$) Note: FX Translation rate is as follows: 2003 2004 Net Income (Including Hedge) 1.587 1.582 Balance Sheet 1.350 1.260 Transactions 1.430 1.330 24
Slide 26: United States Sales - New Annualized Premium
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Sales-New Annualized Premium 2003 2004 Change 2003 2004 Change (US$MM) Health Care 139 186 33% 534 941 76% Financial Services 296 304 3% 912 943 3% Sales - New Annualized Premium 436 490 12% 1,446
Slide 27: United States Revenue Premium
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Revenue Premium (1) 2003 2004 Change 2003 2004 Change (US$MM) (2) (2) Health Care 1,481 1,436 (3%) 4,333 4,247 (2%) Financial Services 667 676 1% 1,968 2,029 3% Total Shareholder 2,148 2,112 (2%) 6
Slide 28: United States Fee Income
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Fee Income 2003 2004 Change 2003 2004 Change (US$MM) Segregated Funds 38 43 13% 110 128 16% Administrative Services Only 150 165 10% 459 473 3% Assets under Administration 23 26 13% 64 74 16% Total
Slide 29: United States Expenses
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Expenses 2003 2004 Change 2003 2004 Change (US$MM) Health Care 144 128 (11%) 396 394 (1%) Financial Services 47 52 11% 132 148 12% Corporate 4 1 (75%) 7 7 0% Restructuring - - NMF - - NMF Total Sha
Slide 30: United States Shareholder Net Income
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors 3 Months Ended Sept 30, 9 Months Ended Sept 30, Shareholder Net Income 2003 2004 Change 2003 2004 Change (US$MM) Health Care 49 40 (18%) 135 122 (10%) Financial Services 48 59 23% 122 174 43% Corporate 6 - n/a 12 1 (92%) Total Shareholder Net In
Slide 31: Employee Benefits Life & Health Sales
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Employee Benefits 3 Months Ended Sept 30, 9 Months Ended Sept 30, Life & Health Sales 2003 2004 Change 2003 2004 Change (US$MM) Case Sales 172 257 49% 607 998 64% Terminations (399) (167) (58%) (1,553) (808) (48%) Net (227) 90 NMF (946) 190 NMF
Slide 32: Financial Services Sales (New Annualized Premium)
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Financial Services 3 Months Ended Sept 30, 9 Months Ended Sept 30, Sales (New Annualized Premium) 2003 2004 Change 2003 2004 Change (US$MM) GWLA & Great-West Life Individual Annuity - Fixed 1 1 0% 4 3 (25%) - Variable 38 29 (24%) 123 84 (32%) 39
Slide 33: Financial Services Participants
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Financial Services 9 Months Ended Sept 30, Participants 2003 2004 In-Qrt Change (000's) Retirement Services: P / NP 1,324 1,421 25 FASCorp 444 521 19 401(k) 435 469 (10) P / NP & 401(k) Net Cash Flow (US$MM) (264) (312) 32 United States
Slide 34: Financial Services Assets
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors Financial Services Assets As At Sept 30, 2003 2004 In-Qrt Change (US$MM) Retirement Services: P / NP General Account 3,768 3,594 (102) Variable - Funds 2,943 3,316 (60) - Stable Value 1,666 1,890 98 Total Variable 4,609 5,206 38 Unwrapped 23,572
Slide 35: United States Invested Assets
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors As At As At December 31, 2003 September 30, 2004 Invested Assets $ % $ % (US$MM) Bonds 15,116 70% 15,499 71% Cash & CD's 400 2% 209 1% Mortgages 2,335 11% 2,180 10% Stocks & Real Estate 271 1% 222 1% Policy Loans 3,496 16% 3,600 17% Invested Ass
Slide 36: United States Non-Performing Loans
QUARTERLY INFORMATION Q3 2004 For Analysts & Investors December Sept Non-Performing Loans 2003 2004 (US$MM) Bonds 58 81 Mortgages 5 - Foreclosed Real Estate 1 2 64 83 (1) Specific Provisions (30) (30) Net Non-Performing Loans 34 53 1. Excludes $44mm in general provisions. 35 United States