Great-west Lifeco Inc. · TSX:GWO
Great-west Lifeco — Q2 2004 Earnings Presentation
37 slides from Great-west Lifeco's earnings presentation, 2004
Slide 1: Quarterly Information Q2 2004 for Analysts and Investors
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors QUARTERLY INFORMATION Q2 2004 For Analysts and Investors 1
Slide 2: Forward Looking Statements
QUARTERLY INFORMATION Q2 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 Q2 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 Q2 2004 For Analysts & Investors Great-West Lifeco 3 Months Ended June 30, 6 Months Ended June 30, Consolidated Earnings 2003 2004 Change 2003 2004 Change (C$MM) Net Income - Common (1) 261 407 56% 514 790 54% Net Income - Common (2) 261 401 54% 514 777 51% Earnings Per Share (
Slide 5: Great-West Lifeco Net Income - Common
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Great-West Lifeco 3 Months Ended June 30, 6 Months Ended June 30, Net Income - Common 2003 2004 Change 2003 2004 Change (C$MM) Canada 117 181 55% 227 328 44% Europe 12 76 533% 23 153 565% United States 132 154 17% 264 313 19% Lifeco Corporate -
Slide 6: Canada Life Acquisition Expense Synergies (Annualized)
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Canada Life Acquisition Expense Synergies (Annualized) Sep-03 Dec-03 Jun-04 (C$MM) Expense Synergy Target Canada 210 210 210 United States 80 80 80 Europe - 40 40 290 330 330 Expense Reduction Realized Cumulative Total Canada 47 111 177 United S
Slide 7: Canada Life Acquisition Reconciliation of Goodwill Balance
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Canada Life Acquisition Reconciliation of Goodwill Balance (C$MM) Goodwill Balance - March 31, 2004 4,204 Q2 Adjustments Actuarial Policy Reserves 113 Restructuring (44) Intangible Assets (100) Other (3) Total Q2, 2004 Adjustments (35) Goodwill
Slide 8: Canada Life Acquisition Restructuring & Exit Program Costs
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Canada Life Acquisition Restructuring & Exit Program Costs (C$MM) Program Amount Utilized in Balance Costs 2003 2004 Total 06/30/04 Canada 356 96 87 183 173 US 45 17 19 36 9 Europe 47 12 4 16 31 448 125 110 235 213 Capitalized 350 94 92 186 164
Slide 9: Consolidated Assets
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors As at June 30, Consolidated Assets 2003 2004 Change (C$MM) General Fund Canada 29,323 48,153 64% Europe 7,300 21,301 192% United States 21,082 30,695 46% 57,705 100,149 74% Segregated Fund Canada 18,976 32,512 71% Europe - 17,141 NMF United Stat
Slide 10: Capital - MCCSR
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors CAPITAL • MCCSR December June 2003 2004 Great-West Life (Consolidated) 190% 195% London Life 252% 253% Canada Life Financial Corp 203% 197% • Lifeco repaid $200mm of the $600mm bank term facility this quarter. 10
Slide 11: Sales
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Sales 2003 2004 Change 2003 2004 Change (C$MM) New Annualized Premium Canada 700 1,065 52% 1,619 2,489 54% Europe 996 2,206 121% 2,148 3,809 77% United States 531 549 3% 1,468 1,796 22% 2,227 3,820
Slide 12: Expenses
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Expenses 2003 2004 2003 2004 (C$MM) Operating Expenses Canada 161 235 321 485 Europe 8 88 15 171 United States 233 250 496 500 Operating Expenses 402 572 832 1,156 Investment Expenses 6 17 12 32 To
Slide 13: Canada Operations
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Canada Operations 13
Slide 14: Canada Sales - New Annualized Premium
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Sales 3 Months Ended June 30, 6 Months Ended June 30, New Annualized Premium 2003 2004 Change 2003 2004 Change (C$MM) Individual Insurance & Investment Products Participating Policyholder 19 18 (5%) 36 36 0% Individual Life 9 23 156% 18 41 128%
Slide 15: Canada Revenue Premium & Equivalents
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Revenue Premium & Equivalents 2003 2004 Change 2003 2004 Change (C$MM) Individual Insurance & Investment Products Participating Policyholder 368 447 21% 717 870 21% Individual Life 68 114 68% 137 2
Slide 16: Canada Fee Income
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Fee Income 2003 2004 Change 2003 2004 Change (C$MM) Canada Segregated Funds 80 127 59% 160 257 61% Administrative Services Only 21 29 38% 38 58 53% Assets under Administration 9 13 44% 19 25 32% To
Slide 17: Individual Segregated Funds - Canada
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Individual Segregated Funds - Canada 1,600 Quadrus 1,400 1,200 1,000 $Millions 800 600 400 200 - 2003A 2004A 2003A 2004A 2003A 2004A 2003A 2004A 2003A 2004A Deposits Withdrawals Net Cash Flow Market Gain Asset Change 2003A 853 652 201 117 318 20
Slide 18: Individual Retail Segregated Funds Market Share
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Individual Retail Segregated Funds Market Share* ($ Millions) June 30, 2004 Dec.31, 2003 June 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 14,754 31.3
Slide 19: Canada Expenses
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Expenses 2003 2004 2003 2004 (C$MM) Individual Insurance & Investment Products Participating Policyholder 34 34 64 65 Individual Life & Living Benefits 16 27 32 57 Retirement & Investment Services
Slide 20: Canada Net Income
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Net Income 2003 2004 Change 2003 2004 Change (C$MM) Individual Insurance & Investment Products Individual Life 25 32 29% 48 69 44% Living Benefits 12 15 25% 20 31 55% Retirement & Investment Servic
Slide 21: Canada / Europe Invested Assets
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors As At As At Canada / Europe June 30, 2003 June 30, 2004 Invested Assets $ % $ % (C$MM) Bonds 18,105 61% 36,658 64% Cash & CD's 739 2% 2,012 4% Mortgages 6,970 24% 12,011 21% Stocks 1,300 4% 2,638 5% Real Estate 963 3% 1,461 3% Policy Loans 1,534
Slide 22: Canada / Europe Non-Performing Loans
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Canada / Europe December June Non-Performing Loans 2003 2004 (C$MM) Bonds 108 93 Mortgages 4 6 112 99 Specific Provisions (67) (62) Net Non-Performing Loans 45 37 22 Canada
Slide 23: Europe Operations
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Europe Operations 23
Slide 24: Europe Sales
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Sales 2003 2004 Change 2003 2004 Change (C$MM) New Annualized Premium Insurance & Annuity - 1,095 n/a - 2,133 n/a Reinsurance 996 1,111 12% 2,148 1,676 (22%) 996 2,206 121% 2,148 3,809 77% Revenue
Slide 25: Europe Expenses and Net Income
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Expenses 2003 2004 Change 2003 2004 Change Operating Expenses 8 88 15 171 Investment Expenses 0 4 0 7 Total Europe Expenses 8 92 15 178 Net Income Insurance & Annuities - 59 n/a - 115 n/a Reinsuran
Slide 26: U.S. Operations (US$)
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors U.S. OPERATIONS (US$) Note: FX Translation rate is as follows: 2003 2004 Net Income (Including Hedge) 1.587 1.576 Balance Sheet 1.355 1.340 Transactions 1.454 1.340 26
Slide 27: United States Sales - New Annualized Premium
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Sales-New Annualized Premium 2003 2004 Change 2003 2004 Change (US$MM) Health Care 127 147 16% 395 755 91% Financial Services 264 248 (6%) 616 585 (5%) Sales - New Annualized Premium 390 395 1% 1,0
Slide 28: United States Revenue Premium
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Revenue Premium (1) 2003 2004 Change 2003 2004 Change (US$MM) (2) (2) Health Care 1,407 1,350 (4%) 2,852 2,811 (1%) Financial Services 592 626 6% 1,301 1,353 4% Total Shareholder 1,999 1,976 (1%) 4
Slide 29: United States Fee Income
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Fee Income 2003 2004 Change 2003 2004 Change (US$MM) Segregated Funds 37 42 14% 72 85 18% Administrative Services Only 150 164 9% 309 308 (0%) Assets under Administration 19 25 32% 41 48 17% Total
Slide 30: United States Expenses
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Expenses 2003 2004 Change 2003 2004 Change (US$MM) Health Care 123 128 4% 252 266 6% Financial Services 43 49 14% 85 96 13% Corporate 1 3 200% 3 6 100% Restructuring 0 2 NMF 0 2 NMF Total Sharehold
Slide 31: United States Shareholder Net Income
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors 3 Months Ended June 30, 6 Months Ended June 30, Shareholder Net Income 2003 2004 Change 2003 2004 Change (US$MM) Health Care 41 38 (7%) 86 82 (5%) Financial Services 36 58 60% 74 115 55% Corporate 5 1 n/a 6 1 (83%) Total Shareholder Net Income 8
Slide 32: Employee Benefits Life & Health Sales
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Employee Benefits 3 Months Ended June 30, 6 Months Ended June 30, Life & Health Sales 2003 2004 Change 2003 2004 Change (US$MM) Case Sales 174 348 100% 435 741 70% Terminations (489) (197) (60%) (1,155) (641) (45%) Net (315) 151 NMF (720) 100 NM
Slide 33: Financial Services Sales (New Annualized Premium)
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Financial Services 3 Months Ended June 30, 6 Months Ended June 30, Sales (New Annualized Premium) 2003 2004 Change 2003 2004 Change (US$MM) Individual Annuity - Fixed 1 1 0% 3 2 (33%) - Variable 34 21 (38%) 85 55 (35%) 35 22 (37%) 88 57 (35%) BO
Slide 34: Financial Services Participants
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Financial Services 6 Months Ended June 30, Participants 2003 2004 In-Qrt Change (000's) Retirement Services: P / NP 1,241 1,396 13 FASCorp 425 502 17 401(k) 449 479 (17) P / NP & 401(k) Net Cash Flow (US$MM) (139) (253) 34 United States
Slide 35: Financial Services Assets
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors Financial Services As At June 30, Assets 2003 2004 In-Qrt Change (US$MM) Retirement Services: P / NP General Account 3,811 3,696 5 Variable - Funds 2,825 3,376 (20) - Stable Value 1,654 1,792 13 Total Variable 4,479 5,168 (7) Unwrapped 20,602 27
Slide 36: Invested Assets United States
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors As At As At December 31, 2003 June 30, 2003 Invested Assets $ % $ % (US$MM) Bonds 15,116 70% 15,320 71% Cash & CD's 400 2% 241 1% Mortgages 2,335 11% 2,274 10% Stocks & Real Estate 271 1% 224 1% Policy Loans 3,496 16% 3,610 17% Invested Assets 2
Slide 37: Non-Performing Loans United States
QUARTERLY INFORMATION Q2 2004 For Analysts & Investors December June Non-Performing Loans 2003 2004 (US$MM) Bonds 58 63 Mortgages 5 1 Foreclosed Real Estate 1 1 64 65 (1) Specific Provisions (30) (37) Net Non-Performing Loans 34 28 1. Excludes $44mm in general provisions. 37 United States