Great-West Lifeco Inc. · TSX:GWO
Great-West Lifeco — Q2 2002 Earnings Presentation
38 slides from Great-West Lifeco's earnings presentation, 2002
Slide 1: Quarterly Information Q2 2002 For Analysts & Investors
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors 1
Slide 2: Forward-Looking Statements
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Forward-Looking Statements This conference call may contain forward-looking statements about future operations, financial results, objectives and strategies of the Company. Forward- looking statements are typically identified by the words ”belie
Slide 3: Highlights
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Highlights • Prior year’s comparative earnings have been adjusted to exclude the amortization of goodwill and non-recurring charges related to Alta Health and Life. • Net Income attributable to Common Shareholders • $456 million, up 15% over 200
Slide 4: Consolidated Earnings
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Consolidated Earnings ($ CDN millions) For the six months ended June 30 2001 2002 Change Total Net Income 414 472 14% Net Income - Common Shareholders 398 456 15% RO E * 20.9% 22.5% * ROE excludes the impact of goodwill amortization and non-recu
Slide 5: Net Income to Common Shareholders by Region
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Net Income to Common Shareholders by Region ($ millions) For the six months ended June 30 2001 * 2002 Change Canadian Segment Great-West Shareholder operating earnings 189 220 16% Portion of Lifeco Earnings (4) (9) Total Canadian segment 185 211
Slide 6: Consolidated Assets
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Consolidated Assets ($ CDN millions) At June 30 2001 2002 Change General Fund Assets Canada 33,542 34,494 3% U.S. 22,911 23,529 3% Total 56,453 58,023 3% Segregated Fund Assets Canada 18,464 19,153 4% U.S. 18,473 17,814 -4% Total 36,937 36,967 -
Slide 7: Sales New Annualized Premium
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Sales New Annualized Premium ($ CDN millions) For the six months ended June 30 2001 2002 Change Canada 3,306 61% 3,717 66% 12% U.S. 2,135 39% 1,912 34% -10% Total Sales 5,441 5,629 3% 7
Slide 8: Revenue Premium Incl. Seg. Funds and ASO
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Revenue Premium Incl. Seg. Funds and ASO ($ CDN millions) For the six months ended June 30 2001 2002 Change Canada 5,547 39% 6,023 44% 9% U.S. 8,682 61% 7,790 56% -10% Total 14,229 13,813 -3% 8
Slide 9: Fee Income
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Fee Income ($ CDN millions) For the six months ended June 30 2001 2002 Change Canada 188 214 14% U.S. 741 724 -2% Total Fee Income 929 938 1% 9
Slide 10: Expenses
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Expenses ($ CDN millions) For the six months ended June 30 2001 2002 Change Operating Expenses GWL (Canada) 357 310 -13% GWL&A (U.S.) 641 605 -6% Lifeco Entity 2 1 Total Operating Expenses 1,000 916 -8% Investment Expenses GWL (Canada) 7 7 - GWL
Slide 11: Investment Quality - Summary
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Investment Quality - Summary • Lifeco’s total TMT (Telecommunications, Media and Information Technologies) bond and preferred share holdings at June 30, 2002 were $1.3 billion, which represents 4% of the total bond and preferred share portfolio
Slide 12: TMT Holdings By Sector of Activities
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors By Sector of Activities (Book Value In $ millions) Total Bonds % of Lifeco Sectors A and higher BBB BB and lower & Preferred Bonds & Prefs Telecommunications Canada 476.9 45.8 132.4 655.1 U.S. 50.5 34.1 0 84.6 Total 527.4 79.9 132.4 739.7 Media
Slide 13: Investment Concentration (TMT)
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Investment Concentration (TMT) ($ millions) % of Lifeco By Group of Corporate Issuers BV % Bonds & Prefs Above $30 million Canadian Bell (Canada & Mobility Cellular Inc.) A 151.8 0.5% Aliant Telecom Inc. A 126.2 0.4% Manitoba Telecom Services In
Slide 14: Canadian Operations
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors CANADIAN OPERATIONS 14
Slide 15: Sales New Annualized Premium
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Sales New Annualized Premium ($ millions) For the six months ended June 30 2001 2002 Change Individual Ins. & Investment Life & Living Benefits 29 31 7% R & IS 1,606 1,831 14% Sub-Total 1,635 1,862 Group 173 169 -2% Reinsurance & Specialty 1,475
Slide 16: Revenue Premium Incl. Seg. Funds and ASO
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Revenue Premium Incl. Seg. Funds and ASO ($ millions) For the six months ended June 30 2001 2002 Change Individual Ins. & Investment Life & Living Benefits 190 195 3% R & IS 1,598 1,731 8% Sub-Total 1,788 1,926 Group 1,610 1,747 9% Reinsurance,
Slide 17: Fee Income
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Fee Income ($ millions) For the six months ended June 30 2001 2002 Change Segregated Funds 144 162 13% Administrative Services Only 30 34 13% Assets Under Administration 14 18 29% Total Fee Income 188 214 14% 17
Slide 18: R&IS Investment Funds - IRIS Net Cash Flow and Asset Change
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors R&IS Investment Funds - IRIS Net Cash Flow and Asset Change 1,500 M utual Funds 1,000 500 $Millions - (500) (1,000) 2001A 2002A 2001A 2002A 2001A 2002A 2001A 2002A 2001A 2002A Deposits Withdrawals Net Cash Flow Market Gain Asset Change 2001A 1,0
Slide 19: Segregated Fund Assets
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Segregated Fund Assets ($ Millions) Great-West Life and London Life Q4 2001 Q2 2002 6 Month Change $ % of Total $ % of Total $ % Equities 10,170.2 53% 10,077.7 53% (92.5) -1% Fixed Income 5,339.3 28% 5,265.9 27% (73.4) -1% Balanced 2,230.7 12% 2
Slide 20: Individual Segregated Funds Market Share
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Individual Segregated Funds Market Share* ($ M illions) Jun. 30, 2002 Dec.31, 2001 Jun. 30, 2001 % Chg in Ne t As se ts Net A ssets Mkt Share Rank Net A ssets Mkt Share Rank Net A ssets Mkt Share Rank Yr Over Yr From Yr End Great-West Lif e1 10,
Slide 21: Expenses
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Expenses ($ millions) For the six months ended June 30 2001 2002 Change Individual Ins. & Investment Life & Living Benefits 33 29 -12% R & IS 81 73 -10% Sub-Total 114 102 Group 114 121 6% Reinsurance, Specialty & Other 38 25 -34% 266 248 -7% Par
Slide 22: Net Income
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Net Income ($ millions) For the six months ended June 30 2001 2002 Change Individual Life & Living Benefits 36 42 17% R & IS 50 63 26% Group Life & Health 50 57 14% Corporate Investments 39 46 18% Corporate 14 12 Total Shareholders 189 220 16% *
Slide 23: Invested Assets
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Invested Assets ($ millions) At June 30 2001 2002 ($) (%) ($) (%) Bonds 15,652 57.5% 16,274 58.3% Cash and CD's 333 1.2% 333 1.2% Mortgages 7,504 27.5% 7,302 26.2% Stocks 1,297 4.8% 1,463 5.2% Real Estate 1,055 3.9% 1,059 3.8% Policy Loans 1,402
Slide 24: Asset Quality Non-Performing Loans
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Asset Quality Non-Performing Loans ($ millions) At June 30 2001 2002 Asset Class Bonds 32 76 Mortgages 11 11 Foreclosed Real Estate 4 0 Total 47 87 In-Year Charge for Credit Losses 1.2 36 24
Slide 25: U.S. Operations (US$)
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors U.S. OPERATIONS (US$) Note: FX Translation rate is as follows: 2001 2002 Income Statement 1.5340 1.5740 Balance Sheet 1.5180 1.5190 25
Slide 26: Sales New Annualized Premium
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Sales New Annualized Premium ($ US millions) For the six months ended June 30 2001 2002 Change Employee Benefits 433 500 15% Financial Services 958 715 -25% Total U.S. 1,392 1,215 -13% 26
Slide 27: Revenue Premium Incl. Seg. Funds and ASO
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Revenue Premium Incl. Seg. Funds and ASO ($ US millions) For the six months ended June 30 2001 2002 Change Employee Benefits 3,527 3,139 -11% Financial Services 1,990 1,682 -15% 5,517 4,821 -13% Par 143 128 Total U.S. 5,660 4,949 -13% 27
Slide 28: Fee Income
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Fee Income ($ US millions) For the six months ended June 30 2001 2002 Change Segregated Funds 91 85 -7% Administrative Services Only 364 346 -5% Assets Under Administration 32 36 - Total Fee Income 488 467 -4% 28
Slide 29: Expenses
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Expenses ($ US millions) For the six months ended June 30 2001 2002 Change Employee Benefits 320 286 -11% Financial Services 94 89 -5% Corporate 3 8 417 383 -8% Par 1 2 Operating Expenses 418 384 -8% Investment Expenses 5 4 - Total Expenses 423
Slide 30: Net Income (Including Alta)
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Net Income (Including Alta) ($ US millions) For the six months ended June 30 2001 2002 Change Employee Benefits 43 77 78% Financial Services 78 80 4% Corporate 1 4 Special Charges (86) N et Income - Common Shareholders 36 161 30
Slide 31: Net Income (Excluding Alta Charges)
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Net Income (Excluding Alta Charges) ($ US millions) For the six months ended June 30 2001 2002 Change Employee Benefits 64 77 20% Financial Services 78 80 4% Corporate 2 4 Net Income - Common Shareholders 144 161 12% 31
Slide 32: Employee Benefits Life & Health Sales
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Employee Benefits Life & Health Sales ($ US millions) June June June 2002 2002 2001 In-Qtr YTD YTD Case Sales 270 625 1,046 Terminations (708) (1,660) (1,501) N et (438) (1,035) (455) Sales Premium 154 500 433 N et Premium (132) (604) (789) * Me
Slide 33: Financial Services 401(k)
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Financial Services 401 (k) ($ US millions) June June June 2002 2002 2001 In-Qtr YTD YTD Case Sales 91 181 230 Terminations (210) (509) (336) N et (119) (328) (106) N et Cash Flow (218) (311) 184 Ending Assets 6,292 6,292 7,428 Participants (thou
Slide 34: Financial Services Sales by Business Line
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Financial Services Sales by Business Line New Annualized Premium ($ US millions) June June June 2002 2002 2001 In-Qtr YTD YTD BOLI 61 68 104 (incl. variable/ sep. accounts) Individual Annuity - fixed 2 5 11 - variable 20 103 103 22 108 114 Indiv
Slide 35: Financial Services Participants
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Financial Services Participants June June Change 2002 2001 In Quarter YTD YTD P/ N P 14,565 1,312,304 1,222,240 FASCorp (13,106) 382,518 383,799 35
Slide 36: Financial Services Assets
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Financial Services Assets ($ US millions) June June Change 2002 2001 In Quarter YTD YTD P/ NP - General Acct. (5) 3,803 3,888 - Variable (179) 4,407 4,325 - Unwrapped (1,148) 19,901 21,263 FASCorp - Unwrapped (452) 5,889 6,184 36
Slide 37: Invested Assets
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Invested Assets ($ US millions) At June 30 2001 2002 ($) (%) ($) (%) Bonds 9,933 71.0% 10,300 71.0% Cash and CD's 184 1.3% 387 2.7% Mortgages 765 5.5% 522 3.6% Stocks & Real Estate 199 1.4% 213 1.5% Policy Loans 2,906 20.8% 3,090 21.3% Total 13,
Slide 38: Asset Quality Non-Performing Loans
QUARTERLY INFORMATION Q2 2002 For Analysts & Investors Asset Quality Non-Performing Loans ($ US millions) At June 30 2001 2002 Asset Class Bonds 68 31 Mortgages 19 6 Foreclosed Real Estate 4 2 Total 91 39 In-Year Charge for 0 (2) N ormal Credit Losses 38