Great-West Lifeco Inc. · TSX:GWO
Great-West Lifeco — Q1 2004 Earnings Presentation
34 slides from Great-West Lifeco's earnings presentation, May 2004
Slide 1: Quarterly Information Q1 2004 for Analysts and Investors
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors QUARTERLY INFORMATION Q1 2004 For Analysts and Investors 1
Slide 2: Forward Looking Statements
QUARTERLY INFORMATION Q1 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 Q1 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 Q1 2004 For Analysts & Investors Great-West Lifeco 3 Months Ended March 31, Consolidated Earnings 2003 2004 Change (C$MM) Net Income - Common (1) 253 383 51% Net Income - Common (2) 253 376 49% Earnings Per Share (1) 0.690 0.856 24% Return on Equity (12 months) (1) 23.5% 19.8%
Slide 5: Great-West Lifeco Net Income - Common
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors Great-West Lifeco 3 Months Ended March 31, Net Income - Common 2003 2004 Change (C$MM) Canada 110 147 34% Europe / Reinsurance 11 77 604% Canada and Europe / Reinsurance 121 224 85% United States 132 159 20% Net Income Before Restructuring 253 3
Slide 6: Canada Life Acquisition Expense Synergies (Annualized)
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors Canada Life Acquisition Expense Synergies (Annualized) Sep-03 Dec-03 Mar-04 (C$MM) Expense Synergy Target Canada 210 210 210 United States 80 80 80 Europe - 40 40 290 330 330 Expense Reduction Realized Cumulative Total Canada 47 111 147 United S
Slide 7: Canada Life Acquisition Restructuring & Exit Program Costs
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors Canada Life Acquisition Restructuring & Exit Program Costs (C$MM) Expected Program Amount Utilized in Balance Costs 2003 2004 Total 03/31/04 Canada 405 96 38 134 271 US 45 17 9 26 19 Europe 47 12 3 15 32 497 125 50 175 322 Capitalized 412 94 41
Slide 8: Canada Life Acquisition Reconciliation of Goodwill Balance
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors Canada Life Acquisition Reconciliation of Goodwill Balance (C$MM) Goodwill Balance - December 31, 2003 4,103 Q1 Adjustments Market Value of Bonds & other Assets 16 Actuarial Reserves 9 Other Balance Sheet Items 76 Total Q1, 2004 Changes 101 Good
Slide 9: Consolidated Assets
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors As at March 31, Consolidated Assets 2003 2004 Change (C$MM) General Fund Canada / Europe 36,891 68,953 87% United States 22,642 30,385 34% 59,533 99,338 67% Segregated Fund Canada / Europe 17,825 48,740 173% United States 16,113 17,407 8% 33,938
Slide 10: Regulatory Capital Ratios
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors December March Regulatory Capital Ratios 2003 2004 MCCSR Great-West Life (Consolidated) 190% 196% London Life 252% 258% Canada Life Financial Corp 203% 206% 10
Slide 11: Sales
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors 3 Months Ended March 31, Sales 2003 2004 Change (C$MM) New Annualized Premium Canada 919 1,424 55% Europe / Reinsurance 1,152 1,603 39% United States 937 1,247 33% 3,008 4,274 42% Revenue Premium (1) Canada 2,199 5,043 129% Europe / Reinsurance
Slide 12: Expenses
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors 3 Months Ended March 31, Expenses 2003 2004 (C$MM) Operating & Investment Expenses Canada 152 250 Europe / Reinsurance 15 83 United States 263 250 Operating Expenses 430 583 Investment Expenses 6 13 Total Expenses 436 596 12
Slide 13: Canada Operations / Europe Operations
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors Canada Operations Europe Operations 13
Slide 14: Canada / Europe Sales - New Annualized Premium
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors Sales 3 Months Ended March 31, New Annualized Premium 2003 2004 Change (C$MM) Individual Insurance & Investment Products Participating Policyholder 17 18 3% Individual Life & Living Benefits 14 27 93% Retirement & Investment Services (1) 813 1,3
Slide 15: Canada / Europe Revenue Premium & Equivalents
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors 3 Months Ended March 31, Revenue Premium & Equivalents 2003 2004 Change (C$MM) Individual Insurance & Investment Products Participating Policyholder 349 423 21% (2) Individual Life & Living Benefits 102 161 58% (1) Retirement & Investment Servic
Slide 16: Canada / Europe Fee Income
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors 3 Months Ended March 31, Fee Income 2003 2004 Change (C$MM) Segregated Funds 80 130 63% Administrative Services Only 17 29 70% Assets under Administration 10 12 20% Total Canada 107 171 60% Europe / Reinsurance - 83 n/a Total Canada & Europe / R
Slide 17: R&IS Investment Funds - IRIS Net Cash Flow and Asset Change
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors R&IS Investment Funds - IRIS Net Cash Flow and Asset Change 1,000 Quadrus 800 600 400 $Millions 200 - (200) (400) (600) Q1 03 Q1 04 Q1 03 Q1 04 Q1 03 Q1 04 Q1 03 Q1 04 Q1 03 Q1 04 Deposits Withdrawals Net Cash Flow Market Gain Asset Change Q1 20
Slide 18: Individual Retail Segregated Funds Market Share
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors Individual Retail Segregated Funds Market Share* ($ Millions) M ar. 31, 2004 Dec.31, 2003 M ar. 31, 2003 % Chg in Net Assets Net Assets Mkt Share Rank Net Assets Mkt Share Rank Net Assets Mkt Share Rank Yr Over Yr In-Quarter Great-West 14,700 31
Slide 19: Canada / Europe Expenses
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors 3 Months Ended March 31, Expenses 2003 2004 (C$MM) Individual Insurance & Investment Products Participating Policyholder 30 40 Individual Life & Living Benefits 16 23 Retirement & Investment Services 36 70 82 133 Group Insurance 70 117 Total Can
Slide 20: Canada / Europe Net Income
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors 3 Months Ended March 31, Net Income 2003 2004 Change (C$MM) Individual Insurance & Investment Products Individual Life & Living Benefits 31 53 71% Retirement & Investment Services 29 57 96% 60 110 83% Group Insurance 36 54 51% Total Canada 96 16
Slide 21: Canada / Europe Invested Assets
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors As At As At March 31, 2003 March 31, 2004 Invested Assets $ % $ % (C$MM) Bonds 18,428 62% 36,162 64% Cash & CD's 364 1% 1,970 4% Mortgages 7,041 24% 11,992 21% Stocks 1,263 4% 2,548 5% Real Estate 1,043 4% 1,437 3% Policy Loans 1,513 5% 2,063 4%
Slide 22: Canada / Europe Non-Performing Loans
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors December March Non-Performing Loans 2003 2004 (C$MM) Bonds 108 97 Mortgages 4 2 112 99 Specific Provisions (67) (63) (1) Net Non-Performing Loans 45 36 1. Excludes $14mm in general provisions. 22 Canada / Europe
Slide 23: U.S. Operations (US$)
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors U.S. OPERATIONS (US$) Note: FX Translation rate is as follows: 2003 2004 Net Income (Including Hedge) 1.577 1.573 Balance Sheet 1.470 1.310 Transactions 1.510 1.320 23
Slide 24: United States Sales - New Annualized Premium
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors 3 Months Ended March 31, Sales-New Annualized Premium 2003 2004 Change (US$MM) Health Care 268 608 127% Financial Services 352 337 (4%) Sales - New Annualized Premium 620 945 52% 24 United States
Slide 25: United States Revenue Premium
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors 3 Months Ended March 31, Revenue Premium (1) 2003 2004 Change (US$MM) Health Care 1,445 1,461 (2) 1% Financial Services 709 727 3% Total Shareholder 2,154 2,188 2% Participating Policyholder 54 112 107% Total Revenue Premium 2,208 2,300 4% 1. In
Slide 26: United States Fee Income
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors 3 Months Ended March 31, Fee Income 2003 2004 Change (US$MM) Segregated Funds 35 43 23% Administrative Services Only 159 144 (9%) Assets under Administration 22 23 5% Total Fee Income 216 210 (3%) 26 United States
Slide 27: United States Expenses
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors 3 Months Ended March 31, Expenses 2003 2004 Change (US$MM) Health Care 129 138 7% Financial Services 42 48 14% Corporate 2 3 50% Total Shareholder 173 189 9% Participating Policyholder 1 1 0% Operating Expenses 174 190 9% Investment Expenses 2 3
Slide 28: United States Shareholder Net Income
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors 3 Months Ended March 31, Shareholder Net Income 2003 2004 Change (US$MM) Health Care 45 44 (2%) Financial Services 38 57 50% Corporate 1 - n/a Total Shareholder Net Income 84 101 20% Shareholder Net Income (C$) 132 159 20% 28 United States
Slide 29: Employee Benefits Life & Health Sales
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors Employee Benefits 3 Months Ended March 31, Life & Health Sales 2003 2004 Change (US$MM) Case Sales 261 393 51% Terminations (665) (444) (33%) Net (404) (51) (87%) Sales Premium 269 608 126% Net Premium (513) (89) (83%) Members (000's) Select and
Slide 30: Financial Services Sales (New Annualized Premium)
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors Financial Services 3 Months Ended March 31, Sales (New Annualized Premium) 2003 2004 Change (US$MM) Individual Annuity - Fixed 2 1 - Variable 51 34 53 35 BOLI (incl. variable/sep. accounts) 4 3 Individual Life (excl. BOLI) 2 4 Group Annuity 52 5
Slide 31: Financial Services Participants
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors Financial Services 3 Months Ended March 31, Participants 2003 2004 In-Qrt Change (000's) Retirement Services: P / NP 1,226 1,383 35 FASCorp 404 485 35 401(k) 464 496 5 P / NP & 401(k) Net Cash Flow (US$MM) (89) (169) 31 United States
Slide 32: Financial Services Assets
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors Financial Services As At March 31, Assets 2003 2004 In-Qrt Change (US$MM) Retirement Services: P / NP General Account 3,815 3,691 (59) Variable - Funds 2,459 3,396 101 - Stable Value 1,709 1,779 26 Total Variable 4,168 5,175 127 Unwrapped 20,877
Slide 33: United States Invested Assets
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors As At As At March 31, 2003 March 31, 2003 Invested Assets $ % $ % (US$MM) Bonds 10,514 73% 14,910 69% Cash & CD's 409 3% 225 1% Mortgages 381 3% 2,411 11% Stocks & Real Estate 221 2% 672 3% Policy Loans 2,964 20% 3,546 16% Invested Assets 14,489
Slide 34: United States Non-Performing Loans
QUARTERLY INFORMATION Q1 2004 For Analysts & Investors December March Non-Performing Loans 2003 2004 (US$MM) Bonds 58 51 Mortgages 5 1 Foreclosed Real Estate 1 1 64 53 Specific Provisions (30) (25) (1) Net Non-Performing Loans 34 28 1. Excludes $58mm in general provisions. 34 United States