Readers are referred to the Non-IFRS Financial Measures and Forward-Looking Statements sections at the end of this release. All figures are expressed in Canadian dollars unless otherwise noted. |
Consolidated results for the period ended
HIGHLIGHTS
- Net earnings [1] were
$422 million or$0.63 per share [2] for the third quarter of 2022, compared with$741 million or$1.09 per share in 2021. - Adjusted net earnings [1][3] were
$422 million or$0.63 per share, compared with$748 million or$1.10 per share in the third quarter of 2021. - Adjusted net asset value per share [3] was
$39.38 atSeptember 30, 2022 , compared with$52.60 atDecember 31, 2021 . The Corporation's book value per participating share [4] was$33.40 atSeptember 30, 2022 , compared with$34.56 atDecember 31, 2021 . - In the third quarter, the Corporation purchased for cancellation 1.5 million subordinate voting shares for a total of
$50 million under its normal course issuer bid. In the nine months endedSeptember 30, 2022 , the Corporation has purchased for cancellation 10.2 million subordinate voting shares for a total of$384 million .
- Third quarter net earnings were
$688 million , compared with$872 million in the third quarter of 2021. Adjusted net earnings [5] were$688 million , compared with$870 million in the third quarter of 2021. Net earnings and adjusted net earnings in the third quarter of 2022 included a net loss provision of$128 million after tax for estimated claims resulting from the impact of Hurricane Ian. - Total assets were
$673 billion and assets under administration [3] were$2.4 trillion atSeptember 30, 2022 , an increase of 7% and 4%, respectively, fromDecember 31, 2021 .
- Third quarter net earnings were
$216.1 million , compared with$270.8 million in the third quarter of 2021. - Assets under management and advisement [4] were
$238.1 billion atSeptember 30, 2022 , a decrease of 10.2% from the third quarter of 2021 and 1.6% fromJune 30, 2022 . - Net outflows [6] were
$342 million in the third quarter of 2022, compared with net inflows of$2.2 billion in 2021. Year-to-date net inflows [6] of$1.6 billion remained strong despite challenging market conditions.
Groupe Bruxelles Lambert (GBL)
- GBL reported a net asset value [4] of €17.2 billion at
September 30, 2022 , representing €112.39 per share, compared with €22.5 billion or €143.91 per share atDecember 31, 2021 . - In the third quarter of 2022, GBL completed €129 million of share buybacks. GBL completed €507 million of share buybacks in the nine months ended
September 30, 2022 .
- Assets under management [4], including unfunded commitments, of the alternative asset investment platforms were
$20.0 billion atSeptember 30, 2022 , an increase from$12.5 billion atSeptember 30, 2021 .
[1] | Attributable to participating shareholders. |
[2] | All per share amounts are per participating share of the Corporation. |
[3] | Adjusted net earnings, adjusted net asset value and assets under administration (reported by Lifeco) are non-IFRS financial measures. Adjusted net earnings per share and adjusted net asset value per share are non-IFRS ratios. See the Non-IFRS Financial Measures section later in this news release. |
[4] | See the Other Measures section later in this news release. |
[5] | Defined as "base earnings" by Lifeco, a non-IFRS financial measure; see the Non-IFRS Financial Measures section later in this news release. |
[6] | Related to assets under management and advisement. |
THIRD QUARTER
Net earnings attributable to participating shareholders were
Adjusted net earnings attributable to participating shareholders [1] were
Contributions to
(in millions of dollars, except per share amounts) | Net Earnings | Adjusted Net Earnings | |||
2022 | 2021 | 2022 | 2021 | ||
Lifeco [2] | 458 | 581 | 458 | 580 | |
IGM [2] | 134 | 167 | 134 | 167 | |
GBL [2] | (36) | (11) | (36) | (11) | |
Effect of consolidation [3] | (21) | 1 | (21) | (4) | |
Publicly traded operating companies | 535 | 738 | 535 | 732 | |
Alternative asset investment platforms [4][5] | (34) | 45 | (34) | 45 | |
ChinaAMC [6] | 15 | 17 | 15 | 17 | |
Standalone businesses [5] | 3 | 58 | 3 | 58 | |
519 | 858 | 519 | 852 | ||
Corporate operations and Other [7] | (97) | (117) | (97) | (104) | |
422 | 741 | 422 | 748 | ||
Per participating share | 0.63 | 1.09 | 0.63 | 1.10 | |
Average shares outstanding (in millions) | 668.7 | 676.7 | 668.7 | 676.7 |
Publicly traded operating companies: contribution to net earnings and adjusted net earnings was $535 million, representing a decrease of 27.5% and 26.9%, respectively, from the third quarter of 2021:
Lifeco: contribution to net and adjusted net earnings decreased by 21%.
IGM: contribution to net and adjusted net earnings decreased by 20%.
GBL: negative contribution to net earnings of $36 million. Results include the Corporation's share of a charge of $22 million in the third quarter of 2022 for losses due to an increase in the put right liability of the non-controlling interests in
Alternative asset investment platforms: net earnings include a negative contribution of $31 million from Power Sustainable mainly related to realized losses in the Power Sustainable China portfolio of $22 million, and a negative contribution from Sagard of $14 million.
Standalone businesses: contribution to net and adjusted net earnings of $3 million.
Adjustments in the third quarter of 2022 were a net impact to earnings of nil as the Corporation's share of each of Lifeco's adjustments was offsetting. Adjustments in the third quarter of 2021, excluded from adjusted net earnings, were a negative net impact to earnings of
[1] | A non-IFRS financial measure; see the Non-IFRS Financial Measures section later in this news release. |
[2] | As reported by Lifeco, IGM and GBL. |
[3] | Refer to the detailed table in the Contribution to Net Earnings and Adjusted Net Earnings section of the Corporation's most recent Management's Discussion and Analysis (MD&A) for additional information. |
[4] | Alternative asset investment platforms includes earnings (losses) from investment platforms including controlled and consolidated subsidiaries and other investments. |
[5] | Presented in Alternative and other investments in the Contribution to Net Earnings and Adjusted Net Earnings section of the Corporation's most recent MD&A. |
[6] | |
[7] | Includes operating and other expenses, dividends on non-participating shares of the Corporation and |
NINE MONTHS
Net earnings attributable to participating shareholders were
Adjusted net earnings attributable to participating shareholders [1] were
Contributions to
(in millions of dollars, except per share amounts) | Net Earnings | Adjusted Net Earnings | ||||
2022 | 2021 | 2022 | 2021 | |||
Lifeco [2] | 1,460 | 1,577 | 1,549 | 1,625 | ||
IGM [2] | 398 | 440 | 398 | 440 | ||
GBL [2] | (109) | 63 | (109) | 63 | ||
Effect of consolidation [3] | 40 | (28) | 35 | 74 | ||
Publicly traded operating companies | 1,789 | 2,052 | 1,873 | 2,202 | ||
Alternative asset investment platforms [4][5] | (164) | 321 | (154) | 421 | ||
ChinaAMC | 43 | 45 | 43 | 45 | ||
Standalone businesses [5] | 34 | 213 | 34 | 213 | ||
1,702 | 2,631 | 1,796 | 2,881 | |||
Corporate operations and Other [6] | (275) | (340) | (275) | (327) | ||
1,427 | 2,291 | 1,521 | 2,554 | |||
Per participating share | 2.12 | 3.38 | 2.26 | 3.77 | ||
Average shares outstanding (in millions) | 671.8 | 676.9 | 671.8 | 676.9 |
[1] | A non-IFRS financial measure; see the Non-IFRS Financial Measures section later in this news release. |
[2] | As reported by Lifeco, IGM and GBL. |
[3] | Refer to the detailed table in the Contribution to Net Earnings and Adjusted Net Earnings section of the Corporation's most recent MD&A for additional information. |
[4] | Alternative asset investment platforms includes earnings (losses) from investment platforms including controlled and consolidated subsidiaries and other investments. |
[5] | Presented in Alternative and other investments in the Contribution to Net Earnings and Adjusted Net Earnings section of the Corporation's most recent MD&A. |
[6] | Includes operating and other expenses, dividends on non-participating shares of the Corporation and Power Financial corporate operations; refer to the Earnings Summary below. |
Results for the quarter ended
The information below is derived from Lifeco and IGM's third quarter MD&As, as prepared and disclosed by the respective companies in accordance with applicable securities legislation, and which are also available either directly from SEDAR (www.sedar.com) or from their websites, www.greatwestlifeco.com and www.igmfinancial.com. The information below related to GBL is derived from publicly disclosed information, as issued by GBL in its third quarter press release and half-year report at |
GREAT-WEST LIFECO INC.
THIRD QUARTER
Net earnings attributable to common shareholders were
Adjusted net earnings [1] attributable to common shareholders were $688 million or
Net earnings and adjusted net earnings in the third quarter of 2022 included a net loss provision of
Adjustments in the third quarter of 2022, excluded from adjusted net earnings, were a net earnings impact of nil, compared with a net positive earnings impact of $2 million in 2021.
IGM FINANCIAL INC.
THIRD QUARTER
Net earnings available to common shareholders were
Assets under management and advisement at
GROUPE BRUXELLES LAMBERT
THIRD QUARTER
GBL reported [2] a net loss of €143 million, compared with a net loss of €44 million in 2021.
GBL reported a net asset value of €17,196 million at
[1] | Defined as "base earnings" by Lifeco. For additional information, please refer to the Non-IFRS Financial Measures section later in this news release. | ||
[2] | GBL adopted IFRS 9 in 2018. |
Alternative and Other Investments
Results for the quarter ended
Alternative and other investments are comprised of the results of the Corporation's alternative asset investment platforms, Sagard and Power Sustainable, which includes income earned from asset management activities and investing activities. Asset management activities includes management fees and carried interest net of investment platform expenses. Investing activities comprises income earned on the capital invested by the Corporation (proprietary capital) in the investment funds managed by each platform and the share of earnings (losses) of controlled and consolidated subsidiaries held within the alternative asset investment platforms. Other includes the share of earnings (losses) of standalone businesses and the Corporation's investments in investment and hedge funds. For additional information, refer to the table later in this news release. |
THIRD QUARTER
Net loss of alternative and other investments, including standalone businesses, was $31 million, compared with net earnings of $103 million in the corresponding period in 2021.
SAGARD AND POWER SUSTAINABLE
Net earnings in the third quarter include a negative contribution of $45 million from Sagard and Power Sustainable comprised of:
- A negative contribution of
$12 million from the asset management activities of Sagard and Power Sustainable; - A negative contribution of
$33 million from investing activities comprised of i) a negative contribution of$5 million from Sagard; and ii) a negative contribution from Power Sustainable's investing activities of$28 million which includes realized losses in the Power Sustainable China portfolio of$22 million .
Summary of assets under management [1] (including unfunded commitments):
(in billions of dollars) | September 30, 2022 | September 30, 2021 |
Sagard [2][3] | 17.4 | 9.5 |
Power Sustainable [3] | 2.6 | 3.0 |
Total | 20.0 | 12.5 |
Percentage of third-party and associates | 87 % | 71 % |
STANDALONE BUSINESSES
Net earnings of the standalone businesses in the third quarter of 2022 were $3 million, compared with $58 million in 2021.
At
[1] | See the Other Measures section later in this news release. |
[2] | Includes ownership in Wealthsimple Financial Corp. (Wealthsimple) valued at |
[3] | Excludes the fair value of interests held in standalone businesses. |
Adjusted Net Asset Value and Participating Shareholders' Equity
At
ADJUSTED NET ASSET VALUE
Adjusted net asset value represents management's estimate of the fair value of the participating shareholders' equity of the Corporation. Adjusted net asset value is the fair value of the assets of the combined |
The Corporation's adjusted net asset value per share was
(in millions of dollars, except per share amounts) | Variation % | |||
Publicly | Lifeco | 18,496 | 23,545 | (21) |
IGM | 5,092 | 6,749 | (25) | |
GBL | 2,128 | 3,157 | (33) | |
25,716 | 33,451 | (23) | ||
Alternative | ||||
Sagard [1] | 976 | 1,515 | (36) | |
Power Sustainable [1] | 1,356 | 1,654 | (18) | |
2,332 | 3,169 | (26) | ||
Other | ChinaAMC | 1,150 | 1,150 | − |
Standalone businesses [2] | 855 | 1,331 | (36) | |
Other assets and investments | 595 | 661 | (10) | |
Cash and cash equivalents | 1,407 | 1,635 | (14) | |
4,007 | 4,777 | (16) | ||
Gross asset value | 32,055 | 41,397 | (23) | |
Liabilities and preferred shares | (5,744) | (5,810) | 1 | |
Adjusted net asset value | 26,311 | 35,587 | (26) | |
Shares outstanding (millions) | 668.1 | 676.6 | ||
Adjusted net asset value per share | 39.38 | 52.60 | (25) |
[1] Includes the management companies of the investment platforms at their carrying value. |
[2] Includes The Lion Electric Company (Lion), LMPG Inc. (LMPG) and |
Shares held [1] | Share price | ||||
Ownership [1] | |||||
Lifeco | 66.6 | 620.3 | |||
IGM | 62.2 | 147.9 | |||
GBL [2] | 14.9 | 22.8 | €71.88 | €98.16 |
[1] As at September 30, 2022. |
[2] Held through |
PARTICIPATING SHAREHOLDERS' EQUITY
Book value per participating share represents |
The Corporation's book value per participating share was
(in millions of dollars, except per share amounts) | Variation % | |||
Publicly | Lifeco | 16,074 | 15,496 | 4 |
IGM | 3,603 | 3,434 | 5 | |
GBL | 3,023 | 4,278 | (29) | |
22,700 | 23,208 | (2) | ||
Alternative | Sagard | 718 | 822 | (13) |
Power Sustainable | 1,148 | 1,389 | (17) | |
1,866 | 2,211 | (16) | ||
Other | ChinaAMC | 753 | 766 | (2) |
Standalone businesses [1] | 769 | 725 | 6 | |
Other assets and investments | 524 | 611 | (14) | |
Cash and cash equivalents | 1,407 | 1,635 | (14) | |
3,453 | 3,737 | (8) | ||
Total assets | 28,019 | 29,156 | (4) | |
Liabilities and preferred shares | (5,704) | (5,771) | 1 | |
Participating shareholders' equity | 22,315 | 23,385 | (5) | |
Shares outstanding (millions) | 668.1 | 676.6 | ||
Book value per participating share | 33.40 | 34.56 | (3) |
[1] Includes Lion, LMPG and Peak. |
Dividend on Power Corporation Participating Shares
The Board of Directors declared a quarterly dividend of 49.50 cents per share on the Participating Preferred Shares and the Subordinate Voting Shares of the Corporation, payable
Dividends on Power Corporation Non-Participating Preferred Shares
The Board of Directors also declared quarterly dividends on the Corporation's preferred shares, payable
Series | Stock Symbol | Amount | Series | Stock Symbol | Amount |
Series A | POW.PR.A | 35¢ | Series D | POW.PR.D | 31.25¢ |
Series B | POW.PR.B | 33.4375¢ | Series G | POW.PR.G | 35¢ |
Series C | POW.PR.C | 36.25¢ |
Investor Information
Access to Quarterly | Quarterly Earnings Conference Call: | |
The third quarter earnings |
The live audio webcast and presentation materials will be available at: www.powercorporation.com/en/investors/events-presentations/.
To listen via telephone, please dial 1-888-886-7786 toll-free in
A replay of the conference call will be available from | |
Investor Relations Contact: | ||
investor.relations@powercorp.com |
About
At
100% – Power Financial | www.powerfinancial.com | |||
66.6 % | www.greatwestlifeco.com | |||
62.2 % | www.igmfinancial.com | |||
14.9 % | GBL [2] (Euronext: GBLB) | www.gbl.be | ||
54.4 % | Wealthsimple [3] | www.wealthsimple.com | ||
Investment Platforms | ||||
100 % | Sagard [4] | www.sagard.com | ||
100 % | Power Sustainable | www.powersustainable.com | ||
13.9% – ChinaAMC [1][5] | www.chinaamc.com |
[1] | On |
[2] | Held through |
[3] | Undiluted equity interest held by |
[4] | The Corporation holds an 83.1% interest in |
[5] | IGM also holds a 13.9% interest in ChinaAMC. |
Earnings Summary
Contribution to Adjusted Net Earnings and Net Earnings
(in millions of dollars) | Three months ended | Nine months ended | ||
2022 | 2021 | 2022 | 2021 | |
Adjusted net earnings [1] | ||||
Lifeco [2] | 458 | 580 | 1,549 | 1,625 |
IGM [2] | 134 | 167 | 398 | 440 |
GBL [2] | (36) | (11) | (109) | 63 |
Effect of consolidation [3] | (21) | (4) | 35 | 74 |
535 | 732 | 1,873 | 2,202 | |
Alternative asset investment platforms and other [4][5] | (34) | 45 | (154) | 421 |
ChinaAMC | 15 | 17 | 43 | 45 |
Standalone businesses [4][6] | 3 | 58 | 34 | 213 |
Corporate operating and other expenses | (50) | (57) | (135) | (186) |
Dividends on non-participating and perpetual preferred shares | (47) | (47) | (140) | (141) |
Adjusted net earnings [7] | 422 | 748 | 1,521 | 2,554 |
Adjustments [8] | − | (7) | (94) | (263) |
Net earnings | ||||
Lifeco [2] | 458 | 581 | 1,460 | 1,577 |
IGM [2] | 134 | 167 | 398 | 440 |
GBL [2] | (36) | (11) | (109) | 63 |
Effect of consolidation [3] | (21) | 1 | 40 | (28) |
535 | 738 | 1,789 | 2,052 | |
Alternative asset investment platforms and other [4][5] | (34) | 45 | (164) | 321 |
ChinaAMC | 15 | 17 | 43 | 45 |
Standalone businesses [4][6] | 3 | 58 | 34 | 213 |
Corporate operating and other expenses | (50) | (70) | (135) | (199) |
Dividends on non-participating and perpetual preferred shares | (47) | (47) | (140) | (141) |
Net earnings [7] | 422 | 741 | 1,427 | 2,291 |
[1] | For a reconciliation of Lifeco and Alternative and other investments' non-IFRS adjusted net earnings to their net earnings, refer to the Non-IFRS Financial Measures and Alternative and Other Investments sections below. |
[2] | As reported by Lifeco, IGM and GBL. |
[3] | Effect of consolidation reflects: i) the elimination of intercompany transactions; ii) the application of the Corporation's accounting method for investments under common control to the reported net earnings of the publicly traded operating companies, which include: a) an adjustment related to Lifeco's investment in |
[4] | Presented in Alternative and other investments in the Contribution to Net Earnings and Adjusted Net Earnings section of the Corporation's most recent MD&A. |
[5] | Includes earnings of the Corporation's alternative asset investment platforms, including investments held through Power Financial. |
[6] | Includes the results of Lion, LMPG, |
[7] | Attributable to participating shareholders. |
[8] | Refer to the detailed table of Adjustments in the Non-IFRS Financial Measures section below. |
Contribution to Adjusted Net Earnings per Share and Net Earnings per Share
(in dollars per share) | Three months ended | Nine months ended | ||
2022 | 2021 | 2022 | 2021 | |
Adjusted net earnings per share – basic [1] | ||||
Lifeco [2] | 0.68 | 0.86 | 2.30 | 2.40 |
IGM [2] | 0.20 | 0.25 | 0.59 | 0.65 |
GBL [2] | (0.05) | (0.02) | (0.16) | 0.09 |
Effect of consolidation [3] | (0.03) | (0.01) | 0.06 | 0.11 |
0.80 | 1.08 | 2.79 | 3.25 | |
Alternative asset investment platforms and other [4][5] | (0.05) | 0.06 | (0.23) | 0.63 |
ChinaAMC | 0.02 | 0.03 | 0.06 | 0.07 |
Standalone businesses [4][6] | − | 0.09 | 0.05 | 0.31 |
Corporate operating and other expenses and Dividends | (0.14) | (0.16) | (0.41) | (0.49) |
Adjusted net earnings per share [7] | 0.63 | 1.10 | 2.26 | 3.77 |
Adjustments [8] | − | (0.01) | (0.14) | (0.39) |
Net earnings per share – basic | ||||
Lifeco [2] | 0.68 | 0.86 | 2.16 | 2.32 |
IGM [2] | 0.20 | 0.25 | 0.59 | 0.65 |
GBL [2] | (0.05) | (0.02) | (0.16) | 0.09 |
Effect of consolidation [3] | (0.03) | − | 0.07 | (0.03) |
0.80 | 1.09 | 2.66 | 3.03 | |
Alternative asset investment platforms and other [4][5] | (0.05) | 0.06 | (0.24) | 0.48 |
ChinaAMC | 0.02 | 0.03 | 0.06 | 0.07 |
Standalone businesses [4][6] | − | 0.09 | 0.05 | 0.31 |
Corporate operating and other expenses and Dividends | (0.14) | (0.18) | (0.41) | (0.51) |
Net earnings per share – basic [7] | 0.63 | 1.09 | 2.12 | 3.38 |
[1] | For a reconciliation of Lifeco and Alternative and other investments' non-IFRS adjusted net earnings to their net earnings, refer to the Non-IFRS Financial Measures and Alternative and Other Investments sections below. |
[2] | As reported by Lifeco, IGM and GBL. |
[3] | Effect of consolidation reflects: i) the elimination of intercompany transactions; ii) the application of the Corporation's accounting method for investments under common control to the reported net earnings of the publicly traded operating companies, which include: a) an adjustment related to Lifeco's investment in PSEIP; and b) an allocation of the results of the fintech portfolio including Wealthsimple, Portage I, Portage II and Portage III to the contributions from Lifeco and IGM based on their respective interest; and iii) adjustments in accordance with IAS 39 for IGM and GBL. Refer to the detailed table in the Contribution to Net Earnings and Adjusted Net Earnings section of the Corporation's most recent MD&A. |
[4] | Presented in Alternative and other investments in the Contribution to Net Earnings and Adjusted Net Earnings section of the Corporation's most recent MD&A. |
[5] | Includes earnings of the Corporation's alternative asset investment platforms, including investments held through Power Financial. |
[6] | Includes the results of Lion, LMPG, Peak and GP Strategies (up to the date of disposal in the fourth quarter of 2021). |
[7] | Attributable to participating shareholders. |
[8] | Refer to the detailed table of Adjustments in the Non-IFRS Financial Measures section below. |
Alternative and Other Investments – Earnings
(in millions of dollars) | Three months ended | Nine months ended | ||
2022 | 2021 | 2022 | 2021 | |
Adjusted net earnings (loss) | ||||
Asset management activities [1] | ||||
Sagard [2] | (9) | (18) | (59) | 44 |
Power Sustainable | (3) | (5) | (18) | (16) |
Investing activities (proprietary capital) | ||||
Sagard [3] | (5) | 55 | 40 | 90 |
Power Sustainable [4] | (28) | 13 | (145) | 279 |
Standalone businesses [5] | 3 | 58 | 34 | 213 |
Investment and hedge funds and Other [6] | 11 | − | 28 | 24 |
Adjusted net earnings (loss) | (31) | 103 | (120) | 634 |
Adjustments [7] | − | − | (10) | (100) |
Net earnings (loss) | (31) | 103 | (130) | 534 |
[1] | Includes management fees charged by the investment platforms on proprietary capital. Management fees paid by the Corporation are deducted from income from investing activities. |
[2] | The first and second quarters of 2022 include a reversal of net carried interest of |
[3] | Includes the Corporation's share of earnings (losses) of Wealthsimple. The first and second quarters of 2022 include a reversal of carried interest payable of $13 million and $25 million, respectively, mainly due to decreases in the fair value of Wealthsimple and investments held by Portage II in the period. The first quarter of 2021 included a charge of $52 million related to the Corporation's share of the carried interest payable due to increases in fair value of investments held in the Portage Funds and Wealthsimple; as well, it excluded a charge of $100 million related to the remeasurement of the put right liability held by certain of the non-controlling interests in Wealthsimple to fair value which has been included in Adjustments (see the Adjustments section below). The net decrease in fair value of the Corporation's investments, including its investments held through Power Financial, in Portage I, Portage II, Portage III, |
[4] | Includes a gain on disposal of a portfolio of solar assets of |
[5] | Includes the Corporation's share of earnings (losses) of Lion, LMPG, Peak and GP Strategies (up to the date of disposal in the fourth quarter of 2021). The second quarter of 2022 includes a net contribution of $28 million related to the investment in Lion which includes remeasurements attributable to the decline in market value of Lion in the quarter and is comprised of i) share of earnings of $17 million which includes a recovery related to the revaluation of its warrants; ii) a recovery of $18 million related to the decrease in amounts payable by Power Sustainable to its management for long-term incentive plans; and iii) a loss of $5 million related to the revaluation of call rights held by Power Sustainable. |
The third quarter of 2021 included a net contribution of | |
In the second quarter of 2021, the Corporation recorded a net gain of | |
[6] | Other consists mainly of foreign exchange gains or losses and interest on cash and cash equivalents. The second quarter of 2022 includes a gain on disposal of a property by the Corporation of |
[7] | Refer to the detailed table of Adjustments in the Non-IFRS Financial Measures section below. |
NON-IFRS FINANCIAL MEASURES
Net earnings attributable to participating shareholders are comprised of:
- Adjusted net earnings attributable to participating shareholders; and
- Adjustments, which include the after-tax impact of any item that in management's judgment, including those identified by management of its publicly traded operating companies, would make the period-over-period comparison of results from operations less meaningful. Includes the Corporation's share of Lifeco's impact of actuarial assumption changes and other management actions, direct equity and interest rate market impacts on insurance and investment contract liabilities net of hedging, as well as items that management believes are not indicative of the underlying business results which include those identified by a subsidiary or a jointly controlled corporation. Items that management and management of its subsidiaries believe are not indicative of the underlying business results include restructuring or reorganization costs, integration costs related to business acquisitions, material legal settlements, material impairment charges, impact of substantially enacted income tax rate changes and other tax impairments, certain non-recurring material items, and net gains, losses or costs related to the disposition or acquisition of a business.
Management uses these financial measures in its presentation and analysis of the financial performance of
Adjusted net asset value is commonly used by holding companies to assess their value. Adjusted net asset value is the fair value of the assets of the combined
Adjusted net earnings attributable to participating shareholders, adjusted net asset value, gross asset value, adjusted net earnings per share and adjusted net asset value per share are non-IFRS financial measures and ratios that do not have a standard meaning and may not be comparable to similar measures used by other entities.
Presentation of Holding Company Activities
The Corporation's reportable segments include Lifeco, IGM and GBL, which represent the Corporation's investments in publicly traded operating companies. These reportable segments, in addition to the asset management and holding company activities, reflect
The holding company activities comprise the corporate activities of the Corporation and Power Financial, on a combined basis, and present the investment activities of the Corporation as a holding company. The investment activities of the holding company, including the investments in Lifeco, IGM and controlled entities within the alternative asset investment platforms, are presented using the equity method. The holding company activities also present the corporate assets and liabilities managed, including the cash and non-participating shares. The discussions included in the sections "Financial Position" and "Cash Flows" of the Corporation's most recent MD&A present the segmented balance sheet and cash flow statement of the holding company; these non-consolidated statements are presented in Note 19 of the Corporation's Interim Consolidated Financial Statements. This presentation is useful to the reader as it presents the holding company's (parent) results separately from the results of its consolidated operating subsidiaries.
RECONCILIATIONS OF NON-IFRS FINANCIAL MEASURES
ADJUSTED NET EARNINGS | ||||
(in millions of dollars) | Three months ended | Nine months ended | ||
2022 | 2021 | 2022 | 2021 | |
Adjusted net earnings – Non-IFRS financial measure [1] | 422 | 748 | 1,521 | 2,554 |
Share of Adjustments [2], net of tax | ||||
Lifeco | − | 6 | (89) | (51) |
IGM | − | − | 5 | (99) |
Alternative and other investments | − | − | (10) | (100) |
Corporate operations | − | (13) | − | (13) |
− | (7) | (94) | (263) | |
Net earnings – IFRS financial measure [1] | 422 | 741 | 1,427 | 2,291 |
[1] Attributable to participating shareholders of | ||||
[2] Refer to the Adjustments section for more detail on Adjustments from Lifeco, IGM, alternative and other investments, and corporate operations. | ||||
ADJUSTMENTS (excluded from Adjusted net earnings) | ||||
(in millions of dollars) | Three months ended | Nine months ended | ||
2022 | 2021 | 2022 | 2021 | |
Lifeco [1] | ||||
Actuarial assumption changes and other management actions (pre-tax) | 16 | 48 | 26 | 80 |
Income tax (expense) benefit | 29 | (3) | 27 | (6) |
Market-related impacts on liabilities (pre-tax) | (36) | 35 | (58) | 9 |
Income tax (expense) benefit | 6 | (3) | 11 | (6) |
Transaction costs related to acquisitions (pre-tax) | 10 | (70) | (42) | (88) |
Income tax (expense) benefit | 4 | 10 | 13 | 11 |
Restructuring and integration charges (pre-tax) | (39) | (21) | (90) | (46) |
Income tax (expense) benefit | 10 | 5 | 24 | 12 |
Tax legislative changes impact on liabilities | − | − | − | (14) |
− | 1 | (89) | (48) | |
Effect of consolidation (pre-tax) [2] | − | 5 | − | (3) |
Income tax (expense) benefit | − | − | − | − |
− | 6 | (89) | (51) | |
IGM | ||||
Effect of consolidation (pre-tax) [2] | − | − | 5 | (99) |
Income tax (expense) benefit | − | − | − | − |
− | − | 5 | (99) | |
Alternative and other investments | ||||
Remeasurements of Wealthsimple's put right liability | − | − | − | (100) |
Impairment charges on direct energy infrastructure investments (pre-tax) | − | − | (13) | − |
Income tax (expense) benefit | − | − | 3 | − |
− | − | (10) | (100) | |
Corporate operations | ||||
Reorganization charges | − | (13) | − | (13) |
− | (7) | (94) | (263) |
[1] | As reported by Lifeco. |
[2] | Effect of consolidation reflects i) the elimination of intercompany transactions; ii) the application of the Corporation's accounting method for investments under common control to the Adjustments reported by Lifeco and IGM, which includes an allocation of the Adjustments related to the fintech portfolio based on their respective interest; iii) IGM's share of Lifeco's Adjustments, in accordance with the Corporation's definition of Adjusted net earnings; and iv) adjustments in accordance with IAS 39 for IGM. |
ADJUSTED NET ASSET VALUE
Adjusted net asset value represents management's estimate of the fair value of the participating shareholders' equity of the Corporation. Adjusted net asset value is the fair value of the assets of the combined |
The Corporation's adjusted net asset value per share was
(in millions of dollars, except per share amounts) | Holding | Fair value | Adjusted net | Holding | Fair value | Adjusted net |
Assets | ||||||
Investments | ||||||
Power Financial | ||||||
Lifeco | 16,074 | 2,422 | 18,496 | 15,496 | 8,049 | 23,545 |
IGM | 3,603 | 1,489 | 5,092 | 3,434 | 3,315 | 6,749 |
GBL [1] | 3,023 | (895) | 2,128 | 4,278 | (1,121) | 3,157 |
Alternative and other investments | ||||||
Asset management companies [2] | ||||||
Sagard | 68 | − | 68 | 116 | − | 116 |
Power Sustainable | 30 | − | 30 | 21 | − | 21 |
Investing activities | ||||||
Sagard [3] | 650 | 258 | 908 | 706 | 693 | 1,399 |
Power Sustainable | 1,118 | 208 | 1,326 | 1,368 | 265 | 1,633 |
Other | ||||||
Standalone businesses [4] | 769 | 86 | 855 | 725 | 606 | 1,331 |
Other | 247 | 71 | 318 | 262 | 50 | 312 |
ChinaAMC | 753 | 397 | 1,150 | 766 | 384 | 1,150 |
Cash and cash equivalents | 1,407 | − | 1,407 | 1,635 | − | 1,635 |
Other assets | 277 | − | 277 | 349 | − | 349 |
Total assets | 28,019 | 4,036 | 32,055 | 29,156 | 12,241 | 41,397 |
Liabilities and non-participating shares | ||||||
Debentures and other debt instruments | 897 | − | 897 | 897 | − | 897 |
Other liabilities [5][6] | 1,027 | 40 | 1,067 | 1,090 | 39 | 1,129 |
Non-participating shares and perpetual | 3,780 | − | 3,780 | 3,784 | − | 3,784 |
Total liabilities and non-participating shares | 5,704 | 40 | 5,744 | 5,771 | 39 | 5,810 |
Net value | ||||||
Participating shareholders' | 22,315 | 3,996 | 26,311 | 23,385 | 12,202 | 35,587 |
Per share | 33.40 | 39.38 | 34.56 | 52.60 |
[1] | The Corporation's share of GBL's reported net asset value was |
[2] | The management companies of the investment funds are presented at their carrying value and are primarily composed of cash and net carried interest receivable. |
[3] | Includes the Corporation's investments in Portage I, Portage II and Wealthsimple, held by Power Financial. |
[4] | An additional deferred tax liability of |
[5] | In accordance with IAS 12, Income Taxes, no deferred tax liability is recognized with respect to temporary differences associated with investments in subsidiaries and jointly controlled corporations as the Corporation is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. If the Corporation were to dispose of an investment in a subsidiary or a jointly controlled corporation, income taxes payable on such disposition would be minimized through careful and prudent tax planning and structuring, as well as with the use of available tax attributes not otherwise recognized on the balance sheet, including tax losses, tax basis, safe income and foreign tax surplus associated with the subsidiary or jointly controlled corporation. |
[6] | At |
This news release also contains other non-IFRS financial measures which are publicly disclosed by the Corporation's subsidiaries including adjusted net earnings, adjusted net earnings per share and Lifeco's assets under administration. The section below includes the description and reconciliation of the non-IFRS financial measures included in this news release as reported by the Corporation's subsidiaries. The information below is derived from Lifeco's third quarter MD&A, as prepared and disclosed in accordance with applicable securities legislation, and which is also available either directly from SEDAR (www.sedar.com) or from its website, www.greatwestlifeco.com.
Lifeco
ADJUSTED NET EARNINGS ATTRIBUTABLE TO LIFECO'S COMMON SHAREHOLDERS
Adjusted net earnings (loss) [1] reflect Lifeco management's view of the underlying business performance of Lifeco and provide an alternate measure to understand the underlying business performance compared to IFRS net earnings. Adjusted net earnings (loss) exclude the following items:
- The impact of actuarial assumption changes and other management actions;
- The net earnings impact related to the direct equity and interest rate market impacts on insurance and investment contract liabilities, net of hedging, and related deferred tax liabilities, which includes:
- the impact of hedge ineffectiveness related to segregated fund guarantee liabilities that are hedged and the performance of the related hedge assets;
- the impact on segregated fund guarantee liabilities not hedged;
- the impact on general fund equity and investment properties supporting insurance contract liabilities; and
- other market impacts on insurance and investment contract liabilities and deferred tax liabilities, including those arising from the difference between actual and expected market movements; and
- Certain items that, when removed, assist in explaining Lifeco's underlying business performance including restructuring costs, integration costs related to business acquisitions, material legal settlements, material impairment charges related to goodwill and intangible assets, impact of substantially enacted income tax rate changes and other tax impairments and net gains, losses or costs related to the disposition or acquisition of a business.
(in millions of dollars) | Three months ended | Nine months ended | ||
2022 | 2021 | 2022 | 2021 | |
Adjusted net earnings – Non-IFRS financial measure [1][2] | 688 | 870 | 2,327 | 2,435 |
Adjustments | ||||
Actuarial assumption changes and other management actions (pre-tax) | 24 | 74 | 39 | 120 |
Income tax (expense) benefit | 44 | (5) | 41 | (9) |
Market-related impacts on liabilities (pre-tax) | (54) | 52 | (87) | 13 |
Income tax (expense) benefit | 9 | (5) | 16 | (9) |
Transaction costs related to acquisitions (pre-tax) | 16 | (104) | (63) | (131) |
Income tax (expense) benefit | 4 | 14 | 19 | 16 |
Restructuring and integration charges (pre-tax) | (58) | (32) | (135) | (69) |
Income tax (expense) benefit | 15 | 8 | 36 | 18 |
Tax legislative changes impact on liabilities | − | − | − | (21) |
− | 2 | (134) | (72) | |
Net earnings – IFRS financial measure [2] | 688 | 872 | 2,193 | 2,363 |
[1] Defined as "base earnings" and identified as a non-GAAP financial measure by Lifeco. |
[2] Attributable to Lifeco common shareholders. |
LIFECO'S ASSETS UNDER MANAGEMENT AND ASSETS UNDER ADMINISTRATION
Assets under management and assets under administration are non-IFRS measures that provide an indicator of the size and volume of Lifeco's overall business. Total assets under administration includes total assets per Lifeco's financial statements, other assets under management and other assets under administration. Please refer to the "Glossary" section of Lifeco's most recent Management's Discussion and Analysis for additional information regarding other assets under management and other assets under administration.
(in billions of dollars) | ||
Total assets per financial statements | 672.8 | 630.5 |
Other assets under management | 319.1 | 377.2 |
Assets under management | 991.9 | 1,007.7 |
Other assets under administration [1] | 1,392.4 | 1,283.9 |
Assets under administration [1] | 2,384.3 | 2,291.6 |
[1] | Comparative figures for 2021 have been restated to include |
OTHER MEASURES
This news release and other continuous disclosure documents also include other measures used to discuss activities of the Corporation's consolidated publicly traded operating companies and alternative asset investment platforms including, but not limited to, "assets under management", "assets under administration", "assets under management and advisement", "book value per participating share", "carried interest", "net asset value", and "unfunded commitments". Refer to the section "Other Measures" in the Corporation's most recent MD&A, which can be located in the Corporation's profile on SEDAR at www.sedar.com, for definitions of such measures, which definitions are incorporated herein by reference.
ELIGIBLE DIVIDENDS
For purposes of the Income Tax Act (
FORWARD-LOOKING STATEMENTS
Certain statements in this news release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect the Corporation's current expectations, or with respect to disclosure regarding the Corporation's public subsidiaries, reflect such subsidiaries' disclosed current expectations. Forward-looking statements are provided for the purposes of assisting the reader in understanding the Corporation's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and the reader is cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of the Corporation and its subsidiaries, the Corporation's sale of its interest in ChinaAMC to IGM, and IGM's sale of a portion of its interest in Lifeco, and related impacts and timing thereof, statements concerning deferred taxes, fundraising activities by investment platforms and capital commitments by the Power group and third parties. 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", "plans", "believes", "estimates", "seeks", "intends", "targets", "projects", "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could".
By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which are beyond the Corporation's and its subsidiaries' control, affect the operations, performance and results of the Corporation and its subsidiaries and their businesses, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: the impact or unanticipated impact of general economic, political and market factors in
The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances, including that the list of risks and uncertainties in the previous paragraph, collectively, are not expected to have a material impact on the Corporation and its subsidiaries and with respect to forward-looking statements of the Corporation's subsidiaries disclosed in this news release, the risks identified by such subsidiaries in their respective MD&A and Annual Information Form most recently filed with the securities regulatory authorities in
Other than as specifically required by applicable Canadian law, the Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Additional information about the risks and uncertainties of the Corporation's business and material factors or assumptions on which information contained in forward-looking statements is based is provided in its disclosure materials, including its most recent Management's Discussion and Analysis and Annual Information Form, filed with the securities regulatory authorities in
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