Mr. Murray Taylor reports
IGM FINANCIAL INC. REPORTS FOURTH QUARTER AND 2013 EARNINGS
IGM Financial Inc. has released its earnings results for the fourth quarter and for the year ended Dec. 31, 2013.
Operating earnings available to common shareholders, excluding other items (1), for the three months ended Dec. 31, 2013, were $198.7-million or 79 cents per share, compared with operating earnings available to common shareholders, excluding other items (2), of $183.2-million or 72 cents per share in 2012.
Net earnings available to common shareholders for the three months ended Dec. 31, 2013, were $197.1-million or 78 cents per share, compared with net earnings available to common shareholders of $202-million or 80 cents per share for the comparative period in 2012.
Operating earnings available to common shareholders, excluding other items (1), for the year ended Dec. 31, 2013, were $763.5-million or $3.02 per share, compared with operating earnings available to common shareholders, excluding other items (2), of $746.4-million or $2.92 per share in 2012.
Net earnings available to common shareholders for the year ended Dec. 31, 2013, were $761.9-million or $3.02 per share, compared with net earnings available to common shareholders of $758.8-million or $2.97 per share in 2012.
Revenues for the three months ended Dec. 31, 2013, were $702.9-million, compared with $632.6-million in the comparative period in 2012. Revenues for the year ended Dec. 31, 2013, were $2.69-billion, compared with $2.58-billion a year ago. Expenses were $449.4-million for the fourth quarter of 2013, compared with $400.4-million a year ago and $1.71-billion for the year ended Dec. 31, 2013, compared with $1.62-billion in 2012.
Total assets under management at Dec. 31, 2013, were $131.8-billion. This compared with total assets under management of $120.7-billion at Dec. 31, 2012.
Shareholders' equity at Dec. 31, 2013, was $4.7-billion, compared with $4.4-billion at Dec. 31, 2012. Return on average common equity based on operating earnings for the year ended Dec. 31, 2013, was 17.3 per cent, unchanged from the comparative period in 2012.
(1) Other items for the three and 12 months ended Dec. 31, 2013, of $1.6-million consisted of a net charge of:
- An after-tax charge of $10.6-million related to restructuring and other charges;
- An after-tax benefit of $9-million representing the company's proportionate share of net changes in
Great-West Lifeco Inc.'s litigation provision.
(2) Other items for the three and 12 months ended Dec. 31, 2012, of $18.8-million and $12.4-million, respectively,
consisted of a net benefit of:
- A favourable change in income tax provision estimates of $24.4-million related to certain tax filings;
- An after-tax charge of $5.6-million representing the company's proportionate share of net changes in Great-West
Lifeco Inc.'s litigation provision.
Other items for the 12 months ended Dec. 31, 2012, also included a
non-cash income tax charge of $6.4-million resulting from increases in
Ontario corporate income tax rates and their effect on the deferred income
tax liability related to indefinite life intangible assets arising from
prior business acquisitions.
Investors Group operations
"Mutual fund gross sales, up 19 per cent over the same period last year, were the highest level of fourth-quarter sales in the history of the company," said Murray J. Taylor, president and chief executive officer of Investors Group Inc. "Our consultant network increased to 4,673 in the fourth quarter from 4,518 in the same quarter last year based primarily on strong recruiting results."
Mutual fund sales for the fourth quarter of 2013 were $1.69-billion compared with $1.42-billion in the prior year, and mutual fund net sales for the fourth quarter were $59-million compared with net redemptions of $261-million a year ago.
Mutual fund sales for the 12 months ended Dec. 31, 2013, were $6.67-billion compared with $5.78-billion in the prior year, and mutual fund net sales were $159-million compared with net redemptions of $724-million a year ago.
The 12-month trailing redemption rate (excluding money market funds) was 9.4 per cent at Dec. 31, 2013, compared with 9.7 per cent at Sept. 30, 2013.
Mutual fund assets under management at Dec. 31, 2013, were $68.3-billion compared with $60.6-billion at Dec. 31, 2012.
Mackenzie operations
Mutual fund sales for the fourth quarter of 2013 were $2.02-billion, an increase of 9.1 per cent compared with $1.85-billion the prior year. Mutual fund net sales for the fourth quarter were $8-million compared with net redemptions of $543-million a year ago.
Mutual fund sales for the year ending Dec. 31, 2013, were $6.7-billion, an increase of 22 per cent compared with $5.49-billion the prior year. Mutual fund net redemptions were $487-million compared with net redemptions of $1,974-million a year ago.
Total sales for the fourth quarter of 2013 were $3.14-billion compared with $2.84-billion in the prior year. Total net redemptions for the fourth quarter were $910,000 compared with total net redemptions of $1-billion a year ago.
Total sales for the year ended Dec. 31, 2013, were $12.36-billion compared with $9.97-billion in the prior year. Total net redemptions were $3.57-billion compared with total net redemptions of $4.24-billion a year ago.
"Solid investment performance, new product introductions and enthusiasm for our global equity offerings have created strong sales momentum," said Jeffrey R. Carney, president and chief executive officer of Mackenzie Financial Corp. "This is our highest level of fourth-quarter mutual fund sales since 2007."
Mackenzie's total assets under management at Dec. 31, 2013, were $65.3-billion compared with total assets under management of $61.5-billion at Dec. 31, 2012. Mutual fund assets under management at Dec. 31, 2013, were $46-billion compared with $40.4-billion a year ago.
Dividends
The board of directors has declared a dividend of 53.75 cents per share on the company's common shares and has declared a dividend of 36.875 cents per share on the company's 5.9-per-cent non-cumulative first preferred shares, Series B. The common share dividend and the preferred share dividend are payable on April 30, 2014, to shareholders of record on March 31, 2014.
Media note
A live webcast of IGM's analyst conference call for the fourth quarter 2013 will be held Friday, Feb. 14, 2014, at 3 p.m. (ET) at on the company's website. Media and interested parties may alternatively choose to listen to the live analyst teleconference call by dialling 1-866-226-1793 or 416-340-2218.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of dollars except per-share amounts)
Three months ended 12 months ended
Dec. 31, Dec. 31,
2013 2012 2013 2012
Restated Restated
Revenues
Management fees $ 475,584 $ 434,691 $1,832,606 $1,766,348
Administration fees 93,721 84,571 357,535 337,155
Distribution fees 85,635 80,198 323,045 321,071
Net investment income and
other 17,774 17,540 83,009 80,611
Proportionate share of
affiliate's earnings 30,191 15,565 93,827 71,971
702,905 632,565 2,690,022 2,577,156
Expenses
Commission 229,384 213,387 886,123 858,248
Non-commission 196,763 163,839 730,369 668,553
Interest 23,239 23,202 92,150 92,188
449,386 400,428 1,708,642 1,618,989
Earnings before income taxes 253,519 232,137 981,380 958,167
Income taxes 54,174 27,923 210,626 190,504
Net earnings 199,345 204,214 770,754 767,663
Perpetual preferred share
dividends 2,212 2,212 8,850 8,850
Net earnings available to
common shareholders $ 197,133 $ 202,002 $ 761,904 $ 758,813
Earnings per share (in
dollars)
Basic $ 0.78 $ 0.80 $ 3.02 $ 2.98
Diluted $ 0.78 $ 0.80 $ 3.02 $ 2.97
FINANCIAL HIGHLIGHTS
As at and for the
For the three months 12 months
ended Dec. 31, ended Dec. 31,
2013 2012 2013 2012
Earnings available
to common
shareholders ($
millions)
Operating
earnings (1) $ 198.7 $ 183.2 $ 763.5 $ 746.4
Net earnings 197.1 202.0 761.9 758.8
Diluted earnings
per share
Operating
earnings (1) 0.79 0.72 3.02 2.92
Net earnings 0.78 0.80 3.02 2.97
Return on equity
Operating
earnings (1) 17.3 % 17.3 %
Net earnings 17.3 % 17.6 %
Dividends per
share 0.5375 0.5375 2.15 2.15
Total assets under
management (2)
($ millions) $ 131,777 $ 120,694
Investors Group
Mutual funds 68,255 60,595
Mackenzie
mutual funds 46,024 40,394
Subadvisory,
institutional
and other
accounts 19,291 21,083
Total 65,315 61,477
Counsel
mutual funds 3,406 2,950
MUTUAL FUNDS AND INSTITUTIONAL SALES
(in millions of dollars)
Investors Mutual Mackenzie
Group funds total (3) Counsel Total
For the three months
ended Dec. 31, 2013
Gross sales $ 1,694 $ 2,019 $ 3,143 $ 147 $ 4,519
Net sales
(redemptions) 59 8 (912) 26 (955)
For the 12 months
ended Dec. 31, 2013
Gross sales $ 6,668 $ 6,700 $ 12,363 $ 485 $ 17,939
Net sales
(redemptions) 159 (487) (3,566) 52 (3,722)
(1) Non-international financial reporting standard financial measures;
2013 operating earnings excluded an after-tax charge of $10.6-million
related to restructuring and other charges; and an after-tax benefit of
$9-million, recorded in the fourth quarter, representing the company's
proportionate share of net changes in Great-West Lifeco's litigation
provisions. Two thousand twelve operating earnings excluded a favourable
change in income tax provision estimates of $24.4-million, recorded in the
fourth quarter, related to certain tax filings; an after-tax charge of
$5.6-million, recorded in the fourth quarter, representing the company's
proportionate share of net changes in Great-West Lifeco's litigation
provisions; a non-cash income tax charge of $6.4-million, recorded in the
second quarter, resulting from increases in Ontario corporate income tax
rates and their effect on the deferred income tax liability related to
indefinite life intangible assets arising from prior business acquisitions.
There is no expectation that the deferred tax liability will become payable
as the company has no intention of disposing of these assets.
(2) Total assets under management excluded $5.2-billion of assets subadvised by
Mackenzie on behalf of Investors Group and Investment Planning Counsel
($4.3-billion at December, 2012).
(3) In the third quarter of 2013, Waddell & Reed Financial Inc. internalized a
$2.4-billion mandate previously subadvised by Mackenzie.
(4) Total gross sales and net sales for the three months ended Dec. 31, 2013,
excluded $465-million and $128-million, respectively, in accounts
subadvised by Mackenzie on behalf of Investors Group and Investment
Planning Counsel. Total gross sales and net sales for the 12 months ended
Dec. 31, 2013, excluded $1.6-billion and $367-million, respectively, in accounts
subadvised by Mackenzie on behalf of Investors Group and Investment
Planning Counsel.
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