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IGM Financial Inc. Reports Fourth Quarter and 2013 Earnings

WINNIPEG, MANITOBA -- (Marketwired) -- 02/14/14 -- Readers are referred to the disclaimer regarding Forward-Looking Statements, Non-IFRS Financial Measures and Additional IFRS Measures at the end of this Release.

IGM Financial Inc. (IGM or the Company) (TSX: IGM) today announced earnings results for the fourth quarter and for the year ended December 31, 2013.

Operating earnings available to common shareholders, excluding other items(1), for the three months ended December 31, 2013 were $198.7 million or 79 cents per share compared to 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 December 31, 2013 were $197.1 million or 78 cents per share compared to net earnings available to common shareholders of $202.0 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 December 31, 2013 were $763.5 million or $3.02 per share compared to 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 December 31, 2013 were $761.9 million or $3.02 per share compared to net earnings available to common shareholders of $758.8 million or $2.97 per share in 2012.

Revenues for the three months ended December 31, 2013 were $702.9 million compared to $632.6 million in the comparative period in 2012. Revenues for the year ended December 31, 2013 were $2.69 billion compared to $2.58 billion a year ago. Expenses were $449.4 million for the fourth quarter of 2013 compared to $400.4 million a year ago and $1.71 billion for the year ended December 31, 2013 compared to $1.62 billion in 2012.

Total assets under management at December 31, 2013 were $131.8 billion. This compared with total assets under management of $120.7 billion at December 31, 2012.

Shareholders' equity at December 31, 2013 was $4.7 billion, compared to $4.4 billion at December 31, 2012. Return on average common equity based on operating earnings for the year ended December 31, 2013 was 17.3%, unchanged from the comparative period in 2012.

(1)  Other items for the three and twelve months ended December 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 $9.0 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 twelve months ended December 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 twelve months ended December 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% 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 to $1.42 billion in the prior year, and mutual fund net sales for the fourth quarter were $59 million compared to net redemptions of $261 million a year ago.

Mutual fund sales for the twelve months ended December 31, 2013 were $6.67 billion compared to $5.78 billion in the prior year, and mutual fund net sales were $159 million compared to net redemptions of $724 million a year ago.

The twelve month trailing redemption rate (excluding money market funds) was 9.4% at December 31, 2013, compared to 9.7% at September 30, 2013.

Mutual fund assets under management at December 31, 2013 were $68.3 billion compared to $60.6 billion at December 31, 2012.

Mackenzie Operations

Mutual fund sales for the fourth quarter of 2013 were $2.02 billion, an increase of 9.1% compared to $1.85 billion the prior year. Mutual fund net sales for the fourth quarter were $8 million compared to net redemptions of $543 million a year ago.

Mutual fund sales for the year ending December 31, 2013 were $6.70 billion, an increase of 22.0% compared to $5.49 billion the prior year. Mutual fund net redemptions were $487 million compared to net redemptions of $1,974 million a year ago.

Total sales for the fourth quarter of 2013 were $3.14 billion compared to $2.84 billion in the prior year. Total net redemptions for the fourth quarter were $0.91 billion compared to total net redemptions of $1.00 billion a year ago.

Total sales for the year ended December 31, 2013 were $12.36 billion compared to $9.97 billion in the prior year. Total net redemptions were $3.57 billion compared to 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 Corporation. "This is our highest level of fourth quarter mutual fund sales since 2007."

Mackenzie's total assets under management at December 31, 2013 were $65.3 billion compared with total assets under management of $61.5 billion at December 31, 2012. Mutual fund assets under management at December 31, 2013 were $46.0 billion compared to $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 $0.36875 per share on the Company's 5.90% 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.

Forward-Looking Statements

Certain statements in this Release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect IGM Financial's current expectations. Forward-looking statements are provided to assist the reader in understanding the Company's financial position and results of operations 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. Readers are 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 Company, as well as the outlook for North American and international economies, for the current fiscal year and subsequent periods. 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".

This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including the perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. While the Company considers these assumptions to be reasonable based on information currently available to management, they may prove to be incorrect.

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 material factors, many of which are beyond the Company's and its subsidiaries' control, affect the operations, performance and results of the Company, 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 North America and internationally, interest and foreign exchange rates, global equity and capital markets, management of market liquidity and funding risks, changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates), the effect of applying future accounting changes, operational and reputational risks, business competition, technological change, changes in government regulations and legislation, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, the Company's ability to complete strategic transactions, integrate acquisitions and implement other growth strategies, and the Company's and its subsidiaries' success in anticipating and managing the foregoing factors.

The reader is cautioned that the foregoing list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. The reader is also cautioned to consider these and other factors, uncertainties and potential events carefully and not place undue reliance on forward-looking statements.

Other than as specifically required by applicable Canadian law, the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are 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 Company's business and material factors or assumptions on which information contained in forward-looking statements is based is provided in its disclosure materials filed with the securities regulatory authorities in Canada, available at www.sedar.com.

Non-IFRS Financial Measures and Additional IFRS Measures

This release contains non-IFRS financial measures and additional IFRS measures. Net earnings available to common shareholders, which is an additional measure in accordance with International Financial Reporting Standards (IFRS), may be subdivided into two components consisting of:

--  Operating earnings available to common shareholders; and
--  Other items, which include the after-tax impact of any item that
    management considers to be of a non-recurring nature or that could make
    the period-over-period comparison of results from operations less
    meaningful.

Terms by which non-IFRS financial measures are identified include but are not limited to "operating earnings available to common shareholders", "operating earnings per share", "operating return on average common equity" and other similar expressions used to provide management and investors with additional measures to assess earnings performance. However, non-IFRS financial measures do not have standard meanings prescribed by IFRS and are not directly comparable to similar measures used by other companies. Please refer to the attached Financial Highlights for the appropriate reconciliations of these non-IFRS financial measures to measures prescribed by IFRS.

Terms by which additional IFRS measures are identified include "earnings before income taxes and discontinued operations", "net earnings from continuing operations" and "net earnings available to common shareholders". Additional IFRS measures are used to provide management and investors with additional measures to assess earnings performance. These measures are considered additional IFRS measures as they are in addition to the minimum line items required by IFRS and are relevant to an understanding of the entity's financial performance.

The Consolidated Financial Statements and Management's Discussion and Analysis (MD&A) of operating results are available on IGM Financial Inc.'s website at www.igmfinancial.com.

IGM Financial Inc. is one of Canada's premier personal financial services companies, and one of the country's largest managers and distributors of mutual funds and other managed asset products, with over $132 billion in total assets under management as of January 31, 2014. Its activities are carried out principally through Investors Group, Mackenzie Financial Corporation and Investment Planning Counsel. IGM Financial Inc. is a member of the Power Financial Corporation group of companies.

Media Note: A live webcast of IGM's Analyst conference call for the Fourth Quarter 2013 will be held Friday February 14, 2014 at 3:00 P.M. (ET) at www.igmfinancial.com. Media and interested parties may alternatively choose to listen to the live analyst teleconference call by dialing 1-866 226-1793 or 416-340-2218.

IGM FINANCIAL INC.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Statements of Earnings

(unaudited)                             Three months                  Twelve
(in thousands of Canadian                      ended            months ended
 dollars, except shares and              December 31             December 31
 per share amounts)                 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
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Average number of common
 shares
  (in thousands)
  - Basic                        252,123     252,520     252,013     254,853
  - Diluted                      253,005     252,862     252,474     255,277

Earnings per share (in
 dollars)
  - Basic                         $ 0.78      $ 0.80      $ 3.02      $ 2.98
  - Diluted                       $ 0.78      $ 0.80      $ 3.02      $ 2.97
----------------------------------------------------------------------------
----------------------------------------------------------------------------

IGM FINANCIAL INC.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Financial Highlights

                                                         As at and for the
                       For the three months                  twelve months
                          ended December 31              ended December 31
                  -------------------------  -----------------------------
(unaudited)            2013     2012 Change        2013      2012   Change
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings available
 to common
 shareholders ($
 millions)

  Operating
   Earnings (1)    $  198.7 $  183.2    8.5 % $   763.5 $   746.4      2.3 %
  Net Earnings        197.1    202.0   (2.4)      761.9     758.8      0.4
Diluted earnings
 per share
  Operating
   Earnings (1)        0.79     0.72    9.7        3.02      2.92      3.4
  Net Earnings         0.78     0.80   (2.5)       3.02      2.97      1.7
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      9.2 %
  Investors Group
    Mutual funds                                 68,255    60,595     12.6
  Mackenzie
    Mutual funds                                 46,024    40,394
    Sub-advisory,
     institutional
     and other
     accounts                                    19,291    21,083
  Total                                          65,315    61,477      6.2
  Counsel
    Mutual funds                                  3,406     2,950     15.5

----------------------------------------------------------------------------

Mutual Funds and
 Institutional Sales ($    Investors                                  Total
 millions)                     Group           Mackenzie   Counsel      (4)
                          ----------  -------------------  -------  --------
                                       Mutual
                                        Funds  Total (3)
  For the three months
   ended December 31,
   2013
    Gross sales          $     1,694 $  2,019 $    3,143  $    147 $  4,519
    Net sales
     (redemptions)                59        8       (912)       26     (955)
  For the twelve months
   ended December 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-IFRS Financial Measures:

    2013 operating earnings excluded:
    - An after-tax charge of $10.6 million related to restructuring and
    other charges.
    - An after-tax benefit of $9.0 million, recorded in the fourth quarter,
    representing the Company's proportionate share of net changes in Great-
    West Lifeco Inc.'s litigation provisions.
    2012 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 Inc.'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 sub-
    advised 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 sub-advised by Mackenzie.

(4) Total Gross Sales and Net Sales for the three months ended December 31,
    2013 excluded $465 million and $128 million respectively in accounts
    sub-advised by Mackenzie on behalf of Investors Group and Investment
    Planning Counsel.
    Total Gross Sales and Net Sales for the twelve months ended December 31,
    2013 excluded $1.6 billion and $367 million respectively in accounts
    sub-advised by Mackenzie on behalf of Investors Group and Investment
    Planning Counsel.

Contacts:
Ron Arnst
Media Relations
IGM Financial Inc.
(204) 956-3364
[email protected]

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