8-K 1 gwlafinancial8k.txt GWLA FINANCIAL 8K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 30, 2003 ----------------- GWL&A FINANCIAL INC. (Exact name of registrant as specified in its charter) Delaware 333-64473 84-1474245 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 8515 East Orchard Road, Greenwood Village, Colorado 80111 (Address of principal executive offices) (Zip Code) (303) 737-3000 (Registrant's telephone number, including area code) -------------------------------------------------------------------------------- ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS Exhibit Number Title 99 Great-West Lifeco Press Release dated January 30, 2003 ITEM 9. REGULATION FD DISCLOSURE On January 30, 2003, Great-West Lifeco Inc., an indirect Canadian parent company of the Registrant, issued a press release regarding its financial results for the fourth quarter of 2002. The press release includes a discussion of the financial results of Great-West Life & Annuity Insurance Company, the operating subsidiary of the Registrant. A copy of the press release is attached as Exhibit 99 hereto. The dollar amounts referred to in the press release are in Canadian dollars unless otherwise stated. This Form 8-K contains forward-looking statements. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. In particular, statements using verbs such as "expect," "anticipate," "believe" or words of similar import generally involve forward-looking statements. Without limiting the foregoing, forward-looking statements include statements which represent the Registrant's beliefs concerning future or projected levels of sales of the Registrant's products, investment spreads or yields, or the earnings or profitability of the Registrant's activities. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Registrant's control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Registrant. Whether or not actual results differ materially from forward-looking statements may depend on numerous foreseeable and unforeseeable events or developments, some of which may be national in scope, such as general economic conditions and interest rates, some of which may be related to the insurance industry generally, such as pricing competition, regulatory developments and industry consolidation, and others of which may relate to the Registrant specifically, such as credit, volatility and other risks associated with the Registrant's investment portfolio, and other factors. Readers are also directed to consider other risks and uncertainties discussed in documents filed by the Registrant and certain of its subsidiaries with the Securities and Exchange Commission. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: January 30, 2003 GWL&A FINANCIAL INC. By:/s/Richard G. Schultz Name: Richard G. Schultz Title: Vice President, Counsel and Associate Secretary Great-West Lifeco reports 2002 results and dividend increase Winnipeg, January 30, 2003 ... Great-West Lifeco Inc. has reported net income attributable to common shareholders of $931 million or $2.530 per common share for the twelve months ended December 31, 2002, compared to $1.387 per common share reported a year ago. This result represents an increase of 15% over 2001, after adjusting for non-recurring charges relating to goodwill amortization, Alta Health and Life Insurance Company (Alta), and the events of September 11, 2001 to facilitate comparison between years. For the fourth quarter, net income attributable to common shareholders was $235 million or $0.641 per common share, compared to adjusted 2001 results of $208 million or $0.562 per common share. Highlights - twelve months 2002 o Earnings per common share increased 15% over 2001 levels, reflecting solid increases in earnings from Lifeco's Canadian and United States operations. o Return on common shareholders' equity was 22.9% for the twelve months ended December 31, 2002, compared to 20.8% in 2001, using adjusted 2001 results. o Quarterly dividends declared were 27(cent) per common share, an increase of 2.25(cent) per share, payable March 31, 2003. Dividends paid on common shares for 2002 were 21% higher than a year ago. Consolidated net earnings for Lifeco are the net operating earnings of The Great-West Life Assurance Company (Great-West) in Canada and Great-West Life & Annuity (GWL&A) in the United States, together with Lifeco's corporate results. The following comparative figures for 2001 have been adjusted to exclude goodwill amortization, Alta charges, and the events of September 11, 2001. - 2 - Canadian consolidated net earnings of Lifeco attributable to common shareholders for the twelve months ended December 31, 2002 increased 15% to $441 million from $384 million at December 31, 2001. For the fourth quarter, Canadian net income attributable to common shareholders increased to $116 million compared to $102 million at December 31, 2001. Lifeco's United States consolidated net earnings for twelve months of 2002 increased 13% to $490 million from $435 million a year ago. For the fourth quarter, United States net income increased to $119 million compared to $106 million at December 31, 2001. GWL&A's twelve months net income attributable to common shareholders increased to US $321 million from US $294 million at December 31, 2001. For the fourth quarter, GWL&A's earnings were US $79 million compared to US $72 million a year ago. The Great-West Life Assurance Company Developments o In December, Great-West completed its first innovative tier 1 capital issue, raising $350 million through an offering of Great-West Life Trust Securities (GREATs). o Great-West, together with London Life and Investors Group, signed an agreement with National Bank of Canada to offer banking products and services through their respective distribution networks. o Great-West and London Life's Group Retirement Services division enhanced its Web site, giving plan members the opportunity to do their retirement planning, including fund selection, online. Results "Great-West and London Life ended the year the same way we started, with exceptional performance from our group and individual lines of business," says Raymond L. McFeetors, President & Chief Executive Officer, Great-West Life. "Despite the decline in consumer confidence in investment markets, segregated funds deposits for the year were up over 2001. Concern for security also led to increased interest among consumers for participating life insurance, where our sales increased nearly 30% this year. Price rationalization in the group insurance market over the past couple of years set the stage for strong growth in net income from our group insurance business, which also enjoyed very strong persistency during the year." - 3 - Total premiums and deposits for full year 2002, including reinsurance premiums, were up 9% from 2001 levels. Fee income increased 7% in 2002 compared to 2001, associated with increases in both segregated funds assets and ASO contract volumes. Total assets under administration at December 31, 2002 were $54.5 billion, up 1% from December 31, 2001. Great-West Life & Annuity Insurance Company Developments o The last quarter of 2002 saw a continuation of our themes for the year-margin expansion, disciplined expense management and conservative investment selection. Results "Low interest rates, weak stock markets, and rising health care costs all combined to test our business managers in 2002. I'm very pleased with the results we achieved in 2002 in this very stormy environment," says William T. McCallum, President & Chief Executive Officer, Great-West Life & Annuity. The decrease in US $ premium income and deposits for 2002 of 12% was comprised of reductions in both Employee Benefits and Financial Services. The change in the Employee Benefits segment is due to a contraction in health care medical membership, while the change in the Financial Services segment is primarily due to lower 401(k) single premium deposits. Fee income is derived from the management of segregated funds assets and the administration of Group health ASO business. The decrease in fee income in 2002 arises out of both the health care business and the effects of the U.S. equity markets on segregated funds fees. Total assets under administration were $41.6 billion at December 31, 2002, down $2.6 billion compared with December 31, 2001, essentially due to reductions in market values of segregated funds. - 4 - Quarterly Dividends At its meeting today, the Board of Directors approved a quarterly dividend of $0.27 per share on the common shares of the Company payable March 31, 2003 to shareholders of record at the close of business March 17, 2003. In addition, the Directors approved quarterly dividends on the preferred shares of the Company: o Series C First Preferred Shares $0.484375 per share; and o Series D First Preferred Shares $0.293750 per share payable March 31, 2003 to shareholders of record at the close of business March 17, 2003 o Class A, Series 1 Preferred Shares $0.3125 per share payable April 30, 2003 to shareholders of record at the close of business April 16, 2003. Great-West Lifeco Great-West Lifeco Inc. is a financial services holding company with interests in the life insurance, health insurance, retirement savings, and reinsurance businesses, primarily in Canada and the United States. Lifeco's subsidiaries - The Great-West Life Assurance Company and London Life Insurance Company (Freedom 55 Financial(TM)) in Canada and Great-West Life & Annuity Insurance Company in the United States - serve the financial security needs of more than 13 million people. Lifeco and its companies have $96 billion in assets under administration. Great-West Lifeco is a member of the Power Financial Corporation group of companies. - 5 - Forward-looking statements This release 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 "believe", "expect", "anticipate", "intend", "estimate" and other similar expressions. These statements are necessarily based on estimates and assumptions that are inherently subject to risks and uncertainties, many of which are beyond the Company's control. Actual results may differ materially due to a variety of factors, including legislative or regulatory developments, competition, technological change, global capital market activity, interest rates and general economic and political conditions in Canada, North America or internationally. Readers are urged to consider these and other such factors carefully and not place undue emphasis on the Company's forward-looking statements. Unless otherwise required by securities laws, the Company does not intend or have any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Further information Selected financial information is attached. Full financial statements and notes for 2002 are available on the Great-West Lifeco Web site at www.greatwestlifeco.com/english/investor/quarterly.html. Great-West Lifeco's fourth quarter analyst teleconference will be held Thursday, January 30, at 2:00 p.m. (Eastern). The call can be accessed through www.greatwestlifeco.com or by phone, through listen-only lines at 1-800-387-6216 (passcode: Chantal) or 416-405-9328 in Toronto. A replay of the call will be available from January 30 until February 6 and can be accessed by calling 1-800-408-3053 (passcode: 1348731) or 416-695-5800 in Toronto. - end - For more information contact: Marlene Klassen Director, Media & Public Relations (204) 946-7705 marlene.klassen@gwl.ca FINANCIAL HIGHLIGHTS (in millions of dollars except per common share amounts)

(1) Segregated funds deposits and self-funded premium equivalents (ASO contracts) The financial statements of a life insurance company do not include the assets, liabilities, deposits and withdrawals of segregated funds or the claims payments related to administrative services only (ASO) Group health contracts. However, the Company does earn fee and other income related to these contracts. Both segregated fund and ASO contracts are an important aspect of the overall business of the Company and should be considered when comparing volumes, size and trends. (2) In addition to net income (Canadian GAAP basis), adjusted net income for 2001 is presented for information. 2001 results include: (i) A charge of $18 after-tax or $0.048 per common share for the three months ended December 31, 2001 and $66 after-tax or $0.177 per common share for the year ended December 31, 2001 related to the amortization of goodwill. On January 1, 2002, the Company stopped amortizing goodwill in accordance with new Canadian Institute of Chartered Accountants standard 3062 Goodwill and Other Intangible Assets (see note 1 of the Company's 2002 financial statements); (ii) A charge of $165 after-tax or $0.444 per common share related to Alta Health & Life Insurance Company (Alta), an indirect wholly-owned subsidiary and part of the Company's United States Employee Benefits segment. (iii) A charge of $73 after-tax or $0.199 per common share from the events of September 11, 2001. Return on common shareholders' equity is also presented excluding 2001 adjustments. FINANCIAL HIGHLIGHTS (cont'd) (in millions of dollars except per common share amounts)

GWL&A FINANCIAL INC 8-K