IGM Financial Inc. Reports 2005 Earnings; Increases Dividend.WINNIPEG Winnipeg, city, Canada Winnipeg (wĭn`ĭpĕg), city (1991 pop. 616,790), provincial capital, SE Man., Canada, at the confluence of the Red and Assiniboine rivers. , Manitoba Manitoba (mănĭtō`bə), province (2001 pop. 1,119,583), 250,934 sq mi (650,930 sq km), including 39,215 sq mi (101,580 sq km) of water surface, W central Canada. -- Readers are referred to the disclaimer (networking) disclaimer - Statement ritually appended to many Usenet postings (sometimes automatically, by the posting software) reiterating the fact (which should be obvious, but is easily forgotten) that the article reflects its author's opinions and not necessarily those of the regarding Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. Information and financial measures not in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (Non-GAAP Financial Measures) at the end of this Release. IGM Financial IGM Financial Inc. is one of Canada's premier personal financial services companies, and the country's largest manager and distributor of mutual funds and other managed asset products, with $121 billion in total assets under management (as at January 31, 2007). Inc. (IGM or the Company) (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :IGM) today announced earnings results for the year ended December December: see month. 31, 2005. Net income for the year ended December 31, 2005 was $682.4 million, compared to adjusted net income of $615.6 million in 2004, an increase of 10.9%. Earnings per share were $2.56, an increase of 10.8% compared to adjusted earnings per share of $2.31 in 2004. Adjusted net income and earnings per share for 2004 excludes a non-recurring expense. Net income in 2004 without adjustment totalled $596.4 million. Earnings per share on this basis were $2.24. Net income for the three months ended December 31, 2005 was $177.2 million compared to adjusted net income of $161.3 million in 2004, an increase of 9.9%. Earnings per share were 66 cents, an increase of 8.2% compared to adjusted earnings per share of 61 cents in 2004. Net income for the three months ended December 31, 2004 without adjustment totalled $142.1 million. Earnings per share on this basis were 53 cents. Gross revenues for the year ended December 31, 2005 were $2.35 billion, compared to $2.12 billion in the prior year. Gross revenues for the fourth quarter were $608.3 million compared to $548.1 million last year. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were $1.37 billion for the twelve months and $353.5 million for the quarter, compared with $1.26 billion and $342.1 million, respectively, in 2004. Mutual fund assets Fund assets The total value of a portfolio's securities, cash, and other holdings, minus any outstanding debts. under management at December 31, 2005 totalled $94.1 billion, compared to $83.3 billion at December 31, 2004, an increase of 13.0%. Total assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. at December 31, 2005 totalled $100.2 billion, compared to $86.6 billion at December 31, 2004, an increase of 15.7%. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. at December 31, 2005 was $3.45 billion, compared to $3.15 billion at December 31, 2004. Return on average common equity for the twelve months ended December 31, 2005 was 20.0% compared with adjusted return on average common equity of 19.8% for the same period in 2004. INVESTORS GROUP OPERATIONS Mutual fund sales for 2005 were $5.5 billion compared to $4.7 billion in the prior year and mutual fund net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were $778 million compared to $218 million a year ago. Net sales of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. funds were $529 million compared to $52 million in the prior year. For the fourth quarter of 2005, mutual fund sales were $1.4 billion compared to $1.1 billion in the prior year. For the quarter, mutual fund net sales were $254 million compared to net redemptions of $46 million in 2004 and net sales of long-term mutual funds (excluding money market funds) were $168 million compared to net redemptions of $94 million in 2004. "During 2005 we significantly expanded our field management to support our growing Consultant network," said Murray Murray, river, Australia Murray, principal river of Australia, 1,609 mi (2,589 km) long, rising in the Australian Alps, SE New South Wales, and flowing westward to form the New South Wales–Victoria boundary. J. Taylor Taylor, city (1990 pop. 70,811), Wayne co., SE Mich., a suburb of Detroit adjacent to Dearborn; founded 1847 as a township, inc. as a city 1968. A small rural village until World War II, it developed significantly in the second half of the 20th cent. , President and Chief Executive Officer of Investors Group Inc. "A 257% increase in mutual fund net sales over 2004 combined with strong investment performance has resulted in record levels of assets under management." Investors Group's twelve month trailing redemption rate (excluding money market funds) was 8.7% at the end of 2005, down from 9.1% at the same time last year. The corresponding rate at December 31, 2005 for all other members of the Investment Funds Noun 1. investment funds - money that is invested with an expectation of profit investment assets - anything of material value or usefulness that is owned by a person or company Institute of Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of (IFIC IFIC International Food Information Council IFIC Investment Funds Institute of Canada IFIC International Finance Investment & Commerce (Bank Limited; Bangladesh) IFIC Iran Foreign Investment Co. IFIC Internet Finance International Corporation ) was 16.4%. Investors Group's mutual fund assets under management at December 31, 2005 were $50.7 billion, an increase of 13.9%, compared to $44.5 billion at December 31, 2004. The number of Investors Group Consultants was 3,668 at December 31, 2005. Investors Group has experienced six consecutive quarters of growth resulting in an increase of 14.4% in the Consultant Network since June June: see month. 30, 2004. MACKENZIE Mackenzie, river, c.1,120 mi (1,800 km) long, issuing from Great Slave Lake, Northwest Territories, Canada, and flowing generally NW to the Arctic Ocean through a great delta. Between Great Slave Lake and Lake Athabasca it is known as the Slave River. OPERATIONS Mackenzie recorded mutual fund sales of $8.1 billion for 2005 compared to $6.8 billion in the prior year. Mutual fund net sales were $1.2 billion compared to $795 million in the prior year. Net sales of long-term funds (excluding money market and managed yield funds) were $1.0 billion for the period compared to $819 million in 2004. For the fourth quarter of 2005, mutual fund sales were $2.2 billion compared to $1.7 billion for the same quarter last year. Mutual fund net sales were $512 million for the fourth quarter of 2005 compared to $123 million in 2004. Net sales of long-term funds (excluding money market and managed yield funds) were $341 million for the quarter, compared with $89 million in 2004. "Industry net sales of long-term funds in the quarter represented the best fourth quarter results since 1998 indicating that the industry is still benefiting from positive investor confidence," said Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by R. Sims, President and Chief Executive Officer of Mackenzie Financial Corporation. "Mackenzie's gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. for the year were the highest in the company's history." Mackenzie's twelve month trailing redemption rate for long-term funds was 14.8% at the end of December 2005, compared to 13.8% at the end of December 2004. The corresponding rate at December 31, 2005 for all other members of IFIC was 15.7%. Mackenzie's mutual fund assets under management at December 31, 2005 were $41.6 billion, an increase of 11.5%, compared to $37.3 billion one year ago. Total assets under management at December 31, 2005 totalled $49.9 billion compared to $42.3 billion at December 31, 2004, an increase of 17.7%. DIVIDENDS The Board of Directors has declared a quarterly dividend of $0.359375 per share on the Company's 5.75% Non-Cumulative First Preferred Shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. , Series "A" payable on March 31, 2006 to shareholders of record on March 7, 2006 and has declared an increase of 2.5 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. in the quarterly dividend from 34.5 cents to 37.0 cents per share on the Company's common shares payable on April 28, 2006 to shareholders of record on March 27, 2006. FORWARD-LOOKING INFORMATION AND NON-GAAP FINANCIAL MEASURES This Release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. about the Company, including its business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets , strategy and expected financial performance and condition. 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", "intends", "plans", "believes", "estimates" or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future financial performance (including revenues, earnings or growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. ), ongoing business strategies or prospects, and possible future Company action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by the Company due to, but not limited to, important factors such as general economic, political and market factors in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, and the Company's ability to complete strategic transactions and integrate acquisitions. The reader is cautioned that the foregoing list of important factors is not exhaustive. The reader is also cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements. This release may also contain non-GAAP financial measures. Terms by which non-GAAP financial measures are identified include but are not limited to "adjusted net income", "adjusted earnings per share", "adjusted return on average common equity", "net income excluding adjustment" and other similar expressions. Non-GAAP financial measures are used to provide management and investors with additional measures of performance. However, non-GAAP financial measures do not have standard meanings prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). 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-GAAP financial measures to measures prescribed by GAAP. A review of activities and performance for IGM Financial Inc., together with financial details and a management discussion, will be published in the Company's 2005 Annual Report which should be mailed to shareholders on or about March 31, 2006. IGM Financial Inc. is one of Canada's premier personal financial services companies, and the country's largest manager and distributor of mutual funds and other managed asset products, with over $103 billion in total assets under management. Its activities are carried out principally through Investors Group, Mackenzie Financial and Investment Planning Counsel. IGM Financial Inc. is a member of the Power Financial Company group of companies. Media Note: A live webcast of IGM's Analyst conference call for the Fourth Quarter 2005 will be held today, Friday, February 17, 2006, at 2:00 P.M. (ET) at www.igmfinancial.com. Media and interested parties may alternatively choose to listen to today's live analyst teleconference call by dialing 1-888-789-0089 or (416) 695-5261.
Consolidated Statements of Income
(in thousands of dollars, Three months ended Twelve months ended
except shares and per December 31 December 31
share amounts) 2005 2004 2005 2004
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Fee and net investment
income
Management $ 427,109 $ 383,190 $ 1,644,737 $ 1,491,657
Administration 78,029 71,588 307,391 299,612
Distribution 55,846 46,196 212,344 164,471
Net investment income
and other 47,341 47,093 183,108 163,331
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Total fee and net
investment income 608,325 548,067 2,347,580 2,119,071
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Operating expenses
Commission expense 189,499 163,777 726,471 616,706
Non-commission expense 141,202 154,210 555,326 544,256
Interest expense 22,749 24,100 90,425 95,593
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Total operating expenses 353,450 342,087 1,372,222 1,256,555
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Income before income
taxes and
non-controlling interest 254,875 205,980 975,358 862,516
Income taxes 77,467 63,470 291,500 264,969
-------------------------------------------
Income before
non-controlling interest 177,408 142,510 683,858 597,547
Non-controlling interest 162 420 1,431 1,151
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Net income $ 177,246 $ 142,090 $ 682,427 $ 596,396
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Average number of common
shares
(in thousands)
- Basic 264,508 264,589 264,573 264,431
- Diluted 266,844 266,250 266,609 266,010
Earnings per share (in
dollars)
- Basic $ 0.67 $ 0.54 $ 2.58 $ 2.26
- Diluted $ 0.66 $ 0.53 $ 2.56 $ 2.24
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Financial Highlights
Three months ended Twelve months ended
December 31 December 31
2005 2004 Change 2005 2004 Change
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Net income ($ millions)
- Excluding
Adjustment (1) $ 177.2 $ 161.3 9.9 % $ 682.4 $ 615.6 10.9 %
- In accordance
with GAAP 177.2 142.1 24.7 682.4 596.4 14.4
Diluted earnings
per share
- Excluding
Adjustment (1) 0.66 0.61 8.2 2.56 2.31 10.8
- In accordance
with GAAP 0.66 0.53 24.5 2.56 2.24 14.3
Return on equity
- Excluding
Adjustment (1) 20.0% 19.8%
- In accordance
with GAAP 20.0% 19.1%
Dividends per
share 0.345 0.30 15.0 1.335 1.15 16.1
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($ millions)
Mutual funds
Investors Group
Sales $ 1,377 $ 1,102 25.0 % $ 5,488 $ 4,722 16.2 %
Net sales 254 (46) N/M 778 218 257.0
Assets under
management 50,701 44,510 13.9
Mackenzie
Sales 2,183 1,694 28.9 8,075 6,786 19.0
Net sales 512 123 316.3 1,175 795 47.7
Assets under
management 41,592 37,298 11.5
Investment
Planning
Counsel
Sales 90 98 (8.2) 407 259(2) N/A
Net sales 51 52 (1.9) 237 161(2) N/A
Assets under
management 1,858 1,497 24.1
Combined mutual
fund assets
under
management (3) 94,116 83,273 13.0
Insurance in
force (face
amount) 37,024 35,897 3.1
Securities
operations
assets under
administration 7,320 7,107 3.0
Mortgages
serviced 6,003 6,010 (0.1)
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Employees 3,320 3,324 (0.1)%
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(1) Non-GAAP Financial Measures
In 2004, the Ontario Securities Commission (OSC), the Manitoba
Securities Commission (MSC) and the Mutual Fund Dealers Association
(MFDA) of Canada approved settlement agreements with subsidiaries
of the company regarding trading by an institutional client in
mutual funds of Investors Group Inc. (IG). IG agreed to provide
compensation to affected unitholders. The Company recorded a $28.8
million ($19.2 million after-tax or $0.07 per share) charge to income
in the fourth quarter to reflect the compensation payments and
related expenses.
(2) From date of acquisition.
(3) Adjusted for $35 million in inter-segment assets ($32 millions at
December 31, 2004).
IGM Financial Inc. (TSX:IGM) |
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