Ci financial reports financial results for the first quarter of 2022
Toronto--(business wire)--ci financial corp. (“ci”) (tsx: cix, nyse: cixx) today released financial results for the quarter ended march 31, 2022. “achieving these strong results during a period of high economic and market uncertainty demonstrates the strength and resilience of our business model,” said kurt macalpine, ci chief executive officer. “over the past two-and-a-half years, we have transformed and diversified the company, with wealth management now accounting for over 60% of our assets and u.s. wealth management becoming our largest business line by assets. these changes have made ci a larger, stronger firm and are having an increasingly positive impact on our revenues and earnings each quarter. “the changes we made to our investment management platform continue to pay off – our investment performance relative to our peers is the highest in years and the redemptions in our mutual fund products were 50% lower than in the first quarter of 2021.” “in canadian wealth management, we acquired the country’s leading multi-family office in northwood family office ltd.” mr. macalpine said. “the common theme in our most recent acquisitions is that they are all high-quality wealth management firms focused on the very attractive ultra-high-net-worth segment.” “we continue to execute on our strategy and achieved significant milestones in u.s. wealth management during the first quarter. we launched the ci private wealth partnership, which will be key to driving the profitable growth of that business, and we reached agreements to acquire three registered investment advisors with more than $21 billion in client assets. “we continue to take a balanced approach to allocating capital between dividends, share repurchases and debt reduction. during the quarter, we prioritized deleveraging and reduced debt by $246 million while also repurchasing shares and paying our regular dividend.” starting this quarter, ci has expanded its segment reporting to three segments and changed its income statement format. as ci’s strategy has rapidly evolved over the past two years, the company has reached a level of scale in its u.s. business that warrants separate disclosures and greater visibility into the performance of the business. ci has also expanded its asset management segment disclosures to provide more insight around the composition of assets under management. while prior periods have been restated to conform with the new presentation format, there is no change to consolidated financial results. operating and financial data highlights financial and operating highlights [millions of dollars, except share amounts] as of and for the quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 total aum and client assets: asset management aum 136,271 144,247 139,380 138,187 132,626 canada wealth management assets 78,957 80,633 76,859 75,521 71,066 u.s. business assets 145,768 151,339 96,974 83,764 31,013 total assets 360,996 376,219 313,213 297,472 234,704 asset management net inflows: retail (861 ) 142 684 530 (601 ) institutional (264 ) (331 ) (126 ) (360 ) (390 ) australia (305 ) 82 159 (33 ) 46 closed business (203 ) (195 ) (146 ) (194 ) (222 ) u.s. asset management 402 260 250 413 284 total (1,231 ) (42 ) 821 356 (883 ) ifrs results net income 137.5 123.7 45.4 118.4 124.8 diluted earnings per share 0.70 0.63 0.22 0.58 0.60 pretax income 185.8 175.1 82.4 166.6 162.2 pretax margin 29.3 % 28.3 % 15.9 % 31.7 % 31.9 % cash flow from operating activities 207.7 179.2 135.2 158.1 177.8 adjusted results1 adjusted net income 166.8 171.0 159.2 153.0 151.6 adjusted diluted earnings per share 0.85 0.86 0.79 0.74 0.72 adjusted ebitda 272.9 277.2 258.1 242.3 236.3 adjusted ebitda margin 46.4 % 47.7 % 47.0 % 48.4 % 50.2 % free cash flow 201.6 187.1 180.9 164.1 155.6 average shares outstanding 196,111,771 196,816,227 199,321,002 203,039,536 207,476,125 ending shares outstanding 192,987,082 197,422,270 197,443,135 201,327,517 203,944,785 total debt 3,530 3,776 3,408 3,350 2,201 net debt 3,352 3,453 2,655 2,461 1,856 net debt to adjusted ebitda 3.0 3.1 2.6 2.5 1.9 financial highlights net income grew to $137.5 million in the quarter from $123.7 million in the fourth quarter. excluding non-operating items, adjusted net income declined slightly to $166.8 million in the quarter from $171.0 million in the fourth quarter of 2021 as higher earnings in our u.s. wealth management segment due to recent acquisitions were offset by lower earnings primarily from our asset management segment. first quarter total net revenues grew 2.3% to $633.8 million in the quarter from $619.3 million in the fourth quarter of 2021. excluding non-operating items, adjusted total net revenue increased 3.8% to $622.3 million, primarily driven by higher revenues from our u.s. wealth management segment due to recent acquisitions, partly offset by lower management fees from our asset management segment due to lower average aum. first quarter total expenses increased 1.0% to $448.0 million in the quarter from $444.2 million in the fourth quarter of 2021. excluding non-operating items, adjusted total expenses increased 5.1% to $384.8 million primarily due to acquisitions in our u.s. wealth management segment. capital allocation in the first quarter of 2022, ci repurchased 4.5 million shares at a cost of $92.0 million, for an average cost of $20.21 per share, and paid $35.5 million in dividends at a rate of $0.18 per share. in addition, the company reduced debt by $246 million. the board of directors declared a quarterly dividend of $0.18 per share, payable on october 14, 2022 to shareholders of record on september 30, 2022. the annual dividend rate of $0.72 per share represented a yield of 4.8% on ci’s closing share price of $14.68 on may 11, 2022. first quarter business highlights ci private wealth us, llc (“cipw”) is the entity through which ci holds its interests in its u.s. rias. cipw is structured as a limited liability company in which ci is majority owner. certain employees of cipw and its affiliates subscribed for membership interests in the firm which interests were issued effective january 1, 2022. this unique model aligns the interests of all member partners and incentivizes them to collaborate, realize synergies, and drive the profitable growth of the firm as a whole. ci agreed to acquire three u.s. registered investment advisors (“rias”) with combined assets of approximately $21.6 billion. they include: certain assets of eaton vance wateroak advisors, formerly eaton vance investment counsel (“evic”). the boston-based evic team joining ci acts as advisor on behalf of families, endowments, foundations and other institutions. the transaction is expected to be completed in the fourth quarter of 2022. corient capital partners, llc, of newport beach, california, which serves ultra-high-net-worth individuals and families across the united states. this transaction was completed on april 29, 2022. galapagos partners, lp of houston, a multi-family office serving wealthy families and individuals. this transaction also closed on april 29, 2022. certain assets of eaton vance wateroak advisors, formerly eaton vance investment counsel (“evic”). the boston-based evic team joining ci acts as advisor on behalf of families, endowments, foundations and other institutions. the transaction is expected to be completed in the fourth quarter of 2022. corient capital partners, llc, of newport beach, california, which serves ultra-high-net-worth individuals and families across the united states. this transaction was completed on april 29, 2022. galapagos partners, lp of houston, a multi-family office serving wealthy families and individuals. this transaction also closed on april 29, 2022. ci agreed to acquire toronto-based northwood family office ltd. (“northwood”), canada’s leading multi-family office. the transaction was completed on april 1, 2022. northwood manages and co-ordinates the integrated financial, investment and personal affairs of wealthy canadian and global families and oversees approximately $2.2 billion of investment assets. in february 2022, euromoney announced that northwood has been ranked as the #1 family office in both canada and north america in the prestigious euromoney private banking and wealth management survey for 2022. ci expanded its capabilities in digital assets with the acquisition of a minority stake in newton crypto ltd., a canadian crypto asset trading platform. ci global asset management (“ci gam”) continued to broaden its etf lineup with the launch of several thematic etfs: ci galaxy multi-crypto etf, ci bio-revolution etf and ci digital security etf. ci gam received securityholder approval for the merger of 21 mutual funds and six exchange-traded funds into other ci gam investment funds. the mergers, which were implemented on april 8, 2022, were an important step in modernizing ci’s asset management business as they reduced product duplication and simplified the lineup for ci gam’s advisor and investor clients. following quarter-end: ci announced its intention to sell up to 20% of its u.s. wealth management business via a u.s. initial public offering (“ipo”). ci stated that it intends to use the net proceeds from the ipo to pay down debt, and that a final decision on the ipo size, conditions and timing is pending and will be subject to market conditions. ci subsidiary ci private wealth us, llc applied for a charter to establish and operate a south dakota trust company. once chartered, the trust company will offer administrative trust solutions through ci’s u.s. wealth management platform. products introduced by ci gam included ci galaxy blockchain etf, ci galaxy metaverse etf and ci floating rate income fund (etf series). analysts’ conference call ci will hold a conference call with analysts today at 9:00 a.m. edt, led by chief executive officer kurt macalpine and chief financial officer amit muni. a live webcast of the call and slide presentation can be accessed here, or through the investor relations section of ci’s website. alternatively, investors may listen to the discussion through the following numbers (access code: 581835): canada toll-free: 1-833-950-0062 united states toll-free: 1-844-200-6205 united states (new york local): 1-646-904-5544. all other locations: 1-929-526-1599. about ci financial ci financial corp. is an integrated global wealth and asset management company. ci’s primary asset management businesses are ci global asset management (ci investments inc.) and gsfm pty ltd., and it operates in canadian wealth management through ci assante wealth management (assante wealth management (canada) ltd.), ci private counsel lp, aligned capital partners inc., northwood family office ltd., ci direct investing (wealthbar financial services inc.), and ci investment services inc. ci’s u.s. wealth management businesses consist of barrett asset management, llc, balasa dinverno foltz llc, bowling portfolio management llc, brightworth, llc, brr opco, llc (budros, ruhlin & roe), the cabana group, llc, corient capital partners, llc, cpwm, llc (columbia pacific wealth management), congress wealth management llc, dowling & yahnke, llc, doyle wealth management, llc, galapagos partners, lp, gofen & glossberg, llc, matrix capital advisors, llc, mccutchen group llc, ocm capital partners, llc, portola partners group llc, radnor financial advisors, llc, regentatlantic capital, llc, the roosevelt investment group, llc, rgt wealth advisors, llc, r.h. bluestein & co., segall bryant & hamill, llc, stavis & cohen private wealth, llc, and surevest llc. ci is listed on the toronto stock exchange under cix and on the new york stock exchange under cixx. further information is available at www.cifinancial.com. commissions, trailing commissions, management fees and expenses all may be associated with an investment in mutual funds and exchange-traded funds (etfs). please read the prospectus before investing. important information about mutual funds and etfs is contained in their respective prospectus. mutual funds and etfs are not guaranteed; their values change frequently, and past performance may not be repeated. you will usually pay brokerage fees to your dealer if you purchase or sell units of an etf on recognized canadian exchanges. if the units are purchased or sold on these canadian exchanges, investors may pay more than the current net asset value when buying units of the etf and may receive less than the current net asset value when selling them. this press release contains forward-looking statements concerning anticipated future events, results, circumstances, performance or expectations with respect to ci financial corp. (“ci”) and its products and services, including its business operations, strategy and financial performance and condition and its intention to conduct an ipo of its us wealth management business. forward-looking statements are typically identified by words such as “believe”, “expect”, “foresee”, “forecast”, “anticipate”, “intend”, “estimate”, “goal”, “plan” and “project” and similar references to future periods, or conditional verbs such as “will”, “may”, “should”, “could” or “would”. these statements are not historical facts but instead represent management beliefs regarding future events, many of which by their nature are inherently uncertain and beyond management’s control. although management believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements involve risks and uncertainties. the material factors and assumptions applied in reaching the conclusions contained in these forward-looking statements include that ci will proceed with the ipo, that all outstanding acquisitions will be completed and their asset levels will remain stable, that the investment fund industry will remain stable and that interest rates will remain relatively stable. factors that could cause actual results to differ materially from expectations include, among other things, general economic and market conditions, including interest and foreign exchange rates, global financial markets, the risk that the ipo may not occur in its expected timeframe or at all, changes in government regulations or in tax laws, industry competition, technological developments and other factors described or discussed in ci’s disclosure materials filed with applicable securities regulatory authorities from time to time. the foregoing list is not exhaustive and the reader is cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. other than as specifically required by applicable law, ci undertakes no obligation to update or alter any forward-looking statement after the date on which it is made, whether to reflect new information, future events or otherwise. this communication is provided as a general source of information and should not be considered personal, legal, accounting, tax or investment advice, or construed as an endorsement or recommendation of any entity or security discussed. individuals should seek the advice of professionals, as appropriate, regarding any particular investment. investors should consult their professional advisors prior to implementing any changes to their investment strategies. ci global asset management is a registered business name of ci investments inc. consolidated statement of income for the three-month period ended march 31 [in thousands of canadian dollars, except per share amounts] 2022 $ 2021 $ revenue canada asset management fees 437,623 425,122 trailer fees and deferred sales commissions (135,289 ) (132,700 ) net asset management fees 302,334 292,422 canada wealth management fees 138,246 119,570 u.s. wealth management fees 164,479 44,688 other revenues 21,646 26,684 foreign exchange gains 11,469 20,201 other gains (losses) (4,424 ) 4,136 total net revenues 633,750 507,701 expenses selling, general and administrative 259,633 151,889 advisor and dealer fees 106,908 95,092 interest and lease finance 35,876 21,322 amortization and depreciation 11,376 10,029 amortization of intangible assets from acquisitions 24,083 9,554 transaction, integration, restructuring and legal settlements 3,800 854 change in fair value of contingent consideration 3,088 22,209 other 3,226 34,603 total expenses 447,990 345,552 income before income taxes 185,760 162,149 provision for income taxes current 47,741 49,636 deferred 511 (12,275 ) 48,252 37,361 net income for the period 137,508 124,788 net income (loss) attributable to non-controlling interests (639 ) 613 net income attributable to shareholders 138,147 124,175 basic earnings per share attributable to shareholders $ 0.70 $ 0.60 diluted earnings per share attributable to shareholders $ 0.70 $ 0.59 other comprehensive loss, net of tax exchange differences on translation of foreign operations (6,721 ) (15,953 ) total other comprehensive loss, net of tax (6,721 ) (15,953 ) comprehensive income for the period 130,787 108,835 comprehensive income (loss) attributable to non-controlling interests (1,052 ) 294 comprehensive income attributable to shareholders 131,839 108,541 consolidated balance sheet [in thousands of canadian dollars] as at march 31, 2022 $ as at december 31, 2021 $ assets current cash and cash equivalents 186,051 230,779 client and trust funds on deposit 1,347,616 1,199,904 investments 35,311 131,772 accounts receivable and prepaid expenses 275,167 272,962 income taxes receivable 3,607 3,607 total current assets 1,847,752 1,839,024 capital assets, net 52,676 52,596 right-of-use assets 136,827 142,606 intangibles 6,113,366 6,185,237 deferred income taxes 60,162 56,901 other assets 452,646 383,187 total assets 8,663,429 8,659,551 liabilities and equity current accounts payable and accrued liabilities 303,990 369,081 current portion of provisions and other financial liabilities 293,951 572,432 redeemable non-controlling interests 564,064 — dividends payable 69,475 71,072 client and trust funds payable 1,363,874 1,202,079 income taxes payable 13,621 19,035 current portion of long-term debt 225,268 444,486 current portion of lease liabilities 19,617 20,216 total current liabilities 2,853,860 2,698,401 long-term debt 3,304,702 3,331,552 provisions and other financial liabilities 246,998 379,641 deferred income taxes 478,849 480,777 lease liabilities 148,253 153,540 total liabilities 7,032,662 7,043,911 equity share capital 1,777,507 1,810,153 contributed surplus 31,018 28,368 deficit (172,743 ) (226,715 ) accumulated other comprehensive loss (29,352 ) (23,289 ) total equity attributable to the shareholders of the company 1,606,430 1,588,517 non-controlling interests 24,337 27,123 total equity 1,630,767 1,615,640 total liabilities and equity 8,663,429 8,659,551 statement of cash flows [in thousands of canadian dollars] 2022 $ 2021 $ operating activities (*) net income for the period 137,508 124,788 add (deduct) items not involving cash other gains (losses) 4,424 (4,214 ) change in fair value of contingent consideration 3,088 22,209 contingent consideration recorded as compensation 18,210 — recognition of vesting of redeemable non-controlling interests 3,926 — equity-based compensation 4,536 3,008 amortization and depreciation 35,459 19,583 deferred income taxes 511 (12,275 ) loss on repurchases of long-term debt — 24,708 cash provided by operating activities before net change in operating assets and liabilities 207,662 177,807 net change in operating assets and liabilities (52,856 ) 11,869 cash provided by operating activities 154,806 189,676 investing activities purchase of investments (30 ) (104 ) proceeds on sale of investments 94,659 — additions to capital assets (3,311 ) (1,881 ) increase in other assets 2,148 1,905 additions to intangibles (1,564 ) (3,615 ) cash paid to settle acquisition liabilities (18,288 ) — acquisitions, net of cash acquired (5,729 ) (2,314 ) cash provided by (used in) investing activities 67,885 (6,009 ) financing activities repayment of long-term debt (297,500 ) (549,695 ) issuance of long-term debt 80,000 331,836 repurchase of long-term debt — (45,953 ) repurchase of share capital (91,038 ) (112,744 ) payment of lease liabilities (5,210 ) (3,934 ) redeemable non-controlling interest 83,330 — net distributions to non-controlling interests (1,489 ) (512 ) dividends paid to shareholders (35,511 ) (37,869 ) cash used by financing activities (267,418 ) (418,871 ) net decrease in cash and cash equivalents during the period (44,727 ) (235,204 ) cash and cash equivalents, beginning of period 230,778 483,598 cash and cash equivalents, end of period 186,051 248,394 (*) included in operating activities are the following: interest paid 9,665 18,983 income taxes paid 52,277 44,855 assets under management and net flows [billions of dollars] quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 beginning aum 144.2 139.4 138.2 132.6 129.6 gross inflows 4.9 5.2 5.1 6.1 5.7 gross outflows 6.6 5.5 4.5 6.1 6.9 net inflows/(outflows) (1.6 ) (0.3 ) 0.6 (0.1 ) (1.2 ) acquisitions — — — 0.2 — market move and fx (6.3 ) 5.2 0.6 5.5 4.2 ending aum 136.3 144.2 139.4 138.2 132.6 proprietary aum 34.5 36.2 34.7 34.5 32.7 non-proprietary aum 101.8 108.0 104.7 103.7 99.9 average assets under management 138.2 143.0 141.1 135.9 131.6 annualized organic growth (4.6 ) % (0.9 ) % 1.6 % (0.2 ) % (3.7 ) % gross management fee/average aum 1.30 % 1.30 % 1.31 % 1.31 % 1.32 % net management fee/average aum 0.88 % 0.88 % 0.88 % 0.88 % 0.89 % net inflows retail (0.9 ) 0.1 0.7 0.5 (0.6 ) institutional (0.3 ) (0.3 ) (0.1 ) (0.4 ) (0.4 ) closed business (0.2 ) (0.2 ) (0.1 ) (0.2 ) (0.2 ) total canada net inflows (1.3 ) (0.4 ) 0.4 — (1.2 ) australia (0.3 ) 0.1 0.2 — — total net inflows/(outflows) (1.6 ) (0.3 ) 0.6 (0.1 ) (1.2 ) retail (ex closed business) [billions of dollars] quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 beginning aum 114.6 110.4 109.1 103.9 95.1 net flows (0.9 ) 0.1 0.7 0.5 (0.6 ) market move / fx (5.3 ) 4.1 0.6 4.5 9.4 acquisitions ___ ___ 0.2 ___ ___ ending aum 108.4 114.6 110.4 109.1 103.9 average aum 109.6 113.8 111.8 106.8 102.8 institutional [billions of dollars] quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 beginning aum 13.3 13.0 13.0 12.7 12.6 net flows (0.3 ) 0.3 (0.1 ) (0.4 ) (0.4 ) market move / fx (0.3 ) 0.6 0.1 0.7 0.5 acquisitions ___ ___ ___ ___ ___ ending aum 12.7 13.3 13.0 13.0 12.7 average aum 12.9 13.2 13.3 13.0 12.8 australia [billions of dollars] quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 beginning aum 7.3 7.0 6.9 7.1 7.0 net flows (0.3 ) 0.1 0.1 (0.0 ) 0.0 market move / fx (0.4 ) 0.2 0.0 (0.2 ) 0.1 acquisitions ___ ___ ___ ___ ___ ending aum 6.6 7.3 7.0 6.9 7.1 average aum 7.0 7.1 7.0 7.1 7.1 closed business [billions of dollars] quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 beginning aum 9.1 9.0 9.1 8.9 8.9 net flows (0.2 ) (0.2 ) (0.2 ) (0.2 ) (0.2 ) market move / fx (0.3 ) 0.3 (0.0 ) 0.4 0.3 acquisitions ___ ___ ___ ___ ___ ending aum 8.6 9.1 8.9 9.1 8.9 average aum 8.7 9.0 9.0 9.0 8.9 aum by asset class [billions of dollars] quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 balanced 59.4 62.1 60.3 60.3 58.5 equity 49.3 52.3 50.1 49.8 46.9 fixed income 13.1 14.2 14.1 13.9 13.3 alternatives 4.9 5.7 5.0 4.3 3.6 cash/other 3.0 2.7 2.8 2.9 3.2 total canada asset management 129.7 137.0 132.4 131.3 125.5 australia 6.6 7.3 7.0 6.9 7.1 total asset management segment 136.3 144.2 139.4 138.2 132.6 canada wealth management client assets [billions of dollars] quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 beginning client assets 80.6 76.9 75.5 71.1 67.3 acquisitions — — — — — net flows and market move (1.7 ) 3.8 1.3 4.5 3.8 ending client assets 79.0 80.6 76.9 75.5 71.1 average client assets 79.0 78.9 77.0 73.1 68.8 wealth management fees/average client assets 0.95 % 0.93 % 0.94 % 0.91 % 0.97 % u.s. wealth management client assets [billions of dollars] quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 beginning billable client assets 146.4 96.1 82.9 30.7 29.0 acquisitions 1.1 49.3 10.1 49.5 0.0 net flows and market move (6.3 ) 1.0 3.1 2.7 1.7 ending billable client assets 141.2 146.4 96.1 82.9 30.7 unbillable client assets 4.6 4.9 0.9 0.8 0.4 total client assets 145.8 151.3 97.0 83.8 31.0 fees/beginning billable client assets1 0.46 % 0.50 % 0.52 % 0.71 % 0.63 % 12q/21 adjusted for the timing of segall bryant & hamill acquisition non-ifrs measures in an effort to provide additional information regarding our results as determined by ifrs, we also disclose certain non-ifrs information which we believe provides useful and meaningful information. our management reviews these non-ifrs financial measurements when evaluating our financial performance and results of operations; therefore, we believe it is useful to provide information with respect to these non-ifrs measurements so as to share this perspective of management. non-ifrs measurements do not have any standardized meaning, do not replace nor are superior to ifrs financial measurements and may not be comparable to similar measures presented by other companies. the non-ifrs financial measurements include: adjusted net income and adjusted basic and diluted earnings per share adjusted ebitda and adjusted ebitda margin free cash flow net debt. these non-ifrs measurements exclude the following revenues and expenses which we believe allows investors a consistent way to analyze our financial performance, allows for better analysis of core operating income and business trends and permits comparisons of companies within the industry, normalizing for different financing methods and levels of taxation: gains or losses related to foreign currency fluctuations on our cash balances costs related to our acquisitions including: amortization of intangible assets change in fair value of contingent consideration related advisory fees contingent consideration classified as compensation per ifrs amortization of intangible assets change in fair value of contingent consideration related advisory fees contingent consideration classified as compensation per ifrs restructuring charges including organizational expenses for the establishment of cipw legal provisions for a class action related to market timing certain gains or losses in assets and investments costs related to issuing or retiring debt obligations expenses associated with cipw redeemable units. further explanations of these non-ifrs measures can be found in the “non-ifrs measures” section of management’s discussion and analysis dated may 12, 2022 available on sedar at www.sedar.com or at www.cifinancial.com. adjusted net income and adjusted earnings per share [millions of dollars, except per share amounts] quarters ended mar. 31, 2022 dec. 31, 2021 mar. 31, 2021 net income 137.5 123.7 124.8 amortization of intangible assets from acquisitions 24.1 18.7 9.9 change in fair value of contingent consideration 3.1 43.9 22.2 contingent consideration recorded as compensation — 2.1 — cipw adjustments 32.2 — — fx (gains)/losses (11.5 ) (3.1 ) (20.2 ) transaction, integration, restructuring and legal 3.8 13.6 0.8 other (gains)/losses — (16.8 ) 7.1 bond redemption costs — — 24.7 total adjustments1 51.7 58.4 44.5 tax effect of adjustments (11.5 ) (11.1 ) (17.0 ) less: non-controlling interest 10.9 — 0.7 adjusted net income 166.8 171.0 151.6 adjusted earnings per share 0.85 0.87 0.73 adjusted diluted earnings per share 0.85 0.86 0.72 1adjustment effects on income statement line items: bond redemption costs are included in other expense, cipw adjustments and contingent consideration recorded as compensation are included in sg&a, amortization of intangible assets from acquisitions, change in fair value of contingent consideration, fx (gains)/losses, other (gains)/losses, and bond redemption costs are included in the line items of the same description. ebitda, adjusted ebitda and adjusted ebitda margin [millions of dollars, except per share amounts] quarters ended mar. 31, 2022 dec. 31, 2021 mar. 31, 2021 pretax income 185.8 175.1 162.2 amortization of intangible assets from acquisitions 24.1 18.7 9.9 depreciation and other amortization 11.4 10.9 10.0 interest and lease finance expense 35.9 32.5 21.3 ebitda 257.1 237.2 203.4 change in fair value of contingent consideration 3.1 43.9 22.2 contingent consideration recorded as compensation 18.2 2.1 — cipw adjustments 3.9 — — fx (gains)/losses (11.5 ) (3.1 ) (20.2 ) transaction, integration, restructuring and legal 3.8 13.6 0.8 other (gains)/losses — (16.8 ) 7.1 bond redemption costs — — 24.7 total adjustments 17.5 39.6 34.6 non-controlling interest 1.8 (0.4 ) 1.7 adjusted ebitda 272.9 277.2 236.3 reported net revenue 633.8 619.3 507.7 less: fx gains/(losses) 11.5 3.1 20.2 less: non-operating other gains/(losses) — 16.8 — less: nci revenues 34.5 17.9 17.0 adjusted net revenue 587.8 581.5 470.5 adjusted ebitda margin 46.4 % 47.7 % 50.2 % free cash flow [millions of dollars] quarters ended mar. 31, 2022 dec. 31, 2021 mar. 31, 2021 cash provided by operating activities 154.8 163.7 189.7 net change in operating assets and liabilities 52.9 15.5 (11.8 ) operating cash flow before the change in operating assets and liabilities 207.7 179.2 177.8 fx (gains)/losses (11.5 ) (3.1 ) (20.2 ) transaction, integration, restructuring and legal 3.8 13.6 0.8 other (gains)/losses — — 7.1 total adjustments (7.7 ) 10.5 (12.3 ) tax effect (recovery) of adjustments 1.2 (2.6 ) (8.3 ) less: non-controlling interest (0.4 ) — 1.7 free cash flow 201.6 187.1 155.6 net debt quarters ended [millions of dollars] mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 current portion of long-term debt 225.3 444.5 74.2 — — long-term debt 3,304.7 3,331.6 3,350.2 3,350.2 2,200.9 3,530.0 3,776.0 3,408.4 3,350.2 2,200.9 less: cash and short-term investments 186.1 230.8 653.9 801.3 248.4 marketable securities 20.4 116.9 122.5 121.1 122.0 add: regulatory capital and non-controlling interests 28.8 25.0 23.1 33.4 25.9 net debt 3,352.3 3,453.4 2,655.1 2,461.2 1,856.4 adjusted ebitda 272.9 277.2 258.1 242.3 236.3 adjusted ebitda, annualized 1,106.8 1,099.8 1,024.1 971.9 958.3 gross leverage (gross debt/annualized adjusted ebitda) 3.2 3.4 3.3 3.4 2.3 net leverage (net debt/annualized adjusted ebitda) 3.0 3.1 2.6 2.5 1.9 summary of quarterly results [millions of dollars, except per share amounts] ifrs results adjusted results for the quarters ended for the quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 revenues asset management fees 437.6 464.9 460.9 441.1 425.1 437.6 464.9 460.9 441.1 425.1 trailer fees and deferred sales commissions (135.3 ) (143.6 ) (143.4 ) (137.7 ) (132.7 ) (135.3 ) (143.6 ) (143.4 ) (137.7 ) (132.7 ) net asset management fees 302.3 321.3 317.5 303.5 292.4 302.3 321.3 317.5 303.5 292.4 canada wealth management fees 138.2 134.9 132.5 119.9 119.6 138.2 134.9 132.5 119.9 119.6 u.s. wealth management fees 164.5 120.9 108.1 71.4 44.7 164.5 120.9 108.1 71.4 44.7 other revenues 21.6 27.3 11.2 18.0 26.7 21.6 27.3 11.2 18.0 26.7 fx gains/(losses) 11.5 3.1 (50.3 ) 8.2 20.2 — — — — — other gains/(losses) (4.4 ) 11.9 (1.1 ) 3.8 4.1 (4.4 ) (4.9 ) (1.1 ) 2.5 11.2 total net revenues 633.8 619.3 517.9 524.7 507.7 622.3 599.4 568.2 515.2 494.6 expenses selling, general & administrative 259.6 214.6 201.9 173.9 151.9 241.4 212.5 197.7 173.0 151.9 advisor and dealer fees 106.9 104.8 103.4 93.4 95.1 106.9 104.8 103.4 93.4 95.1 other 3.2 5.7 6.5 5.3 34.6 (10.8 ) 5.7 6.5 5.0 9.9 interest and lease finance expense 35.9 32.5 31.6 24.2 21.3 35.9 32.5 31.6 24.2 21.3 depreciation and other amortization 11.4 10.9 10.3 9.7 10.0 11.4 10.4 10.0 9.4 9.7 amortization of intangible assets from acquisitions 24.1 18.2 16.4 11.7 9.6 — — — — — transaction, integration, restructuring and legal 3.8 13.6 3.9 17.5 0.8 — — — — — change in fair value of contingent consideration 3.1 43.9 61.4 22.4 22.2 — — — — — total expenses 448.0 444.2 435.5 358.2 345.6 384.8 365.9 349.2 305.1 287.9 pretax income 185.8 175.1 82.4 166.6 162.2 237.5 233.4 219.0 210.1 206.7 income tax expense 48.3 51.3 37.0 48.2 37.4 59.7 62.5 58.1 56.4 54.3 net income 137.5 123.7 45.4 118.4 124.8 177.8 171.0 160.9 153.8 152.4 non-controlling interest (0.6 ) — 1.6 0.8 0.6 10.9 — 1.6 0.8 0.7 net income attributable to shareholders 138.1 123.7 43.8 117.6 124.2 166.8 171.0 159.2 153.0 151.6 basic earnings per share 0.70 0.63 0.22 0.58 0.60 0.85 0.87 0.80 0.75 0.73 diluted earnings per share 0.70 0.62 0.22 0.57 0.59 0.85 0.86 0.79 0.74 0.72 results of operations - asset management segment [millions of dollars, except per share amounts] ifrs results adjusted results for the quarters ended for the quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 revenues asset management fees 442.5 469.6 465.6 445.5 429.2 442.5 469.6 465.6 445.5 429.2 trailer fees and deferred sales commissions (143.9 ) (152.6 ) (152.4 ) (146.3 ) (141.1 ) (143.9 ) (152.6 ) (152.4 ) (146.3 ) (141.1 ) net asset management fees 298.6 316.9 313.2 299.3 288.2 298.6 316.9 313.2 299.3 288.2 other revenues 10.2 19.9 3.2 12.2 20.8 10.2 19.9 3.2 12.2 20.8 fx gains/(losses) 11.4 (1.4 ) (19.0 ) 1.2 8.2 — — — — — other gains/(losses) (4.4 ) 12.0 (1.1 ) 3.8 4.2 (4.4 ) (4.8 ) (1.1 ) 2.5 4.2 total net revenues 315.8 347.5 296.3 316.5 321.4 304.4 332.1 315.3 313.9 313.2 expenses selling, general & administrative 96.8 108.7 109.6 104.9 102.8 96.8 108.7 109.6 104.9 102.8 other — (0.5 ) 1.6 0.2 0.3 — (0.5 ) 1.6 0.2 0.3 interest and lease finance expense 1.0 0.5 0.5 0.6 0.6 1.0 0.5 0.5 0.6 0.6 depreciation and other amortization 5.0 5.6 5.5 5.5 6.7 5.0 5.6 5.5 5.5 6.7 amortization of intangible assets from acquisitions 0.6 0.6 0.6 0.6 0.5 — — — — — transaction, integration, restructuring and legal (0.9 ) 10.4 0.4 14.6 0.1 — — — — — change in fair value of contingent consideration 4.0 14.2 1.9 10.0 — — — — — — total expenses 106.5 139.4 120.2 136.4 111.1 102.8 114.2 117.2 111.1 110.4 pretax income 209.3 208.0 176.1 180.1 210.3 201.6 217.9 198.1 202.8 202.8 non-ifrs adjustments pretax income 209.3 208.0 176.1 180.1 210.3 201.6 217.9 198.1 202.8 202.8 amortization of intangible assets from acquisitions 0.6 0.6 0.6 0.6 0.5 — — — — — depreciation and other amortization 5.0 5.6 5.5 5.5 6.7 5.0 5.6 5.5 5.5 6.7 interest and lease finance expense 1.0 0.5 0.5 0.6 0.6 1.0 0.5 0.5 0.6 0.6 ebitda 215.9 214.7 182.7 186.7 218.1 207.6 223.9 204.1 208.8 210.0 change in fair value of contingent consideration 4.0 14.2 1.9 10.0 — — — — — — fx (gains)/losses (11.4 ) 1.4 19.0 (1.2 ) (8.2 ) — — — — — transaction, integration, restructuring and legal (0.9 ) 10.4 0.4 14.6 0.1 — — — — — other (gains)/losses — (16.8 ) — (1.4 ) — — — — — — total adjustments (8.3 ) 9.2 21.4 22.1 (8.1 ) — — — — — less: non-controlling interest 0.4 0.1 0.5 0.2 — 0.4 0.1 0.5 0.2 — adjusted ebitda 207.2 223.8 203.6 208.6 210.0 207.2 223.8 203.6 208.6 210.0 results of operations - canada wealth management segment [millions of dollars, except per share amounts] ifrs results adjusted results for the quarters ended for the quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 revenues canada wealth management fees 185.7 184.3 181.7 166.5 164.4 185.7 184.3 181.7 166.5 164.4 other revenues 17.1 16.0 14.8 13.9 13.9 17.1 16.0 14.8 13.9 13.9 fx gains/(losses) 0.1 0.8 0.7 0.7 1.2 — — — — — other gains/(losses) — (0.1 ) — — — — (0.1 ) — — — total net revenues 202.9 201.1 197.2 181.1 179.5 202.8 200.3 196.5 180.4 178.3 expenses selling, general & administrative 41.4 39.9 37.8 35.7 34.6 41.4 39.9 37.8 35.7 34.6 advisor and dealer fees 145.6 145.2 143.5 131.3 131.4 145.6 145.2 143.5 131.3 131.4 other 2.9 3.2 1.8 1.3 8.5 2.9 3.2 1.8 1.3 1.4 interest and lease finance expense 0.2 0.2 0.2 0.1 0.1 0.2 0.2 0.2 0.1 0.1 depreciation and other amortization 2.5 2.3 2.4 2.5 2.4 2.5 2.3 2.4 2.5 2.4 amortization of intangible assets from acquisitions 1.6 1.5 1.7 1.3 1.0 — — — — — transaction, integration, restructuring and legal 0.8 0.1 0.1 — 0.5 — — — — — change in fair value of contingent consideration — — — — — — — — — — total expenses 195.0 192.6 187.5 172.3 178.4 192.6 191.0 185.7 171.0 169.8 pretax income 7.9 8.5 9.7 8.8 1.1 10.2 9.3 10.8 9.5 8.5 non-ifrs adjustments pretax income 7.9 8.5 9.7 8.8 1.1 10.2 9.3 10.8 9.5 8.5 amortization of intangible assets from acquisitions 1.6 1.6 1.8 1.4 1.1 — 0.1 0.1 0.1 0.1 depreciation and other amortization 2.5 2.3 2.4 2.5 2.4 2.5 2.3 2.4 2.5 2.4 interest and lease finance expense 0.2 0.2 0.2 0.1 0.1 0.2 0.2 0.2 0.1 0.1 ebitda 12.1 12.6 14.0 12.8 4.6 12.9 11.9 13.5 12.2 11.0 fx (gains)/losses (0.1 ) (0.8 ) (0.7 ) (0.7 ) (1.2 ) — — — — — transaction, integration, restructuring and legal 0.8 0.1 0.1 — 0.5 — — — — — other (gains)/losses — — — — 7.1 — — — — — total adjustments 0.8 (0.7 ) (0.6 ) (0.6 ) 6.4 — — — — — less: non-controlling interest — (1.5 ) 0.7 0.5 0.3 — (1.5 ) 0.7 0.5 0.3 adjusted ebitda 12.9 13.5 12.8 11.6 10.7 12.9 13.5 12.8 11.6 10.7 results of operations - u.s. wealth management segment [millions of dollars, except per share amounts] ifrs results adjusted results for the quarters ended for the quarters ended mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 mar. 31, 2022 dec. 31, 2021 sep. 30, 2021 jun. 30, 2021 mar. 31, 2021 revenues u.s. wealth management fees 164.5 120.9 108.1 71.4 44.7 164.5 120.9 108.1 71.4 44.7 other revenues 4.8 1.3 2.6 0.9 0.5 4.8 1.3 2.6 0.9 0.5 fx gains/(losses) — 3.7 (31.9 ) 6.3 10.7 other gains/(losses) — — — — (0.1 ) — — — — (0.1 ) total net revenues 169.2 125.9 78.8 78.6 55.9 169.2 122.2 110.7 72.3 45.2 expenses selling, general & administrative 136.9 80.8 68.8 46.9 27.3 114.8 78.7 64.6 46.0 27.3 advisor and dealer fees — — — — — — — — — — other 0.4 2.9 3.1 3.5 1.1 0.4 2.9 3.1 3.5 1.1 interest and lease finance expense 0.5 0.4 0.4 0.2 0.1 0.5 0.4 0.4 0.2 0.1 depreciation and other amortization 3.9 3.1 2.5 1.7 1.0 3.9 3.1 2.5 1.7 1.0 amortization of intangible assets from acquisitions 21.9 16.1 14.1 9.8 8.0 transaction, integration, restructuring and legal 3.9 3.1 3.4 2.9 0.2 change in fair value of contingent consideration (0.9 ) 29.7 59.5 12.4 22.2 — — — — — total expenses 166.5 136.1 151.7 77.4 59.9 119.6 85.2 70.5 51.4 29.5 pretax income 2.7 (10.2 ) (72.9 ) 1.2 (4.0 ) 49.7 37.0 40.2 20.9 15.7 non-ifrs adjustments pretax income 2.7 (10.2 ) (72.9 ) 1.2 (4.0 ) 49.7 37.0 40.2 20.9 15.7 amortization of intangible assets from acquisitions 21.9 16.5 14.4 10.1 8.3 — 0.5 0.3 0.3 0.3 depreciation and other amortization 3.9 3.1 2.5 1.7 1.0 3.9 3.1 2.5 1.7 1.0 interest and lease finance expense 0.5 0.4 0.4 0.2 0.1 0.5 0.4 0.4 0.2 0.1 ebitda 29.1 9.9 (55.6 ) 13.2 5.4 54.1 41.0 43.4 23.1 17.0 change in fair value of contingent consideration (0.9 ) 29.7 59.5 12.4 22.2 — — — — — contingent consideration recorded as compensation 18.2 2.1 4.2 0.9 — — — — — — cipw adjustments 3.9 — — — — — — — — — fx (gains)/losses — (3.7 ) 31.9 (6.3 ) (10.7 ) — — — — — transaction, integration, restructuring and legal 3.9 3.1 3.4 2.9 0.2 — — — — — total adjustments 25.0 31.1 99.0 9.9 11.6 — — — — — less: non-controlling interest 1.3 1.0 1.7 1.0 1.4 1.3 1.0 1.7 1.0 1.4 adjusted ebitda 52.8 40.0 41.7 22.1 15.6 52.8 40.0 41.7 22.1 15.6
