News Classic

• Closed Diamond acquisition on September 4th
• Increased capital return program with additional share repurchase authorization of $400 million
• Repurchased 6.9 million of shares in Q3 2024, $0.50 per share dividend declared for Q4 2024, bringing total FY 2024 cash returns to shareholders to over $525 million, including Q4 dividend
• Q3 Net Income of $61 million, Diluted Earnings Per Share of $0.40, Adjusted EBITDA of $291 million, net cash provided by operating activities of $284 million, and Free Cash Flow of $165 million
• Q4 2024 Guidance provided as follows: Total Revenue $850 to $890 million, Adjusted EBITDA $275 to $305 million, Capital Additions (net of reimbursements) $105 to $135 million

SUGAR LAND, Texas, Nov. 5, 2024 /PRNewswire/ — Noble Corporation plc NENOBLE “, Noble”, or the “, Company”, )) today reported third quarter 2024 results.

Robert W. Eifler, President and Chief Executive Officer of Noble Corporation plc, stated “We are excited to have closed on the Diamond acquisition during the third quarter, enabling us to start capturing the value from the transaction earlier than expected. Our strategy of pursuing rational and accretive growth in the high-end deepwater segment toward an ultimate objective of maximizing cash returns to shareholders is yielding tangible results, as evidenced by robust third quarter free cash flow and a sector leading dividend and buyback program. Despite a more muted near-term demand environment than we had envisioned coming into this year, Noble is uniquely well positioned to deliver customer and shareholder value through various market conditions.“

Third Quarter Results
Contract drilling services revenue for the third quarter of 2024 totaled $764 million compared to $661 million in the second quarter of 2024, with the sequential increase driven primarily by an approximate four weeks of contribution from the legacy Diamond fleet. Marketed fleet utilization was 82% in the three months ended September 30, 2024, compared to 78% in the previous quarter. Contract drilling services costs for the third quarter of 2024 were $434 million, up from $336 million for the second quarter of 2024, with the sequential increase driven by the legacy Diamond fleet and partially offset by lower contract preparation and mobilization expenses. Net income decreased to $61 million in the third quarter of 2024, down from $195 million in the second quarter of 2024, and Adjusted EBITDA increased to $291 million in the third quarter of 2024, up from $271 million in the second quarter of 2024. Net cash provided by operating activities in the third quarter of 2024 was $284 million, net capital expenditures were $119 million, and free cash flow (non-GAAP) was $165 million.

Balance Sheet, Capital Allocation, and Increased Shareholder Return Authorization
The Company’s balance sheet as of September 30, 2024, reflected total debt principal value of approximately $2.0 billion and cash (and cash equivalents) of $392 million.

The Company repurchased approximately 6.9 million shares in the third quarter for $250 million, bringing total repurchases executed under the original $400 million program to $360 million. On October 22, 2024, Noble’s Board of Directors authorized an increased share repurchase authorization of up to an additional $400 million, subject to any applicable shareholder approval limits. This authorization does not have a fixed expiration, and may be modified, suspended or discontinued at any time. The program does not obligate the Company to acquire any particular amount of shares.

On November 5, 2024, Noble’s Board of Directors approved an interim quarterly cash dividend on our ordinary shares of $0.50 per share for the fourth quarter of 2024. The $0.50 dividend is expected to be paid on December 19, 2024, to shareholders of record at close of business on December 5, 2024. The Company intends to continue to pay dividends on a quarterly basis, and the fourth quarter dividend represents $2.00 on an annualized basis. Future quarterly dividends and other shareholder returns will be subject to, amongst other things, approval by the Board of Directors and may be modified as market conditions dictate.

Operating Highlights and Backlog
Noble’s marketed fleet of twenty-five floaters was 81% contracted during the third quarter (including nine marketed floaters from the legacy Diamond fleet on a partial quarter basis from September 4, 2024), compared with 78% in the prior quarter. Industry leading edge dayrates for tier-1 drillships remain in the mid $400,000s to low $500,000s per day range. Contract fixtures for lower specification floaters have been limited in 2024, and are expected to reflect a softer utilization environment throughout 2025 due to continuing white space risk that is impacting all floater segments.

Utilization of Noble’s thirteen marketed jackups improved to 83% in the third quarter, compared with 77% in the prior quarter. Leading edge harsh environment jackup dayrates remain in the mid $200,000s per day in Norway and $130,000 to $150,000 per day in the rest of the North Sea. The Northern Europe jackup market continues to indicate potential for a slight demand improvement in Norway for 2025, while policy and permitting factors present potential headwinds for the Southern North Sea.

Subsequent to last quarter’s earnings press release, ExxonMobil Guyana awarded an additional 4.8 years of backlog under the Commercial Enabling Agreement (CEA), intended to extend the contract duration for each of our four drillships operating under the CEA from Q2 2027 to Q3 2028. Additionally, the Ocean Endeavor has been awarded an additional 130 days with Shell in the UK North Sea.

Noble’s current backlog as of November 5, 2024 stands at $6.2 billion.

Outlook
For the fourth quarter of 2024, Noble is providing guidance as follows: Total revenue in the range of $850 to $890 million; Adjusted EBITDA in the range of $275 to $305 million, and capital additions (net of reimbursements) in the range of $105 to $135 million.

Commenting on Noble’s outlook, Mr. Eifler stated, “We remain encouraged by the high level of tangible contract opportunities in our commercial pipeline which is expected to drive a backlog inflection sometime next year. In the meantime, Noble is poised to generate robust cash flow amid sub-optimal utilization over the near term. We remain committed to returning essentially all free cash flow to shareholders and are pleased to announce a second $400 million share repurchase authorization.“

Due to the forward-looking nature of Adjusted EBITDA, management cannot reliably predict certain of the necessary components of the most directly comparable forward-looking GAAP measure. Accordingly, the Company is unable to present a quantitative reconciliation of such forward-looking non-GAAP financial measure to the most directly comparable forward-looking GAAP financial measure without unreasonable effort. The unavailable information could have a significant effect on Noble’s fourth quarter 2024 GAAP financial results.

Conference Call
Noble will host a conference call related to its third quarter 2024 results on Wednesday, November 6th, 2024, at 8:00 a.m. U.S. Central Time. Interested parties may dial +1 800-715-9871 and refer to conference ID 31391 approximately 15 minutes prior to the scheduled start time. Additionally, a live webcast link will be available on the Investor Relations section of the Company’s website. A webcast replay will be accessible for a limited time following the call.

For additional information, visit www.noblecorp.com or email investors@noblecorp.com.

About Noble Corporation plc
Noble is a leading offshore drilling contractor for the oil and gas industry. The Company owns and operates one of the most modern, versatile, and technically advanced fleets in the offshore drilling industry. Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921. Noble performs, through its subsidiaries, contract drilling services with a fleet of offshore drilling units focused largely on ultra-deepwater and high specification jackup drilling opportunities in both established and emerging regions worldwide. Additional information on Noble is available at www.noblecorp.com.

Dividend Details and Return of Capital Disclaimers
Dividends payable to Noble shareholders will generally be paid in U.S. dollars (USD). However, holders of shares in the form of share entitlements admitted to trading on NASDAQ Copenhagen will receive an equivalent dividend payment in Danish krone (DKK) as determined by the exchange rate on a specified date. The holders of such share entitlements bear the risk of fluctuations in USD and DKK exchange rates.

On October 22, 2024, the Board of Directors approved a share repurchase program of up to $400 million commencing immediately after completion of the prior $400 million share repurchase. All shares purchased under the share repurchase programs are cancelled. The share repurchase programs take place within the limitations of the general authority previously granted by shareholders, or any authorization to be granted at a future general meeting of the Company. As of today, the repurchase programs do not have fixed expirations, and may be modified, suspended or discontinued at any time. The programs do not obligate the Company to acquire any particular amount of shares.

Forward-looking Statements
This communication includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, as amended. All statements other than statements of historical facts included in this communication are forward looking statements, including those regarding future guidance, including revenue, adjusted EBITDA, the offshore drilling market and demand fundamentals, realization and timing of integration synergies, costs, the benefits or results of acquisitions or dispositions such as the acquisition of Diamond Offshore Drilling, Inc. (the “Diamond Transaction”), free cash flow expectations, capital expenditures, capital additions, capital allocation expectations, including planned dividends and share repurchases, contract backlog, rig demand, expected future contracts, anticipated contract start dates, major project schedules, dayrates and duration, any asset sales, access to capital, fleet condition and utilization, timing and amount of insurance recoveries and 2024 financial guidance. Forward-looking statements involve risks, uncertainties and assumptions, and actual results may differ materially from any future results expressed or implied by such forward-looking statements. When used in this communication, or in the documents incorporated by reference, the words “guidance,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “on track,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” “achieve,” “shall,” “target,” “will” and similar expressions are intended to be among the statements that identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot assure you that such expectations will prove to be correct. These forward-looking statements speak only as of the date of this communication and we undertake no obligation to revise or update any forward-looking statement for any reason, except as required by law. Risks and uncertainties include, but are not limited to, those detailed in Noble’s most recent Annual Report on Form 10-K, Quarterly Reports Form 10-Q and other filings with the U.S. Securities and Exchange Commission, including, but not limited to, risks related to the recently completed Diamond Transaction, including the risk that the benefits of the transaction may not be fully realized or may take longer to realize than expected. We cannot control such risk factors and other uncertainties, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. You should consider these risks and uncertainties when you are evaluating us. With respect to our capital allocation policy, distributions to shareholders in the form of either dividends or share buybacks are subject to the Board of Directors’ assessment of factors such as business development, growth strategy, current leverage and financing needs. There can be no assurance that a dividend or buyback program will be declared or continued.

NOBLE CORPORATION plc AND SUBSIDIARIES
NON-GAAP MEASURES AND RECONCILIATION

Certain non-GAAP measures and corresponding reconciliations to GAAP financial measures for the Company have been provided for meaningful comparisons between current results and prior operating periods. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles.

The Company defines “Adjusted EBITDA” as net income (loss) adjusted for interest expense, net of amounts capitalized; interest income and other, net; income tax benefit (provision); and depreciation and amortization expense, as well as, if applicable, gain (loss) on extinguishment of debt, net; losses on economic impairments; amortization of intangible assets and contract liabilities, net; restructuring and similar charges; costs related to mergers and integrations; and certain other infrequent operational events. We believe that the Adjusted EBITDA measure provides greater transparency of our core operating performance. We prepare Adjusted Net Income (Loss) by eliminating from Net Income (Loss) the impact of a number of non-recurring items we do not consider indicative of our on-going performance. We prepare Adjusted Diluted Earnings (Loss) per Share by eliminating from Diluted Earnings per Share the impact of a number of non-recurring items we do not consider indicative of our on-going performance. Similar to Adjusted EBITDA, we believe these measures help identify underlying trends that could otherwise be masked by the effect of the non-recurring items we exclude in the measure.

The Company also discloses free cash flow as a non-GAAP liquidity measure. Free cash flow is calculated as Net cash provided by (used in) operating activities less cash paid for capital expenditures. We believe Free Cash Flow is useful to investors because it measures our ability to generate or use cash. Once business needs and obligations are met, this cash can be used to reinvest in the company for future growth or to return to shareholders through dividend payments or share repurchases. We may have certain obligations such as non-discretionary debt service that are not deducted from the measure. Such business needs, obligations, and other non-discretionary expenditures that are not deducted from Free Cash Flow would reduce cash available for other uses including return of capital.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics used by our management team for financial and operational decision-making. We are presenting these non-GAAP financial measures to assist investors in seeing our financial performance through the eyes of management, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

These non-GAAP adjusted measures should be considered in addition to, and not as a substitute for, or superior to, contract drilling revenue, contract drilling costs, contract drilling margin, average daily revenue, operating income, cash flows from operations, or other measures of financial performance prepared in accordance with GAAP. Please see the following non-GAAP Financial Measures and Reconciliations for a complete description of the adjustments.

NOBLE OFFSHORE DRILLING INC.
UNAUDITED SELECTED FINANCIALS

On the Merger Effective Date, Diamond Offshore Drilling, Inc. merged into Noble Offshore Drilling, Inc. with Noble Offshore Drilling, Inc. being the surviving entity.

The indenture governing the 8.500% Senior Secured Second Lien Notes due October 2030 issued by Diamond Foreign Asset Company and Diamond Finance, LLC (“Diamond Second Lien Notes”) contains a covenant that requires Noble Offshore Drilling, Inc., as a successor Guarantor, to furnish to holders of the Diamond Second Lien Notes certain financial information relating to Noble Offshore Drilling, Inc. and its restricted subsidiaries.

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SOURCE Noble Corporation plc

Sustained profitable growth driven by continued strong sales momentum

THIRD QUARTER HIGHLIGHTS – iA Financial Corporation

• Solid profitability: EPS of $2.99, trailing 12-month ROE¹ of 14.5% and annualized ROE of 16.9%
• Achievement of mid-term targets: core EPS^†† of $2.93 (+17% YoY), trailing 12-month core ROE^†† of 15.3% and annualized core ROE^†† of 16.6%
• Strong sales² momentum leading to over $4.9 billion in premiums and deposits^2,3 and nearly $250 billion in assets (total AUM² and AUA²)
• Robust solvency ratio⁴ of 140% and capital available for deployment² of $1 billion, expected to increase by $700 million on January 1, 2025⁵
• Book value per common share⁶ reaching $71.63 at September 30, 2024, up 10% over 12 months
• Dividend to common shareholders increased by 10% and renewal of NCIB program to buy back up to 5% of outstanding shares

QUEBEC CITY, Nov. 5, 2024 /CNW/ – For the third quarter ended September 30, 2024, iA Financial Corporation IAG recorded core diluted earnings per common share (EPS)^†† of $2.93, which is 17% higher than the same period in 2023. Core return on common shareholders’ equity (ROE)^†† for the trailing twelve months was 15.3%, meeting the Company’s medium-term target of 15%+. Third quarter net income attributed to common shareholders was $283 million, diluted EPS was $2.99 and ROE for the trailing twelve months was 14.5%. The solvency ratio of 140% at September 30, 2024 is well above the Company’s operating target of 120%.

“We achieved solid third quarter results, with very strong EPS growth and ROE expansion. Disciplined execution of our growth-driven strategy resulted in a 25% year-over-year increase in premiums and deposits³ in the third quarter, driven by robust sales and the acquisitions of Vericity and the Prosperity blocks of business. Sales were particularly strong for segregated funds and individual insurance in Canada and the U.S., ” commented Denis Ricard, President and CEO of iA Financial Group. “With our high level of capital available for deployment, which is expected to increase further, we will continue to invest in our growth, both organically and through acquisitions. Through our sustained growth, we will continue our track record of creating and returning value to our shareholders.”

“Third quarter results testify to our ability to generate growth through quality earnings. The strong year-over-year EPS growth is mainly due to higher expected insurance earnings, resulting from solid growth in premiums and deposits³, as well as in assets, including those from recent acquisitions,” added Éric Jobin, Executive Vice‑President, CFO and Chief Actuary. “This good profitability led to strong organic capital generation² of $180 million for the quarter, which positions us well to achieve our 600 million+ target for 2024. With our solid capital position, we are pleased to announce today a 10% increase in our dividend to common shareholders and the renewal of our share buyback program for the coming year.”

Unless otherwise indicated, the results presented in this document are in Canadian dollars and are compared with those from the corresponding period last year. 

ANALYSIS OF EARNINGS BY BUSINESS SEGMENT

Insurance, Canada

• Net income attributed to common shareholders for the Insurance, Canada segment was $95 million compared to $79 million for the same period in 2023. Net income attributed to common shareholders is comprised of core earnings^† as well as core earnings adjustments.
• Core earnings adjustments to net income totalled $11 million, mostly from acquisition-related items.
• Core earnings^† for this business segment were $106 million, higher than $91 million for the same period in 2023.
  
  The 16% increase in core earnings^† over the same period in 2023 is the net result of various items. In particular, expected insurance earnings⁷ were higher than a year ago, an increase driven by the favourable impact of price increases in various business units in the last 12 months. Other positive items included the lower impact of new insurance business⁷ from Employee Plans compared to a year ago, the favourable impact of higher distribution results on core non-insurance activities⁷ and lower core other expenses.⁷ As for core insurance experience,⁷ losses of $6 million were recorded during the quarter. At iA Auto and Home, claims associated with the heavy rainfall event that occurred in August in Quebec were partly offset by lower auto thefts and otherwise favourable summer weather. In other business units, favourable morbidity and mortality experience was offset by miscellaneous unfavourable items, including higher claims in Dealer Services.

Wealth Management

• Net income attributed to common shareholders for the Wealth Management segment was $99 million compared to $73 million for the same period in 2023. Net income attributed to common shareholders is comprised of core earnings^† as well as core earnings adjustments.
• Core earnings adjustments to net income totalled $7 million, mostly from acquisition-related items.
• Core earnings^† for this business segment were $106 million for the third quarter compared with $82 million a year ago.
  
  The 29% increase in core earnings^† over the same period in 2023 is mainly the result of good financial market performance, as well as an increase in the expected insurance earnings for segregated funds from strong net sales over the last 12 months and the increase in CSM recognized for services provided.⁸ Mortality experience was also favourable, leading to an insurance experience gain. Finally, core non-insurance activities were up, reflecting a solid performance once again from the distribution affiliates, arising mainly from higher net commissions and better margins.

US Operations

• Net income attributed to common shareholders for the US Operations segment was $21 million compared to $24 million for the same period in 2023. Net income attributed to common shareholders is comprised of core earnings^† as well as core earnings adjustments.
• Core earnings adjustments to net income totalled $10 million, mostly from acquisition-related items.
• Core earnings^† for this business segment were $31 million, which compares to $32 million for the same period in 2023.
  
  The $1 million year-over-year decrease is the net result of various items. In particular, the recent acquisitions of Vericity and the Prosperity blocks of business led to an increase in expected insurance earnings. Core insurance experience was also positive, mainly from favourable mortality experience. However, in core non-insurance activities, the unfavourable impact of lower sales in 2023 and the less favourable business mix arising from the current competitive environment was only partly offset by good sales growth in 2024. Finally, core other expenses increased following the addition of Vericity expenses, while non-recurring expenses were partially mitigated by cost-saving initiatives in Dealer Services.

Investments

• Net income attributed to common shareholders for the Investments segment was $114 million compared to a net loss of $76 million for the same period in 2023. Net income attributed to common shareholders is comprised of core earnings^† as well as core earnings adjustments.
• Core earnings adjustments to net income of $34 million for this business segment are market-related, as the impact of favourable equity, interest rate and credit spread variations were partly offset by investment property value adjustments and the unfavourable impact of the tax-exempt investment income from the Company’s multinational insurer status (CIF).⁹
• Core earnings^† for this business segment were $80 million compared to $93 million a year ago and to $91 million the previous quarter. The third quarter core earnings^† were supported by the good performance of our high-quality investment portfolio, bolstered by the favourable impact of interest rate variations. However, taxes were higher and the result from iA Auto Finance was lower due to credit losses and an increased allowance for credit losses.¹⁰

Corporate

• The net loss attributed to common shareholders for the Corporate segment was $46 million compared to $45 million for the same period in 2023. The net loss attributed to common shareholders is comprised of core losses^† as well as core earnings adjustments.
• Core losses adjustments to net loss for this business segment from acquisition-related items totalled $1 million pre-tax, which is less than $500,000 after tax.
• This segment recorded core losses^† from after-tax expenses of $46 million, which compares with $42 million in the third quarter of 2023. This quarter’s result is derived from core other expenses of $60 million before taxes, which is in line with the 2024 quarterly expectation of $65 million plus or minus $5 million. The favourable outcome for corporate expenses is the result of ongoing strong emphasis on operational efficiency, cost-conscious execution and a disciplined approach to project and workforce management.

RECONCILIATION OF NET INCOME ATTRIBUTED TO COMMON SHAREHOLDERS AND CORE EARNINGS^†

The following table presents net income attributed to common shareholders and the adjustments that account for the difference between net income attributed to common shareholders and core earnings.^†

Core earnings^† of $277 million in the third quarter are derived from net income attributed to common shareholders of $283 million and a total adjustment of $6 million from:

• the favourable market-related impacts that differ from management’s expectations, totalling $34 million, as the impact of favourable equity, interest rate and credit spread variations was partly offset by investment property value adjustments and the unfavourable impact from the CIF;
• a total of $6 million related to the Prosperity and Vericity acquisitions ($3 million), the charge for the Surex minority shareholders’ sell option ($2 million) and small restructuring charges ($1 million);
• the expenses associated with acquisition-related intangible assets of $19 million; and
• the impact of non-core pension expenses¹¹ of $3 million.

Contractual Service Margin (CSM)¹³ – During the third quarter, the CSM increased organically by $100 million due to the positive impact of new insurance business of $187 million, organic financial growth of $83 million and an insurance experience gain of $14 million. These favourable items were partly offset by the CSM recognized in earnings of $184 million, which was 21% higher than a year ago. Non-organic items led to an increase of $104 million during the third quarter, mainly due to the positive impacts of macroeconomic variations and the acquisition of two blocks of business from Prosperity Life Group. As a result, the total CSM increased by $204 million during the quarter to stand at $6,675 million at September 30, 2024, an increase of 15% over the last twelve months.

An analysis of results according to the financial statements and additional analysis are presented in the Management’s Discussion and Analysis as at September 30, 2024. They supplement the information presented above by providing additional indicators for assessing financial performance.

Business growth – Sales momentum continued to be strong in both Canada and the U.S. during the third quarter, with almost every business unit recording good sales growth. Once again this quarter, strong sales were posted by Individual Insurance, Canada, segregated fund inflows were solid and individual insurance sales reached record levels in the U.S. The strong business growth propelled net premiums, premium equivalents and deposits to over $4.9 billion, representing a solid increase of 25% compared to the same period in 2023, and total assets under management and total assets under administration to nearly $250 billion, representing an increase of 22% over the last twelve months.

INSURANCE, CANADA

• In Individual Insurance, third quarter sales totalled $103 million, recording another solid performance with a 7% increase over a strong quarter a year earlier. This very good result reflects the strength of all our distribution networks, the excellent performance of our digital tools, as well as our comprehensive and distinctive range of products. Sales were notably strong for participating insurance and living benefit products. The Company maintained the leading position in the Canadian market for the number of policies issued.¹⁴
• In Group Insurance, third quarter sales of $18 million in Employee Plans were significantly higher than the $10 million recorded during the same quarter last year, largely attributed to the higher volume of mid-to-large group sales. Net premiums, premium equivalents and deposits increased by 9% year over year, benefiting from good sales and premium increases on renewals. Special Markets sales were 14% higher than a year earlier, reaching $97 million, driven by strong sales growth in travel medical insurance products.
• For Dealer Services, total sales ended the third quarter at $197 million, 2% higher than the same period in 2023. This growth was essentially supported by sales of extended warranties and ancillary products. Note that the impact of the temporary outage at CDK Global at the end of the second quarter was immaterial on third quarter sales.
• At iA Auto and Home, direct written premiums reached $164 million in the third quarter, a strong increase of 15% compared to the same period last year. This reflects the success in generating new sales and the impact of recent premium increases.

WEALTH MANAGEMENT

• In Individual Wealth Management, the Company continued to rank first in Canada in gross and net segregated fund sales.¹⁵ Gross sales of segregated funds amounted to more than $1.3 billion for the third quarter, a significant increase of 51% year over year, and net sales were once again particularly strong at $781 million. This robust performance was driven notably by the strength of our distribution networks. Additionally, the favourable performance of financial markets continued to increase client optimism towards riskier asset classes with higher return potential compared to guaranteed investments. Reciprocally, sales of insured annuities and other savings products totalled $483 million in the third quarter, compared to a very strong quarter of $618 million a year earlier. Mutual fund gross sales for the quarter amounted to $385 million, 33% higher than the same period in 2023, with net outflows of $163 million.
• Group Savings and Retirement sales for the third quarter totalled $900 million and were 62% higher than a year earlier. This solid performance was driven by strong sales of both insured annuities and accumulation products.

US OPERATIONS

• In Individual Insurance, record sales of US$68 million in the third quarter were 55% higher than a year earlier. This solid result, driven by good results in the final expense and middle/family markets and the addition of sales from the Vericity acquisition, confirms our potential for strong growth in the U.S. life insurance market, both organically and through acquisitions.
• In Dealer Services, third quarter sales were up 15% over the same period last year, reaching US$286 million. This good result reflects the quality of our products and services. Also, dealers are emphasizing supplementary products sold with vehicles (F&I products) amid improved consumer affordability resulting from lower interest rates and reduced vehicle prices. Note that sales that were delayed to the third quarter due to the temporary outage at CDK Global at the end of the second quarter totalled around US$10 million.

ASSETS UNDER MANAGEMENT AND ASSETS UNDER ADMINISTRATION

Assets under management and administration ended the third quarter at around $250 billion, up 22% over the last 12 months and up 6% during the quarter, mainly driven by favourable market conditions and high net fund inflows.

NET PREMIUMS, PREMIUM EQUIVALENTS AND DEPOSITS

Net premiums, premium equivalents and deposits exceeded $4.9 billion in the third quarter, recording a solid increase of 25% over the same period last year. All business units contributed to this strong performance, particularly Individual Wealth Management and Group Savings and Retirement.

FINANCIAL POSITION

The Company’s solvency ratio was 140% at September 30, 2024, compared with 141% at the end of the previous quarter and 145% a year earlier. This result is well above the Company’s solvency ratio operating target of 120%. The one percentage point decrease during the third quarter is the result of specific items. These include capital deployment through share buybacks (NCIB), the acquisition of two blocks of business from Prosperity Life Group and IT investments. They also include capital management initiatives, namely the $125 million redemption of Industrial Alliance Insurance and Financial Services Inc. (“iA Insurance”) outstanding preferred shares. These items were partly offset by the favourable impact of organic capital generation, which continues to be strong at $180 million, and the positive impact of macroeconomic variations. The Company’s financial leverage ratio^†† of 15.3% at September 30, 2024 compares favourably to 16.4% at the end of the previous quarter.

Organic capital generation and capital available for deployment – The Company organically generated $180 million in additional capital during the third quarter. After nine months, $485 million has been generated, which is in line with projections to exceed the minimum annual target of $600 million in 2024. At September 30, 2024, the capital available for deployment was assessed at $1.0 billion. In addition, as detailed below in this section, if adopted as published the AMF’s proposed revisions to the Capital Adequacy Requirements Guideline – Life and Health Insurance (CARLI) are expected to increase the Company’s capital available for deployment by around $700 million on January 1, 2025.

Proposed changes to AMF Capital Adequacy Requirements Guideline – On September 19, 2024, the Autorité des marchés financiers du Québec (AMF) published a consultation concerning a revised Capital Adequacy Requirements Guideline – Life and Health Insurance (CARLI), expected to take effect on January 1, 2025. This consultation ended on October 22, 2024. If adopted as published, iA Financial Corporation would no longer be subject to the intervention target ratios, while still being subject to minimum ratios. This is anticipated to positively impact iA’s financial flexibility, and the revised guideline is expected to increase the Company’s capital available for deployment by around $700 million, with no material impact on the solvency ratio level. Note that the proposed change related to intervention target ratios would not impact Industrial Alliance Insurance and Financial Services Inc.

Among other changes, the proposed CARLI guideline includes revisions related to the regulatory capital requirements for segregated fund guarantees. In this regard, a transition period is authorized for the first two quarters of 2025 when insurers can apply the previous version of the guideline. Analyses will be performed in anticipation of this transition period to assess the impacts of these other changes, which are expected to be more limited than those resulting from the removal of intervention target ratios mentioned above.

Book value – The book value per common share was $71.63 at September 30, 2024, up 2% during the quarter and 10% during the last twelve months.

Normal Course Issuer Bid (NCIB) – During the third quarter of 2024, the Company repurchased and cancelled 1,379,860 outstanding common shares for a total value of $123 million under the NCIB program. A total of 7,004,964 shares, or approximately 6.94% of the issued and outstanding common shares as at October 31, 2023, were repurchased under the current program between November 14, 2023 and September 30, 2024.

Dividend – The Company paid a quarterly dividend of $0.8200 per share to common shareholders in the third quarter of 2024. The Board of Directors approved a quarterly dividend of $0.9000 per share payable during the fourth quarter of 2024, representing an increase of $0.08 per share or 10% compared to the dividend paid in the previous quarter. This dividend is payable on December 16, 2024 to the shareholders of record at November 22, 2024.

Dividend Reinvestment and Share Purchase Plan – Registered shareholders wishing to enrol in iA Financial Corporation’s Dividend Reinvestment and Share Purchase Plan (DRIP) so as to be eligible to reinvest the next dividend payable on December 16, 2024 must ensure that the duly completed form is delivered to Computershare no later than 4:00 p.m. on November 15, 2024. Enrolment information is provided on iA Financial Group’s website at ia.ca, under the Dividends section. Common shares issued under iA Financial Corporation’s DRIP will be purchased on the secondary market and no discount will be applicable.

Appointment – Mr. Nicolas Darveau-Garneau, who has been a board member of iA Financial Corporation since 2018, was appointed strategic advisor in the field of artificial intelligence applied to improving the client experience. As a result, he stepped down from the Board of Directors on October 1, 2024, to focus on this new role. Mr. Darveau-Garneau has over 30 years of experience in the information technology field, especially in digital innovation in businesses. The Board of Directors of iA Financial Corporation now comprises 14 directors.

Acquisition of two blocks of business from Prosperity Life Group – On August 7, 2024, iA Financial Group completed the acquisition of two blocks of business from Prosperity Life Group. The insurance blocks purchased by iA Financial Group primarily consist of final expense products, as well as term life insurance, totalling over 115,000 policies and US$100 million in annual premiums. This transaction continues to enhance iA’s footprint in the United States, in addition to being accretive from the first year, on both a core and reported basis.

Acquisition of assets of Laurentian Bank Securities’ retail full-service investment broker division – On August 6, 2024, iA Financial Group completed the acquisition of assets of the retail full-service investment broker division of Laurentian Bank Securities Inc.  (LBS). This division of LBS has over $2 billion in assets under administration. As a result of the transaction, approximately 15,000 client accounts have been transferred, with some 25 advisors joining iAPW’s network, marking another important milestone for iA Private Wealth.

Strategic partnership with Clutch – On July 5, 2024, iA Financial Group announced a strategic investment in Toronto-based business Clutch Technologies Inc., which is one of Canada’s largest retailers in online sales of pre-owned vehicles. This investment enables iA to add online sales as a new product distribution channel to its current extensive network.

Preferred share redemption – On July 29, 2024, iA Insurance completed the redemption of its 5,000,000 outstanding Non-Cumulative Class A Preferred Shares Series B with a principal amount of $125 million. This repurchase follows the issuance of $350 million Limited Recourse Capital Notes in June 2024 and is part of the capital management actions aimed at optimizing the capital structure.

End of reporting issuer status of iA Insurance – Following the redemption of its Non-Cumulative Class A Preferred Shares Series B on July 29, 2024, iA Insurance ceased to be a reporting issuer in accordance with an order granted under the securities legislation of Quebec and Ontario. Therefore, from the third quarter onward, iA Insurance is no longer subject to continuous disclosure requirements under securities legislation, including the requirement to file its financial statements.

Philanthropic contest – On September 10, 2024, the eighth edition of the Company’s philanthropic contest was launched. A total of $500,000 in donations will be shared by charities addressing societal issues. The winners will be announced between December 10 and December 13, 2024.

Subsequent to the third quarter:

• Investor Event – iA Financial Group announced that it will host an Investor Event on February 24, 2025. The event will take place in Toronto and will include an update on the Company’s growth strategy, including a deep dive on U.S. operations and key objectives of the Canadian businesses. Investors and financial analysts are welcome to attend either in person or virtually. For additional information, please refer to the press release dated October 17, 2024, which can be found on our website at ia.ca.
• NCIB renewal – With the approval of the Toronto Stock Exchange and the Autorité des marchés financiers, the Company could purchase, under a Normal Course Issuer Bid between November 14, 2024 and November 13, 2025, up to 4,694,894 common shares, representing approximately 5% of its 93,897,897 common shares issued and outstanding at October 31, 2024. The purchases will be made at market price at the time of purchase through the facilities of the Toronto Stock Exchange or an alternative Canadian trading system, in accordance with market rules and policies. The common shares repurchased will be cancelled.

OUTLOOK

Medium-term guidance for iA Financial Corporation

• Core earnings per common share^††: target of 10%+ annual average growth
• Core return on common shareholders’ equity (ROE)^††: target of 15%+
• Solvency ratio operating target: target of 120%
• Organic capital generation: target of $600+ million in 2024
• Dividend payout ratio based on core earnings^††: target range of 25% to 35%

The Company’s outlook, including the market guidance provided and expectations as to the increase in capital available for deployment, constitutes forward-looking information within the meaning of securities laws. Although the Company believes that its outlook is reasonable, such statements involve risks and uncertainties and undue reliance should not be placed on such statements. Factors that could cause actual results to differ materially from expectations include, but are not limited to: insurance, market, credit, liquidity, strategic and operational risks. In the case of the increase in capital available for deployment resulting from the proposed changes to the CARLI Guideline, such factors also include required capital target adjustments and applicable internal approvals. In addition, certain material factors or assumptions are applied in preparing the Company’s outlook, including but not limited to: accuracy of estimates, assumptions and judgments under applicable accounting policies, and no material change in accounting standards and policies applicable to the Company; no material variation in interest rates; no significant changes to the Company’s effective tax rate; no material changes in the level of the Company’s regulatory capital requirements; availability of options for deployment of excess capital; credit experience, mortality, morbidity, longevity and policyholder behaviour being in line with actuarial experience studies; investment returns being in line with the Company’s expectations and consistent with historical trends; different business growth rates per business unit; no unexpected changes in the economic, competitive, insurance, legal or regulatory environment or actions by regulatory authorities that could have a material impact on the business or operations of iA Financial Group or its business partners; no unexpected change in the number of shares outstanding; and the non-materialization of risks or other factors mentioned or discussed elsewhere in this document. The Company’s outlook serves to provide shareholders, market analysts, investors, and other stakeholders with a basis for adjusting their expectations with regard to the Company’s performance throughout the year and may not be appropriate for other purposes. Additional information about risk factors and assumptions applied may be found in the “Forward-looking Statements” section of this document.

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NON-IFRS AND ADDITIONAL FINANCIAL MEASURES

iA Financial Corporation (hereinafter referred to as the “Company”) reports its financial results and statements in accordance with International Financial Reporting Standards (“IFRS”). The Company also publishes certain financial measures or ratios that are not presented in accordance with IFRS. The Company uses non-IFRS and other financial measures when evaluating its results and measuring its performance. The Company believes that such measures provide additional information to better understand its financial results and assess its growth and earnings potential, and that they facilitate comparison of the quarterly and full year results of the Company’s ongoing operations. Since such non-IFRS and other financial measures do not have standardized definitions and meaning, they may differ from similar measures used by other institutions and should not be viewed as an alternative to measures of financial performance, financial position or cash flow determined in accordance with IFRS. The Company strongly encourages investors to review its financial statements and other publicly filed reports in their entirety and not to rely on any single financial measure.

Non-IFRS financial measures include core earnings (losses).

Non-IFRS financial ratios include core earnings per common share (core EPS); core return on common shareholders’ equity (core ROE); core effective tax rate; dividend payout ratio, core; and financial leverage ratio.

Supplementary financial measures include return on common shareholders’ equity (ROE); components of the CSM movement analysis (organic CSM movement, impact of new insurance business, organic financial growth, insurance experience gains (losses), impact of changes in assumptions and management actions, impact of markets, and currency impact); components of the drivers of earnings (in respect of both net income attributed to common shareholders and core earnings); assets under management; assets under administration; capital available for deployment; dividend payout ratio; total payout ratio (trailing 12 months); organic capital generation; sales; net premiums; and premium equivalents and deposits.

For relevant information about the non-IFRS measures, including a reconciliation of non-IFRS financial measures to the most directly comparable IFRS measure used in this document, see the “Non-IFRS and Additional Financial Measures” section in the Management’s Discussion and Analysis for the period ending September 30, 2024, which is hereby incorporated by reference and is available for review on SEDAR+ at sedarplus.ca or on iA Financial Group’s website at ia.ca.

A reconciliation of net income attributed to common shareholders to core earnings by business segment is included below. See “Reconciliation of Net Income Attributed to Common Shareholders and Core Earnings” above for the reconciliation on a consolidated basis.

Reconciliation of Select Non-IFRS Financial Measures