CI Financial Reports Financial Results for the Second Quarter of 2024

• Record diluted EPS of $1.15, record adjusted diluted EPS¹ of $0.90
• Record EBITDA of $342.7 million, record adjusted EBITDA attributable to shareholders¹ of $253.2 million
• EBITDA per share of $2.27 and adjusted EBITDA attributable to shareholders¹ per share of $1.68, both at record levels
• Operating cash flow of $176.8 million, free cash flow¹ of $151.7 million
• Operating cash flow per share of $1.17, free cash flow per share of $1.01
• Record total assets of $489.0 billion, up $81.0 billion or 19.8% year over year
• Paid $30.3 million in dividends at $0.20 per share
• In July, total assets surpassed $500 billion for the first time
• Repurchased 9.9 million shares under substantial issuer bids completed in April and July
• Corient acquired two U.S. wealth management firms with combined assets of approximately $5.6 billion; two additional firms acquired after quarter-end, adding $8.1 billion

All financial amounts in Canadian dollars as at June 30, 2024, unless stated otherwise.

CI Financial Corp. (“CI”) (TSX: CIX) today released financial results for the quarter ended June 30, 2024.

“CI delivered strong results in the second quarter, with record adjusted diluted earnings per share¹ of $0.90, and continued growth in revenues and adjusted EBITDA¹,” said Kurt MacAlpine, CI Chief Executive Officer. “Total assets reached a new high of $489 billion, a year-over-year increase of 20%, and in July, our assets exceeded $500 billion for the first time.

“Corient, our U.S. subsidiary, is demonstrating significant growth in assets and profitability, having generated double-digit gains in adjusted EBITDA relative to both the previous quarter and the second quarter of 2023. This reflects the significant progress we have made in integrating that business and expanding its product offering.

“In addition to fostering organic growth at Corient, we continued our highly selective approach to M&A, seeking exceptional wealth management firms focused on ultra-high-net-worth individuals and families,” Mr. MacAlpine said. “In the second quarter, we made our first acquisitions of 2024, adding firms based in Florida and Ohio with combined assets of approximately $5.6 billion. In July, Corient completed the acquisitions of two other registered investment advisors – a Florida multi-family office and a private wealth manager based in Charlotte, North Carolina.

“Our recent capital management activities have also been productive,” Mr. MacAlpine said. "Through a tender offer and market transactions, we repurchased over US$578 million of our 2051 notes and US$52 million of our 2030 notes at significant discounts to face value, realizing a sizeable gain for CI shareholders.

“We also reduced acquisition-related liabilities by $101 million during the quarter and continued to return capital to shareholders by repurchasing a meaningful number of shares. Through two substantial issuer bids completed in April and July, we have bought back almost 10 million shares so far this year. Our normal course issuer bid, which we renewed in July, permits the repurchase of another 12.6 million shares over the next 12 months.”

Operating and financial data highlights

1. Free cash flow, net debt, adjusted net income, adjusted earnings per share, adjusted diluted earnings per share, adjusted EBITDA, adjusted net revenues and adjusted expenses are not standardized earnings measures prescribed by IFRS. For further information, see “Non-IFRS Measures” note below.
2. Includes $34.7 billion, $34.4 billion, $33.2 billion, $31.8 billion, and $32.8 billion of assets managed by CI and held by clients of advisors with CI Assante Wealth Management, CI Private Counsel (CIPC) and Aligned Capital Partners as at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively.
3. Includes $25.6 billion, $24.5 billion, $21.5 billion, $19.7 billion, and $5.4 billion of assets advised by CI and held by clients of advisors with Assante, CIPC, CI Direct Investing and Aligned Capital as at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively. Prior to July 2023, custody assets were historically not included as part of reported assets for Canada wealth management or consolidated total assets.
4. Month-end USD/CAD exchange rates of 1.3680, 1.3546, 1.3250, 1.3582, and 1.3248 for June 2024, March 2024, December 2023, September 2023, and June 2023, respectively.
5. Includes 100% of flows from CI’s minority investments in Columbia Pacific Advisors, OCM Capital Partners, The Cabana Group and GLASfunds Holdings.

Financial highlights

Second quarter net income attributable to shareholders was $176.4 million compared to a net loss of $154.4 million in the first quarter of 2024. Excluding non-operating items, adjusted net income attributable to shareholders¹ was $135.6 million in the second quarter, up 2.0% from the previous quarter.

Second quarter total net revenues were $986.0 million, up from $645.7 million in the first quarter of 2024. Excluding non-operating items, adjusted total net revenues¹ were $731.3 million, up 4.7% from $698.6 million due to higher revenues from all three segments, led by a 7.9% increase in U.S. wealth management fees.

Second quarter total expenses declined 1.8% to $754.7 million from $768.3 million in the first quarter of 2024. Excluding non-operating items, adjusted total expenses¹ were $507.9 million, up 8.0% from $470.3 million in the previous quarter as a result of higher SG&A, higher advisor and dealer fees due to higher Canada Wealth Management revenues, and higher interest expense.

Capital allocation

CI paid $30.3 million in dividends at a rate of $0.20 per share. The annual dividend rate of $0.80 per share represented a yield of 5.0% on CI’s closing share price of $16.00 on August 7, 2024. As announced yesterday, the Board of Directors of CI declared a quarterly dividend of $0.20 per share, payable on January 15, 2025 to shareholders of record as of December 31, 2024.

Under a substantial issuer bid that expired on April 2, 2024, CI purchased for cancellation 4,857,142 common shares at a purchase price of $17.50 per share, for an aggregate price of $85 million.

On May 31, CI commenced a subsequent substantial issuer bid, which expired after quarter-end, on July 8, 2024. Under the offer, CI purchased for cancellation five million common shares at a purchase price of $15.50 per share, for an aggregate price of approximately $77.5 million.

As a result of a tender offer announced in May 2024 and completed in June 2024, CI purchased US$570 million of its outstanding 4.100% notes due 2051, resulting in a significant gain for CI. Concurrent with the tender offer, CI issued 7.500% notes due 2029 with an aggregate principal amount of US$675.0 million.

CI executed amendments to the trust indentures governing its 3.759% Debentures due 2025 and 3.904% Debentures due 2027 following approvals from debentureholders at meetings held April 4, 2024. The amendments remove the covenants preventing any subsidiary of CI from creating, assuming, or otherwise directly incurring certain indebtedness.

Second quarter business highlights

• Corient completed the acquisitions of two registered investment advisors with combined assets of approximately $5.6 billion (US$4.1 billion): Paragon Advisors Inc. of Shaker Heights, Ohio, a multi-family office, and Socius Family Office, LLC of Fort Lauderdale, Florida, which specializes in wealth management for professional athletes. Both firms are now operating under the Corient name.
• As part of CI’s strategy of modernizing asset management, CI Global Asset Management (“CI GAM”) made several enhancements to its lineup of investment solutions. These included launching CI Global Artificial Intelligence ETF (TSX: CIAI), which focuses on investment opportunities created by AI technologies, and new series of two existing U.S. equity ETFs. CI GAM also completed the mergers of 13 mutual funds and six ETFs into other funds, simplifying the firm’s overall product offering.
• Northwood Family Office was named the winner of the 2024 Family Wealth Report Award for Best Multi-Family Office in North America (up to and including US$2.5 billion AUM/AUA).

Following quarter-end:

• Effective July 31, 2024, Corient acquired Emerald Multi-Family Office (EMFO, LLC) of Weston, Florida, and Byron Financial, LLC of Charlotte, North Carolina, which provide comprehensive wealth management services to ultra-high-net-worth clients. The firms have combined assets of approximately $8.1 billion (US$5.9 billion).
• CI GAM launched new investment solutions to meet investor demand in two key market segments. These included new fixed-income solutions available in both mutual funds and ETF series: CI Global Short-Term Bond Fund (Cboe: CGSB) and CI Global Unconstrained Bond Fund (TSX: CUBD). Additionally, CI GAM launched three covered call mandates: CI Multi-Sector Covered Call Fund, CI U.S. Aggregate Bond Covered Fund and CI U.S. Aggregate Bond Covered ETF.

Analysts’ conference call

CI will hold a conference call with analysts today at 9:00 a.m. EDT, led by Mr. 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: 921751):

• Canada toll-free: 1-833-950-0062
• United States toll-free: 1-833-470-1428
• All other locations: 1-929-526-1599.

A recording of the webcast will be archived on CI’s Investor Relations site.

About CI Financial

CI Financial Corp. is a diversified global asset and wealth management company operating primarily in Canada, the United States and Australia. Founded in 1965, CI has developed world-class portfolio management talent, extensive capabilities in all aspects of wealth planning, and a comprehensive product suite.

CI operates in three segments:

• Asset Management, which includes CI Global Asset Management, which operates in Canada, and GSFM, which operates in Australia.
• Canadian Wealth Management, which includes the operations of CI Assante Wealth Management, Aligned Capital Partners, CI Private Wealth, Northwood Family Office, Coriel Capital, CI Direct Investing and CI Investment Services.
• U.S. Wealth Management, which includes Corient Private Wealth, an integrated wealth management firm providing comprehensive solutions to ultra-high-net-worth and high-net-worth clients across the United States.

CI is headquartered in Toronto and listed on the Toronto Stock Exchange (TSX: CIX). To learn more, visit CI’s website or LinkedIn page.

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. 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 the forward-looking statements include that asset levels will remain stable. 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., a wholly owned subsidiary of CI.

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 and consideration for strategic recruitment classified as compensation per IFRS
• restructuring charges
• legal provisions for a class action related to time zone arbitrage
• certain gains or losses in assets and investments
• costs related to issuing or retiring debt obligations
• expenses associated with Corient and 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 August 8, 2024 available on SEDAR at www.sedar.com or at www.cifinancial.com.