6-K

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

For the month of February, 2021

Commission File Number 001-39684

CI Financial Corp.

(Translation of registrant’s name into English)

2 Queen Street East

Twentieth Floor

Toronto, Ontario, Canada M5C 3G7

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

  Form 20-F ¨    Form 40-F x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

Exhibits 99.1, 99.2 and 99.3 to this Form 6-K of CI Financial Corp. (the “Company”) are hereby incorporated by reference as exhibits to the Registration Statement on Form F-10 (File No. 333-251032) of the Company, as amended or supplemented.

DOCUMENTS INCLUDED AS PART OF THIS REPORT

Exhibit
99.1	Audited Consolidated Financial Statements for the year ended December 31, 2020
99.2	Management’s Discussion and Analysis for the year ended December 31, 2020
99.3	Consent of Ernst & Young LLP
99.4	Press Release dated February 11, 2021

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		CI Financial Corp.
		(Registrant)
Date:	February 12, 2021	By:	/s/ Edward Kelterborn
			Name:	Edward Kelterborn
			Title:	Chief Legal Officer

3

EX-99.1

Exhibit 99.1 

CONSOLIDATED

FINANCIAL STATEMENTS

December 31, 2020

 

Q4 Financial Report |  1  | December 31, 2020 

Independent Auditor’s Report

Report of Independent Registered Public Accounting Firm

To the shareholders and the Board of Directors of CI Financial Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of CI Financial Corp. and its subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of income and comprehensive income, changes in shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Q4 Financial Report |  2  | December 31, 2020 

Independent Auditor’s Report

Business Combinations

Description of the Matter

During 2020, the Company completed multiple acquisitions accounted for as business combinations which, in aggregate, amounted to $901 million in total consideration, as disclosed in Note 3 to the consolidated financial statements. The cost of an acquisition is measured as the aggregate fair values of the assets given, equity instruments issued, and liabilities incurred or assumed as at the date of the exchange of control of the acquiree. Where the amounts allocated to the assets and liabilities are less than the overall consideration given, the difference is accounted for as goodwill.

Auditing the Company’s business combinations was complex due to the degree of judgment and subjectivity in estimating the fair values of the identified assets and liabilities of the acquiree as at the date of acquisition, including identifiable intangible assets, as well as estimating the fair value of contingent consideration included in the purchase consideration.. Management estimated the fair value of the customer relationship contracts using various modelling techniques including the multi-period excess earnings method, which is a specific discounted cash flow method. Management also estimated the fair value of contingent consideration using various modelling techniques, including Monte-Carlo simulations. The fair value determination of the customer relationship contracts and contingent consideration required management to make significant estimates and assumptions related to future cash flows of the acquired businesses and the selection of the discount rate.

How We Addressed the Matter in Our Audit

To test the estimated fair value of the identified assets and liabilities resulting from the business acquisitions, we performed audit procedures that included, among others, assessing the selection and application of the discount rate by evaluating the inputs and mathematical accuracy of the calculation, and developing a range of independent estimates and comparing those to the discount rates selected by management. We read the purchase agreements to obtain an understanding of the key terms and conditions and to identify the necessary accounting considerations. For certain acquisitions, we also involved our valuation specialists to assess the valuation methodologies applied and assist in testing the significant assumptions and inputs used by the Company, as discussed above, by comparing to externally available industry and economic trends, the Company's budgets and forecasts, the historical results of the acquired businesses, other guidelines used by companies within the same industry and other relevant factors. We performed sensitivity analyses on significant assumptions to consider the impact of changes in the valuation of the intangibles and contingent consideration that would result from changes in management’s assumptions. We also assessed the adequacy of the Company’s disclosures in relation to this matter.

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Independent Auditor’s Report

Impairment of Indefinite Life Intangible Assets, Including Goodwill

Description of the Matter

As at December 31, 2020, the Company had $4,291 million of intangible assets, which are primarily comprised of goodwill and fund management contracts with an indefinite life acquired in previous business acquisitions, as disclosed in Note 5 to the consolidated financial statements. The Company assesses goodwill and intangibles with an indefinite life for impairment annually or more frequently if impairment indicators are present.

Auditing the Company’s impairment tests was complex and required the involvement of specialists due to the judgmental nature of key assumptions and significant estimation required to determine the recoverable amount of the CGUs or groups of CGUs. Significant assumptions in the estimate of the recoverable amount included market appreciation, net sales of funds, operating margins, and discount rates, which are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit

To test the estimated recoverable amount of the CGUs or groups of CGUs, our audit procedures included, among others, with the assistance of our valuation specialists, assessing the methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its assessment. We assessed the selection and application of the discount rate by evaluating the inputs and mathematical accuracy of the calculation and developing a range of independent estimates and comparing those to the discount rates selected by management. We assessed the historical accuracy of management’s forecast estimates by performing a comparison of management’s past projections to actual results. We also compared the market appreciation, net sales of funds and operating margin assumptions to externally available industry and economic trends, and the Company’s budgets, forecasts and historical results. We performed sensitivity analyses on significant assumptions to consider the impact of changes in the recoverable amount of the CGU or groups of CGUs that would result from changes in the assumptions. We also assessed the adequacy of the Company’s disclosures related to the impairment of intangible assets, including goodwill.

We have served as the Company's auditor since 1994.

/s/ Ernst & Young LLP

Chartered Professional Accountants

Licensed Public Accountants

Toronto, Canada

February 11, 2021

Q4 Financial Report |  4  | December 31, 2020 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	As at		As at
	December 31, 2020		December 31, 2019
[in thousands of Canadian dollars]	$		$
ASSETS
Current
Cash and cash equivalents	483,598		118,360
Client and trust funds on deposit [note 3]	973,143		364,964
Investments [note 13]	133,375		138,412
Accounts receivable and prepaid expenses [note 3]	240,849		170,156
Income taxes receivable	7,687		25,841
Total current assets	1,838,652		817,733
Capital assets, net [notes 3 and 4]	46,978		45,954
Right-of-use assets [notes 3 and 9]	50,620		44,882
Intangibles [notes 3 and 5]	4,290,998		3,388,482
Deferred income taxes [note 12]	7,846		—
Other assets [notes 3 and 6]	124,742		70,755
Total assets	6,359,836		4,367,806
LIABILITIES AND EQUITY
Current
Accounts payable and accrued liabilities [note 3]	315,884		245,267
Current portion of provisions and other financial liabilities [notes 3 and 8]	275,710		14,643
Dividends payable [note 11]	75,297		79,845
Client and trust funds payable [note 3]	961,080		368,348
Income taxes payable	3,209		—
Current portion of long-term debt [note 7]	203,805		449,509
Current portion of lease liabilities [notes 3 and 9]	14,926		11,348
Total current liabilities	1,849,911		1,168,960
Long-term debt [note 7]	2,252,311		1,154,985
Provisions and other financial liabilities [notes 3 and 8]	107,842		18,493
Deferred income taxes [note 12]	470,735		464,841
Lease liabilities [notes 3 and 9]	61,307		61,171
Total liabilities	4,742,106		2,868,450
Equity
Share capital [note 10(a)]	1,867,997		1,944,311
Contributed surplus	22,817		23,435
Deficit	(287,621	)	(474,013	)
Accumulated other comprehensive income (loss)	(20,746	)	255
Total equity attributable to the shareholders of the Company	1,582,447		1,493,988
Non-controlling interests [note 3]	35,283		5,368
Total equity	1,617,730		1,499,356
Total liabilities and equity	6,359,836		4,367,806

(see accompanying notes)
On behalf of the Board of Directors:
	William T. Holland Director	Tom P. Muir Director

Q4 Financial Report |  5  | December 31, 2020 

CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

For the years ended December 31

	2020			2019
[in thousands of Canadian dollars, except per share amounts]	$			$
REVENUE
Management fees		1,635,773			1,789,100
Administration fees		364,408			292,501
Redemption fees		8,230			11,060
Realized and unrealized gain on investments		6,949			10,788
Other income [note 6]		35,096			19,017
		2,050,456			2,122,466
EXPENSES
Selling, general and administrative [note 19]		449,439			489,272
Trailer fees		509,444			555,167
Advisor and dealer fees		253,376			206,301
Deferred sales commissions		7,492			12,814
Amortization and depreciation [note 20]		43,514			32,891
Interest and lease finance [notes 7 and 9]		65,440			55,422
Other [notes 6 and 8]		79,004			43,794
		1,407,709			1,395,661
Income before income taxes		642,747			726,805
Provision for income taxes [note 12]
Current		168,923			188,831
Deferred		(1,722	)		450
		167,201			189,281
Net income for the year		475,546			537,524
Net loss attributable to non-controlling interests		(432	)		(872	)
Net income attributable to shareholders		475,978			538,396
Basic earnings per share attributable to shareholders [note 10(e)]	$	2.22		$	2.30
Diluted earnings per share attributable to shareholders [note 10(e)]	$	2.21		$	2.29
Other comprehensive loss, net of tax
Exchange differences on translation of foreign operations		(24,350	)		(22	)
Total other comprehensive loss, net of tax		(24,350	)		(22	)
Comprehensive income for the year		451,196			537,502
Comprehensive loss attributable to non-controlling interests		(3,781	)		(872	)
Comprehensive income attributable to shareholders		454,977			538,374

(see accompanying notes)

Q4 Financial Report |  6  | December 31, 2020 

CONSOLIDATED STATEMENTS OF CHANGES IN

SHAREHOLDERS’ EQUITY

For the years ended December 31

	Share capital [note 10(a)]		Contributed surplus		Deficit		Accumulated other comprehensive income (loss)		Total shareholders’ equity		Non- controlling interests [note 3]		Total equity
[in thousands of Canadian dollars]	$		$		$		$		$		$		$
Balance, January 1, 2020	1,944,311		23,435		(474,013	)	255		1,493,988		5,368		1,499,356
Comprehensive income	—		—		475,978		(21,001	)	454,977		(3,781	)	451,196
Dividends declared [note 11]	—		—		(150,765	)	—		(150,765	)	—		(150,765	)
Shares repurchased, net of tax	(120,236	)	—		(135,448	)	—		(255,684	)	—		(255,684	)
Business combination [note 3]	—		—		(3,373	)	—		(3,373	)	32,915		29,542
Issuance of share capital for business combinations, net of transaction costs and tax [notes 3 and 10]	35,434		—		—		—		35,434		—		35,434
Issuance of share capital for equity-based plans, net of tax	8,488		(8,488	)	—		—		—		—		—
Compensation expense for equity-based plans, net of tax	—		7,870		—		—		7,870		—		7,870
Net contributions from non-controlling interests	—		—		—		—		—		781		781
Change during the year	(76,314	)	(618	)	186,392		(21,001	)	88,459		29,915		118,374
Balance, December 31, 2020	1,867,997		22,817		(287,621	)	(20,746	)	1,582,447		35,283		1,617,730
Balance, January 1, 2019	2,125,130		25,270		(730,663	)	277		1,420,014		2,849		1,422,863
Comprehensive income	—		—		538,396		(22	)	538,374		(872	)	537,502
Dividends declared [note 11]	—		—		(31,483	)	—		(31,483	)	(875	)	(32,358	)
Shares repurchased, net of tax	(193,570	)	—		(250,263	)	—		(443,833	)	—		(443,833	)
Business combination [note 3]	—		—		—		—		—		4,266		4,266
Issuance of share capital for equity-based plans, net of tax	12,751		(12,751	)	—		—		—		—		—
Compensation expense for equity-based plans, net of tax	—		10,916		—		—		10,916		—		10,916
Change during the year	(180,819	)	(1,835	)	256,650		(22	)	73,974		2,519		76,493
Balance, December 31, 2019	1,944,311		23,435		(474,013	)	255		1,493,988		5,368		1,499,356

(see accompanying notes)

Q4 Financial Report |  7  | December 31, 2020 

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31

	2020		2019
[in thousands of Canadian dollars]	$		$
OPERATING ACTIVITIES (*)
Net income for the year	475,546		537,524
Add (deduct) items not involving cash
Realized and unrealized gain on investments	(6,949	)	(10,788	)
Equity-based compensation	10,657		14,701
Amortization and depreciation	43,514		32,891
Deferred income taxes	(1,722	)	450
Impairment loss on intangibles [note 5]	—		6,442
Loss on long-term debt [note 7]	2,328		—
Cash provided by operating activities before net change in operating assets and liabilities	523,374		581,220
Net change in operating assets and liabilities	18,595		(23,211	)
Cash provided by operating activities	541,969		558,009
INVESTING ACTIVITIES
Purchase of investments	(17,648	)	(11,503	)
Proceeds on sale of investments	23,599		36,741
Additions to capital assets	(11,990	)	(12,351	)
Increase in other assets	(47,645	)	(26,032	)
Additions to intangibles	(17,132	)	(4,425	)
Cash paid to settle put option and contingent liability [note 8]	—		(2,667	)
Acquisition of subsidiaries, net of cash acquired [note 3]	(527,298	)	(26,077	)
Cash used in investing activities	(598,114	)	(46,314	)
FINANCING ACTIVITIES
Repayment of long-term debt	(569,015	)	(591,500	)
Issuance of long-term debt	1,471,022		690,959
Repurchase of long-term debt	(55,985	)	—
Repurchase of share capital	(257,939	)	(447,293	)
Payment of lease liabilities	(12,168	)	(11,036	)
Net contributions from non-controlling interests	781		—
Dividends paid to shareholders [note 11]	(155,313	)	(170,750	)
Dividends paid to non-controlling interests	—		(875	)
Cash provided by (used in) financing activities	421,383		(530,495	)
Net increase (decrease) in cash and cash equivalents during the year	365,238		(18,800	)
Cash and cash equivalents, beginning of year	118,360		137,160
Cash and cash equivalents, end of year	483,598		118,360
(*) Included in operating activities are the following:
Interest paid	62,997		49,548
Income taxes paid	147,804		205,592

(see accompanying notes)

Q4 Financial Report |  8  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 · [in thousands of Canadian dollars, except per share amounts]

CI Financial Corp. [“CI”] is a publicly listed company (TSX: CIX; NYSE: CIXX) incorporated under the laws of the Province of Ontario and has its registered office and principal place of business located at 2 Queen Street East, Toronto, Ontario.

CI’s primary business is the management and distribution of a broad range of financial products and services, including mutual funds, segregated funds, exchange-traded funds, financial planning, insurance, investment advice, wealth management and estate and succession planning.

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements of CI have been prepared in accordance with International Financial Reporting Standards [“IFRS”] as issued by the International Accounting Standards Board [“IASB”].

These consolidated financial statements were authorized for issuance by the Board of Directors of CI on February 10, 2021.

BASIS OF PRESENTATION

The consolidated financial statements of CI have been prepared on a historical cost basis, except for certain financial instruments that have been measured at fair value. The consolidated financial statements have been prepared on a going concern basis. CI’s presentation currency is the Canadian dollar, which is CI’s functional currency.

BASIS OF CONSOLIDATION

The consolidated financial statements include the accounts of CI and all its subsidiaries on a consolidated basis after elimination of intercompany transactions and balances. Subsidiaries are entities over which CI has control, when CI has the power, directly or indirectly, to govern the financial and operating policies of an entity, is exposed to variable returns from its activities, and is able to use its power to affect such variable returns to which it is exposed.

CI’s principal subsidiaries are as follows:

· CI’s wholly owned Canadian subsidiaries include CI Investments Inc. [“CI Investments”], Assante Wealth Management (Canada) Ltd. [“AWM”], CI Investment Services Inc. [“CI Investment Services”, formerly BBS Securities Inc.], Wealthbar Financial Services Inc., and their respective subsidiaries. CI has a controlling interest in Marret Asset Management Inc. [“Marret”] and Aligned Capital Distributions Inc., and their respective subsidiaries. Effective, July 1, 2019, First Asset Investment Management Inc. amalgamated with CI Investments.

· CI’s wholly owned U.S. subsidiaries include, Balasa Dinverno Foltz LLC, Bowling Portfolio Management LLC, The Roosevelt Investment Group, Inc. and Doyle Wealth Management, Inc. CI has a controlling interest in Surevest LLC, OCM Capital Partners LLC, The Cabana Group, LLC, Stavis & Cohen Financial, LLC and RGT Wealth Advisors, LLC [“RGT”], and their respective subsidiaries.

· CI has a controlling interest in its Australian subsidiary, GSFM Pty Limited [“GSFM”] and its subsidiaries.

Q4 Financial Report |  9  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 · [in thousands of Canadian dollars, except per share amounts]

· CI holds a controlling interest in GSFM and RGT with put and call options over the remaining minority interest. CI considers the non-controlling interest in GSFM and RGT to have already been acquired and consolidates 100% of the income and comprehensive income in the consolidated statements of income and comprehensive income.

· For subsidiaries where CI holds a controlling interest, a non-controlling interest is recorded in the consolidated financial statements of income and comprehensive income to reflect the non-controlling interest’s share of the income and comprehensive income, and a non-controlling interest is recorded within equity in the consolidated statements of financial position to reflect the non-controlling interest’s share of the net assets.

Hereinafter, CI and its subsidiaries are referred to as CI.

CI manages a range of mutual funds, segregated funds, structured products and other funds that meet the definition of structured entities under IFRS. CI earns fees for providing management and administrative services to these investment funds. Fees are calculated on assets under management in these funds, which totalled $135.1 billion as at December 31, 2020 [2019 – $131.7 billion]. CI does not consolidate these investment funds because the form of fees and ownership interest are not significant enough to meet the definition of control under IFRS. CI provides no guarantees against the risk of financial loss to the investors of these investment funds.

REVENUE RECOGNITION

Revenue is recognized when control of the goods or services are transferred by CI at an amount that reflects the consideration to which CI expects to be entitled in exchange for those goods or services. Revenue is measured at the fair value of the consideration received or receivable. In addition to these general principles, CI applies the following specific revenue recognition policies:

Management fees are based upon the net asset value of the funds managed by CI and are recognized on an accrual basis.

Administration fees and other income are recognized as services are provided under contractual arrangements. Administration fees include commission revenue, which is recorded on a trade date basis and advisory fees, which are recorded when the services related to the underlying engagements are completed.

Redemption fees payable by security holders of deferred sales charge mutual funds, the sales commission of which was financed by CI, are recognized as revenue on the trade date of the redemption of the applicable mutual fund securities.

FINANCIAL INSTRUMENTS

Classification and measurement of financial assets

CI classifies its financial assets as fair value through profit or loss [“FVPL”] and amortized cost. CI had no financial assets classified as fair value through other comprehensive income [“FVOCI”] during the year ended December 31, 2020.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and CI’s business model for managing them. With the exception of trade receivables, that do not contain a significant financing component and are measured at the transaction price in accordance with IFRS 15, Revenue from Contracts with Customers [“IFRS 15”], all financial assets are initially measured at fair value adjusted for transaction costs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 · [in thousands of Canadian dollars, except per share amounts]

Financial assets classified as FVPL are carried at fair value in the consolidated statements of financial position and any gains or losses are recorded in net income in the period in which they arise. Financial assets classified as FVPL include cash and cash equivalents, investments and other assets.

Financial assets are classified at amortized cost using the effective interest method if they meet the following conditions and are not designated as FVPL:

· they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows

· the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding

Financial assets classified at amortized cost include client and trust funds on deposit, accounts receivable and other assets.

Cash and cash equivalents

Cash and cash equivalents include cash on deposit, highly liquid investments and interest-bearing deposits with original maturities of 90 days or less.

Client and trust funds

Client and trust funds on deposit include amounts representing cash held in trust with Canadian financial institutions for clients in respect of self-administered Registered Retirement Savings Plans and Registered Retirement Income Funds, and amounts received from clients for which the settlement date on the purchase of securities has not occurred or accounts in which the clients maintain a cash balance. Client and trust funds on deposit also include amounts for client transactions that are entered into on either a cash or margin basis and recorded on the trade date of the transaction. Amounts are due from clients on the settlement date of the transaction for cash accounts. For margin accounts, CI extends credit to a client for the purchase of securities, collateralized by the financial instruments in the client’s account. Amounts loaned are limited by margin regulations of the Investment Industry Regulatory Organization of Canada [“IIROC”] and other regulatory authorities, and are subject to CI’s credit review and daily monitoring procedures. The corresponding liabilities related to the above accounts and transactions are included in client and trust funds payable.

Investments

Investments include CI Investment Services’s securities owned, at market, principally for the purpose of selling or repurchasing in the near term. Securities owned, at market, are classified as FVPL and are initially recognized on the consolidated statements of financial position at fair value with transaction costs expensed as incurred. Subsequent realized and unrealized gains and losses are included in administration fees income in the consolidated statements of income and comprehensive income in the period in which they arise. Securities transactions are recorded on a trade date basis. Market value is based on quoted prices where an active market exists. For securities in non-active markets, market value is based on valuation techniques and management’s best estimate of fair value.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 · [in thousands of Canadian dollars, except per share amounts]

Also included in investments are marketable securities that consist of CI’s seed capital investments in CI mutual funds and strategic investments. Investments in marketable securities are measured at fair value and recognized on the trade date. Mutual fund securities are valued using the net asset value per unit of each fund. Realized and unrealized gains and losses are recognized using average cost and recorded in net income. Distributions from mutual fund securities are recorded as other income. Distributions that are reinvested increase the cost base of the mutual fund investments.

Impairment of financial assets

CI recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the loss allowance is measured for the credit risk on the financial asset at an amount equal to 12 months of expected credit losses. For trade receivables, CI applies the simplified approach to providing for expected credit losses, which allows for the use of a lifetime expected credit loss provision. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and is related to an event occurring after the impairment was recognized.

Classification and measurement of financial liabilities

CI classifies its financial liabilities as FVPL and amortized cost. Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the financial liability is classified at FVPL. Subsequently, financial liabilities are measured at amortized cost using the effective interest method except for derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses recognized in net income. Financial liabilities classified at FVPL include derivative financial instruments included in long-term debt and contingent consideration payables included in provisions and other financial liabilities. All other financial liabilities are measured at amortized cost.

Derivative financial instruments and hedge accounting

CI may use derivative financial instruments such as interest rate swaps and forward foreign exchange contracts to manage its interest rate and foreign currency risk related to long-term debt. Derivative financial instruments are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at fair value. The accounting for subsequent changes depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged and the type of hedge relationship designated.

To qualify for hedge accounting, the hedging relationship must meet all of the following requirements:

· there is an economic relationship between the hedged item and the hedging instrument

· the effect of credit risk does not dominate the value changes that result from that economic relationship

Q4 Financial Report |  12  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 · [in thousands of Canadian dollars, except per share amounts]

· the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item

CI entered into an interest rate swap designated as a fair value hedge to manage the effect of changes in interest rates relating to its fixed-rate debentures. The swap involves exchanging interest payments without exchanging the notional amount on which the payments are based. The exchange of payments is recorded as an adjustment to interest expense on the hedged item. Changes in the fair value of the swap are recorded in the consolidated statements of income and comprehensive income in other expenses, together with any changes in the fair value of the hedged liability attributable to the hedged risk as an offset.

FAIR VALUE MEASUREMENT

CI uses valuation techniques to determine the fair value of financial instruments where active market quotes are not available. This involves developing estimates and assumptions consistent with how market participants would price the instrument. CI maximizes the use of observable data when developing estimates and assumptions, but this is not always available. In that case management uses the best information available.

All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

· Level 1 – valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities

· Level 2 – valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived from or corroborated by observable market data by correlation or other means

· Level 3 – valuation techniques with significant unobservable market inputs

For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, CI determines whether transfers have occurred between levels in the hierarchy by reassessing the categorization at the end of each reporting period.

COLLATERALIZED SECURITIES TRANSACTIONS

CI engages in securities lending and borrowing to facilitate the securities settlement process and to maximize revenue by acting as an agent for such transactions. These transactions are typically short-term in nature, with interest being received on the cash delivered. These transactions are collateralized by either cash, letters of credit or other collateral and are subject to daily margin calls for any deficiency between the market value of the security given and the amount of collateral received. CI manages its credit exposure by establishing and monitoring aggregate limits by counterparty for these transactions. CI’s securities lending and borrowing transactions are recorded in accounts receivable and prepaid expenses and accounts payable and accrued liabilities.

Q4 Financial Report |  13  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 · [in thousands of Canadian dollars, except per share amounts]

CAPITAL ASSETS

Capital assets are recorded at cost less accumulated depreciation. These assets are depreciated over their estimated useful lives as follows:

Computer hardware	Straight-line over three years to five years
Office equipment	Straight-line over five years
Leasehold improvements	Straight-line over the term of the lease

LEASES

CI assesses at inception whether a contract contains a lease that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. All leases are accounted for by recognizing a right-of-use asset and a lease liability except for leases of low value assets and leases with a duration of 12 months or less.

Right-of-use assets

CI recognizes right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of their estimated useful life and the lease term.

Lease liabilities

At the commencement date of the lease, CI recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include in substance fixed payments less any lease incentives receivable, variable payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by CI and payments of penalties for terminating a lease, if the lease term reflects CI exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognized as expense in the period on which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, CI uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

Q4 Financial Report |  14  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Short-term leases and lease of low-value assets

CI applies the short-term lease recognition exemption to its short-term leases of equipment and property leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). CI also applies the lease of low-value assets recognition exemption to leases of equipment that are considered of low value (i.e. below $5,000). Lease payments on short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term.

Sub-leases

CI enters into lease agreements as an intermediate lessor with respect to some of its leased properties. When CI is an intermediate lessor, the head lease and the sub-lease are accounted for as two separate contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.

Amounts due from lessees under finance leases are recognized as other assets at the amount of CI’s net investment in the leases. Finance lease income is recognized over the lease term using the effective interest rate. Payments received reduce the net investment in the lease.

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

BUSINESS COMBINATIONS

The acquisition method of accounting is used to account for the acquisition of subsidiaries by CI, whereby the purchase consideration is allocated to the identifiable assets and liabilities on the basis of fair value at the date of acquisition. Provisional fair values allocated at a reporting date are finalized as soon as the relevant information is available, within a period not to exceed 12 months from the acquisition date, with retroactive restatement of the impact of adjustments to those provisional fair values effective as at the acquisition date.

CI elects on a transaction-by-transaction basis whether to measure any non-controlling interest at fair value, or at the proportionate share of the recognized amount of the identifiable net assets of the acquired subsidiary, at the acquisition date.

Consideration transferred includes the fair values of the assets transferred, liabilities incurred and equity interests issued by CI. Consideration also includes the fair value of any put option or contingent consideration. Subsequent to the acquisition, the put option and contingent consideration that is based on an earnings measurement and classified as a liability is measured at fair value with any resulting gain or loss recognized in net income. Acquisition-related costs are expensed as incurred.

INTANGIBLES

Fund contracts

Fund administration contracts and fund management contracts [collectively, “fund contracts”] are recorded net of any write-down for impairment. CI evaluates the carrying amounts of indefinite life fund contracts at least annually for potential impairment by comparing the recoverable amount with their carrying amounts. CI will evaluate the carrying amount of fund contracts if events or changes in circumstances indicate a potential impairment. Any impairment would be written off to income.

Q4 Financial Report |  15  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Fund administration contracts are amortized on a straight-line basis over a period of up to 25 years. Fund management contracts with a finite life are amortized on a straight-line basis over a period of up to 20 years. The amortization period depends on the contractual terms of such agreements and management’s best estimate of their useful lives. Fund management contracts with an indefinite life are not amortized.

Goodwill

Goodwill is recorded as the excess of purchase price over identifiable assets acquired. Following initial recognition, goodwill is stated at cost less any accumulated impairment losses. Goodwill is evaluated for impairment at least annually and any impairment is recognized immediately in income and not subsequently reversed. Goodwill is allocated to the asset management and wealth management cash-generating units for the purpose of impairment testing.

Other intangibles

Other intangibles include the costs of trademarks and computer software, capitalized where it is probable that future economic benefits that are attributable to the assets will flow to CI and the cost of the assets can be measured reliably. Computer software is recorded initially at cost and amortized over its expected useful life of two to ten years on a straight-line basis. Trademarks have an indefinite life and are not amortized.

EQUITY-BASED COMPENSATION

CI uses the fair value method to account for equity-settled employee incentive share options and restricted share units [“RSUs”]. The value of the equity-based compensation, as at the date of grant, is recognized over the applicable vesting period as compensation expense with a corresponding increase in contributed surplus. When options are exercised, the proceeds received, together with the amount in contributed surplus, are credited to share capital. Upon vesting of the RSUs, the amount accumulated in contributed surplus for the RSUs is reclassified to share capital.

CI has a deferred share unit plan for directors. The value of the compensation at the date of grant is recognized immediately as compensation with a corresponding increase in accounts payable and accrued liabilities. At each consolidated statement of financial position date, the liability is revalued with an offset to compensation expense.

The amount recognized as an expense is adjusted to reflect the number of awards for which the related service conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that do meet the related service condition at the vesting date.

INCOME TAXES

Current income tax liabilities are measured at the amount expected to be paid to tax authorities, net of recoveries based on the tax rates and tax laws enacted or substantively enacted as at the consolidated statements of financial position dates.

Q4 Financial Report |  16  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

The liability method of tax allocation is used in accounting for income taxes. Under this method, deferred income tax assets and liabilities are determined based on differences between the carrying amount and tax basis of assets and liabilities and measured using the substantively enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Deferred tax liabilities are generally recognized for all taxable temporary differences.

Deferred tax liabilities are recognized for taxable temporary differences arising in investments in subsidiaries and joint ventures except where the reversal of the temporary difference can be controlled and it is probable that the difference will not reverse in the foreseeable future. Deferred tax liabilities are not recognized on temporary differences that arise from the initial recognition of goodwill, which is not deductible for tax purposes. Deferred tax assets and liabilities are not recognized in respect of temporary differences that arise on initial recognition of assets and liabilities acquired other than in a business combination.

PROVISIONS

A provision is recognized if, as a result of a past event, CI has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. In the event that the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects a current market assessment of the time value of money and the risks specific to the liability.

FOREIGN CURRENCY

(i) Foreign currency transactions

Transactions that are denominated in a currency other than the functional currency of the entity are translated as follows: Monetary assets and liabilities are translated into Canadian dollars using the exchange rates in effect as at the consolidated statements of financial position dates. Non-monetary assets and liabilities are translated into Canadian dollars using historical exchange rates. Revenue and expenses are translated at average rates prevailing during the period. Other foreign currency transactions are translated into Canadian dollars using the exchange rate in effect on the transaction date. Translation exchange gains and losses are included in other income in the period in which they occur.

(ii) Foreign currency operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated at the exchange rate in effect as at the consolidated statements of financial position dates. Revenue and expenses are translated at average rates prevailing during the period. Translation exchange gains and losses are recognized as other comprehensive income and reclassified to net income when the gain or loss on disposal of the foreign subsidiary is recognized. The consolidated statements of cash flows are translated at average exchange rates during the period, whereas cash and cash equivalents are translated at the spot exchange rate in effect as at the consolidated statements of financial position dates.

Q4 Financial Report |  17  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

In the process of applying CI’s accounting policies, management has made significant judgments involving estimates and assumptions, which are summarized as follows:

(i) Business combinations

The purchase price related to business acquisitions is allocated to the underlying assets and liabilities based on their estimated fair value at the acquisition date. Management makes estimates to determine the fair value of assets and liabilities, including the valuation of separately identifiable intangibles acquired. Contingent consideration and put option payable as part of the acquisitions are generally based on acquired businesses achieving certain performance targets. The estimates are based on management’s best assessment of the related inputs used in the valuation models, such as future cash flows and discount rates. Future performance results that differ from management’s estimates could result in changes to the liabilities, which are recorded as they arise in net income.

(ii) Impairment of intangible assets

Finite life intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Indefinite life intangible assets, including goodwill, are tested for impairment annually or more frequently if changes in circumstances indicate that the carrying amount may be impaired. The values associated with intangibles involve estimates and assumptions, including those with respect to future cash inflows and outflows, discount rates and asset lives. These estimates require significant judgment regarding market growth rates, fund flow assumptions, expected margins and costs that could affect CI’s future results if the current estimates of future performance and fair values change. These determinations also affect the amount of amortization expense on intangible assets with finite lives recognized in future periods.

(iii) Deferred tax assets

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profits will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

(iv) Provisions and other financial liabilities

Due to the nature of provisions and other financial liabilities, a considerable part of their determination is based on estimates and judgments, including assumptions concerning the future. The actual outcome of these uncertain factors may be materially different from the estimates, causing differences with the estimated provisions. Further details are provided in Note 8.

Q4 Financial Report |  18  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

2. NEW ACCOUNTING STANDARDS AND AMENDMENTS

IFRS 3

Effective January 1, 2020, CI adopted prospectively, the amendment to IFRS 3, Business Combinations, which clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarifies that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the consolidated financial statements of CI, but may impact future periods should CI enter into additional business combinations.

3. BUSINESS ACQUISITION

[A] Acquisitions - Year ended December 31, 2019

WealthBar Financial Services Inc.

On January 23, 2019, CI acquired 75% of the outstanding shares and debt obligations of WealthBar Financial Services Inc. [“WealthBar”] and on May 14, 2020, acquired the remaining 25% of the outstanding shares, for all cash consideration. WealthBar provides a leading Canadian online wealth management and financial planning platform. The acquisition was accounted for using the acquisition method of accounting. The fair values of the assets acquired and liabilities assumed and the results of operations have been consolidated from the date of the transaction and are included in the wealth management segment.

Snap Projections Inc.

On October 16, 2019, WealthBar acquired 100% of the outstanding shares of Snap Projections Inc., a Canadian financial and retirement software provider. The acquisition was accounted for using the acquisition method of accounting. The estimated fair values of the assets acquired and liabilities assumed and the results of operations have been consolidated from the date of the transaction and are included in the wealth management segment.

[B] Acquisitions - Year ended December 31, 2020

CI ETF Investment Management Inc.

On February 19, 2020, CI acquired 100% of the outstanding shares and debt obligations of CI ETF Investment Management Inc. [“CI ETF”], formerly WisdomTree Asset Management Canada, Inc., an investment fund manager of Canadian exchange-traded funds. The acquisition was accounted for using the acquisition method of accounting. The estimated fair values of the assets acquired and liabilities assumed, and the results of operations have been consolidated from the date of the transaction and are included in the asset management segment. Effective July 1, 2020, CI ETF amalgamated with CI Investments.

Q4 Financial Report |  19  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Aligned Capital Distributions Inc.

On October 19, 2020, CI acquired a controlling interest in Aligned Capital Distributions Inc. [“Aligned”], a Canadian full-service investment advisory firm, for cash consideration and the issuance of 855 thousand shares of CI. The estimated fair values of the assets acquired and liabilities assumed and the results of operations have been consolidated from the date of the transaction and are included in the wealth management segment.

U.S. Registered Investment Advisors

During the year ended December 31, 2020, CI acquired controlling interests in the following registered investment advisory firms, together [“U.S. RIAs”]. The estimated fair values of the assets acquired and liabilities assumed and the results of operations have been consolidated from the date of the transaction and are included in the wealth management segment.

• Surevest LLC

• OCM Capital Partners LLC

• The Cabana Group, LLC

• Balasa Dinverno Foltz LLC

• Thousand Oaks Financial Corporation

• Bowling Portfolio Management LLC

• The Roosevelt Investment Group, Inc.

• Stavis & Cohen Financial, LLC

• Doyle Wealth Management, Inc.

• RGT Wealth Advisors, LLC

Q4 Financial Report |  20  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

[C] Net Assets Acquired - Year ended December 31, 2020

Details of the net assets acquired during the year ended December 31, 2020, at fair value, are as follows:

	Wealth Management			Asset Management			Total
	$			$			$
Cash and cash equivalents		19,578			1,736			21,314
Client and trust funds on deposit		450,932			—			450,932
Accounts receivable and prepaid expenses		6,398			331			6,729
Capital assets		1,390			5			1,395
Right-of-use assets		14,724			—			14,724
Deferred tax		(4,219	)		6,896			2,677
Intangibles		393,744			1,753			395,497
Other assets		344			—			344
Accounts payable and accrued liabilities		(18,245	)		(1,298	)		(19,543	)
Clients and trust funds payable		(450,932	)		—			(450,932	)
Income taxes payable		(312	)		—			(312	)
Lease liability		(15,545	)		—			(15,545	)
Fair value of identifiable net assets		397,857			9,423			407,280
Non-controlling interest		(35,222	)		—			(35,222	)
Goodwill on acquisition		528,557			763			529,320
Total acquired cost		891,192			10,186			901,378
Cash consideration		537,430			5,500			542,930
Share consideration		35,434			—			35,434
Other financial liabilities		318,328			4,686			323,014
		891,192			10,186			901,378

Included in intangibles are fund administration contracts with a fair value of $392,904 with a finite life of 12 years and indefinite life fund management contracts of $1,753. Goodwill of $528,557 has been attributed to the wealth management segment and $763 to the asset management segment. Goodwill of $495,546 for the U.S. RIAs is deductible for income taxes.

The acquisition agreements provided for deferred compensation, contingent consideration and a put option payable payable in cash and shares of CI. Deferred compensation payable in cash of $81,937 and shares of $15,294, is payable within 1 year from the date of acquisition. Contingent consideration of $126,485 is payable in cash within 1 to 4 years from the date of acquisition, if certain financial targets are met based on EBITDA. The put option payable of $99,298 in cash or common shares of CI, is exercisable within 270 days following the date of acquisition. The put option granted to the minority shareholders requires CI to purchase the shares owned by each shareholder at a fixed price if exercised within 270 days, after which the price is based on fair market value. CI has estimated the fair value of the contingent consideration and put option payable using a discounted cash flow approach. This approach included assumptions regarding the timing and proportion of shares the minority shareholders will require CI to purchase. The fair market measurement is based on significant inputs that are considered level 3 inputs.

Q4 Financial Report |  21  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Non-controlling interests were measured at the proportionate interest in the identifiable net assets of the acquired subsidiary, at the acquisition date.

[D] Other Acquisitions

Congress Wealth Management LLC

On July 2, 2020, CI completed the acquisition of a minority interest in Congress Wealth Management LLC [“Congress”]. The acquisition of Congress has been accounted for using the equity method of accounting.

AWM Dorval

On September 30, 2020, AWM completed the acquisition of a minority interest in AWM’s Dorval, Quebec operation [“AWM Dorval”]. The acquisition of AWM Dorval has been accounted for using the equity method of accounting.

Subsequent events

On January 25, 2021, CI reached an agreement to acquire 100% of Segal Bryant & Hamill, LLC, a registered investment advisory and institutional investment management firm. The details of the acquisition are being finalized and is expected to close by June 30, 2021.

Q4 Financial Report |  22  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

4.    CAPITAL ASSETS

Capital assets consist of the following:

	Computer hardware			Office equipment			Leasehold improvements			Total
	$			$			$			$
Cost
Balance, December 31, 2018		17,589			17,960			80,554			116,103
Acquired		141			51			28			220
Additions		3,151			2,337			6,863			12,351
Retired		(1,678	)		(6	)		—			(1,684	)
Balance, December 31, 2019		19,203			20,342			87,445			126,990
Acquired		2,249			3,215			1,930			7,394
Additions		6,687			1,172			4,131			11,990
Retired		(1,739	)		—			—			(1,739	)
Translation		(105	)		(46	)		(18	)		(169	)
Balance, December 31, 2020		26,295			24,683			93,488			144,466
Accumulated depreciation
Balance, December 31, 2018		12,101			14,323			44,694			71,118
Acquired		66			21			20			107
Depreciation		3,927			1,405			6,159			11,491
Retired		(1,674	)		(6	)		—			(1,680	)
Balance, December 31, 2019		14,420			15,743			50,873			81,036
Acquired		1,781			2,467			1,751			5,999
Depreciation		3,756			1,644			6,895			12,295
Retired		(1,739	)		—			—			(1,739	)
Translation		(51	)		(41	)		(11	)		(103	)
Balance, December 31, 2020		18,167			19,813			59,508			97,488
Carrying amounts
At December 31, 2018		5,488			3,637			35,860			44,985
At December 31, 2019		4,783			4,599			36,572			45,954
At December 31, 2020		8,128			4,870			33,980			46,978

Q4 Financial Report |  23  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

5.    INTANGIBLES

	Goodwill			Fund administration contracts			Fund management contracts finite life			Fund management contracts indefinite life			Other intangibles			Total
	$			$			$			$			$			$
Cost
Balance, December 31, 2018		1,521,105			44,500			50,157			1,779,957			56,116			3,451,835
Acquired		11,670			5,000			—			—			16,300			32,970
Additions		—			—			—			—			4,425			4,425
Retired		—			—			—			—			(12,664	)		(12,664	)
Translation		(1,502	)		—			—			—			—			(1,502	)
Balance, December 31, 2019		1,531,273			49,500			50,157			1,779,957			64,177			3,475,064
Acquired		529,320			392,904			—			1,753			1,006			924,983
Additions		—			—			—			—			17,132			17,132
Translation		(6,921	)		(10,439	)		(112	)		(2,809	)		(29	)		(20,310	)
Balance, December 31, 2020		2,053,672			431,965			50,045			1,778,901			82,286			4,396,869
Accumulated amortization
Balance, December 31, 2018		—			23,254			29,374			—			28,866			81,494
Acquired		—			—			—			—			(1,826	)		(1,826	)
Amortization		—			2,467			2,022			—			6,823			11,312
Retired		—			—			—			—			(4,398	)		(4,398	)
Balance, December 31, 2019		—			25,721			31,396			—			29,465			86,582
Acquired		—			—			—						166			166
Amortization		—			9,325			2,037			—			7,955			19,317
Translation		—			(210	)		20			—			(4	)		(194	)
Balance, December 31, 2020		—			34,836			33,453			—			37,582			105,871
Carrying amounts
At December 31, 2018		1,521,105			21,246			20,783			1,779,957			27,250			3,370,341
At December 31, 2019		1,531,273			23,779			18,761			1,779,957			34,712			3,388,482
At December 31, 2020		2,053,672			397,129			16,592			1,778,901			44,704			4,290,998
Remaining term		N/A			7.9 – 12.0 yrs			6.3 – 12.9 yrs			N/A			0.1 – 8.8 yrs

CI has two groups of cash-generating units [“CGUs”] for the purpose of assessing the carrying amount of the allocated goodwill being the asset management and wealth management operating segments as described in Note 17. Goodwill of $1,311,873 is allocated to the asset management segment and $741,799 is allocated to the wealth management segment as at December 31, 2020 [2019 – $1,309,008 and $222,265, respectively]. Within the asset management segment, CI has indefinite life fund management contracts of $1,778,901 as at December 31, 2020 [2019 – $1,779,957].

Q4 Financial Report |  24  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

The recoverable amounts of the CGUs are based on a fair value less cost to sell calculation. The fair value was determined using the discounted cash flow method, based on estimated future cash flows over a 10-year period with a terminal value for the period thereafter. CI uses a 10-year period to reflect the expected growth strategies for the various contracts acquired in addition to the fact that it may take several years to fully integrate operations and benefit from synergies. The key assumptions used in the forecast calculation include assumptions on market appreciation, net sales of funds and operating margins. Market appreciation rates are determined using historical inflation-adjusted index returns adjusted for CI’s average management fee. Net sales are determined based on the historical 3-year average as well as management’s forecasts for future sales. Inputs to the operating margin include estimates for management and trailer fees using current average fee rates and historical rates for selling, general and administrative costs that are applied to forecast average assets under management over the 10-year period. The terminal value has been calculated assuming a long-term growth rate of 2% per annum in perpetuity based on a long-term real GDP growth rate as at December 31, 2020 and 2019. A discount rate of 10.10% – 14.94% per annum has been applied to the recoverable amount calculation as at December 31, 2020 [2019 – 11.38% – 13.88%].

The calculation of the recoverable amount exceeds the carrying amount of goodwill and indefinite life fund management contracts as at December 31, 2020 and 2019.

6.    OTHER ASSETS, INCOME AND EXPENSE

Other assets as at December 31, 2020 consist mainly of long-term investments and advisor and employee loans.

	2020		2019
	$		$
Long-term investments		64,191		27,774
Advisor loans and employee loans		36,470		24,148
Other		24,081		18,833
		124,742		70,755

Long-term investments includes long-term strategic investments including CI’s equity accounted investments in Congress and AWM Dorval.

CI has a hiring and retention incentive program whereby loans are extended to current investment advisors. These loans are initially recorded at their fair value, may bear interest at prescribed rates and are contractually forgiven on a straight-line basis over the applicable contractual period, which varies in length from three to seven years. CI utilizes the effective interest method to amortize the forgiven amount. The forgiven amount is included in selling, general and administrative expenses. As at December 31, 2020, loans to investment advisors of $32,774 [2019 – $19,135] are included in other assets. These loans become due on demand upon early termination or breach in the terms of the agreements.

CI has an employee share purchase loan program for key employees. These loans are renewable yearly and bear interest at prescribed rates. As at December 31, 2020, the carrying amount of employee share purchase loans is $757 [2019 – $3,933] and is included in other assets. These loans become due immediately upon termination of employment or sale of the shares that are held as collateral. As at December 31, 2020, the shares held as collateral have a market value of approximately $918 [2019 – $4,763].

Q4 Financial Report |  25  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Other income consists mainly of fees received for the administration of third-party mutual funds, custody fees, investment income, foreign exchange gains (losses), interest income and the revenue earned by Marret. Other expenses consist mainly of the provisions and other financial liabilities as discussed in Note 8, acquisition related costs and expenses incurred by Marret.

7.    LONG-TERM DEBT

Long-term debt consists of the following:

					2020	2019
					$	$
Credit facility
Bankers’ acceptances					—		35,000
					—		35,000
Debenture principal amount	Interest rate		Issued date	Maturity date
$450 million	2.645	%	December 7, 2015	December 7, 2020	—		449,509
$200 million	2.775	%	November 25, 2016	November 25, 2021	203,805		199,512
$325 million	3.520	%	July 20, 2018	July 20, 2023	323,944		323,616
$350 million	3.215	%	July 22, 2019	July 22, 2024	348,454		348,101
$450 million	3.759	%	May 26, 2020	May 26, 2025	447,829		—
$250 million	3.904	%	September 27, 2017	September 27, 2027	248,891		248,756
$700 million USD	3.200	%	December 17, 2020	December 17, 2030	883,193		—
					2,456,116		1,569,494
Long-term debt					2,456,116		1,604,494
Current portion of long-term debt					203,805		449,509

CREDIT FACILITY

CI has a $700,000 revolving credit facility with three Canadian chartered banks. Loans are made by the banks under a three-year revolving credit facility, with the outstanding principal balance due upon maturity on December 11, 2021. Amounts may be borrowed in Canadian dollars through prime rate loans, which bear interest at the greater of the bank’s prime rate and the Canadian Deposit Offering Rate plus 1.00%, or bankers’ acceptances, which bear interest at bankers’ acceptance rates plus 0.90%. Amounts may also be borrowed in U.S. dollars through base rate loans, which bear interest at the greater of the bank’s reference rate for loans made by it in Canada in U.S. funds and the federal funds effective rate plus 1.00%, or LIBOR loans, which bear interest at LIBOR plus 0.90%.

CI may also borrow under this facility in the form of letters of credit, which bear a fee of 0.90% on any undrawn portion. As at December 31, 2020 and 2019, CI had not accessed the facility by way of letters of credit.

The credit facility contains a number of financial covenants that require CI to meet certain financial ratios and financial condition tests. CI is within its financial covenants with respect to its credit facility, which require that the funded debt to annualized EBITDA ratio remain below 3:1 and that CI’s assets under management not fall below $85 billion, calculated based on a rolling 30-day average. There can be no assurance that future borrowings or equity financing will be available to CI or available on acceptable terms.

Q4 Financial Report |  26  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

DEBENTURES AND NOTES

On July 22, 2019, CI completed an offering pursuant to which it issued $350,000 principal amount of debentures due July 22, 2024 at par [the “2024 Debentures”]. Interest on the 2024 Debentures is paid semi-annually in arrears at a rate of 3.215%. The proceeds, net of transaction costs, were used to repay outstanding indebtedness under the credit facility.

On May 26, 2020, CI completed an offering pursuant to which it issued $450,000 principal amount of debentures due May 26, 2025 at par [the “2025 Debentures”]. Interest on the 2025 Debentures is paid semi-annually in arrears at a rate of 3.759%. The proceeds, net of transaction costs, were used to repay outstanding indebtedness under the credit facility.

On December 17, 2020, CI completed an offering pursuant to which it issued $700,000 USD principal amount of notes due December 17, 2030 [the “2030 Notes”]. Interest on the 2030 Notes is paid semi-annually in arrears at a rate of 3.200%. The proceeds, net of transaction costs, were used to repay outstanding indebtedness under the credit facility.

CI may, at its option, redeem the 2023 Debentures, the 2024 Debentures, the 2025 Debentures and the 2027 Debentures, in whole or in part, from time to time, on not less than 30 nor more than 60 days’ prior notice to the registered holder, at a redemption price which is equal to the greater of par and the Government of Canada yield, plus 36.0, 44.5, 84.0, 44.5 basis points respectively. CI may also, at its option, redeem the 2030 Notes in whole or in part, from time to time, at a redemption price which is equal to the greater of 100% of the principal amount of the notes to be redeemed and the Treasury Rate plus 35.0 basis points. CI considers these embedded prepayment options to be closely related to the debentures and, as such, does not account for it separately as a derivative.

During the year ended December 31, 2020, CI repurchased $55,985 principal amount of debentures due December 7, 2020 at an average price of $100.693 and recorded a loss of $388, included in other income. The remaining principal amount of $394,015 was repaid on the maturity date, December 7, 2020.

On January 18, 2021, CI redeemed the $200,000 principal amount of debentures due November 25, 2021 [the “2021 Debentures”] at a price of $101.903, realizing a loss of $3,805 and paying interest of $806.

In connection with the redemption of the 2021 Debentures, on January 18, 2021, CI terminated the interest swap agreement entered into on February 2, 2017, and realized a gain of $1,865. The interest rate swap agreement was entered into with a Canadian chartered bank to swap the semi-annual fixed rate payments on the 2021 Debentures for floating rate payments. Based on the terms of the agreement, CI paid a rate equivalent to the three-month Canadian bankers’ acceptance rate plus a spread of 138.4 basis points. The rates reset quarterly and paid semi-annually to match the fixed payment obligations of the 2021 Debentures. As at December 31, 2020, the fair value of the interest rate swap agreement was an unrealized gain of $1,857 [2019 – $2,388] and is included in long-term debt in the consolidated statements of financial position.

On January 19, 2021, CI announced its intention to repurchase the 2023 Debentures on or about February 19, 2021 in accordance with their terms.

Q4 Financial Report |  27  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Interest paid on the debentures and notes is paid semi-annually. During the years ended December 31, 2020 and 2019, interest paid is as follows:

						2020		2019
	Interest rate			Issued date	Maturity date	$		$
Interest paid on debentures and notes
$450 million		2.645	%	December 7, 2015	December 7, 2020		10,305		11,903
$200 million		2.775	%	November 25, 2016	November 25, 2021		5,409		6,841
$325 million		3.520	%	July 20, 2018	July 20, 2023		11,440		11,440
$350 million		3.215	%	July 22, 2019	July 22, 2024		11,384		4,861
$450 million		3.759	%	May 26, 2020	May 26, 2025		10,098		—
$250 million		3.904	%	September 27, 2017	September 27, 2027		9,760		9,760
$700 million USD		3.200	%	December 17, 2020	December 17, 2030		1,115		—
							59,511		44,805

Issuance costs and the issuance discount are amortized over the term of the debentures using the effective interest method. The amortization expense related to the discount and transaction costs for CI’s issued debentures for the year ended December 31, 2020 was $2,054 [2019 – $1,302], which is included in other expenses.

In the event that both a change of control occurs and the rating of the debentures is lowered to below investment grade by two out of three rating agencies as defined as below BBB- by Standard & Poor’s, BBB (low) by DBRS Limited and Baa3 by Moody’s Investor Service, Inc., CI will be required to make an offer to repurchase all or, at the option of each holder, any part of each holder’s debentures at a purchase price payable in cash equivalent to 101% of the outstanding principal amount of the debentures and notes, together with accrued and unpaid interest, to the date of purchase. Also, in the case of the 2030 Notes, in the event that certain changes affecting Canadian withholding taxes occur, CI will have the option to redeem the notes in whole or in part, at a redemption price equal to 100% of the aggregate principal amount, together with accrued and unpaid interest, to the date of redemption.

Q4 Financial Report |  28  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

8.    PROVISIONS AND OTHER FINANCIAL LIABILITIES

CI is a party to a number of claims, proceedings and investigations, including legal, regulatory and tax, in the ordinary course of its business. Due to the inherent uncertainty involved in these matters, it is difficult to predict the final outcome or the amount and timing of any outflow related to such matters. Based on current information and consultations with advisors, CI does not expect the outcome of these matters, individually or in aggregate, to have a material adverse effect on its financial position or on its ability to continue normal business operations.

CI has made provisions based on current information and the probable resolution of such claims, proceedings and investigations, as well as severance and amounts payable in connection with business acquisitions. The movement in provisions and other financial liabilities during the years ended December 31, are as follows:

	Provisions			Acquisition liabilities			Provisions			Acquisition liabilities
	2020			2020			2019			2019
	$			$			$			$
Provisions and other financial liabilities, beginning of year		25,563			7,573			23,330			11,438
Additions		56,277			334,616			35,214			—
Amounts used		(34,869	)		(701	)		(32,639	)		(3,220	)
Amounts reversed		(790	)		—			(342	)		—
Translation		—			(4,117	)		—			(645	)
Provisions and other financial liabilities, end of year		46,181			337,371			25,563			7,573
Current portion of provisions and other financial liabilities		45,298			230,412			12,484			2,159

ACQUISITION RELATED LIABILITIES

In connection with the 2020 acquisitions [Note 3], are amounts payable for contingent consideration of $131,122, deferred consideration of $96,855 and a put option payable of $99,025, payable in cash and shares, including foreign exchange translation adjustments since the date of acquisition.

Included in provisions and other financial liabilities as at December 31, 2020, is a payable for the fair value of the put option granted to minority interest shareholders for the acquisition of GSFM of $10,369, including foreign exchange translation adjustments [2019 – $7,573]. During 2020, there were no GSFM shareholders who exercised their put to CI [2019 - 50 thousand shares for Canadian cash value of $2,667].

LITIGATION AND RESTRUCTURING

CI is a defendant to certain lawsuits of which two are class action lawsuits related to events and transactions that gave rise to a settlement agreement with the Ontario Securities Commission [“OSC”] in 2004. Although CI continues to believe that this settlement fully compensated investors affected by frequent trading activity, a provision has been made based on the probable resolution of these claims and related expenses.

CI maintains insurance policies that may provide coverage against certain claims. Amounts receivable under these policies are not accrued for unless the realization of income is virtually certain. During the years ended December 31, 2020 and 2019, no insurance proceeds were received, related to the settlement of legal claims.

Q4 Financial Report |  29  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

During the year ended December 31, 2020, CI recorded provisions of $56,277 for legal and severance [2019 - $35,214 for legal, severance and the write-down of software intangibles that were retired]. As at December 31, 2020, a provision of $46,181 remains [2019 - $12,484].

9.    LEASES

The following shows the carrying amounts of CI’s right-of-use assets and lease liabilities, and the movements during the year ended December 31, 2020:

	Right-of-use assets
	Property leases			Equipment leases			Total			Lease liabilities
	$			$			$			$
As at January 1, 2020		43,711			1,171			44,882			72,519
Additions & modifications		15,942			183			16,125			16,492
Depreciation expense		(9,005	)		(843	)		(9,848	)		—
Interest expense		—			—			—			2,905
Payments		—			—			—			(15,073	)
Translation		(539	)		—			(539	)		(610	)
As at December 31, 2020		50,109			511			50,620			76,233

During the year ended December 31, 2020, CI recognized rent expenses from short-term leases of $355, leases of low-value assets of $29 and variable lease payments of $12,724 [2019 – expenses of $886, $155 and $12,869, respectively].

Included in other income for the year ended December 31, 2020, is finance income of $89 received from sub-leasing right-of-use assets [2019 – $109].

Q4 Financial Report |  30  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

10.    SHARE CAPITAL

A summary of the changes to CI’s share capital for the years ended December 31 is as follows:

[A] AUTHORIZED AND ISSUED

	Number of shares			Stated value
	[in thousands]			$
Authorized
An unlimited number of common shares of CI
Issued
Common shares, balance, December 31, 2018		243,721			2,125,130
Issuance of share capital on vesting of restricted share units		711			12,751
Share repurchases, net of tax		(22,640	)		(193,570	)
Common shares, balance, December 31, 2019		221,792			1,944,311
Issuance for acquisition of subsidiary, net of issuance costs		2,034			35,434
Issuance of share capital on vesting of restricted share units		522			8,488
Share repurchases, net of tax		(13,990	)		(120,236	)
Common shares, balance, December 31, 2020		210,358			1,867,997

During the year ended December 31, 2020, 13,615 thousand shares [2019 – 21,950 thousand shares] were repurchased under a normal course issuer bid at an average cost of $18.32 per share for total consideration of $249,427 [2019 – $19.78 per share for total consideration of $434,236]. Deficit was increased by $130,216 during the year ended December 31, 2020 [2019 – $243,211] for the cost of the shares repurchased in excess of their stated value.

During the year ended December 31, 2020, 375 thousand shares [2019 – 690 thousand shares] were repurchased for CI’s restricted share unit plan at an average cost of $22.70 per share for total consideration of $8,512 [$6,256 after tax] [2019 – $18.92 per share for total consideration of $13,057 [$9,597 net of tax]]. Deficit was increased by $5,231 during the year ended December 31, 2020 [2019 – $7,052] for the cost of the shares repurchased in excess of their stated value.

[B] EMPLOYEE INCENTIVE SHARE OPTION PLAN

CI has an employee incentive share option plan [the “Share Option Plan”], as amended and restated, for the executives and key employees of CI.

During the year, CI granted nil thousand options [2019 – 743 thousand options] to employees. The fair value method of accounting is used for the valuation of the 2020 and 2019 share option grants. Compensation expense is recognized over the vesting period, assuming an estimated average forfeiture rate of nil for the year [2019 – 13%], with an offset to contributed surplus. When exercised, amounts originally recorded against contributed surplus as well as any consideration paid by the option holder are credited to share capital. The fair value of the 2020 and 2019 option grants was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:

Q4 Financial Report |  31  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Year of grant	2019			2019
# of options granted [in thousands]		213			530
Vesting terms		At end of year 5			1/3 at end of years 3, 4 and 5
Dividend yield		3.792	%		3.792	%
Expected volatility (*)		17	%		17	%
Risk-free interest rate		2.238	%		2.182% - 2.238%
Expected life [years]		6.8			5.2 - 6.8
Forfeiture rate		0	%		13	%
Fair value per stock option	$	2.48			$2.23 - $2.48
Exercise price	$	18.99		$	18.99

(*) Based on historical volatility of CI’s share price

The maximum number of shares that may be issued under the Share Option Plan is 14,000 thousand shares. As at December 31, 2020, there are 2,606 thousand shares [2019 – 5,584 thousand shares] reserved for issuance on exercise of share options. These options vest over periods of up to five years, may be exercised at prices ranging from $18.99 to $28.67 per share and expire at dates up to 2029.

A summary of the changes in the Share Option Plan is as follows:

	Number of options			Weighted average exercise price
	[in thousands]			$
Options outstanding, December 31, 2018		6,958			32.18
Options exercisable, December 31, 2018		5,789			32.97
Options granted		743			18.99
Options cancelled		(2,117	)		34.28
Options outstanding, December 31, 2019		5,584			29.63
Options exercisable, December 31, 2019		4,758			31.26
Options cancelled		(2,978	)		34.28
Options outstanding, December 31, 2020		2,606			26.38
Options exercisable, December 31, 2020		2,020			28.44

(*) Weighted-average share price of options exercised was nil during the year ended December 31, 2020 [2019 - nil]

The equity-based compensation expense under the Share Option Plan for the year ended December 31, 2020 of $210 [2019 – $513] has been included in selling, general and administrative expenses.

Q4 Financial Report |  32  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Options outstanding and exercisable as at December 31, 2020 are as follows:

Exercise price	Number of options outstanding		Weighted average remaining contractual life		Number of options exercisable
$	[in thousands]		[years]		[in thousands]
18.99		569		8.2		—
27.44		331		1.2		331
28.63		1,655		0.1		1,655
28.67		51		2.2		34
18.99 to 28.67		2,606		2.0		2,020

[C] RESTRICTED SHARE UNITS

CI has an employee restricted share unit plan [the “RSU Plan”] for senior executives and other key employees. Compensation expense is recognized and recorded as contributed surplus based upon the market value of the restricted share units [“RSUs”] at the grant date. Forfeitures of RSUs reduce compensation expense to the extent contributed surplus was previously recorded for such awards. On vesting of RSUs, share capital is credited for the amounts initially recorded as contributed surplus to reflect the issuance of share capital.

During the year ended December 31, 2020, CI granted 386 thousand RSUs [2019 - 736 thousand RSUs], including 36 thousand RSUs granted, to reflect dividends declared on the common shares [2019 - 39 thousand RSUs]. Also during the year ended December 31, 2020, 521 thousand RSUs were exercised, and 18 thousand RSUs were forfeited [2019 - 711 thousand RSUs exercised, and 32 thousand RSUs forfeited]. During the year ended December 31, 2020, CI credited contributed surplus for $10,447, related to compensation expense recognized for the RSUs [2019 - $14,188]. As at December 31, 2020, 504 thousand RSUs are outstanding [2019 - 657 thousand RSUs].

CI uses a Trust to hold CI’s common shares, to fulfill obligations to employees arising from the RSU Plan. The common shares held by the Trust are not considered to be outstanding for the purposes of basic and diluted earnings per share calculations.

[D] DEFERRED SHARE UNITS

The deferred share unit plan [the “DSU Plan”] was established in March 2017, whereby directors may elect to receive all or a portion of their quarterly compensation in either cash or deferred share units [“DSUs”]. The DSUs fully vest on the grant date and an expense is recorded based upon the market value of the DSUs at the grant date with an offset included in accounts payable and accrued liabilities. At the end of each period, the change in the fair value of the DSUs is recorded as an expense with an offset recorded to the liability. DSUs can only be redeemed for cash once the holder ceases to be a director of CI.

During the year ended December 31, 2020, 11 thousand DSUs were granted, and nil DSUs were exercised, [2019 - 6 thousand DSUs, and nil exercised]. An expense of $51 was recorded during the year ended December 31, 2020, [2019 - $195]. As at December 31, 2020, included in accounts payable and accrued liabilities, is an accrual of $515 for amounts to be paid under the DSU Plan [2019 - $464].

Q4 Financial Report |  33  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

[E] BASIC AND DILUTED EARNINGS PER SHARE

The following table presents the calculation of basic and diluted earnings per common share for the years ended December 31:

[in thousands]	2020		2019
Numerator:
Net income attributable to shareholders of the Company basic and diluted	$	475,978	$	538,396
Denominator:
Weighted average number of common shares - basic		214,092		234,273
Weighted average effect of dilutive stock options and RSU awards (*)		1,527		976
Weighted average number of common shares - diluted		215,619		235,249
Net earnings per common share attributable to shareholders
Basic	$	2.22	$	2.30
Diluted	$	2.21	$	2.29

(*) The determination of the weighted average number of common shares - diluted excludes 2,606 thousand shares related to stock options that were anti-dilutive for the year ended December 31, 2020 [2019 - 5,584 thousand shares].

[F] MAXIMUM SHARE DILUTION

The following table presents the maximum number of shares that would be outstanding if all the outstanding options were exercised and if all RSU awards vested as at January 31, 2021:

[in thousands]
Shares outstanding at January 31, 2021	208,330
RSU awards	491
Options to purchase shares	2,587
	211,408

Q4 Financial Report |  34  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

11.    DIVIDENDS

The following dividends were paid by CI during the year ended December 31, 2020:

Record date	Payment date	Cash dividend per share		Total dividend amount
		$		$
December 31, 2019	January 15, 2020		0.18		39,971
March 31, 2020	April 15, 2020		0.18		38,995
June 30, 2020	July 15, 2020		0.18		38,574
September 30, 2020	October 15, 2020		0.18		37,773
Paid during the year ended December 31, 2020					155,313

The following dividends were declared but not paid as at December 31, 2020:

Record date	Payment date	Cash dividend per share		Total dividend amount
		$		$
December 31, 2020	January 15, 2021		0.18		37,649
March 31, 2021	April 15, 2021		0.18		37,648
Declared and accrued as at December 31, 2020					75,297

The following dividends were paid by CI during the year ended December 31, 2019:

Record date	Payment date	Cash dividend per share		Total dividend amount
		$		$
December 31, 2018	January 15, 2019		0.18		43,899
March 31, 2019	April 15, 2019		0.18		43,285
June 30, 2019	July 15, 2019		0.18		42,461
September 30, 2019	October 15, 2019		0.18		41,105
Paid during the year ended December 31, 2019					170,750

The following dividends were declared but not paid as at December 31, 2019:

Record date	Payment date	Cash dividend per share		Total dividend amount
		$		$
December 31, 2019	January 15, 2020		0.18		39,923
March 31, 2020	April 15, 2020		0.18		39,922
Declared and accrued as at December 31, 2019					79,845

Q4 Financial Report |  35  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

12. INCOME TAXES

The following are the major components of income tax expense for the years ended December 31:

	2020			2019
	$			$
Consolidated Statements of Income
Current income tax expense
Based on taxable income of the current year		171,637			189,438
Adjustments in respect of prior years		(2,714	)		(607	)
		168,923			188,831
Deferred income tax expense
Origination and reversal of temporary differences (net)		(1,722	)		450
		(1,722	)		450
Income tax expense reported in the consolidated statements of income		167,201			189,281

The following is a reconciliation between CI’s statutory and effective income tax rates for the years ended December 31:

	2020			2019
	%			%
Combined Canadian federal and provincial income tax rate		26.5			26.5
Increase (decrease) in income taxes resulting from
Recovery of prior years’ provisions for settled tax items		(0.5	)		(0.6	)
Other, net		—			0.1
Income tax expense reported in the consolidated statements of income and comprehensive income		26.0			26.0

Q4 Financial Report |  36  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of CI’s deferred income tax assets and liabilities are as follows at December 31, 2020:

	December 31, 2019			Recognized in net income			Business acquisition  [note 3]			Recognized in equity and FX		December 31, 2020
	$			$			$			$		$
Net deferred income tax (assets) liabilities
Fund contracts		482,696			(1,197	)		4,188			1,661		487,348
Right-of-use assets		11,866			1,038			—			—		12,904
Equity-based compensation		(12,950	)		(1,982	)		—			532		(14,400	)
Non-capital loss carryforwards		(5,116	)		4,681			(6,906	)		—		(7,341	)
Provisions and other financial liabilities		(2,690	)		(4,921	)		—			—		(7,611	)
Lease liabilities		(19,163	)		(246	)		—			—		(19,409	)
Other		10,198			905			41			254		11,398
Net deferred income tax (assets) liabilities		464,841			(1,722	)		(2,677	)		2,447		462,889

Significant components of CI’s deferred income tax assets and liabilities are as follows at December 31, 2019:

	December 31, 2018			Opening retained earnings adjustments			Recognized in net income			Business acquisition			Recognized in equity and FX			December 31, 2019
	$			$			$			$			$			$
Net deferred income tax (assets) liabilities
Fund contracts		483,776			—			(2,425	)		1,345			—			482,696
Right-of-use assets		—			17,267			(5,401	)		—			—			11,866
Equity-based compensation		(12,465	)		—			(785	)		—			300			(12,950	)
Non-capital loss carryforwards		(1,444	)		—			(912	)		(2,760	)		—			(5,116	)
Provision for other liabilities		(2,910	)		—			220			—			—			(2,690	)
Lease liabilities		—			(21,567	)		2,404			—			—			(19,163	)
Other		(874	)		635			7,349			4,404			(1,316	)		10,198
Net deferred income tax (assets) liabilities		466,083			(3,665	)		450			2,989			(1,016	)		464,841

Q4 Financial Report |  37  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

13. FINANCIAL INSTRUMENTS

The carrying amounts of the financial instruments are presented in the table below and are classified according to the following categories:

	December 31, 2020		December 31, 2019
	$		$
Financial assets
Fair value through profit or loss
Cash and cash equivalents		483,598		118,360
Investments		133,375		138,412
Other assets		12,210		26,856
Amortized cost
Client and trust funds on deposit		973,143		364,964
Accounts receivable		219,074		159,760
Other assets		44,314		39,564
Total financial assets		1,865,714		847,916
Financial liabilities
Fair value through profit or loss
Provisions and other financial liabilities		240,516		8,650
Amortized cost
Accounts payable and accrued liabilities		308,797		242,176
Provisions and other financial liabilities		143,036		24,486
Dividends payable		75,297		79,845
Client and trust funds payable		961,080		368,348
Long-term debt		2,456,116		1,604,494
Total financial liabilities		4,184,842		2,327,999

CI’s investments as at December 31, 2020 and 2019 include CI’s marketable securities which are comprised of seed capital investments in CI’s mutual funds and strategic investments. Mutual fund securities are valued using the net asset value per unit of each fund, which represents the underlying net assets at fair values determined using closing market prices. CI’s mutual fund securities that are valued daily are classified as level 1 in the fair value hierarchy. Mutual fund securities and strategic investments that are valued less frequently are classified as level 2 in the fair value hierarchy. CI’s investments as at December 31, 2020, also include securities owned, at market, consisting of money market and equity securities. Money market and equity securities are valued based on quoted prices and are classified as level 1 in the fair value hierarchy. There have been no transfers between level 1, level 2 and level 3 during the year.

Q4 Financial Report |  38  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Investments consist of the following as at December 31, 2020:

	Total		Level 1		Level 2		Level 3
	$		$		$		$
Marketable securities		118,126		37,193		77,278		3,655
Securities owned, at market		15,249		15,249		—		—
Total investments		133,375		52,442		77,278		3,655

Investments consist of the following as at December 31, 2019:

	Total		Level 1		Level 2		Level 3
	$		$		$		$
Marketable securities		118,243		40,587		74,003		3,653
Securities owned, at market		20,169		20,169		—		—
Total investments		138,412		60,756		74,003		3,653

Included in other assets are long-term private equity strategic investments of $12,210 [2019 - $26,856] valued using level 3 inputs.

Included in provisions and other financial liabilities, as at December 31, 2020 is put option payable on non-controlling interest of $109,394 [2019 - $7,573] and contingent consideration payable of $131,122 carried at fair value and classified as level 3 in the fair value hierarchy. The fair value of the put option payable and contingent consideration payable was determined using a combination of the discounted cash flow method and Monte-Carlo simulations. Significant unobservable inputs include discount rates in the range of 3% to 16% and volatility of up to 52%. The estimated fair value of the put option payable and contingent consideration payable would increase (decrease) if the discount rate was lower (higher) and volatility was higher (lower).

Long-term debt as at December 31, 2020 includes debentures with a fair value of $2,575,740 [2019 - $1,586,136], as determined by quoted market prices, which have been classified as level 2 in the fair value hierarchy.

14.    RISK MANAGEMENT

Risk management is an integrated process with independent oversight. Management has developed an enterprise-wide approach to risk management that involves executives in each core business unit and operating area of CI. Using a quantitative and qualitative analysis, risk factors are assessed and procedures are implemented to mitigate the various events that could impact CI’s financial position and results of operations.

CI’s financial instruments bear the following financial risks:

[A] MARKET RISK

Market risk is the risk of a financial loss resulting from adverse changes in underlying market factors, such as interest rates,

Q4 Financial Report |  39  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

foreign exchange rates, and equity prices. The corporate finance group reviews the exposure to interest rate risk, foreign exchange risk and price risk by identifying, monitoring and reporting potential market risks to the Chief Financial Officer. A description of each component of market risk is described below:

•Interest rate risk is the risk of loss due to the volatility of interest rates.

•Foreign exchange risk is the risk of loss due to volatility of foreign exchange rates.

•Price risk is the risk of loss due to changes in prices and volatility of financial instruments.

CI’s financial performance is indirectly exposed to market risk. Any decline in financial markets or lack of sustained growth in such markets may result in a corresponding decline in the performance and may adversely affect CI’s assets under management and financial results.

(i) Interest rate risk

Interest rate risk arises from the possibility that changes in interest rates will affect the value of financial instruments. Fluctuations in interest rates have a direct impact on the interest payments CI makes on its long-term debt. Debt outstanding on CI’s credit facility of nil [2019 – $35,000] is borrowed at a floating interest rate. In 2017, CI entered into an interest rate swap agreement with a Canadian chartered bank to swap the semi-annual fixed rate payments on the 2021 Debentures $200,000 principal amount for floating rate payments.

Based on the amount borrowed under the credit facility and the 2021 Debentures as at December 31, 2020, each 0.50% increase or decrease in interest rates would result in annual interest expense increasing or decreasing by $1,000 [2019 – $1,175], respectively.

(ii) Foreign exchange risk

CI is exposed to foreign exchange risk primarily from its investment in foreign subsidiaries operating in the United States, Australia and Hong Kong and from long-term debt denominated in U.S. dollars.

The following table provides the impact on net income and other comprehensive income [“OCI”] of a 10% change in the value of foreign currencies with respect to CI’s net financial assets as at December 31, 2020:

	10% strengthening of foreign exchange rate on net income			10% strengthening of foreign exchange rate on OCI		10% weakening of foreign exchange rate on net income			10% weakening of foreign exchange rate on OCI
United States dollar		(75,123	)		1,511		75,123			(1,511	)
Australian dollar		389			761		(389	)		(761	)
Hong Kong dollar		127			—		(127	)		—

Q4 Financial Report |  40  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

The following table provides the impact on net income and OCI of a 10% change in the value of foreign currencies with respect to CI’s net financial assets as at December 31, 2019:

	10% strengthening of foreign exchange rate on net income			10% strengthening of foreign exchange rate on OCI		10% weakening of foreign exchange rate on net income			10% weakening of foreign exchange rate on OCI
United States dollar		12,489			—		(12,489	)		—
Australian dollar		(220	)		552		220			(552	)
Hong Kong dollar		106			—		(106	)		—

[iii] Price risk

CI incurs price risk through its investments of $133,375 [2019 – $138,412]. Based on the carrying amount of these assets, an increase or decrease in prices by 10% would result in estimated gains or losses of $13,337 [2019 - $13,841], respectively.

[B] LIQUIDITY RISK

Liquidity risk arises from the possibility that CI will encounter difficulties in meeting its financial obligations as they fall due. CI manages its liquidity risk through a combination of cash received from operations as well as borrowings under its revolving credit facility. Liquidity is monitored through a daily cash management process that includes the projection of cash flows to ensure CI meets its funding obligations.

CI’s liabilities have contractual maturities, excluding interest payments, as follows:

	Total		2021		2022		2023		2024		2025		2027		2030
	$		$		$		$		$		$		$		$
Accounts payable and accrued liabilities		308,797		308,797		—		—		—		—		—		—
Dividends payable		75,297		75,297		—		—		—		—		—		—
Client and trust funds payable		961,080		961,080		—		—		—		—		—		—
Long-term debt		2,466,027		200,000		—		325,000		350,000		450,000		250,000		891,027
Deferred consideration		96,855		96,855		—		—		—		—		—		—
Contingent consideration		131,122		29,695		25,023		23,829		52,575		—		—		—
Put option		109,394		103,862		2,449		—		1,432		—		1,651		—
Total		4,148,572		1,775,586		27,472		348,829		404,007		450,000		251,651		891,027

[C] CREDIT RISK

Credit risk is the risk of loss associated with the inability of a third party to fulfill its payment obligations. CI is exposed to the risk that third parties that owe it money, securities or other assets will not perform their obligations. Expected credit losses associated with CI’s financial assets are insignificant.

As at December 31, 2020, financial assets of $1,248,740 [2019 – $711,359], represented by client and trust funds on deposit of $973,143 [2019 – $364,964], accounts receivable of $219,074 [2019 – $159,760] and other assets of $56,523 [2019 – $66,420], were exposed to credit risk. CI does not have a significant exposure to any individual counterparty. Credit risk is mitigated by regularly monitoring the credit performance of each individual counterparty and holding collateral, where appropriate.

Q4 Financial Report |  41  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Client and trust funds on deposit consist mainly of cash deposits or unsettled trade receivables. CI may also extend amounts to clients on a margin basis for security purchases. Margin loans are due on demand and are collateralized by the financial instruments in the client’s account. CI faces a risk of financial loss in the event a client fails to meet a margin call if market prices for securities held as collateral decline and if CI is unable to recover sufficient value from the collateral held. The credit extended is limited by regulatory requirements and by CI’s internal credit policy. Credit risk is managed by dealing with counterparties CI believes to be creditworthy and by actively monitoring credit and margin exposure and the financial health of the counterparties.

CI’s accounts receivable consist primarily of management fees receivable, amounts due to CI from the government agencies with respect to input tax credits and other short-term receivables due within 90 days.

Securities lending and borrowing agreements consist of the following as at December 31, 2020:

	Cash		Securities
	$		$
Loaned or delivered as collateral		12,321		11,523
Borrowed or received as collateral		31,862		30,520

Securities lending and borrowing agreements consist of the following as at December 31, 2019:

	Cash		Securities
	$		$
Loaned or delivered as collateral		10,958		11,176
Borrowed or received as collateral		13,051		13,657

CI uses securities lending and borrowing to facilitate the securities settlement process. These transactions are typically short-term in nature, fully collateralized by either cash or securities and subject to daily margin calls for any deficiency between the market value of the security given and the amount of collateral received. CI manages its credit exposure by establishing and monitoring aggregate limits by counterparty for these transactions. Cash loaned or delivered as collateral is included in accounts receivable and cash borrowed or received as collateral is included in accounts payable and accrued liabilities.

Other assets consist mainly of long-term investments, long-term accounts receivable, loans granted under CI’s employee share purchase plan and loans extended to investment advisors under CI’s hiring and incentive program. Employee loans are collateralized by CI shares and become due immediately upon termination of the employee or upon the sale of the shares held as collateral. Commissions may be used to offset loan amounts made to investment advisors in the event of default. Credit risk associated with other assets is limited given the nature of the relationship with the counterparties.

Q4 Financial Report |  42  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

15.    CAPITAL MANAGEMENT

CI’s objectives in managing capital are to maintain a capital structure that allows CI to meet its growth strategies and build long-term shareholder value, while satisfying its financial obligations and meeting its long-term debt covenants. CI’s capital comprises shareholders’ equity and long-term debt (including the current portion of long-term debt).

CI and its subsidiaries are subject to minimum regulatory capital requirements whereby sufficient cash and other liquid assets must be on hand to maintain capital requirements rather than using them in connection with its business. As at December 31, 2020, cash and cash equivalents of $14,680 [December 31, 2019 – $12,810] were required to be on hand for regulatory capital maintenance. Failure to maintain required regulatory capital by CI may result in fines, suspension or revocation of registration by the relevant securities regulator. CI from time to time provides loans to its subsidiaries for operating purposes and may choose to subordinate these loans in favour of general creditors. The repayment of subordinated loans is subject to regulatory approval. As at December 31, 2020 and December 31, 2019, CI met its capital requirements.

CI’s capital consists of the following:

	As at		As at
	December 31, 2020		December 31, 2019
	$		$
Shareholders’ equity		1,582,447		1,493,988
Long-term debt		2,456,116		1,604,494
Total capital		4,038,563		3,098,482

16.    COMMITMENTS

LEASE COMMITMENTS

CI has entered into leases relating to the rental of office premises and computer equipment. CI has the option to renew certain leases. The approximate future minimum annual rental payments under such leases are as follows:

	$
2021		17,708
2022		16,529
2023		15,141
2024		14,704
2025		12,684
2026+		8,725

ADVISOR SERVICES AGREEMENTS

CI is a party to certain advisor services agreements, which provide that the advisor has the option to require CI to purchase a practice that cannot otherwise be transitioned to a qualified buyer. The purchase price would be in accordance with a pre-determined formula contained in the advisor services agreements.

Q4 Financial Report |  43  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

INDEMNITIES

CI has agreed to indemnify its directors and officers, and certain of its employees in accordance with its by-laws. CI maintains insurance policies that may provide coverage against certain claims.

17.SEGMENTED INFORMATION

CI has two reportable segments: asset management and wealth management (formerly asset management and asset administration). These segments reflect CI’s internal financial reporting, performance measurement and strategic priorities. Prior year has been recast for comparative purposes.

The asset management segment includes the operating results and financial position of CI Investments, GSFM and Marret Asset Management Inc., which derive their revenues principally from the fees earned on the management of several families of mutual funds, segregated funds and exchange-traded funds. The operating results of of CI Private Counsel LP are now included in the wealth management segment.

The wealth management segment includes the operating results and financial position of CI Private Counsel LP, the U.S. RIAs, Aligned, CI Investment Services, Wealthbar and AWM and its subsidiaries, including Assante Capital Management Ltd. and Assante Financial Management Ltd. These companies derive their revenues principally from commissions and fees earned on the sale of mutual funds and other financial products, and ongoing service to clients.

Q4 Financial Report |  44  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Segmented information as at and for the year ended December 31, 2020 is as follows:

	Asset management		Wealth management	Intersegment eliminations		Total
	$		$	$		$
Management fees	1,650,076		—	(14,303	)	1,635,773
Administration fees	—		530,058	(165,650	)	364,408
Other income	(4,555	)	54,830	—		50,275
Total revenue	1,645,521		584,888	(179,953	)	2,050,456
Selling, general and administrative	325,245		138,805	(14,611	)	449,439
Trailer fees	538,409		—	(28,965	)	509,444
Advisor and dealer fees	—		389,264	(135,888	)	253,376
Deferred sales commissions	7,981		—	(489	)	7,492
Amortization and depreciation	24,714		18,800	—		43,514
Other expenses	66,848		12,156	—		79,004
Total expenses	963,197		559,025	(179,953	)	1,342,269
Income before income taxes and non-segmented items	682,324		25,863	—		708,187
Interest and lease finance						(65,440	)
Provision for income taxes						(167,201	)
Net income for the year						475,546
Identifiable assets	1,293,057		1,234,206	—		2,527,263
Indefinite life intangibles
Goodwill	1,311,873		741,799	—		2,053,672
Fund contracts	1,778,901		—	—		1,778,901
Total assets	4,383,831		1,976,005	—		6,359,836

Q4 Financial Report |  45  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

Segmented information as at and for the year ended December 31, 2019 is as follows:

	Asset management	Wealth management	Intersegment eliminations		Total
	$	$	$		$
Management fees	1,802,257	—	(13,157	)	1,789,100
Administration fees	—	457,501	(165,000	)	292,501
Other income	4,001	36,864	—		40,865
Total revenue	1,806,258	494,365	(178,157	)	2,122,466
Selling, general and administrative	370,638	131,791	(13,157	)	489,272
Trailer fees	583,683	—	(28,516	)	555,167
Advisor and dealer fees	—	342,072	(135,771	)	206,301
Deferred sales commissions	13,527	—	(713	)	12,814
Amortization and depreciation	21,785	11,106	—		32,891
Other expenses	38,693	5,101	—		43,794
Total expenses	1,028,326	490,070	(178,157	)	1,340,239
Income before income taxes and non-segmented items	777,932	4,295	—		782,227
Interest					(55,422	)
Provision for income taxes					(189,281	)
Net income for the year					537,524
Identifiable assets	463,377	593,199	—		1,056,576
Indefinite life intangibles
Goodwill	1,309,008	222,265	—		1,531,273
Fund contracts	1,779,957	—	—		1,779,957
Total assets	3,552,342	815,464	—		4,367,806

18.    COMPENSATION OF KEY MANAGEMENT

The remuneration of directors and other key management personnel of CI during the years ended December 31, is as follows:

	2020	2019
	$	$
Salaries	5,155	6,976
Equity-based compensation	6,660	1,827
Total	11,815	8,803

Q4 Financial Report |  46  | December 31, 2020 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019 • [in thousands of Canadian dollars, except per share amounts]

19. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Included in selling, general and administrative expenses [“SG&A”] are salaries and benefits of $241,614 for the year ended December 31, 2020 [2019 - $265,908]. Other SG&A of $207,825 for the year ended December 31, 2020, primarily includes marketing and information technology expenses as well as professional and regulatory fees [2019 - $223,364].

20. AMORTIZATION AND DEPRECIATION

The following table provides details of amortization and depreciation:

	2020	2019
	$	$
Depreciation of capital assets	12,295	11,491
Depreciation of right-of-use assets	9,848	8,786
Amortization of intangibles	19,317	11,312
Amortization of debenture transaction costs	2,054	1,302
Total amortization and depreciation	43,514	32,891

21. UPDATE ON COVID-19

COVID-19, which has been recognized by the World Health Organization as a pandemic, has spread rapidly and extensively across the globe. Efforts by governments to control the further spread of COVID-19 have disrupted normal economic activity both domestically and globally. Uncertainty related to the extent, duration and severity of the pandemic has contributed to significant volatility in the financial markets, resulting in a decline in certain equity and commodity prices and lower interest rates and a corresponding decline in CI’s assets under management. In addition, CI may face declines in its assets under management as a result of client redemptions related to a variety of COVID-19 related factors including general market pessimism, poor fund performance, or clients’ needs for immediate cash.  

CI is monitoring the impact of the pandemic and managing expenses accordingly. CI believes it is well positioned to meet its financial obligations and to support planned business operations throughout this pandemic. The extent to which CI’s business, financial condition and results of operations will be impacted by the COVID-19 pandemic, is uncertain and will depend on future developments, which are unpredictable and rapidly evolving. Accordingly, there is a higher level of uncertainty with respect to management’s judgments and estimates.

22. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform to the consolidated financial statement presentation in the current year.

This Report contains forward-looking statements with respect to CI, including its business operations and strategy and financial performance and condition. Although management believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially include, among other things, general economic and market factors, including interest rates, business competition, changes in government regulations or in tax laws, and other factors discussed in materials filed with applicable securities regulatory authorities from time to time.

Q4 Financial Report |  47  | December 31, 2020 

EX-99.2

Exhibit 99.2

MANAGEMENT’S DISCUSSION & ANALYSIS | December 31, 2020

 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

This Management’s Discussion and Analysis (“MD&A”) dated February 11, 2021 presents an analysis of the financial position of CI Financial Corp. and its subsidiaries (“CI”) as at December 31, 2020, compared with December 31, 2019, and the results of operations for the quarter and year ended December 31, 2020, compared with the quarter and year ended December 31, 2019 and the quarter ended September 30, 2020.

CI’s Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Amounts are expressed in Canadian dollars. The principal subsidiaries referenced herein include CI Investments Inc. (“CI Investments”) and Assante Wealth Management (Canada) Ltd. (“AWM” or “Assante”). CI has two reportable segments: Asset Management and Wealth Management (formerly Asset Administration). These segments reflect CI’s current internal financial reporting, performance measurement, and strategic priorities. The Asset Management segment of the business includes the operating results and financial position of CI Investments and its subsidiaries, as well as the operating results and financial position of GSFM Pty Limited (“GSFM”). First Asset Investment Management Inc., formerly a subsidiary of CI Investments, was amalgamated on July 1, 2019. CI ETF Investment Management Inc. (“CI ETF”), formerly WisdomTree Asset Management Canada, Inc. and a subsidiary of CI Investments, was amalgamated on July 1, 2020. The Wealth Management segment includes the operating results and financial position of AWM and its subsidiaries, including Assante Capital Management Ltd. (“ACM”) and Assante Financial Management Ltd. (“AFM”), as well as the operating results and financial position of CI Investment Services Inc. (“CI Investment Services”, formerly BBS Securities Inc.), WealthBar Financial Services Inc., operating as CI Direct Investing (“CI Direct Investing”), Aligned Capital (“Aligned”), Surevest LLC (“Surevest”), OCM Capital Partners LLC (“One Capital”), The Cabana Group LLC (“Cabana”), Congress Wealth Management LLC (“Congress”), Balasa Dinverno Foltz LLC (“BDF”), Bowling Portfolio Management LLC (“Bowling”), Stavis & Cohen Private Wealth LLC (“Stavis Cohen”), Doyle Wealth Management LLC (“Doyle”), The Roosevelt Investment Group LLC (“Roosevelt”), and RGT Wealth Advisors LLC (“RGT”).  CI Private Counsel LP (“CIPC”), previously included in the Asset Management segment, is included in the Wealth Management segment effective January 1, 2020.  The impact of this change was to move revenue of approximately $69.0 million and related expenses to the Wealth Management segment in the year ended December 31, 2020. The operating results of prior periods have been restated for comparative purposes.

Q4 Financial Report |  2  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

This MD&A contains forward-looking statements concerning anticipated future events, results, circumstances, performance or expectations with respect to CI Financial Corp. 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 these forward-looking statements include 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 impact of the coronavirus pandemic, 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 MD&A includes several non-IFRS financial measures that do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. CI believes that these financial measures provide information that is useful to investors in understanding CI’s performance and facilitate a comparison of quarterly and full year results from period to period. Descriptions of these non-IFRS measures and reconciliations to the nearest IFRS measure, where necessary, are provided in the “Non-IFRS Measures” section of this MD&A. Note that figures in tables may not add due to rounding.

Q4 Financial Report |  3  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

BUSINESS OVERVIEW

CI is a diversified wealth management firm and one of Canada’s largest independent asset management companies. CI’s principal business is the management, marketing, distribution and administration of investment products for Canadian investors. CI also provides financial advice, tax, retirement, estate and wealth planning services in Canada through Assante, CIPC, CI Direct Investing, Aligned, and in the United States through Surevest, One Capital, Cabana, Congress, BDF, Bowling, Stavis Cohen, Doyle, Roosevelt, and RGT. In addition, CI has asset management operations in Australia through its subsidiary GSFM. CI’s products are distributed primarily through brokers, independent financial planners and insurance advisors, including ACM, AFM, and Aligned financial advisors. CI operates through two business segments, Asset Management and Wealth Management.

The Asset Management segment provides the majority of CI’s income and derives its revenue principally from the fees earned on the management of investment funds and other fee-earning investment products. CI uses in-house teams and external investment managers to provide portfolio management services. These investment managers typically have long careers in the industry as well as extensive track records with CI. This lineup of investment managers provides a wide selection of styles and areas of expertise for CI’s funds and ETFs.

The Wealth Management segment (previously called Asset Administration) was renamed to better reflect CI’s performance measurement and business strategy, and now includes the results of operations of CIPC (previously in Asset Management). The Wealth Management segment derives its revenue principally from fees and commissions for providing financial planning and advice (which may include investment management services), and on the sale of investment funds and other financial products. Prior results have been restated for comparative purposes.

BUSINESS STRATEGY

In the fourth quarter of 2019, CI Financial announced a new strategic direction for the company, with the introduction of three strategic priorities:

·  Modernize the asset management business

·  Expand the wealth management platform

·  Globalize the company

In establishing these priorities, CI sought input from a series of critical sources, including employees, clients, shareholders and industry analysts, and incorporated insights from observing market dynamics and industry trends. Each strategic priority builds on CI’s existing extensive capabilities to take advantage of opportunities in the marketplace.

A key factor in CI’s focus on modernizing its asset management business is that the rate and pace of change in the industry is at an all-time high, due to changes in demographics and investor preferences, changing client expectations for service and support, and ongoing regulatory change. This environment requires new services, new products and new approaches to meet investors’ changing needs.

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

CI also believes that the role of the advisor is more important than ever. As consumers' lives become increasingly complex and digital, CI’s breadth of capabilities uniquely positions the firm to be Canada's market leader; this is why expanding its wealth management platform is a strategic priority.

With scale becoming increasingly important in the industry and difficult to achieve in Canada alone, CI is globalizing the company. This strategic priority will also help the firm secure access to global talent to complement its existing capabilities.

In executing its strategy, the firm is leveraging its strategic foundation comprised of people, technology, speed and financial strength. By deploying its human capital and capabilities, driving advanced technology into everything the firm does, embedding new ways of working to be faster and more nimble, and maximizing the benefits of its financial strength, CI intends to maintain and grow its leadership in the asset management and wealth management industries.

As CI evolves to meet the challenges of a rapidly changing investment industry, it continues to make significant investments in key areas of the business to drive growth and broaden revenue opportunities, while prudently controlling expenditures.

As of November 17, 2020, the Corporation’s shares began trading on the New York Stock Exchange (“NYSE”) under the symbol CIXX. CI sought the listing to broaden its investor base, increase its corporate profile in the U.S. market, and provide the option of offering shares as part of the purchase price when acquiring companies in the U.S. The listing supports CI’s strategic priorities of globalizing the firm and expanding its wealth management platform.

COVID-19 IMPACT

The COVID-19 pandemic has contributed to significant volatility in the financial markets. CI activated its business continuity plan in early March 2020 to mitigate risks, maintain operational efficiency and service levels, and address the health and safety concerns of our employees, clients and advisors.  The extent to which CI’s business, financial condition and results of operations will be impacted by the COVID-19 pandemic, including attempts to mitigate its effects, is uncertain and will depend on future developments, which continues to be unpredictable and rapidly evolving. A more detailed discussion can be found in “Business Continuity Risk” of the “Risk Management” section of this report.

KEY PERFORMANCE DRIVERS

Total assets under management (“total AUM”) includes core assets under management (“core AUM”) and U.S. assets under management. The key performance indicator for the Asset Management segment is the level of core AUM, and for the Wealth Management segment, the level of wealth management assets. CI’s total AUM and wealth management assets are primarily driven by fund performance, gross sales and redemptions of investment products, attracting new clients and the addition of new assets from current clients. As most of CI’s revenues and expenses are based on daily asset levels throughout the year, average assets for a particular period are critical to the analysis of CI’s financial results. While some expenses, such as trailer fees, vary directly with the level of AUM, a portion of CI’s expenses do not, such as a portion of overhead, discretionary spend, and deferred sales commissions. Over the long term, CI manages the level of its discretionary spend to be consistent with, or below, the growth in its revenue. In any given period, CI may choose to make investments in people or technology that benefit the long-term growth of the company.

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

CI uses several performance indicators to assess its results. These indicators are described throughout the results of operations and the discussion of the two operating segments and include the following measures prescribed by IFRS: net income and earnings per share; and measures not prescribed by IFRS: adjusted net income, adjusted earnings per share, operating cash flow, free cash flow, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, dealer gross margin, net debt, asset management margin, and SG&A efficiency margin. Descriptions of these non-IFRS measures and reconciliations to IFRS are provided below.

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

NON-IFRS MEASURES

CI reports certain financial information using non-IFRS measures as CI believes that these financial measures provide information that is useful to investors in understanding CI’s performance and facilitate a comparison of quarterly and full-year results from period to period.

ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE

CI defines adjusted net income as net income, net of non-controlling interest, and net of other provisions and adjustments. CI uses adjusted net income and adjusted earnings per share to compare underlying profitability for different periods.

TABLE 1: ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE 

[millions of dollars, except per share amounts]	Quarter ended Dec. 31, 2020		Quarter ended Sep. 30, 2020			Quarter ended Dec. 31, 2019			Year ended Dec. 31, 2020			Year ended Dec. 31, 2019
Net Income		105.7		130.2			147.3			475.5			537.5
Add:
Legal and restructuring charges		39.6		—			—			45.9			26.6
Write-down of investments		1.6		—			—			1.6			—
Bond redemption costs		1.4		—			—			1.4			—
Less:
Non-controlling interest		0.6		(0.4	)		(0.3	)		(0.4	)		(0.9	)
Adjusted net income		147.6		130.6			147.5			524.8			565.0
Adjusted earnings per share		0.71		0.62			0.66			2.45			2.41

OPERATING CASH FLOW AND FREE CASH FLOW

CI measures its operating cash flow before the change in operating assets and liabilities, and the actual cash amount paid for interest and income taxes, as these items often distort the cash flow generated during the period. Operating assets and liabilities are affected by seasonality, the timing of interest payments depends on terms in specific debt instruments, and tax installments paid may differ materially from the cash tax accrual.

Free cash flow is calculated as operating cash flow, net of non-controlling interest, and net of other provisions and adjustments. CI uses this measure, among others, when determining how to deploy capital.

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

TABLE 2: OPERATING CASH FLOW AND FREE CASH FLOW

[millions of dollars]	Quarter ended Dec. 31, 2020		Quarter ended Sep. 30, 2020		Quarter ended Dec. 31, 2019		Year ended Dec. 31, 2020			Year ended Dec. 31, 2019
Cash provided by operating activities		77.3		140.1		157.0		542.0			558.0
Net change in working capital		31.6		4.3		11.3		(18.6	)		23.2
Operating cash flow		108.9		144.4		168.3		523.4			581.2
Add:
Legal and restructuring charges		39.6		—		—		45.9			26.6
Write-down on investments		1.6		—		—		1.6			—
Bond redemption costs		1.4		—		—		1.4			—
Less:
Non-controlling interest		1.3		0.4		—		2.0			—
Free cash flow		150.2		143.9		168.3		570.2			607.8

EBITDA, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN

CI uses EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted EBITDA, which it defines as EBITDA, net of non-controlling interest and other provisions and adjustments, to assess its underlying profitability prior to the impact of its financing structure, income taxes and amortization and depreciation. This permits comparisons of companies within the industry, normalizing for different financing methods and levels of taxation. Adjusted EBITDA is a measure of operating performance, a facilitator for valuation and a proxy for cash flow. Adjusted EBITDA margin expresses adjusted EBITDA as a percentage of total revenue.

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

TABLE 3: EBITDA, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN

[millions of dollars, except per share amounts]	Quarter ended Dec. 31, 2020			Quarter ended Sep. 30, 2020			Quarter ended Dec. 31, 2019			Year ended Dec. 31, 2020			Year ended Dec. 31, 2019
Net Income		105.7			130.2			147.3			475.5			537.5
Add:
Interest and lease finance		17.8			17.3			14.2			65.4			55.4
Provision for income taxes		36.6			46.1			53.8			167.2			189.3
Amortization and depreciation1		14.2			11.5			8.2			44.2			32.9
EBITDA		174.2			205.1			223.5			752.4			815.1
EBITDA per share		0.83			0.97			0.99			3.51			3.48
Add:
Legal and restructuring provision		52.1			0.0			0.0			60.6			35.0
Write-down on investments		1.8			0.0			0.0			1.8			0.0
Bond redemption costs		1.9			0.0			0.0			1.9			0.0
Less:
Non-controlling interest		1.5			0.5			(0.2	)		2.2			(0.4	)
Adjusted EBITDA		228.4			204.5			223.7			814.5			850.5
Adjusted EBITDA per share		1.09			0.97			0.99			3.80			3.63
Total revenue		566.4			509.4			536.3			2,050.5			2,122.5
Adjusted EBITDA Margin		40.3	%		40.2	%		41.7	%		39.7	%		40.1	%

¹Includes amortization of equity accounted investments of $0.3 million for the quarter ended December 31, 2020 and $0.7 million for the year ended December 31, 2020 ($0.4 million for the quarter ended September 30, 2020, nil for the quarter ended December 31, 2019, and nil for the year ended December 31, 2019).

NET DEBT

CI calculates net debt as long-term debt (including the current portion) less cash and marketable securities, net of cash required for regulatory purposes and non-controlling interests. Net debt is a measure of leverage and CI uses this measure to assess its financial flexibility.

TABLE 4: NET DEBT

[millions of dollars]	As at Dec. 31, 2020		As at  Dec. 31, 2019
Current portion of long-term debt		203.8		449.5
Long-term debt		2,252.3		1,155.0
		2,456.1		1,604.5
Less:
Cash and short-term investments		483.6		118.4
Marketable securities, excluding CI Investment Services’ securities owned, at market		118.1		118.2
Add:
Regulatory capital and non-controlling interests		18.0		14.7
Net Debt		1,872.4		1,382.6

Q4 Financial Report |  9  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

DEALER GROSS MARGIN

CI monitors its operating profitability on the revenues earned within its Wealth Management segment by measuring its dealer gross margin, which is calculated as administration fee revenue less advisor and dealer fees (previously investment dealer fees), divided by administration fee revenue (all figures before inter-segment eliminations). CI uses this measure to assess the profitability of the Wealth Management segment before SG&A expenses.

TABLE 5: DEALER GROSS MARGIN                              

[millions of dollars]	Quarter ended Dec. 31, 2020			Quarter ended Sep. 30, 2020			Quarter ended Dec. 31, 2019			Year ended Dec. 31, 2020			Year ended Dec. 31, 2019
Administration fees		167.9			128.2			120.4			530.1			457.5
Less:
Advisor and dealer fees		121.4			94.1			90.2			389.3			342.1
		46.5			34.1			30.2			140.8			115.4
Dealer gross margin		27.7	%		26.6	%		25.1	%		26.6	%		25.2	%

ASSET MANAGEMENT MARGIN

CI assesses the overall performance of the asset management segment using a trailing 12-month asset management margin, where deferred sales commissions, trailer fees, and SG&A expenses are deducted from management fees and measured as a percentage of management fees (all figures are before inter-segment eliminations). This removes distortion caused by other revenues and expenses, eliminates the financing impact of back-end load funds, and eliminates revenue mix variances because it is measured as a percentage of management fees and not average AUM. Using a trailing 12-month margin eliminates any seasonality associated with SG&A expenses.

TABLE 6: ASSET MANAGEMENT MARGIN

[millions of dollars - trailing 12 months]	Quarter ended Dec. 31, 2020			Quarter ended Sep. 30, 2020			Quarter ended Jun. 30, 2020			Quarter ended Mar. 31, 2020			Quarter ended Dec. 31, 2019
Management fees		1,650.1			1,681.2			1,718.9			1,783.1			1,802.3
Less:
Deferred sales commissions paid		8.0			9.1			10.4			12.1			13.5
Trailer fees		538.4			547.3			558.4			578.2			583.7
Net management fees		1,103.7			1,124.8			1,150.2			1,192.9			1,205.0
Less:
SG&A expenses		325.2			327.1			343.2			358.9			370.6
		778.4			797.7			807.0			834.0			834.4
Asset management margin		47.2	%		47.4	%		46.9	%		46.8	%		46.3	%

SG&A EFFICIENCY MARGIN

CI uses a trailing 12-month SG&A efficiency margin to assess its costs relative to management fees earned, net of deferred sales commissions and trailer fees, which are not directly controllable by CI. SG&A expenses are subtracted from these net management fees and the remainder is measured as a percentage of net management fees. Using a trailing 12-month margin eliminates any seasonality associated with SG&A expenses.

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

TABLE 7: SG&A EFFICIENCY MARGIN

[millions of dollars - trailing 12 months]	Quarter ended Dec. 31, 2020			Quarter ended Sep. 30, 2020			Quarter ended Jun. 30, 2020			Quarter ended Mar. 31, 2020			Quarter ended Dec. 31, 2019
Management fees		1,650.1			1,681.2			1,718.9			1,783.1			1,802.3
Less:
Deferred sales commissions paid		8.0			9.1			10.4			12.1			13.5
Trailer fees		538.4			547.3			558.4			578.2			583.7
Net management fees		1,103.7			1,124.8			1,150.2			1,192.9			1,205.0
Less:
SG&A expenses		325.2			327.1			343.2			358.9			370.6
		778.4			797.7			807.0			834.0			834.4
SG&A efficiency margin		70.5	%		70.9	%		70.2	%		69.9	%		69.2	%

Q4 Financial Report |  11  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

ASSETS AND SALES

CI is one of Canada’s largest independent investment fund companies with total assets under management of $135.1 billion and wealth management assets of $96.5 billion at December 31, 2020, as shown in Table 8. Core assets under management represents assets managed by CI Investments and GSFM. Operating results related to core assets under management are included in the Asset Management segment. U.S. assets under management are included in the Wealth Management segment as the related revenues are part of a holistic fee charged to clients for providing wealth management services. The operating results of CIPC, previously included in the Asset Management segment, are included in the Wealth Management segment effective January 1, 2020.  Assets and sales for the prior periods have been restated, in the respective segments, for comparative purposes.

Assets under management increased 3% year over year due to the acquisitions of CI ETF (formerly WisdomTree Asset Management Canada Inc.), One Capital, and Cabana, and positive investment performance, more than offsetting net redemptions of funds. The 91% increase in wealth management assets from last year was mainly due to the acquisitions of Surevest, One Capital, Cabana, Congress, BDF, Aligned, Bowling, Stavis Cohen, Doyle, Roosevelt and RGT. Total assets, which include mutual, segregated, separately managed accounts, structured products, exchange-traded funds, pooled funds and wealth management assets, were $231.5 billion at December 31, 2020, up $49.3 billion from $182.2 billion at December 31, 2019.

TABLE 8: TOTAL ASSETS

	As at		As at
[billions of dollars]	December 31, 2020		December 31, 2019		% change
Core assets under management1		129.6		131.7		(2	)
U.S. assets under management		5.5		—		nmf
Total assets under management		135.1		131.7		3
Canadian wealth management		67.3		50.5		33
U.S. wealth management		29.2		—		nmf
Total wealth management assets		96.5		50.5		91
Total assets		231.5		182.2		27

¹ Includes $32.6 billion of assets managed by CI and held by clients of advisors with Assante, Aligned, and CIPC as at December 31, 2020 and $29.0 billion of assets managed by CI and held by clients of advisors with Assante and CIPC as at December 31, 2019.

Despite a resurgence of COVID-19 cases and renewed lockdowns in many regions, markets trended upward during the fourth quarter of 2020, boosted by growing clarity around the outcome of the U.S. presidential election and significant COVID-19 vaccine progress. The S&P 500 Index experienced a pullback due to uncertainty in the days leading up to the U.S. election but soared in the weeks that followed, driven by the energy and financials sectors, to end the year at a new all-time high. The S&P 500 Index, a broad representation of the U.S. equity market, was up 6.7% for the fourth quarter and 14.4% for the year in Canadian-dollar terms. The MSCI World Index, which reflects returns for developed equity markets around the globe, was up 8.5% for the quarter and 12.2% for the year in Canadian-dollar terms.

Q4 Financial Report |  12  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

The Canadian economy was boosted by stronger demand for energy and higher oil prices in the fourth quarter, along with the approval of COVID-19 vaccines. While the S&P/TSX Composite Index has moved upward since its pandemic-induced low in March, the Canadian benchmark has yet to return to the record level reached in February. The index posted a gain of 7.7% for the quarter and 2.2% for the year.

Government benchmark interest rates remained unchanged in Canada, the U.S. and Europe during the final three-month period of the year. In December, the Bank of Canada held its benchmark interest rate steady at 0.25% after cutting rates in March in response to the COVID-19 pandemic. The Bank of Canada reiterated it will continue to buy Government of Canada bonds at a rate of about $4 billion per week to keep downward pressure on interest rates, and restated that it would keep the benchmark lending rate near zero until sometime in 2023. The U.S. Federal Reserve maintained its target for the federal funds rate at a range of 0% to 0.25%. The European Central Bank held interest rates on its main refinancing operations, marginal lending facility and key deposit rate at 0.00%, 0.25% and -0.50%, respectively and also expanded its monetary stimulus program.

The change in AUM during each of the past five quarters is detailed in Table 9 and a breakdown of CI’s sales is provided in Table 10.

TABLE 9: CHANGE IN TOTAL ASSETS UNDER MANAGEMENT
[billions of dollars]	Quarter ended Dec. 31, 2020		Quarter ended Sep. 30, 2020		Quarter ended Jun. 30, 2020		Quarter ended Mar. 31, 2020		Quarter ended Dec. 31, 2019
Assets under management, beginning	128.312		125.563		111.065		131.741		129.615
Gross sales	4.863		4.320		3.998		5.103		4.430
Redemptions	7.003		6.330		5.910		7.824		6.324
Net sales	(2.140	)	(2.010	)	(1.911	)	(2.721	)	(1.894	)
Acquisitions (divestitures)	—		—		3.957		1.033		—
Fund performance	8.880		4.759		12.452		(18.988	)	4.020
Assets under management, ending	135.052		128.312		125.563		111.065		131.741
Average assets under management	131.246		129.021		120.104		127.163		130.542
Core assets under management, ending	129.591		123.605		121.286		111.065		131.741
Core average assets under management	126.233		124.626		118.413		127.163		130.542

CI reported $2.1 billion in overall net redemptions for the fourth quarter of 2020. CI’s Canadian retail business, excluding products closed to new investors, had $1.3 billion in net redemptions for the fourth quarter of 2020, an improvement of $0.2 billion from the third quarter of 2020 and up from $0.4 billion in net redemptions for the fourth quarter of 2019. CI’s Canadian institutional business had net redemptions of $0.9 billion for the fourth quarter of 2020, and represents an improvement of $0.5 billion over the same quarter a year ago. Sales at GSFM were relatively flat, with $36 million of net redemptions in the fourth quarter of 2020, and CI’s U.S. RIA business had $0.3 billion in net sales. CI’s closed business, comprised primarily of segregated fund contracts that are no longer available for sale, had $0.2 billion in net redemptions for the quarter.

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

TABLE 10: SALES BREAKDOWN
	Quarter ended December 31, 2020							Quarter ended December 31, 2019
[millions of dollars]	Gross Sales		Redemptions		Net Sales			Gross Sales		Redemptions		Net Sales
Canadian Business
Retail		3,722		4,976		(1,255	)		3,771		4,178		(407	)
Institutional		302		1,226		(925	)		383		1,853		(1,469	)
		4,023		6,203		(2,180	)		4,154		6,030		(1,876	)
GSFM
Retail		276		116		160			79		33		46
Institutional		124		320		(197	)		190		8		182
		400		436		(36	)		269		41		228
U.S. RIAs		428		126		301			—		—		—
Closed Business		12		237		(226	)		8		253		(245	)
Total		4,863		7,003		(2,140	)		4,430		6,324		(1,894	)

Q4 Financial Report |  14  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

RESULTS OF OPERATIONS

The table below presents the consolidated results of operations of CI.

TABLE 11: SELECTED ANNUAL INFORMATION

	Fiscal Years Ending December 31
[millions, except per share amounts]	2020			2019			2018
Management fees	$	1,635.8		$	1,789.1		$	1,933.6
Total revenue	$	2,050.5		$	2,122.5		$	2,236.4
Selling, general & administrative	$	449.4		$	489.3		$	512.6
Total expenses	$	1,407.7		$	1,395.7		$	1,393.1
Income before income taxes	$	642.7		$	726.8		$	843.3
Income taxes	$	167.2		$	189.3		$	225.5
Non-controlling interest	$	(0.4	)	$	(0.9	)	$	0.4
Net income available to shareholders	$	476.0		$	538.4		$	617.5
Adjusted net income1	$	524.8		$	565.0		$	617.5
Free cash flow1	$	570.2		$	607.8		$	655.5
Basic earnings per share	$	2.22		$	2.30		$	2.38
Diluted earnings per share	$	2.21		$	2.29		$	2.38
Adjusted earnings per share1	$	2.45		$	2.41		$	2.38
Adjusted EBITDA1	$	814.5		$	850.5		$	906.2
Total assets	$	6,360		$	4,368		$	4,292
Gross debt	$	2,456		$	1,604		$	1,504
Net debt1	$	1,872		$	1,383		$	1,255
Average shares outstanding		214.1			234.3			259.3
Shares outstanding		210.4			221.8			243.7
Share price	$	15.78		$	21.71		$	17.28
Market capitalization	$	3,319		$	4,815		$	4,212

¹Adjusted net income, adjusted earnings per share, free cash flow, adjusted EBITDA and net debt are not standardized earnings measures prescribed by IFRS. Descriptions of these non-IFRS measures, as well as others, and reconciliations to IFRS, where necessary, are provided in the "Non-IFRS Measures" section of this MD&A.

Q4 Financial Report |  15  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

TABLE 12: SUMMARY OF QUARTERLY RESULTS

	2020											2019
[millions of dollars, except per share amounts]	Q4		Q3			Q2			Q1			Q4			Q3			Q2			Q1
INCOME STATEMENT DATA
Management fees		415.9		410.4			386.9			422.6			447.3			448.4			451.0			442.4
Administration fees		125.6		86.8			75.9			76.2			78.2			73.2			71.7			69.5
Other revenues		24.9		12.1			12.7			0.5			10.8			7.0			8.2			14.9
Total revenues		566.4		509.4			475.4			499.3			536.3			528.6			530.9			526.8
Selling, general & administrative		116.7		108.8			109.0			115.0			113.8			124.6			124.8			126.1
Trailer fees		129.4		128.0			121.0			131.1			138.7			139.1			140.4			136.9
Advisor and dealer fees		87.0		60.3			53.6			52.5			55.4			51.7			50.6			48.5
Deferred sales commissions paid		1.4		1.4			1.4			3.2			2.4			2.6			3.1			4.6
Interest and lease finance		17.8		17.3			15.8			14.6			14.2			13.8			13.7			13.7
Amortization and depreciation		13.9		11.0			10.0			8.6			8.2			8.2			8.3			8.2
Other expenses		58.0		6.2			3.8			11.0			2.3			2.4			37.4			1.6
Total expenses		424.2		333.0			314.6			335.9			335.2			342.4			378.5			339.6
Income before income taxes		142.2		176.3			160.8			163.4			201.1			186.2			152.4			187.2
Income taxes		36.6		46.1			41.1			43.5			53.8			47.4			40.9			47.2
Non-controlling interest		0.6		(0.4	)		(0.4	)		(0.3	)		(0.3	)		(0.2	)		(0.3	)		(0.1	)
Net income attributable to shareholders		105.0		130.6			120.2			120.2			147.5			139.0			111.9			140.0
Earnings per share		0.50		0.62			0.56			0.55			0.66			0.60			0.47			0.58
Diluted earnings per share		0.50		0.61			0.55			0.54			0.65			0.60			0.47			0.58
Dividends paid per share		0.18		0.18			0.18			0.18			0.18			0.18			0.18			0.18

Year Ended December 31, 2020

For the year ended December 31, 2020, CI reported net income attributable to shareholders of $476.0 million ($2.22 per share) versus $538.4 million ($2.30 per share) for the year ended December 31, 2019 as seen in Table 11 above. Net income for the year ended December 31, 2020 included a $6.2 million ($8.5 million before tax) restructuring provision in the first quarter, $39.6 million ($52.1 million before tax) of legal and severances charges, $1.6 million ($1.8 million before tax) of investment write-downs, and $1.4 million ($1.9 million before tax) of losses from the early redemption of bonds in the fourth quarter of 2020. Net income for the year ended December 31, 2019 included a restructuring provision of $26.6 million ($35.0 million before tax) related to severances and technology write downs in the second quarter. Excluding the non-recurring items in both periods, CI’s adjusted net income attributable to shareholders was $524.8 million ($2.45 per share) for 2020 and $565.0 million ($2.41 per share) for 2019. The year-over-year decrease in adjusted net income was primarily a result of lower management fees due to lower average AUM.

Q4 Financial Report |  16  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

CI’s total revenue was $2,050.5 million in 2020, a decrease of 3.4% when compared to total revenue of $2,122.5 million in 2019. Total revenue included realized and unrealized gains on investments of $6.9 million in 2020 and $10.8 million in 2019. Similar to net income, the decrease in total revenue was primarily due to a decrease in management fees, as average AUM declined 2.2% offset by acquisitions made in the Wealth Management segment during 2020.

For the year ended December 31, 2020, SG&A expenses were $449.4 million, down 8.1% from $489.3 million for the year ended 2019. While CI has been selectively investing in high-growth opportunities and other initiatives, the decrease in SG&A from last year was largely a result of management’s efforts to contain discretionary expenses in the legacy side of its asset management business, partially offset by acquisitions made in the Wealth Management segment during 2020. As a percentage of average core AUM, SG&A expenses were 0.362%, down from 0.377% last year.

During 2020, CI paid $7.5 million in deferred sales commissions, compared with $12.8 million in 2019. Consistent with the Canadian mutual fund industry, CI’s sales into deferred load funds have been steadily decreasing over the past decade.

Interest expense of $65.4 million was recorded for the year ended December 31, 2020 compared with $55.4 million for the year ended December 31, 2019. The change in interest expense reflects the changes in average debt levels and interest rates, as discussed under the Liquidity and Capital Resources section.

For 2020, CI recorded $167.2 million in income tax expense for an effective tax rate of 26.0%, compared to $189.3 million, or 26.0%, in 2019. CI’s effective tax rate may differ from its statutory tax rate, which is currently 26.5%, as a result of some expenses being nondeductible or partially deductible, or some revenue items not being fully taxable.

Quarter Ended December 31, 2020

For the quarter ended December 31, 2020, CI reported net income attributable to shareholders of $105.0 million ($0.50 per share) down from $147.5 million ($0.66 per share) for the quarter ended December 31, 2019 and down from $130.6 million ($0.62 per share) for the quarter ended September 30, 2020 as seen in Table 12 above. The fourth quarter of 2020 included $39.6 million ($52.1 million before tax) of legal and severances charges, $1.6 million ($1.8 million before tax) of investment write-downs, and $1.4 million ($1.9 million before tax) of losses from the early redemption of bonds. Excluding the non-recurring items in the current quarter, adjusted net income attributable to shareholders was $147.6 million ($0.71 per share). The slight increase from the prior year was mainly due to cost containment efforts offsetting lower management fees from lower average AUM and the increase from the prior quarter was mainly due to higher average AUM and an increase in client based revenue from the wealth management segment.

CI’s total revenue was $566.4 million in the fourth quarter of 2020, an increase of 5.6% when compared to total revenue of $536.3 million in the same period in 2019. On a consecutive quarter basis, total revenue increased 11.2% from $509.4 million. Total revenue included realized and unrealized gains on investments of $9.6 million in the fourth quarter of 2020, compared with $3.0 million in the same period in 2019, and $4.8 million in the prior quarter. The increase from the prior year was related to acquisitions made during the year. The increase from the prior quarter was due to higher asset-based revenue from higher average assets, the inclusion of Congress and BDF for a full quarter, and acquisitions made during the current quarter.

Q4 Financial Report |  17  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

For the quarter ended December 31, 2020, SG&A expenses were $116.7 million, up 2.5% from $113.8 million in the same quarter of 2019 and up from $108.8 million in the prior quarter. The increase in SG&A from the prior year was related to acquisitions made during the year. The increase from the prior quarter was due to the inclusion of Congress and BDF for a full quarter, and acquisitions made during the current quarter. As an annualized percentage of average core AUM, SG&A expenses were 0.368%, up from 0.346% for the fourth quarter of last year and 0.347% for the prior quarter.

In the fourth quarter of 2020, CI paid $1.4 million in deferred sales commissions, compared with $2.4 million in the same quarter of 2019 and $1.4 million in the prior quarter. Consistent with the Canadian mutual fund industry, CI’s sales into deferred load funds have been steadily decreasing over the past decade.

Interest expense of $17.8 million was recorded for the quarter ended December 31, 2020 compared with $14.2 million for the quarter ended December 31, 2019 and $17.3 million for the quarter ended September 30, 2020. The change in interest expense reflects the changes in average debt levels and interest rates, as discussed under the Liquidity and Capital Resources section.

For the fourth quarter of 2020, CI recorded $36.6 million in income tax expense for an effective tax rate of 25.7% compared to $53.8 million, or 26.8%, in the fourth quarter of 2019, and $46.1 million, or 26.1%, in the prior quarter. The effective tax rate for the current quarter was lower than comparable periods due to the tax effect of unrealized gains on investments and translation-related foreign exchange gains. CI’s effective tax rate may differ from its statutory tax rate, which is currently 26.5%, as a result of some expenses being nondeductible or partially deductible, or some revenue items not being fully taxable.

ASSET MANAGEMENT SEGMENT

The Asset Management segment is CI’s largest business segment and its operating results are presented in Table 13. This segment excludes U.S. assets under management, as the related revenues are part of a holistic fee charged to clients for providing wealth management services. Accordingly, the key performance indicator for the asset management segment is the level of core AUM. As of January 1, 2020, the operating results of CI Private Counsel LP (previously included in the Asset Management segment) are included in the Wealth Management segment and operating results in the prior periods have been restated for comparative purposes.

Q4 Financial Report |  18  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

TABLE 13: RESULTS OF OPERATIONS - ASSET MANAGEMENT SEGMENT

[millions of dollars]	Quarter ended Dec. 31, 2020			Quarter ended Sep. 30, 2020		Quarter ended Dec. 31, 2019		Year ended Dec. 31, 2020			Year ended Dec. 31, 2019
Management fees		419.6			414.1		450.7		1,650.1			1,802.3
Other revenue		(1.1	)		4.0		1.6		(4.6	)		4.0
Total revenue		418.5			418.1		452.4		1,645.5			1,806.3
Selling, general and administrative		82.5			78.4		84.4		325.2			370.6
Trailer fees		137.2			135.3		146.1		538.4			583.7
Deferred sales commissions paid		1.5			1.5		2.6		8.0			13.5
Amortization and depreciation		6.7			6.0		5.4		24.7			21.8
Other expenses		50.7			3.7		1.0		66.8			38.7
Total expenses		278.6			224.9		239.6		963.2			1,028.3
Non-controlling interest		0.4			0.1		0.3		0.9			0.7
Income before taxes and non-segmented items		139.5			193.1		212.5		681.4			777.2

Year Ended December 31, 2020

Revenues

Revenues from management fees were $1,650.1 million for the year ended December 31, 2020, a decrease of 8.4% from $1,802.3 million for the year ended December 31, 2019. Net of inter-segment amounts, management fees were $1,635.8 million for 2020, versus $1,789.1 million for 2019. The decrease in management fees was mainly due to the 4.4% decrease in core average AUM and a decline in the management fee rate. The management fee rate has been generally declining due to a change in CI’s mix of business towards newer products with lower pricing, products that do not pay trailer fees, as well as new pricing initiatives intended to keep CI’s products competitive. Net management fees (management fees less trailer fees and deferred sales commissions) as a percentage of average core AUM were 0.889%, down from 0.928% for 2019.

For the twelve months ended December 31, 2020, other revenue was $(4.6) million versus $4.0 million for the twelve months ended December 31, 2019. Other revenue in 2020 included a $1.9 million loss on the early repurchase of bonds, and $6.9 million of realized and unrealized gains on investments. This compares with $10.8 million of gains on investments in 2019. Other revenue for the year also included inter-segment related foreign exchange losses of $11.3 million that were offset by gains in the Wealth Management segment (nil in 2019).

SG&A expenses for the Asset Management segment were $325.2 million for 2020, compared with $370.6 million for 2019. The decrease from last year was primarily due to ongoing efforts to contain SG&A in the asset management segment. As a percentage of average core AUM, SG&A expenses were 0.262% for the year ended December 31, 2020, down from 0.286% for the year ended December 31, 2019.

Q4 Financial Report |  19  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

Trailer fees were $538.4 million for the twelve months ended December 31, 2020, down from $583.7 million for the twelve months ended December 31, 2019. Net of inter-segment amounts, this expense was $509.4 million for the 2020 versus $555.2 million for 2019. The decrease related to the change in average AUM as well as the change in asset mix towards products that do not pay trailer fees.

In 2020, before inter-segment eliminations, CI paid $8.0 million in deferred sales commissions, compared with $13.5 million in 2019. Consistent with the industry, CI’s sales into deferred load funds have been steadily decreasing over the past decade.

Other expenses for the year ended December 31, 2020 were $66.8 million, compared to $38.7 million for the year ended December 31, 2019. As discussed earlier, 2020 included legal and restructuring charges and investment write-downs, $57.8 million of which related to the asset management segment, and 2019 included a restructuring provision, of which $32.4 million related to the asset management segment.

The asset management margin for 2020 was 47.2% compared to 46.3% in 2019. CI was able to hold the annual margin relatively steady through cost containment measures in response to declining fees. During periods of declining AUM and/or fee rates, CI’s management will respond by strategically reducing SG&A. Another measure that CI uses to assess its costs is the SG&A efficiency margin. This measure differs from the asset management margin as it is calculated as a percentage of net management fees (management fees less trailers and deferred sales commissions), and measures CI’s profitability without regard to purchase option preferences available to clients. CI’s 2020 SG&A efficiency margin was 70.5%, a slight improvement from 69.2% in 2019. The calculations and definitions of asset management margin and SG&A efficiency margin can be found in the “Non-IFRS Measures” section.

Income before taxes and non-segmented items for CI’s largest segment was $681.4 million for the year ended December 31, 2020, down 12.3% from $777.2 million for the year ended December 31, 2019. Excluding inter-segment foreign exchange losses and non-recurring items discussed earlier, income before taxes and non-segmented items was $752.5 million for the year ended December 31, 2020 and $809.6 million for the year ended December 31, 2019.

Quarter Ended December 31, 2020

Revenues

Revenues from management fees were $419.6 million for the quarter ended December 31, 2020, a decrease of 6.9% from $450.7 million for the quarter ended December 31, 2019 and an increase of 1.3% from $414.1 million for the quarter ended September 30, 2020. Net of inter-segment amounts, management fees were $415.9 million for the fourth quarter of 2020, versus $447.3 million for the fourth quarter of 2019, and $410.4 million for the third quarter of 2020. The decrease in management fees from the prior year was due to a decline in core average AUM and the management fee rate, and the increase in management fees from the prior quarter was mainly due to an increase in core average AUM. Net management fees (management fees less trailer fees and deferred sales commissions) as a percentage of core average AUM were 0.886%, down from 0.918% for the fourth quarter last year and relatively unchanged from 0.885% for the prior quarter.

Q4 Financial Report |  20  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

For the quarter ended December 31, 2020, other revenue was $(1.1) million versus $1.6 million for the quarter ended December 31, 2019 and $4.0 million for the quarter ended September 30, 2020. Other revenue included a $1.9 million loss on the early repurchase of bonds, and $9.6 million of realized and unrealized gains on investments in the fourth quarter of 2020. This compares with $3.0 million of gains on investments in the same period in 2019, and $4.8 million of gains in the prior quarter. Other revenue also included inter-segment related foreign exchange losses of $11.7 million that were offset by gains in the Wealth Management segment. This compared to nil in the fourth quarter of 2019, and $1.5 million of inter-segment related gains in the prior quarter.

Expenses

SG&A expenses for the Asset Management segment were $82.5 million for the quarter ended December 31, 2020, compared with $84.4 million for the fourth quarter in 2019 and $78.4 million for the prior quarter. Changes from the prior periods are primarily due to changes in variable SG&A and management’s efforts to modernize its asset management business and contain costs in this segment. As a percentage of core average AUM, SG&A expenses were 0.260% for the quarter ended December 31, 2020, relatively unchanged from 0.256% for the quarter ended December 31, 2019 and 0.250% for the quarter ended September 30, 2020.

Trailer fees were $137.2 million for the quarter ended December 31, 2020, down 6.1% from $146.1 million for the quarter ended December 31, 2019 and up 1.4% from $135.3 million for the quarter ended September 30, 2020. Net of inter-segment amounts, this expense was $129.4 million for the quarter ended December 31, 2020 versus $138.7 million for the fourth quarter of 2019 and $128.0 million for the third quarter of 2020. Changes from the prior periods are due to changes in core average AUM.

In the fourth quarter of 2020, before inter-segment eliminations, CI paid $1.5 million in deferred sales commissions, compared with $2.6 million in the same quarter of 2019 and $1.5 million in the prior quarter. Consistent with the Canadian mutual fund industry, CI’s sales into deferred load funds have been steadily decreasing over the past decade.

Other expenses for the quarter ended December 31, 2020 were $50.7 million, compared to $1.0 million for the quarter ended December 31, 2019 and $3.7 million for the quarter ended September 30, 2020. As discussed earlier, other expenses for the fourth quarter of 2020 included legal and restructuring charges and investment write-downs, $49.3 million of which related to the asset management segment.

On a trailing 12-month basis, CI’s asset management margin was 47.2%, up from 46.3% for the same period last year. CI’s current quarter SG&A efficiency margin was 70.6%, down from 72.1% in the fourth quarter of last year and relatively unchanged from 71.7% in the prior quarter. The calculations and definitions of asset management margin and SG&A efficiency margin can be found in the “Non-IFRS Measures” section. The asset management margin for the fourth quarter of 2020 was 47.3% compared to 48.3% in the fourth quarter of 2019 and 48.0% in the prior quarter.

Income before taxes and non-segmented items for the segment was $139.5 million for the quarter ended December 31, 2020, down 34.4% from $212.5 million in the same period in 2019 and down 27.8% from $193.1 million in the previous quarter. Excluding inter-segment related foreign exchange losses and non-recurring items discussed earlier, income before taxes and non-segmented items was $202.4 million for the quarter ended December 31, 2020 compared with $212.5 million for the quarter ended December 31, 2019, and $191.6 million for the prior quarter.

Q4 Financial Report |  21  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

WEALTH MANAGEMENT SEGMENT

The Wealth Management segment operating results are presented in Table 14. As of January 1, 2020, the operating results of CI Private Counsel LP (previously included in the Asset Management segment) are included in the Wealth Management segment and operating results in the prior periods have been restated for comparative purposes. The results also comprise all revenues and expenses from U.S. wealth management companies, including those derived from the management of investment products.

TABLE 14: RESULTS OF OPERATIONS - WEALTH MANAGEMENT SEGMENT

[millions of dollars]	Quarter ended Dec. 31, 2020		Quarter ended Sep. 30, 2020			Quarter ended Dec. 31, 2019			Year ended Dec. 31, 2020			Year ended Dec. 31, 2019
Administration fees		167.9		128.2			120.4			530.1			457.5
Other revenue		26.0		8.1			9.2			54.8			36.9
Total revenue		194.0		136.3			129.6			584.9			494.4
Selling, general and administrative		38.0		34.3			32.9			138.8			131.8
Advisor and dealer fees		121.4		94.1			90.2			389.3			342.1
Amortization and depreciation		7.2		5.0			2.8			18.8			11.1
Other expenses		7.3		2.6			1.3			12.2			5.1
Total expenses		173.9		135.9			127.1			559.0			490.1
Non-controlling interest		0.4		(0.5	)		(0.9	)		(1.2	)		(2.1	)
Income before taxes and non-segmented items		19.7		0.8			3.4			27.1			6.4

Year Ended December 31, 2020

Revenues

Administration fees were $530.1 million for 2020, an increase of 15.9% from $457.5 million for 2019. The increase in administration fees from last year related to higher average wealth management assets and acquisitions made during the year. Net of inter-segment amounts, administration fee revenue was $364.4 million for the year ended December 31, 2020, up from $292.5 million for the year ended December 31, 2019.

For the year ended December 31, 2020, other revenue was $54.8 million, up from $36.9 million for the year ended December 31, 2019. Other revenue is derived mainly from non-advisor associated activities, and included inter-segment related foreign exchange gains of $11.3 million in 2020 that were offset by losses in the Asset Management segment (nil in 2019). Advisor and dealer fees were $389.3 million for 2020 compared to $342.1 million for 2019. Net of inter-segment amounts, advisor and dealer fees were $253.4 million, up from $206.3 million for the prior year. The increase from the prior year is consistent with changes in client asset levels and associated administration fee revenues.

Q4 Financial Report |  22  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

As discussed in the “Non-IFRS Measures” section of this MD&A and as set out in Table 5, dealer gross margin was $140.8 million or 26.6% of administration fee revenue for the year ended December 31, 2020 compared to $115.4 million or 25.2% for the year ended December 31, 2019.

SG&A expenses for the segment were $138.8 million for the twelve months ended December 31, 2020 compared to $131.8 million for the twelve months ended December 31, 2019. Net of inter-segment amounts, SG&A was $124.2 million for the year ended December 31, 2020 compared to $118.6 million for the year ended December 31, 2019. The increase in SG&A was attributable to acquisitions made in the Wealth Management segment during the year.

Other expenses were $12.2 million for 2020, up from $5.1 million for 2019. As discussed earlier, 2020 included legal and restructuring charges, of which $4.6 million related to the wealth management segment, and 2019 included a restructuring provision, of which $2.6 million related to the wealth management segment.

The Wealth Management segment had income before taxes and non-segmented items of $27.1 million for the year ended December 31, 2020, compared to $6.4 million for the year ended December 31, 2019. Excluding inter-segment related foreign exchange gains and non-recurring items discussed earlier, income before taxes and non-segmented items was $20.3 million for the year ended December 31, 2020 and $9.0 million for the year ended December 31, 2019.

Quarter Ended December 31, 2020

Revenues

Administration fees were $167.9 million for the quarter ended December 31, 2020, an increase of 39.5% from $120.4 million for the same period a year ago and an increase of 31.0% from $128.2 million for the prior quarter. The increase from the prior year was related to higher average wealth management assets and acquisitions made during the year. The increase from the prior quarter was related to higher average wealth management assets, the inclusion of Congress and BDF for a full quarter, and acquisitions made during the current quarter. Net of inter-segment amounts, administration fee revenue was $125.6 million for the quarter ended December 31, 2020, up from $78.2 million for the quarter ended December 31, 2019 and up from $86.8 million for the quarter ended September 30, 2020.

For the quarter ended December 31, 2020, other revenue was $26.0 million, up from $9.2 million for the quarter ended December 31, 2019 and up from $8.1 million for the prior quarter. Other revenue is derived mainly from non-advisor associated activities, and included inter-segment related foreign exchange gains of $11.7 million in the fourth quarter of 2020, that were offset by losses in the Asset Management segment. This compares with nil in the fourth quarter of 2019, and $1.5 million of inter-segmented related losses in the prior quarter.

Q4 Financial Report |  23  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

Expenses

Advisor and dealer fees were $121.4 million for the quarter ended December 31, 2020 compared to $90.2 million for the fourth quarter of 2019 and $94.1 million for the quarter ended September 30, 2020. Net of inter-segment amounts, advisor and dealer fees were $87.0 million, up from $55.4 million for the same quarter last year and up from $60.3 million for the prior quarter. Increases from prior periods are mainly a result of acquisitions, and are consistent with changes in client asset levels and associated administration fee revenues.

As discussed in the “Non-IFRS Measures” section of this MD&A and as set out in Table 5, dealer gross margin was $46.5 million or 27.7% of administration fee revenue for the quarter ended December 31, 2020 compared to $30.2 million or 25.1% for the fourth quarter of 2019 and $34.1 million or 26.6% for the previous quarter.

SG&A expenses for the segment were $38.0 million for the quarter ended December 31, 2020 compared to $32.9 million in the fourth quarter of 2019 and $34.3 million in the third quarter of 2020. Net of inter-segment amounts, SG&A was $34.1 million for the fourth quarter of 2020, compared with $29.4 million for the fourth quarter of 2019 and $30.4 million for the third quarter of 2020. The increase in SG&A from both comparable periods was attributable to acquisitions made in the U.S. registered investment advisor business.

Other expenses were $7.3 million for the quarter ended December 31, 2020, up from $1.3 million in the same quarter of 2019 and up from $2.6 million in the third quarter of 2020. As discussed earlier, other expenses for the fourth quarter of 2020 included legal and restructuring charges, of which $4.6 million related to the wealth management segment. Depreciation and amortization expenses were $7.2 million for the quarter ended December 31, 2020, up from $2.8 million for the quarter ended December 31, 2019 and up from $5.0 million for the prior quarter. The increase from both prior periods was related to the depreciation of right-of-use assets and amortization of intangibles due to the acquisitions made in the segment.

The Wealth Management segment had income before taxes and non-segmented items of $19.7 million for the quarter ended December 31, 2020, compared to $3.4 million for the fourth quarter of 2019 and $0.8 million for the prior quarter. Excluding inter-segment foreign exchange gains and legal and restructuring charges described earlier, income before taxes and non-segmented items was $12.6 million for the fourth quarter of 2020, compared to $3.4 million for the fourth quarter of 2019 and $2.3 million for the prior quarter.

LIQUIDITY AND CAPITAL RESOURCES

CI generated $570.2 million of free cash flow in 2020, compared to $607.8 million for the same period in 2019. Reconciliations of free cash flow to cash provided by operating activities are provided in the “Non-IFRS Measures” section and set out in Table 2.

CI primarily uses cash flow to fund capital expenditures, fund acquisitions, pay down debt, pay dividends on its shares, and repurchase shares through its normal course issuer bid. At current levels of cash flow and anticipated dividend payout rates, CI expects to meet its obligations and support planned business operations.

Q4 Financial Report |  24  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

CI’s cash flows may fluctuate, primarily in the first quarter, as a result of the balance of cash income taxes and incentive compensation related to the prior year being paid at the end of February.

TABLE 15: SUMMARY OF CASH FLOWS

	Year ended			Year ended
[millions of dollars]	December 31, 2020			December 31, 2019
Free cash flow		570.2			607.8
Less:
Investments in marketable securities, net of marketable securities sold		(6.0	)		(25.2	)
Capital expenditures		12.0			12.4
Share repurchases, net of shares issued		257.9			447.3
Dividends paid		155.3			170.8
(Increase) / decrease in debt		(846.0	)		(99.5	)
Acquisitions, net of cash acquired		527.3			26.1
Working capital and other items		104.4			94.8
		204.9			626.7
Net change in cash		365.2			(18.8	)
Cash at January 1		118.4			137.2
Cash at December 31		483.6			118.4

During 2020, CI invested $17.6 million in marketable securities and received $23.6 million in proceeds from the disposition of marketable securities. Excluding CI Investment Services’ securities owned, at market, the fair value of CI’s investments as of December 31, 2020 was $118.1 million. This was comprised of seed capital investments in CI funds and strategic investments.

During the year ended December 31, 2020, CI invested $12.0 million in capital assets, down slightly from $12.4 million in the year ended December 31, 2019. These investments related primarily to leasehold improvements and technology.

During the year ended December 31, 2020, CI repurchased 14.0 million shares under its normal course issuer bid at a total cost of $257.9 million, or $18.42 per share. CI had 210,358,710 shares outstanding at the end of December, which differs from CI’s TSX-listed shares outstanding of 210,857,394 by the amount of restricted employee shares held in trust.

CI paid dividends of $155.3 million during the year ended December 31, 2020. The Board of Directors declared a quarterly dividend of $0.18 per share, payable on July 15, 2021, to shareholders of record on June 30, 2021.

The statement of financial position for CI at December 31, 2020 reflected total assets of $6.360 billion, an increase of $1,992.0 million from $4.368 billion at December 31, 2019. This change was primarily due to acquisitions made during the year.

CI’s cash and cash equivalents increased by $365.2 million in 2020 to $483.6 million, mainly due to restructuring debt, as described in greater detail below. In 2020, CI used $527.3 million, net of cash acquired, to fund acquisitions. Accounts receivable and prepaid expenses increased by $70.7 million to $240.8 million as of December 31, 2020. Capital assets increased by $1.0 million during the twelve months ended December 31, 2020 as a result of $13.3 million in capital additions, including those from acquisitions, less $12.3 million in amortization.

Q4 Financial Report |  25  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

Total liabilities increased by $1,873.7 million during 2020 to $4.742 billion at December 31, 2020. The main contributors to the change in liabilities were an increase in debt and changes to working capital.

At December 31, 2020, CI had $2,466.0 million in outstanding debentures with a weighted average interest rate of 3.64% and a carrying value of$2,456.6 million. In May 2020, CI issued $450 million of debentures, to ensure sufficient liquidity during a period of market uncertainty in anticipation of an upcoming maturity in December. In December, CI issued US$700 million of debentures with a 10-year maturity, and announced its intention to use part of the proceeds towards the early redemption of debentures maturing in November 2021. CI completed the early redemption in January, resulting in a $1.9 million loss ($1.4 million after tax) in the fourth quarter of 2020. Subsequent to the year-end, CI raised an additional US$260 million by re-opening the December debenture issuance and announced its intention to redeem $325 million of debentures scheduled to mature in July 2023. On December 31, 2020, CI had drawn nil against its $700 million credit facility. Principal repayments on any drawn amounts are only required at the maturity of the facility, which is December 11, 2021.

Net debt, as discussed in the “Non-IFRS Measures” section and as set out in Table 4, was $1,872.4 million at December 31, 2020, up from $1,382.6 million at December 31, 2019. The average gross debt level for the year ended December 31, 2020 was $1,881.7 million, compared to $1,587.4 million for the same period last year.

At December 31, 2020, CI was in a positive working capital position. This, in addition to the availability of its credit facility, reflects the ability of CI to meet its cash flow requirements.

CI’s ratios of debt to adjusted EBITDA and net debt to adjusted EBITDA were 2.7 to 1 and 2.1 to 1, respectively. CI was within its financial covenants with respect to its credit facility, which required that the debt to EBITDA ratio remain below 3.0 to 1, and assets under management not fall below $85 billion, based on a rolling 30-day average.

Shareholders’ equity was $1.582 billion at December 31, 2020, an increase of $88.5 million from December 31, 2019.

RISK MANAGEMENT

CI is exposed to a number of risks that are inherent in the asset and wealth management business. Some factors which introduce or exacerbate risk are within the control of management and others are, by their nature, outside of CI’s direct control but must still be managed. Effective risk management is a key component to achieving CI’s business objectives and protecting company and client assets. It is an ongoing process involving the Board of Directors and the Company’s Risk Management Committee, comprising senior executives from CI’s core business and operating units. The Board has delegated primary responsibility for oversight of risk management to the Audit and Risk Committee of the Board of Directors.

The Risk Management Committee monitors, evaluates and manages risk to provide reasonable assurance to the Board that CI’s business strategies and activities are consistent with its risk appetite. Risk updates are regularly provided to the Audit and Risk Committee of CI’s Board.

CI has developed an enterprise-wide approach to identifying, measuring, monitoring and managing risk. The members of the Risk Management Committee identify and evaluate specific and material risks, applying both a quantitative and a qualitative analysis to assess the likelihood and impact of occurrence of a particular risk event. Once risks have been identified and rated, strategies and procedures are developed to minimize, transfer or avoid negative consequences. These risk mitigation processes are implemented and monitored with each business unit.

Q4 Financial Report |  26  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

The risks described below are not the only risks facing CI. The risks set out below are risks and uncertainties that the Risk Management Committee currently believe could materially affect CI’s future financial performance. The reader should carefully consider the risks described below, and the other information contained in this MD&A, including under the heading “Forward-Looking Statements” before making an investment decision.

MARKET RISK

Market risk is the risk of a financial loss resulting from adverse changes in underlying market factors, such as interest rates, foreign exchange rates, and equity and commodity prices. A description of each component of market risk is described below:

CI’s financial performance is indirectly exposed to market risk. Any decline in financial markets or lack of sustained growth in such markets may result in a corresponding decline in the performance of CI’s investment funds and may adversely affect CI’s assets under management, management fees and revenues, which would reduce cash flow to CI and ultimately impact CI’s ability to meet its financial obligations.

MARKET RISK FOR THE ASSET MANAGEMENT SEGMENT

At December 31, 2020, approximately 29% of CI’s assets under management were held in fixed-income securities, which are exposed to interest rate risk. An increase in interest rates causes market prices of fixed-income securities to fall, while a decrease in interest rates causes market prices to rise. CI’s fund managers invest in a well-diversified portfolio of securities across issuers, durations and maturities, which reduces risk. CI estimates that a 100 basis point change in interest rates across the yield curve would cause a change of approximately $40 million to $50 million in annual pre-tax earnings in the Asset Management segment.

At December 31, 2020, about 41% of CI’s assets under management were based in Canadian currency. While CI’s concentration in Canadian currency assets reduces its exposure to foreign exchange risk, approximately 44% of CI’s assets under management were based in U.S. currency. Any change in the value of the Canadian dollar relative to U.S. currency will cause fluctuations in CI’s assets under management. CI estimates that a 10% change in Canadian/U.S. exchange rates would cause a change of approximately $20 million to $30 million in the Asset Management segment’s annual pre-tax earnings.

About 66% of CI’s assets under management were held in equity securities at December 31, 2020, which are subject to equity risk. Equity risk is classified into two categories: general equity risk and issuer-specific risk. CI employs internal and external fund managers to take advantage of their expertise in particular market niches, sectors and products and to reduce issuer-specific risk through diversification. CI estimates that a 10% change in the value of equities would cause a change of approximately $60 million to $70 million in annual pre-tax earnings.

Please note that exposures and sensitivities do not account for currency hedging that portfolio managers may employ. There are risks and limitations with relying on models and it is possible that actual results may differ from those presented above.

Q4 Financial Report |  27  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

CI has a control environment that ensures market risks are reviewed regularly. CI’s compliance group reviews and monitors CI’s fund and portfolio investments for compliance with investment policies and regulations. CI also reviews investment processes, portfolio positioning and attribution of results of its investment teams on a regular basis.

MARKET RISK FOR THE WEALTH MANAGEMENT SEGMENT

CI’s wealth management segment generated approximately 4.0% of the total income before non-segmented items for the twelve months ended December 31, 2020. Excluding inter-segment related foreign exchange gains and non-recurring items, the wealth management segment generated approximately 2.6% of total income before non-segmented items. Investment advisors regularly review their client portfolios to assess market risk and consult with clients to make appropriate changes to mitigate it.

POLITICAL AND MACRO-ECONOMIC RISK

CI’s performance is directly affected by the performance of the financial markets which may be influenced by various political, demographic and macro-economic conditions or events, including any political change and uncertainty in the United States and globally. These changes may cause significant volatility and decline in the global economy or specific international, regional and domestic financial markets which are beyond the control of CI. There can be no assurance that financial market performance will be favourable in the future. Any decline in financial markets or lack of sustained growth in such markets may result in a corresponding decline in performance, which could negatively impact CI’s business and impede the growth of CI’s assets under management and revenue.

REDEMPTION RISK

CI earns revenue primarily from management fees earned for advising and managing investment fund assets. The level of these assets is dependent on (i) sales; (ii) redemptions; and (iii) investment performance. Sales and redemptions may fluctuate depending on market and economic conditions, investment preference, or other factors.

Significant redemptions could adversely affect investor fund returns by impacting market values and increasing transaction costs or taxable distributions, which could negatively impact the prospects and operating results of CI.

A rapid and sustained increase in redemptions, particularly in the face of severe market volatility, may also adversely affect fund liquidity, which in turn could negatively affect CI’s reputation and/or result in further declines in assets under management, all of which could have an unfavourable impact on our business, financial condition or operating results.

INFORMATION TECHNOLOGY RISK

CI uses information technology and the internet to streamline business operations and to improve the client and advisor experience. CI has, more recently, been expanding its online footprint by automating its product and service delivery systems and acquiring digital platforms. The use of information technology and the internet, email messaging and other online capabilities, however, exposes CI to information security risk that could have an adverse impact on its business. CI is dependent on its information security policies, procedures and capabilities to protect its computer and telecommunications systems and the data that it stores on or transmits through its information technology systems. Any information technology event, such as a cybersecurity breach or intrusion into CI’s information technology systems, or failure to implement sufficient controls, could result in unauthorized access to sensitive or confidential information, loss or theft of data, operational disruption, regulatory actions, legal liability or reputational harm.

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

CI actively monitors this risk and continues to develop and implement technology-enabled controls to protect against cyber threats that are becoming increasingly sophisticated and pervasive. In addition, CI has and will continue to implement safeguards to control access to sensitive information, through password protection, encryption of confidential information and other means. Notwithstanding these measures, CI cannot fully mitigate the risk associated with information technology security. CI is dependent on the efficiency and effectiveness of the technology it uses to secure its information technology environment and keeping pace with a continuously evolving information technology landscape. Malfunction of any technology used by CI or inability to keep pace with evolving cybersecurity advancements may increase CI’s exposure to cybersecurity risk.

CI’s business is also dependent on the physical integrity of its infrastructure, including its office space, storage centers and other facilities. CI has taken precautions to protect the physical security of its infrastructure, and the sensitive information contained therein, through passkey protection, limited after-hours access and clean desk policies. However, a breach of the physical integrity of CI infrastructure may leave sensitive information vulnerable to unauthorized access and use, increasing a possible security risk, which could negatively impact CI’s business and reputation.

DISTRIBUTION RISK

CI distributes its investment products through a number of distribution channels, including brokers, independent financial planners and insurance advisors. CI’s access to these distribution channels is impacted by the strength of the relationship with certain business partners and the level of competition faced from the financial institutions that own those channels. While CI continues to develop and enhance existing relationships, there can be no assurance that CI will, in the future, enjoy the level of access that it has in the past, which would adversely affect its sales of investment products.

COMPETITION RISK

CI operates in a highly competitive environment, with competition based on a variety of factors, including the range of products offered, brand recognition, investment performance, business reputation, financing strength, management and sales relationships, quality of service, level of fees charged and level of commissions and other compensation paid. CI competes with a large number of mutual fund companies and other providers of investment products, investment management firms, broker-dealers, banks, insurance companies and other financial institutions. Some of these competitors have, and potential future competitors may have, greater technical, financial, marketing, distribution or other resources than CI. The trend toward greater consolidation within the investment management industry has increased the strength of a number of CI’s competitors. CI’s competitors seek to expand market share by offering different products and services and more competitive pricing than those offered by CI. While CI continues to develop and market new products and services and remains competitive with respect to fees, there can be no assurance that CI will maintain its current standing or market share or investment performance relative to its competitors, which may adversely affect the business, financial condition or operating results of CI.

Q4 Financial Report |  29  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

STRATEGIC RISK

Strategic risks are risks that directly impact the overall direction of CI and the ability of CI to successfully identify growth opportunities and implement proposed solutions. The key strategic risk is the risk that management fails to anticipate, and respond to, changes in the business environment, including demographic, regulatory and competitive changes. CI’s performance is directly affected by the financial market and business conditions, including the legislation and policies of the governments and regulatory authorities having jurisdiction over CI’s operations. These are beyond the control of CI; however, an important part of the risk management process is the ongoing review and assessment of industry and economic trends and changes. Strategies are then designed to effectively respond to any anticipated changes, including identifying acquisition opportunities, developing new business lines, introducing new products, and implementing cost control strategies.

Part of CI’s strategy includes strategic acquisitions and investments in growth opportunities. Strategic acquisitions may benefit CI through increasing fee earning assets, broadening CI’s distribution relationships, enhancing CI’s business capabilities and capturing cost synergies. CI embarks on a thorough due diligence process prior to any acquisition; however, there can be no assurances that the anticipated benefits of any acquisition will be achieved. The success of an acquisition is contingent upon many factors, including retaining key employees, securing assets acquired, obtaining legal and regulatory approvals, integrating operations and vendor relationships, and having favourable economic conditions.

BUSINESS CONTINUITY RISKS

CI's business, operations and financial results may be adversely affected by its ability to mitigate the effect of natural and man-made disasters, including floods, earthquakes, tornadoes, fires, civil unrest, wars, epidemics, and pandemics. The occurrence of any of these events may pose significant challenges to CI’s business continuity, either by exacerbating one or more of the other risks described in this section, or by introducing new risks. CI has a comprehensive and stress-tested business continuity plan in place to deal with any disaster-related scenario, however there can be no assurance that such plan will be effective to mitigate any adverse effects on CI’s business, financial condition or operating results as a result of any natural or man-made disasters or other similar events, including the recent COVID-19 pandemic.

COVID-19, which has been recognized by the World Health Organization as a pandemic, has spread rapidly and extensively across the globe. Efforts by governments to control the spread of COVID-19 have disrupted normal economic activity both domestically and globally and uncertainty related to the extent, duration and severity of the pandemic has contributed to significant volatility in the financial markets, which may result in a decline in equity and commodity prices and lower interest rates and a corresponding decline in CI’s assets under management. In addition, CI may face declines in its assets under management as a result of client redemptions related to a variety of COVID-19 related factors including general market pessimism, poor fund performance, or clients’ needs for immediate cash.

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

To control the spread of COVID-19, many governments at all levels have imposed severe restrictions on business activity and travel. Although certain of these restrictions have subsequently been eased, there can be no certainty when these restrictions will be fully lifted or that they will not be expanded. CI activated its business continuity plan in response to the COVID-19 pandemic to mitigate risks, maintain operational efficiency and service levels, and address the health and safety concerns of our employees, clients and advisors. With few exceptions, all of CI’s business operations are being carried out remotely. The extensive use of remote communication tools and third party services may lead to heightened cybersecurity and privacy risks. Market volatility, increased trading volumes and the requirement to work remotely may result in the deterioration in service levels of certain key service providers. Stress on technology resources, new workplace constraints, personal stress and health concerns may all lead to higher operational risks across all of CI’s businesses. With the emergence of several new services as business critical, key supplier risk may also increase significantly. As part of the plan, CI has implemented enhanced monitoring of network assets and management oversight of business processes, active employee engagement and client communication, and built redundancy for critical services and infrastructure, however there can be no guarantee that this will be effective to mitigate these risks.

Ultimately, the extent to which CI’s business, financial condition and results of operations will be impacted by the COVID-19 pandemic, including the extensive attempts to mitigate its effects, is uncertain and will depend on future developments, which are unpredictable and rapidly evolving.

LIQUIDITY RISK

Liquidity risk is the risk that CI may not be able to generate sufficient funds and within the time required in order to meet its obligations as they come due. While CI currently has access to financing, unfavourable market conditions may affect the ability of CI to obtain loans or make other arrangements on terms acceptable to CI.

LIQUIDITY RISK FOR THE ASSET MANAGEMENT SEGMENT

CI is also exposed to the risk of its investment funds not being able to meet their redemption obligations due to an inability to liquidate the underlying assets in a timely manner. This could be caused by insufficient liquid assets in the fund, an unexpected spike in redemptions triggered by negative market information, sentiment or contagion, adverse liquidity conditions in the financial markets, procedural issues that may delay the liquidation of securities or other factors. Inability to meet its redemption obligations may lead to legal liability, regulatory action and reputational damage. CI has robust mechanisms in place to monitor and maintain adequate liquidity in its investment fund portfolios at all times. However, CI has no control over extreme market events that may result in the sudden loss of liquidity or trigger a run on the funds.

REGULATORY AND LEGAL RISK

CI’s business is dependent upon compliance with and continued registration under securities laws in all jurisdictions in which CI and its subsidiaries carry on business. Laws and regulations applied at the national and provincial or state level generally grant governmental agencies and self-regulatory bodies broad administrative discretion over the activities of CI, including the power to limit or restrict business activities as well as impose additional disclosure requirements on CI products and services. Possible sanctions include the revocation or imposition of conditions on licenses to operate certain businesses, the suspension or expulsion from a particular market or jurisdiction of any of CI’s business segments or its key personnel or financial advisors, and the imposition of fines and censures. It is also possible that the laws and regulations governing a subsidiary’s operations or particular investment products or services could be amended or interpreted in a manner that is adverse to CI. To the extent that existing or future regulations affecting the sale or offering of CI’s product or services or CI’s investment strategies cause or contribute to reduced sales of CI’s products or lower margins or impair the investment performance of CI’s products, CI’s aggregate assets under management and its revenues may be adversely affected. In addition, the ongoing change in the securities regulatory environment governing CI’s business may require additional human resources and operations which will increase costs.

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

Given the nature of CI’s business, CI may from time to time be subject to claims or complaints from investors or others in the normal course of business. The legal risks facing CI, its directors, officers, employees or agents in this respect include potential liability for violations of corporate laws, securities laws, stock exchange rules and misuse of investors’ funds. Some violations of corporate laws, securities laws or stock exchange rules could result in civil liability, fines, sanctions, or expulsion from a self- regulatory organization or the suspension or revocation of CI’s right to carry on an existing business. CI may incur significant costs in connection with such potential liabilities.

OPERATIONAL RISK

Operational risk is the risk of loss resulting from inadequate or failed internal processes or systems. The operational risk that CI is exposed to may arise from, technology failures, business disruption, theft and fraud, failure of key third parties, employee errors, processing and execution errors, and inaccurate or incomplete client information. Operational risk may result in a financial loss but can also lead to regulatory sanctions and harm to CI’s reputation. Operational risk driven by people and processes are mitigated through human resources policies and practices, and a strong internal control environment. Operational risks driven by systems and services are managed through controls over technology development and change management as well as enhanced procedures for oversight of third-party service providers. While CI continuously monitors its operational risks, there can be no assurances that CI’s internal control procedures can mitigate all operational risks.

KEY PERSONNEL RISK

The success of CI is dependent to a significant degree upon the contributions of senior management. The loss of any of these individuals, or an inability to attract, retain and motivate sufficient numbers of qualified senior management personnel, could adversely affect CI’s business. The retention of these key managers and the identification and development of the next generation of managers is an area of focus for CI. CI has not purchased any “key person” insurance with respect to any of its directors, officers or key employees and has no current plans to do so.

The success of CI is also dependent upon, among other things, the skills and expertise of its human resources, including the management and investment personnel with specialized skills related to, among other things, marketing, risk management, credit, information technology, accounting, administrative operations and legal affairs. These highly skilled and often highly specialized individuals play an important role in developing, implementing, operating, managing and distributing CI’s products and services. Accordingly, the recruitment and retention of skilled personnel, continuous training and transfer of knowledge are key activities that are essential to CI’s performance. CI has taken, and will continue to take, steps to encourage our key employees to remain employed at CI, including the implementation of long-service awards, employee engagement strategies and enhanced transparency measures with respect to compensation. In addition, the focus on asset growth and the reliance on investment performance to sell financial products has increased the demand for experienced and high- performing portfolio managers. Compensation packages for these managers may increase at a rate well in excess of inflation and well above the rates of increase observed in other industries and the rest of the labour market. The loss of these individuals or an inability to attract, retain and motivate a sufficient number of qualified personnel could result in a loss of clients and a decline in sales and adversely affect CI’s business.

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

The market for financial advisors is extremely competitive and is increasingly characterized by frequent movement by financial advisors among different firms. Individual financial advisors CI’s Wealth Management businesses have regular direct contact with clients, which can lead to a strong and personal client relationship based on the client’s trust in the individual financial advisor. The loss of a significant number of financial advisors from any of CI’s Wealth Management businesses could lead to the loss of client accounts which could have a material adverse effect on the results of operations and prospects of that business and, in turn, CI. Although CI uses or have used a combination of competitive compensation structures and equity with vesting provisions as a means of seeking to retain financial advisors, there can be no assurance that financial advisors will be retained.

REPUTATION RISK

Reputation risk is the potential negative impact of a deterioration of CI’s image or lower public confidence in the CI brand, its senior management or its products and services. Operational errors, poor performance, regulatory investigation or sanctions, litigation or employee misconduct could result in reputational harm to CI. Through its Codes of Conduct, governance practices, risk management programs, policies, procedures and training, CI attempts to prevent and detect any activities by CI officers, directors, and employees that would harm CI’s reputation. While all employees, directors and officers are expected to protect the reputation of CI, there can be no assurances that unauthorized or unsuccessful activities may result in damage to CI’s reputation, which could adversely affect CI’s business and profitability.

CREDIT RISK

Credit risk is the risk of loss associated with the inability of a third party to fulfill its payment obligations. CI is exposed to the risk that third parties that owe it money, securities or other assets will not perform their obligations. These parties include trading counterparties, customers, clearing agents, exchanges, clearing houses and other financial intermediaries, as well as issuers whose securities are held by CI. These parties may default on their obligations due to bankruptcy, lack of liquidity, operational failure or other reasons. CI does not have significant exposure to any individual counterparty. Credit risk is mitigated by regularly monitoring the credit performance of individual counterparties and holding collateral where appropriate.

One of the primary sources of credit risk arises when CI extends credit to clients to purchase securities by way of margin lending. Margin loans are due on demand and are collateralized by the financial instruments in the client’s account. CI faces a risk of financial loss in the event a client fails to meet a margin call if market prices for securities held as collateral decline and if CI is unable to recover sufficient value from the collateral held. The credit extended is limited by regulatory requirements and by CI’s internal credit policy.

Q4 Financial Report |  33  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

INSURANCE RISK

CI maintains various types of insurance which include financial institution bonds, errors and omissions insurance, directors’, trustees’ and officers’ liability insurance, agents’ insurance, general commercial liability insurance, and cyber liability insurance. Management evaluates the adequacy of CI’s insurance coverage on an ongoing basis. However, there can be no assurance that a claim or claims will not exceed the limits of available insurance coverage, that any insurer will remain solvent or willing to continue providing insurance coverage with sufficient limits or at a reasonable cost or that any insurer will not dispute coverage of certain claims due to ambiguities in the relevant policies. A judgment against CI in excess of available coverage could have a material adverse effect on CI both in terms of damages awarded and the impact on the reputation of CI.

TAXATION RISK

CI is subject to various uncertainties concerning the interpretation and application of Canadian tax laws. CI Investments is considered a large case file by the Canada Revenue Agency and, as such, is subject to audit each year. There is a significant lag between the end of a fiscal year and when such audits are completed. Therefore, at any given time, several years may be open for audit and/or adjustments. While CI regularly assesses the likely outcome of these audits in order to determine the appropriateness of its tax provision, there can be no assurance that CI will accurately predict the outcomes of these audits. If tax authorities disagree with CI’s application of such tax laws, CI’s profitability and cash flows could be adversely affected.

SHARE CAPITAL

As at December 31, 2020, CI had 210,358,710 shares outstanding.

Employee Incentive Share Option Plan: At December 31, 2020, 2.6 million options to purchase shares were outstanding, of which 2.0 million options were exercisable at prices ranging from $27.44 to $28.67.

Restricted Share Unit (“RSU”) Plan: 503,737 RSUs were outstanding as at December 31, 2020.

Deferred Share Unit (“DSU”) Plan: 32,643 DSUs were outstanding as at December 31, 2020.

Additional details about the above Plans can be found in Note 6 to the Interim Condensed Consolidated Financial Statements.

Q4 Financial Report |  34  | December 31, 2020 

| MANAGEMENT’S DISCUSSION & ANALYSIS |

CONTRACTUAL OBLIGATIONS

The table that follows summarizes CI’s contractual obligations at December 31, 2020.

TABLE 16: PAYMENTS DUE BY YEAR
[millions of dollars]	Total		1 year or less		2		3		4		5		More than 5 years
Long-term debt		2,466.0		200.0		—		325.0		350.0		450.0		1,141.0
Leases		85.4		17.7		16.5		15.1		14.7		12.7		8.7
Total		2,551.4		217.7		16.5		340.1		364.7		462.7		1,149.7

SIGNIFICANT ACCOUNTING ESTIMATES

The December 31, 2020 Consolidated Financial Statements have been prepared in accordance with IFRS. For a discussion of all significant accounting policies, refer to Note 1 of the Notes to the Consolidated Financial Statements. Note 3 provides a discussion regarding the methodology used for business acquisitions. Note 5 provides a discussion regarding the recoverable amount of CI’s goodwill and intangible assets compared to its carrying value.

DISCLOSURE CONTROLS AND INTERNAL CONTROLS OVER FINANCIAL REPORTING

The Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), together with management, are responsible for the design of CI’s disclosure controls and procedures as defined in National Instrument 52-109 (NI 52-109). Management evaluated, with participation of the CEO and CFO, the effectiveness of the disclosure controls and procedures as at December 31, 2020. Based on this evaluation, the CEO and CFO have concluded that they are reasonably assured these disclosure controls and procedures were effective as at December 31, 2020 and that material information relating to CI was made known to them within the time periods specified under applicable securities legislation. Management, under the supervision of the CEO and CFO, is responsible for the design and maintenance of adequate internal controls over financial reporting as defined in NI 52-109 for the purposes of providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. However, due to its inherent limitations, internal controls over financial reporting can only provide reasonable, not absolute, assurance that the financial statements are free of misstatements. The COSO 2013 Framework was used to assist management, along with the CEO and CFO, in the evaluation of these internal control systems. Management, under the direction of the CEO and CFO, concluded that the internal controls over financial reporting were effective as at December 31, 2020. Management used various tools to evaluate internal controls over financial reporting which included interaction with key control systems, review of policy and procedure documentation, observation or reperformance of control procedures to evaluate the effectiveness of controls and concluded that these controls are effective. For the quarter ended December 31, 2020, there have been no changes to the internal controls that have materially affected, or are reasonably likely to affect, internal controls over financial reporting

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| MANAGEMENT’S DISCUSSION & ANALYSIS |

Additional information relating to CI, including the most recent audited annual financial statements, management information circular and annual information form, is available on SEDAR at www.sedar.com and on CI’s website at www.cifinancial.com. Information contained in or otherwise accessible through the websites mentioned in this MD&A does not form part of, and is not incorporated by reference into, this MD&A.

Q4 Financial Report |  36  | December 31, 2020 

EX-99.3

Exhibit 99.3

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference of our report dated February 11, 2021 with respect to the consolidated statements of financial position of CI Financial Corp. (the "Company") as of December 31, 2020 and 2019, and the consolidated statements of income and comprehensive income, changes in shareholders’ equity and cash flows for each of the two years in the period then ended December 31, 2020, included in Exhibit 99.1 on Form 6-K filed on February 12, 2021, in the Registration Statement on Form F-10 of the Company (File No. 333-251032) for the registration of up to US$2,000,000,000 of unsecured debt securities, subscription receipts, preference shares or common shares of the Company.

/s/ Ernst & Young LLP

Chartered Professional Accountants

Licensed Public Accountants

Toronto, Canada
February 12, 2021

EX-99.4

Exhibit 99.4

  2 Queen Street East, Twentieth Floor, Toronto, Canada M5C 3G7 Telephone: 416-364-1145 Toll Free: 1-800-268-9374 www.ci.com  

CI Financial Reports Fourth Quarter and Annual Financial Results for 2020

· Adjusted EPS¹ reaches record levels of $0.71 for Q4 and $2.45 for 2020

· Repurchased 1.8 million shares in Q4 for $29.8 million, and 14.0 million shares in 2020 for $258 million

· Paid quarterly dividend of $0.18 a share, totalling $37.8 million in Q4 and $155.3 million in 2020

· Continued expansion of North American wealth management platform through six acquisitions with $25 billion in assets in Q4; total of 14 acquisitions in 2020 almost doubles wealth assets to $96 billion

· Total assets increased 19% in Q4 and 27% in 2020 to $231.5 billion

· Acquisition announced after quarter-end expected to increase U.S. assets to $58 billion, total assets to $261 billion

· Significantly diversified investor base through NYSE listing (ticker CIXX), successful U.S. debt issue that raised US$960 million

· Completed corporate rebranding which included the rollout of CI Global Asset Management and alignment of in-house investment teams

All financial amounts in Canadian dollars unless otherwise stated.

TORONTO (February 11, 2021) - CI Financial Corp. (“CI”) (TSX: CIX, NYSE: CIXX) today released financial results for the quarter and year ended December 31, 2020.

“We delivered a very successful fourth quarter, capping a transformative year for CI,” said Kurt MacAlpine, CI Chief Executive Officer. “In 2020, we made great progress in executing on our strategic priorities of modernizing asset management, expanding wealth management, and globalizing the firm. While we are still in the early stages of executing our strategy, CI is a fundamentally different company than it was just a year ago.

“We have almost doubled the size of our wealth management business, reaching $96 billion at the end of the year, and quickly built a significant presence in the United States,” Mr. MacAlpine said. “Our assets in the U.S. alone are nearing $60 billion with the completion of five acquisitions in the fourth quarter and an agreement this January to acquire Segall Bryant & Hamill, LLC of Chicago. The U.S. wealth management firms we acquired operate at strong margins and generated aggregate organic net new asset growth of 9% in 2020. These businesses are making important contributions to our results and we are committed to building on this progress in the coming year.

“We have diversified our investor base by listing on the New York Stock Exchange in November and issuing debt in the United States in December,” said Mr. MacAlpine. “With the re-opening of that offering in January, we have issued US$960 million in notes, demonstrating a high level of investor interest and confidence in CI and our strategy. While CI had no U.S. debt just two months ago, today over 50% of our bonds are issued in the U.S.

“In asset management, we have kept up the pace of enhancements to the business, rebranding CI Investments to CI Global Asset Management, and building on our leadership in alternative investments with the launch of the CI Galaxy Bitcoin Fund and, in January, launching a private equity product with Adams Street Partners for accredited investors,” Mr. MacAlpine said.

CI is the market leader in liquid alternatives in Canada, with $3.2 billion in assets under management in this category as at December 31, 2020, offered in both mutual fund and exchange-traded fund structures.

“We’re making these substantial investments in CI’s growth while achieving strong financial results, paying a quarterly dividend of $0.18 a share and continuing our share repurchase program,” Mr. MacAlpine said.

“As a result of growing wealth management revenues and prudent cost management, our earnings per share, on an adjusted basis¹, were $0.71 for the fourth quarter, the highest in the company’s history. For the year, adjusted earnings were $2.45, also a record high for the company.”

Financial results

CI reported earnings per share of $0.50 for the fourth quarter of 2020, compared to $0.62 in the previous quarter and $0.66 in the fourth quarter of 2019. Adjusted earnings per share¹ for the fourth quarter were $0.71. This compares to adjusted earnings per share of $0.62 for the third quarter of 2020 and $0.66 for the same quarter a year ago. Adjusted earnings exclude a provision of $42.6 million ($55.8 million before tax) in the fourth quarter of 2020 for non-recurring items, including legal and restructuring charges, investment write-downs and losses from the early redemption of bonds.

For the year ended December 31, 2020, CI reported record adjusted earnings per share of $2.45, versus $2.41 for fiscal 2019. Adjusted earnings exclude provisions taken in the first and fourth quarters of 2020 and in the second quarter of 2019.

SG&A expenses for the fourth quarter were $116.7 million, up from $108.8 million in the prior quarter and $113.8 million in the same quarter of 2019. The change reflects the inclusion of results of acquired companies in the fourth quarter of 2020, partially offset by continued cost reduction in other areas of the business.

CI generated $150.2 million in free cash flow¹ during the fourth quarter, an increase of 4% from $143.9 million in the third quarter and a decrease from $168.3 million in the same quarter a year ago.

At December 31, 2020, total ending assets under management were $135.1 billion, representing an increase of 5% from September 30, 2020 and 3% from December 31, 2019. Core assets under management, which consists of assets managed by CI’s Canadian and Australian subsidiaries, were $129.6 billion at December 31, 2020, an increase of 5% from the previous quarter-end and a decline of 2% year over year. During the fourth quarter, U.S. assets under management grew by 16% to $5.5 billion.

Total average assets under management were $131.2 billion for the fourth quarter, up 2% from the third quarter and up 1% from the fourth quarter of 2019. Core average assets under management were $126.2 billion in the fourth quarter, compared to $124.6 billion for the previous quarter and $130.5 billion for the year-ago quarter.

Total wealth management assets as at December 31, 2020 were $96.5 billion, which represents an all-time year-end high for CI and an increase of $30.4 billion or 46% over September 30, 2020 and an increase of $46.0 billion or 91% year over year.

Canadian wealth management assets, at $67.3 billion, increased $16.1 billion or 31% during the quarter, reflecting net sales, market growth and the acquisition of Aligned Capital Partners Inc. in October 2020. Year over year, Canadian wealth management assets increased by 33%. This category also includes the assets of CI Assante Wealth Management (Assante Wealth Management (Canada) Limited), CI Private Counsel LP, CI Direct Investing (WealthBar Financial Services Inc.) and Virtual Brokers.

U.S. wealth management assets were $29.2 billion at December 31, 2020, up 96% from $14.9 billion over the quarter. The change reflects the addition during the quarter of five U.S. RIA firms: RGT Wealth Advisors, LLC, The Roosevelt Investment Group, LLC, Doyle Wealth Management, LLC, Stavis & Cohen Private Wealth, LLC and Bowling Portfolio Management LLC. CI’s U.S. wealth management assets also include assets of Balasa Dinverno Foltz LLC, The Cabana Group, LLC, Congress Wealth Management, LLC, One Capital Management, LLC and Surevest, LLC.

CI posted $2.1 billion in overall net redemptions for the fourth quarter of 2020. CI’s Canadian retail business, excluding products closed to new investors, had $1.3 billion in net redemptions for the fourth quarter of 2020, an improvement of $0.2 billion from the third quarter of 2020 but an increase from $0.4 billion in net redemptions for the fourth quarter of 2019. CI’s Canadian institutional business had net redemptions of $0.9 billion for the fourth quarter of 2020, representing an improvement of $0.5 billion over the same quarter a year ago. Sales at GSFM were relatively flat, and CI’s U.S. RIA business had $0.3 billion in net sales. CI’s closed business, comprised primarily of segregated fund contracts that are no longer available for sale, had $0.2 billion in net redemptions for the quarter.

Capital allocation

In the fourth quarter of 2020, CI repurchased 1.8 million shares at a cost of $29.8 million (average cost of $16.96 per share) and paid $37.8 million in dividends at a rate of $0.18 a share.

The Board of Directors declared a quarterly dividend of $0.18 per share, payable on July 15, 2021 to shareholders of record on June 30, 2021. The annual dividend rate of $0.72 per share represented a yield of 4.2% on CI’s closing share price of $17.33 on February 10, 2021.

Fourth quarter business highlights

· CI made significant progress in expanding its U.S. wealth management business, completing the acquisition of five U.S. RIAs: RGT Wealth Advisors of Dallas, with approximately $6.1 billion in assets; New York-based The Roosevelt Investment Group, with approximately $3.8 billion in assets; Doyle Wealth Management of St. Petersburg, FL, with approximately $1.6 billion in assets; Texas-based Stavis & Cohen Private Wealth of Houston, with approximately $0.8 billion in assets; and Bowling Portfolio Management, with approximately $0.6 billion in assets under management.³

· CI also completed the acquisition of Burlington, Ontario-based Aligned Capital, a full-service investment advisory firm with approximately $12.2 billion in assets and about 200 advisors across Canada.³ 

·	CI listed its common shares on the New York Stock Exchange as part of its strategy to globalize the company. CI expects the listing to enhance its corporate profile in the U.S., broaden its investor base and make CI’s shares more attractive to sellers as purchase consideration when making acquisitions in the U.S.
·	CI completed a US$700 million public offering of 3.200% notes due 2030. The offering allowed for the early redemption of the company’s $200-million principal amount of 2.775% debentures due November 2021, which was completed in January 2021. Also in January 2021, CI announced the US$260 million re-opening of the 3.200% notes, along with its intention to redeem the outstanding C$325 million aggregate principal amount of its 3.520% debentures due July 20, 2023.
·	CI expanded its partnership with d1g1t Inc. as part of CI’s strategy to modernize its technology platforms. The partnership is allowing CI to further develop advanced discretionary capabilities within its Assante Wealth Management business and is expected to help facilitate the integration of CI’s acquired U.S.-based RIAs firms by providing them access to the d1g1t platform.
·	CI continued to implement its corporate branding initiative, with the rebranding of CI Investments to CI Global Asset Management (“CI GAM”). As part of the rebranding, all legacy in-house investment management boutique brands are being phased out. Additionally, CI GAM has removed the compliance barriers between the in-house teams, allowing for increased collaboration and information sharing across the firm and allowing investors to benefit from the full spectrum of capabilities within CI GAM.
·	Recent product launches included CI Galaxy Bitcoin Fund in the fourth quarter and a private equity product with Adams Street Partners in early January 2021, available to accredited investors. The two funds, both offering innovative access to alternative investments, reflect one aspect of CI GAM’s drive to modernize its business.
	Investment funds managed by CI GAM continued to receive industry recognition for risk-adjusted performance, receiving nine Canada Lipper Fund Awards from Refinitiv and 35 FundGrade A+® Awards for 2020 performance.

Following quarter-end:

CI announced an agreement to acquire Segall Bryant & Hamill, LLC a leading high-net-worth-focused registered investment advisor and multi-office institutional investment management firm with US$23 Billion in assets, headquartered in Chicago. Once completed, the transaction is expected to double CI’s total U.S.-based assets to approximately $58 billion (US$46 billion)⁴.

Analysts’ conference call

CI will hold a conference call with analysts today at 9:00 a.m. Eastern Time, led by Chief Executive Officer Kurt MacAlpine and Chief Financial Officer Douglas Jamieson. The call and a slide presentation will be accessible through a webcast, which can also be reached through the Events section of the Investor Relations page on www.cifinancial.com. Alternatively, investors may listen to the discussion by calling 1-866-248-8441 or 647-792-1241 (Passcode: 6228002). A replay of the call will be available for one year following the presentation (Passcode: 6228002). The webcast will be archived in the Financials section of www.cifinancial.com.

Financial highlights

	As at and for the quarters ended						Change (%)
[millions of dollars, except share amounts]	Dec. 31, 2020		Sep. 30, 2020		Dec. 31, 2019		QoQ		YoY
Core assets under management (Canada and Australia)	129,591		123,605		131,741		5		(2	)
U.S. assets under management	5,461		4,707		-		16		n/a
Total assets under management	135,052		128,312		131,741		5		3
Canadian wealth management	67,257		51,189		50,505		31		33
U.S. wealth management	29,230		14,937		-		96		n/a
Total wealth management assets	96,487		66,127		50,505		46		91
Total assets	231,539		194,438		182,246		19		27
Core average assets under management	126,233		124,626		130,542		1		(3	)
Total average assets under management	131,246		129,021		130,542		2		1
Net income attributable to shareholders	105.0		130.6		147.5		(20	)	(29	)
Adjusted net income1	147.6		130.6		147.5		13		-
Basic earnings per share	0.50		0.62		0.66		(19	)	(24	)
Diluted earnings per share	0.50		0.61		0.65		(18	)	(23	)
Adjusted earnings per share1	0.71		0.62		0.66		15		8
Free cash flow1	150.2		143.9		168.3		4		(11	)
Return on equity2	34.6	%	34.9	%	37.8	%
Dividends paid per share	0.18		0.18		0.18		-		-
Dividend yield	4.6	%	4.3	%	3.3	%
Average shares outstanding	209,347,760		211,347,613		224,961,509		(1	)	(7	)
Share price – High	18.27		19.68		22.24		(7	)	(18	)
Share price – Low	15.40		16.80		18.26		(8	)	(16	)
Share price – Close	15.78		16.89		21.71		(7	)	(27	)
Change in share price	(6.6	)%	(2.2	)%	12.3	%
Total shareholder return	(5.5	)%	(1.2	)%	13.2	%
Market capitalization	3,319		3,542		4,815		(6	)	(31	)
P/E ratio2	6.4		7.0		9.0		(9	)	(29	)
Long term debt (including current portion)	2,456		1,962		1,604		25		53
Net debt1	1,872		1,669		1,383		12		35
Net debt to adjusted EBITDA1	2.06		2.05		1.56		-		32

¹ Free cash flow, net debt, adjusted net income, adjusted earnings per share and adjusted EBITDA are not standardized earnings measures prescribed by IFRS. Descriptions of these measures, as well as others, and reconciliations to the nearest IFRS measures, where necessary, are included in Management’s Discussion and Analysis available at www.cifinancial.com.

² Trailing 12 months, calculated using adjusted net income.

³ All asset levels as at December 31, 2020.

⁴ Based on assets for Segall Bryant & Hamill, LLC and CI as at December 31, 2020.

About CI Financial

CI Financial Corp. is an independent company offering global asset management and wealth management advisory services. 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 Assante Wealth Management (Canada) Ltd., CI Private Counsel LP, Aligned Capital Partners Inc., CI Direct Investing (WealthBar Financial Services Inc.), and CI Investment Services Inc.

CI’s U.S. wealth management businesses consist of Balasa Dinverno Foltz LLC, Bowling Portfolio Management LLC, The Cabana Group, LLC, Congress Wealth Management, LLC, Doyle Wealth Management, LLC, One Capital Management, LLC, The Roosevelt Investment Group, LLC, RGT Wealth Advisors, 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.

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 these forward-looking statements include that the acquisition of Segall Bryant & Hamill, LLC will be completed and its 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, 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.

CI Global Asset Management is a registered business name of CI Investments Inc.

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. 

This announcement is not an offer of securities for sale into the United States. Securities of CI Galaxy Bitcoin Fund have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

FundGrade A+^® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+^® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+^® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+^® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+^® Award. For more information, see www.FundGradeAwards.com.

The Refinitiv Lipper Fund Awards, granted annually, highlight funds and fund companies that have excelled in     delivering    consistently    strong    risk-adjusted    performance    relative    to     their    peers. The Refinitiv Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. The fund with the highest Lipper Leader for Consistent Return (Effective Return) value in each eligible classification wins the Refinitiv Lipper Fund Award. For more information, see lipperfundawards.com. 

Contacts:

Investor Relations

Jason Weyeneth, CFA

Vice-President, Investor Relations & Strategy

416-681-8779 

jweyeneth@ci.com 

Media

Canada

Murray Oxby

Vice-President, Communications

416-681-3254 

moxby@ci.com

United States

Trevor Davis, Gregory FCA for CI Financial

443-248-0359

cifinancial@gregoryfca.com