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Table 5 sets out the levels and changes in CI’s average assets under management and the gross and net sales for the relevant periods. As most of CI’s revenues and expenses are based on assets throughout the year, average asset levels are critical to the analysis of CI’s fi nancial results. 

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The Investment Funds Institute of Canada (IFIC) reported $30.4 billion in industry net sales of mutual funds for the year ended December 31, 2012, up $9.2 billion from net sales of $21.2 billion in the same period for 2011. Total industry assets as reported by IFIC at December 31, 2012 of $849.7 billion were up 10% from $769.7 billion at December 31, 2011. 

## RESULTS OF OPERATIONS 

## YEAR ENDED DECEMBER 31, 2012 

For the year ended December 31, 2012, CI reported net income of $352.2 million ($1.24 per share) versus $376.9 million ($1.31 per share) for the year ended December 31, 2011. Included in 2011 was $4.9 million ($3.5 million after-tax) in revenue from an insurance settlement and 2012 included an $18.8 million non-cash future tax provision. Adjusting for these items, the year- over-year decline in net income was only $2.4 million, or less than 1%. 

CI’s pre-tax operating earnings, as set out in Table 6, adjust for the impact of gains and losses on marketable securities, performance fees and non-recurring items. Redemption fee revenue and the amortization of deferred sales commissions and fund contracts are netted out to remove the impact of financing back-end assets under management. Pre-tax operating earnings were $641.5 million in 2012, a decrease of 2% from 2011, reflecting the decline in management fee revenue as a result of the change in asset mix toward fi xed-income products. 

In 2012, CI recorded $151.6 million in income tax expense for an effective tax rate of 30.1%. In the second quarter of 2012, CI recorded a non-cash future income tax provision of $18.8 million. Adjusting for this, CI’s effective tax rate for 2012 was 26.4%, compared to an effective tax rate of 27.7% in 2011. CI’s statutory rate for 2012 was 26.5% versus 28.2% in 2011. 

For the year ended December 31, 2012, redemption fee revenue was $27.4 million compared with $28.6 million for the year ended December 31, 2011. The decrease is a result of a decline in redemptions of deferred load funds that are subject to redemption fees. 

