Management of CI has the specialized skills and knowledge to focus on several key objectives. These include: meeting the  needs of its clients, developing new products, enhancing investor awareness and increasing market share by marketing to  investment dealers, mutual fund dealers and life insurance agents. CI’s results are driven primarily by the level of its assets under management, which are in turn driven by the returns earned  by its funds and the net sales of its funds. The margin earned on these assets under management determines, to a large  extent, CI’s profi tability. The returns of each fund reflect the returns of equities and bonds or other securities held by the fund. These returns will  reflect the returns of equity and bond indexes plus the over or under performance of the investment manager of each  fund. In years when markets decline (such as 2008) CI’s assets will decline. Conversely, CI’s assets will appreciate in years  when markets perform well. For a particular period, the average assets under management will drive CI’s results as CI  receives the majority of its fees on a daily basis.  Fund sales and acquisitions also affect CI’s assets under management. While sales results help increase assets under  management, they are also an indicator of the level of demand for CI’s products and our success in delivering attractive  products. CI uses several performance indicators to assess its results. These are described throughout the results of operations and  the discussion of the two operating segments and include the following: net income, earnings per share, pre-tax operating  earnings, EBITDA, EBITDA margin, and dealer gross margin. CI’s average assets under management for 2012 increased 1% from 2011 as a result of the strong performance of CI’s funds  and $973 million in net sales. However, a greater factor in CI’s performance this year was the continued trend of investor  preference for fixed income products, which generally carry a lower management fee. As well, a larger proportion of CI’s  assets under management are now institutional mandates, which carry a lower management fee. The resulting change in  asset mix reduced management fee revenues by 2% notwithstanding the increase in average assets under management. This was mitigated by a similar impact on trailer fee expense, which fell 1% year over year, and management’s efforts  to control spending in which selling, general and administrative (“SG&A”) expenses dropped 2% during the year. However,  pre-tax operating earnings, as set out in Table 6, still declined 2% in 2012 versus 2011. While markets in 2012 faced challenges, including lingering concerns over the European debt crisis, the slowing Chinese  economy, and the U.S. “fiscal cliff,” volatility eventually subsided and investors responded. Industry gross sales of funds  picked up in 2012 and CI’s gross sales increased 16% year over year and net sales increased 201% year over year.  2012 OVERVIEW KEY PERFORMANCE DRIVERS 25