Readers are referred to the sections entitled "Forward-looking Statements" and "Non-GAAP Financial Measures" at the end of this release.
MONTREAL, March 11 /CNW Telbec/ - Power Corporation of Canada reported today operating earnings of $1,271 million or $2.70 per participating share for the year ended December 31, 2008, compared with $1,458 million or $3.12 per share in 2007.
Other items, not included in operating earnings, were a net charge of $403 million or $0.89 per share in 2008, compared with $5 million or $0.01 per share in 2007. Other items in the period in 2008 include the Corporation's share of other items recorded by Power Financial, as well as other items recorded by the Corporation and by Power Technology Investment Corporation, a subsidiary.
As a result, net earnings were $868 million or $1.81 per share in 2008, compared with $1,463 million or $3.13 per share in 2007.
FOURTH-QUARTER RESULTS ----------------------
The Corporation's operating earnings for the three-month period ended December 31, 2008 were $252 million or $0.53 per share, compared with $309 million or $0.66 per share in the same period in 2007.
Other items in the fourth quarter of 2008 were a net charge $787 million or $1.73 per share, compared with $41 million or $0.09 per share in the same period in 2007.
As a result, the net loss for the fourth quarter of 2008 was $535 million or $1.20 per share, compared with net earnings of $350 million or $0.75 per share for the same period in 2007.
RESULTS OF POWER FINANCIAL CORPORATION --------------------------------------
Power Financial Corporation's operating earnings for the year ended December 31, 2008 were $1,974 million or $2.69 per share, compared with $2,082 million or $2.84 per share in 2007.
Other items, not included in operating earnings, were a net charge of $637 million or $0.90 per share in 2008, compared with a net charge of $38 million or $0.05 in 2007. Other items in 2008 consisted of Power Financial's share of non-recurring items recorded by Lifeco, IGM and Pargesa. The main components of other items in 2008 were the write-down of intangibles assets and goodwill relating to the acquisition of Putnam in 2007 ($983 million), the gain from the sale of health business at Great-West Life & Annuity ($472 milion), and the write-down of Pargesa's investments in Lafarge and Pernod Ricard ($328 million for 2008).
As a result, net earnings were $1,337 million or $1.79 per share in 2008, compared with $2,044 million or $2.79 per share in 2007.
Power Financial Corporation's operating earnings for the three-month period ended December 31, 2008 were $434 million or $0.59 per share, compared with $500 million or $0.68 per share in the same period in 2007.
Other items in the fourth quarter of 2008 were a charge of $1,207 million or $1.71 per share, compared with $32 million in the same period in 2007.
As a result, the net loss for the fourth quarter of 2008 was $773 million or $1.12 per share, compared with net earnings of $532 million or $0.73 per share for the same period in 2007.
DIVIDENDS ON PREFERRED SHARES
-----------------------------
The Board of Directors today declared quarterly dividends on the
Corporation's preferred shares, as follows:
-------------------------------------------------------------------------
Type of shares Record Date Payment Date Amount
-------------------------------------------------------------------------
1986 Series March 25, 2009 April 15, 2009 To be determined in
accordance with the
articles of the
Corporation
-------------------------------------------------------------------------
Series A March 25, 2009 April 15, 2009 35 cents
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Series B March 25, 2009 April 15, 2009 33.4375 cents
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Series C March 25, 2009 April 15, 2009 36.25 cents
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Series D March 25, 2009 April 15, 2009 31.25 cents
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DIVIDENDS ON PARTICIPATING SHARES
---------------------------------
The Board of Directors also declared a quarterly dividend of 29 cents on the Participating Preferred and Subordinate Voting Shares of the Corporation, payable March 31, 2009 to shareholders of record March 23, 2009.
For purposes of the Income Tax Act (Canada) and any similar provincial legislation, all of the above dividends of the Corporation's preferred and subordinate voting shares are eligible dividends.
Forward-looking Statements --------------------------
Certain statements in this press release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect the Corporation's and its subsidiaries' current expectations. Forward-looking statements are provided for the purposes of assisting the reader in understanding the Corporation's financial position and results of operations as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of the Corporation and its subsidiaries, as well as, the outlook for North American and international economies, for the current fiscal year and subsequent periods. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "plans", "believes", "estimates", "intends", "seeks", "targets", "projects", "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could".
This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including the perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances.
By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, the assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of material factors, many of which are beyond the Corporation's and its subsidiaries' control, affect the operations, performance and results of the Corporation and its subsidiaries, and their businesses, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: the impact or unanticipated impact of general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, management of market liquidity and funding risks, changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates) the effect of applying future accounting changes (including adoption of International Financial Reporting Standards), business competition, operational and reputational risks, technological change, changes in government regulation and legislation, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, the Corporation's and its subsidiaries' ability to complete strategic transactions, integrate acquisitions and implement other growth strategies, and the Corporation's and its subsidiaries' success in anticipating and managing the foregoing factors.
The reader is cautioned that the foregoing list of factors is not exhaustive of the factors that may affect any of the Corporation's and its subsidiaries' forward-looking statements. The reader is also cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements.
Other than as specifically required by law, the Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Additional information about the risks and uncertainties of the Corporation's business is provided in its disclosure materials, including its most recent Management's Discussion and Analysis and Annual Information Form, filed with the securities regulatory authorities in Canada, available at www.sedar.com.
Non-GAAP Financial Measures
In analysing the financial results of the Corporation and consistent with the presentation in previous years, net earnings are subdivided into the following components:
- operating earnings; and - other items, which include the after-tax impact of any item that management considers to be of a non recurring nature or that could make the period-over-period comparison of results from operations less meaningful, and also include the Corporation's share of any such item presented in a comparable item manner by its subsidiaries.
Management has used these financial measures for many years in its presentation and analysis of the financial performance of Power Corporation, and believes that they provide additional meaningful information to readers in their analysis of the results of the Corporation.
Following the announcement in 2007 of GWL&A's sale of its health care business, which closed on April 1, 2008, the results from Lifeco's U.S. health care business are presented in the consolidated financial statements as "discontinued operations", in accordance with GAAP. Power Corporation's share of these results is included in operating earnings, while the Corporation's share of the gain realized on the sale is included in Other items.
Operating earnings and operating earnings per share are non-GAAP financial measures that do not have a standard meaning and may not be comparable to similar measures used by other entities.
Attachments: Financial Information
POWER CORPORATION OF CANADA
CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------
As at December 31
(in millions of dollars) 2008 2007
-------------------------------------------------------------------------
Assets
Cash and cash equivalents 5,323 6,320
-------------------------------------------------------------------------
Investments
Shares 6,487 8,426
Bonds 66,554 65,069
Mortgages and other loans 18,034 16,423
Loans to policyholders 7,622 6,317
Real estate 3,190 2,549
-------------------------------------------------------------------------
101,887 98,784
Funds held by ceding insurers 11,447 1,512
Investments at equity 2,820 3,527
Assets of operations held for sale - 697
Intangible assets 4,607 5,072
Goodwill 8,712 9,343
Future income taxes 1,796 632
Other assets 7,079 7,064
-------------------------------------------------------------------------
143,671 132,951
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities
Policy liabilities
Actuarial liabilities 97,895 87,487
Other 4,732 4,385
Deposits and certificates 959 857
Funds held under reinsurance contracts 192 164
Liabilities of operations held for sale - 428
Debentures and other borrowings 5,745 6,875
Preferred shares of subsidiaries 1,569 1,603
Capital trust securities and debentures 658 639
Future income taxes 808 841
Other liabilities 7,376 6,854
-------------------------------------------------------------------------
119,934 110,133
-------------------------------------------------------------------------
Non-controlling interests 13,980 12,781
-------------------------------------------------------------------------
Shareholders' Equity
Stated capital
Non-participating shares 791 794
Participating shares 509 475
Contributed surplus 103 78
Retained earnings 8,612 8,304
Accumulated other comprehensive income (loss) (258) 386
-------------------------------------------------------------------------
9,757 10,037
-------------------------------------------------------------------------
143,671 132,951
-------------------------------------------------------------------------
-------------------------------------------------------------------------
For additional information, refer to the 2008 Audited Consolidated
Financial Statements.
CONSOLIDATED STATEMENTS OF EARNINGS
Three months
ended For the years
December 31 ended
(unaudited) December 31
-------------------------------------------------------------------------
(in millions of dollars,
except per share amounts) 2008 2007 2008 2007
-------------------------------------------------------------------------
Revenues
Premium income 4,782 5,764 30,007 18,753
Net investment income
Regular net investment income 1,481 1,347 6,275 5,985
Change in fair value on
held-for-trading assets (368) 821 (5,161) (1,098)
-------------------------------------------------------------------------
1,113 2,168 1,114 4,887
Fee and media income 1,366 1,633 5,978 5,766
-------------------------------------------------------------------------
7,261 9,565 37,099 29,406
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and experience
refunds, and change in
actuarial liabilities 4,815 6,840 26,774 19,122
Commissions 526 588 2,172 2,236
Operating expenses 1,057 1,032 4,147 3,740
Financing charges 76 122 445 417
-------------------------------------------------------------------------
6,474 8,582 33,538 25,515
-------------------------------------------------------------------------
787 983 3,561 3,891
Share of earnings of
investments at equity (2) 13 169 126
Other income (charges), net (2,401) 38 (2,383) 49
-------------------------------------------------------------------------
Earnings from continuing
operations before income
taxes and non-controlling
interests (1,616) 1,034 1,347 4,066
Income taxes (690) 254 38 972
Non-controlling interests (391) 450 775 1,729
-------------------------------------------------------------------------
Earnings from continuing
operations (535) 330 534 1,365
Earnings from discontinued
operations - 20 334 98
-------------------------------------------------------------------------
Net earnings (535) 350 868 1,463
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per participating share
- Basic (1.20) 0.75 1.81 3.13
-------------------------------------------------------------------------
- Diluted (1.19) 0.74 1.80 3.10
-------------------------------------------------------------------------
SEGMENTED INFORMATION
-------------------------------------------------------------------------
Information on Profit Measure
-------------------------------------------------------------------------
Three months ended
December 31, 2008
(in millions of dollars) Par-
(unaudited) Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 4,782 - - - 4,782
Net investment income
Regular net investment
income 1,423 36 - 22 1,481
Change in fair value
on held-for-trading
assets (368) - - - (368)
-------------------------------------------------------------------------
1,055 36 - 22 1,113
Fee and media income 743 549 - 74 1,366
-------------------------------------------------------------------------
6,580 585 - 96 7,261
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and
experience refunds,
and change in
actuarial liabilities 4,815 - - - 4,815
Commissions 360 206 - (40) 526
Operating expenses 746 163 - 148 1,057
Financing charges 37 25 - 14 76
-------------------------------------------------------------------------
5,958 394 - 122 6,474
-------------------------------------------------------------------------
622 191 - (26) 787
Share of earnings of
investments at equity - - 2 (4) (2)
Other income (charges),
net (2,248) - (376) 223 (2,401)
-------------------------------------------------------------------------
Earnings from
continuing
operations
before income
taxes and
non-controlling
interests (1,626) 191 (374) 193 (1,616)
Income taxes (744) 51 - 3 (690)
Non-controlling
interests (459) 110 (126) 84 (391)
-------------------------------------------------------------------------
Contribution to
consolidated
earnings from
continuing
operations (423) 30 (248) 106 (535)
Contribution to
consolidated
earnings from
discontinued
operations - - - - -
-------------------------------------------------------------------------
Contribution to
consolidated
net earnings (423) 30 (248) 106 (535)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Information on Profit Measure
-------------------------------------------------------------------------
Three months ended
December 31, 2007
(in millions of dollars) Par-
(unaudited) Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 5,764 - - - 5,764
Net investment income
Regular net
investment
income 1,304 42 - 1 1,347
Change in fair value
on held-for-trading
assets 821 - - - 821
-------------------------------------------------------------------------
2,125 42 - 1 2,168
Fee and media income 861 679 - 93 1,633
-------------------------------------------------------------------------
8,750 721 - 94 9,565
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and
experience refunds,
and change in
actuarial liabilities 6,840 - - - 6,840
Commissions 374 241 - (27) 588
Operating expenses 712 157 - 163 1,032
Financing charges 84 22 - 16 122
-------------------------------------------------------------------------
8,010 420 - 152 8,582
-------------------------------------------------------------------------
740 301 - (58) 983
Share of earnings of
investments at equity - - 17 (4) 13
Other income (charges),
net - - 23 15 38
-------------------------------------------------------------------------
Earnings from
continuing operations
before income taxes
and non-controlling
interests 740 301 40 (47) 1,034
Income taxes 198 67 - (11) 254
Non-controlling interests 312 147 14 (23) 450
-------------------------------------------------------------------------
Contribution to
consolidated earnings
from continuing
operations 230 87 26 (13) 330
Contribution to
consolidated earnings
from discontinued
operations 20 - - - 20
-------------------------------------------------------------------------
Contribution to
consolidated
net earnings 250 87 26 (13) 350
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Information on Profit Measure
-------------------------------------------------------------------------
For the year ended
December 31, 2008
(in millions of dollars) Par-
(unaudited) Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 30,007 - - - 30,007
Net investment income
Regular net investment
income 5,962 202 - 111 6,275
Change in fair value
on held-for-trading
assets (5,161) - - - (5,161)
-------------------------------------------------------------------------
801 202 - 111 1,114
Fee and media income 3,124 2,503 - 351 5,978
-------------------------------------------------------------------------
33,932 2,705 - 462 37,099
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and
experience refunds,
and change in
actuarial liabilities 26,774 - - - 26,774
Commissions 1,353 906 - (87) 2,172
Operating expenses 2,886 648 - 613 4,147
Financing charges 296 91 - 58 445
-------------------------------------------------------------------------
31,309 1,645 - 584 33,538
-------------------------------------------------------------------------
2,623 1,060 - (122) 3,561
Share of earnings of
investments at equity - - 183 (14) 169
Other income (charges),
net (2,248) - (364) 229 (2,383)
-------------------------------------------------------------------------
Earnings from continuing
operations before
income taxes and
non-controlling
interests 375 1,060 (181) 93 1,347
Income taxes (278) 293 - 23 38
Non-controlling interests 334 494 (61) 8 775
-------------------------------------------------------------------------
Contribution to
consolidated earnings
from continuing
operations 319 273 (120) 62 534
Contribution to
consolidated earnings
from discontinued
operations 334 - - - 334
-------------------------------------------------------------------------
Contribution to
consolidated net
earnings 653 273 (120) 62 868
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Information on Profit Measure
-------------------------------------------------------------------------
For the year ended
December 31, 2007
(in millions of dollars) Par-
(unaudited) Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 18,753 - - - 18,753
Net investment income
Regular net investment
income 5,565 194 - 226 5,985
Change in fair value
on held-for-trading
assets (1,098) - - - (1,098)
-------------------------------------------------------------------------
4,467 194 - 226 4,887
Fee and media income 2,703 2,701 - 362 5,766
-------------------------------------------------------------------------
25,923 2,895 - 588 29,406
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and
experience refunds,
and change in
actuarial liabilities 19,122 - - - 19,122
Commissions 1,366 947 - (77) 2,236
Operating expenses 2,517 623 - 600 3,740
Financing charges 269 88 - 60 417
-------------------------------------------------------------------------
23,274 1,658 - 583 25,515
-------------------------------------------------------------------------
2,649 1,237 - 5 3,891
Share of earnings of
investments at equity - - 145 (19) 126
Other income (charges),
net - - 26 23 49
-------------------------------------------------------------------------
Earnings from continuing
operations before
income taxes and
non-controlling
interests 2,649 1,237 171 9 4,066
Income taxes 582 355 - 35 972
Non-controlling interests 1,204 556 58 (89) 1,729
-------------------------------------------------------------------------
Contribution to
consolidated earnings
from continuing
operations 863 326 113 63 1,365
Contribution to
consolidated
earnings from
discontinued
operations 98 - - - 98
-------------------------------------------------------------------------
Contribution to
consolidated
net earnings 961 326 113 63 1,463
-------------------------------------------------------------------------
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