Readers are referred to the sections entitled "Forward-looking Statements" and "Non-GAAP Financial Measures" at the end of this release.
WINNIPEG, Aug. 7 /CNW Telbec/ - Power Corporation of Canada's operating earnings for the six-month period ended June 30, 2009 were $412 million or $0.86 per share, compared with $685 million or $1.45 per share in the corresponding period of 2008. Subsidiaries contributed $420 million to Power Corporation's operating earnings for the six-month period ended June 30, 2009, compared with $692 million in the corresponding period of 2008.
The decrease in operating earnings reflects a lower contribution from Power Financial Corporation.
Other items were a charge of $34 million or $0.08 per share in the six-month period ended June 30, 2009, compared with earnings of $386 million or $0.85 per share in the corresponding period of 2008, and consisted mainly of the Corporation's share of non-operating results recorded by Power Financial. Included in the 2008 amount is $313 million representing the Corporation's share of the gain recorded by Great-West Lifeco on the disposal of its U.S. healthcare business.
As a result, net earnings for the six-month period ended June 30, 2009 were $378 million or $0.78 per share, compared with $1,071 million or $2.30 per share in the corresponding period of 2008.
SECOND-QUARTER RESULTS ----------------------
For the quarter ended June 30, 2009, operating earnings of the Corporation were $223 million or $0.47 per share, compared with $381 million or $0.81 per share in the second quarter of 2008. Subsidiaries contributed $273 million to Power Corporation's operating earnings in the second quarter of 2009, compared with $383 million in the second quarter of 2008.
Other items for the second quarter in 2009 were earnings of $4 million or $0.01 per share, compared with $314 million or $0.69 per share in same quarter of 2008.
Net earnings for the quarter were $227 million or $0.48 per share in 2009, compared with $695 million or $1.50 per share in 2008.
RESULTS OF POWER FINANCIAL CORPORATION --------------------------------------
Power Financial Corporation's operating earnings for the six-month period ended June 30, 2009 were $694 million or $0.92 per share, compared with $1,081 million or $1.48 per share in the corresponding period in 2008.
The decrease in operating earnings reflects primarily the decrease in the contribution from Power Financial's subsidiaries and Parjointco.
Other items were a charge of $47 million or $0.06 per share for the six-month period ended June 30, 2009 and consisted mainly of Power Financial's share of non operating results recorded by Pargesa. For the six-month period ended June 30, 2008, other items were earnings of $572 million or $0.81 per share and consisted of Power Financial's share of non-operating earnings recorded by Lifeco and Pargesa.
Net earnings, including other items, for the six-month period ended June 30, 2009 were $647 million or $0.86 per share, compared with $1,653 million or $2.29 per share in 2008.
For the quarter ended June 30, 2009, operating earnings of Power Financial were $442 million or $0.60 per share, compared with $590 million or $0.81 per share in the second quarter of 2008.
Other items for the second quarter of 2009 were earnings of $10 million or $0.01 per share, compared with $477 million or $0.68 per share for the same quarter in 2008.
Net earnings of Power Financial for the quarter were $452 million or $0.61 per share in 2009, compared with $1,067 million or $1.49 per share in 2008.
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 September 24, 2009 October 15, 2009 To be determined
in accordance with
the articles of
the Corporation
-------------------------------------------------------------------------
Series A September 24, 2009 October 15, 2009 35¢
-------------------------------------------------------------------------
Series B September 24, 2009 October 15, 2009 33.4375¢
-------------------------------------------------------------------------
Series C September 24, 2009 October 15, 2009 36.25¢
-------------------------------------------------------------------------
Series D September 24, 2009 October 15, 2009 31.25¢
-------------------------------------------------------------------------
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 September 30, 2009 to shareholders of record September 9, 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 (unaudited)
POWER CORPORATION OF CANADA
CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------
June 30,
2009 December 31,
(in millions of Canadian dollars) (unaudited) 2008
-------------------------------------------------------------------------
Assets
Cash and cash equivalents 6,284 5,323
-------------------------------------------------------------------------
Investments
Shares 7,054 6,240
Bonds 68,311 66,801
Mortgages and other loans 18,090 18,034
Loans to policyholders 7,416 7,622
Real estate 3,380 3,190
-------------------------------------------------------------------------
104,251 101,887
Funds held by ceding insurers 11,761 11,447
Investments at equity 2,477 2,820
Intangible assets 4,692 4,792
Goodwill 8,746 8,712
Future income taxes 1,615 1,796
Other assets 6,441 6,894
-------------------------------------------------------------------------
146,267 143,671
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities
Policy liabilities
Actuarial liabilities 100,127 97,895
Other 4,683 4,732
Deposits and certificates 997 959
Funds held under reinsurance contracts 169 192
Debentures and other borrowings 6,236 5,745
Preferred shares of subsidiaries 1,596 1,569
Capital trust securities and debentures 786 658
Future income taxes 934 808
Other liabilities 6,920 7,376
-------------------------------------------------------------------------
122,448 119,934
-------------------------------------------------------------------------
Non-controlling interests 14,003 13,980
-------------------------------------------------------------------------
Shareholders' Equity
Stated capital
Non-participating shares 789 791
Participating shares 517 509
Contributed surplus 111 103
Retained earnings 8,728 8,612
Accumulated other comprehensive income (loss) (329) (258)
-------------------------------------------------------------------------
9,816 9,757
-------------------------------------------------------------------------
146,267 143,671
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS
-------------------------------------------------------------------------
Three months ended Six months ended
June 30 June 30
-------------------------------------------------------------------------
(unaudited) (in millions of
Canadian dollars, except per
share amounts) 2009 2008 2009 2008
-------------------------------------------------------------------------
Revenues
Premium income 4,664 4,523 9,373 21,313
Net investment income
Regular net investment income 1,654 1,712 3,261 3,137
Change in fair value on
held-for-trading assets 2,250 (1,595) 276 (2,535)
-------------------------------------------------------------------------
3,904 117 3,537 602
Fee and media income 1,301 1,569 2,570 3,111
-------------------------------------------------------------------------
9,869 6,209 15,480 25,026
-------------------------------------------------------------------------
Expenses
Policyholder benefits, dividends
and experience refunds, and
change in actuarial liabilities 7,473 3,502 10,839 19,786
Commissions 528 549 1,007 1,090
Operating expenses 1,034 1,019 2,081 2,056
Financing charges 156 113 268 256
-------------------------------------------------------------------------
9,191 5,183 14,195 23,188
-------------------------------------------------------------------------
678 1,026 1,285 1,838
Share of earnings (losses) of
investments at equity 83 97 62 110
Other income (charges), net 8 2 (49) 20
-------------------------------------------------------------------------
Earnings from continuing
operations before income taxes
and non-controlling interests 769 1,125 1,298 1,968
Income taxes 172 260 290 449
Non-controlling interests 370 483 630 782
-------------------------------------------------------------------------
Earnings from continuing
operations 227 382 378 737
Earnings from discontinued
operations - 313 - 334
-------------------------------------------------------------------------
Net earnings 227 695 378 1,071
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per participating share
- Basic 0.48 1.50 0.78 2.30
-------------------------------------------------------------------------
- Diluted 0.48 1.49 0.78 2.29
-------------------------------------------------------------------------
SEGMENTED INFORMATION
INFORMATION ON PROFIT MEASURE
-------------------------------------------------------------------------
Three months ended Par-
June 30, 2009 Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 4,664 - - - 4,664
Net investment income
Regular net investment
income 1,616 59 - (21) 1,654
Change in fair value
on held-for-trading
assets 2,272 (20) - (2) 2,250
-------------------------------------------------------------------------
3,888 39 - (23) 3,904
Fee and media income 666 549 - 86 1,301
-------------------------------------------------------------------------
9,218 588 - 63 9,869
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and experience
refunds, and change in
actuarial liabilities 7,473 - - - 7,473
Commissions 353 198 - (23) 528
Operating expenses 721 158 - 155 1,034
Financing charges 106 28 - 22 156
-------------------------------------------------------------------------
8,653 384 - 154 9,191
-------------------------------------------------------------------------
565 204 - (91) 678
Share of earnings
(losses) of investments
at equity - - 87 (4) 83
Other income (charges),
net - - (2) 10 8
-------------------------------------------------------------------------
Earnings from continuing
operations before
income taxes and
non-controlling
interests 565 204 85 (85) 769
Income taxes 122 59 - (9) 172
Non-controlling interests 255 89 29 (3) 370
-------------------------------------------------------------------------
Contribution to
consolidated earnings
from continuing
operations 188 56 56 (73) 227
Contribution to
consolidated earnings
from discontinued
operations - - - - -
-------------------------------------------------------------------------
Contribution to
consolidated net
earnings 188 56 56 (73) 227
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INFORMATION ON PROFIT MEASURE
-------------------------------------------------------------------------
Three months ended Par-
June 30, 2008 Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 4,523 - - - 4,523
Net investment income
Regular net investment
income 1,648 56 - 8 1,712
Change in fair value
on held-for-trading
assets (1,595) - - - (1,595)
-------------------------------------------------------------------------
53 56 - 8 117
Fee and media income 806 665 - 98 1,569
-------------------------------------------------------------------------
5,382 721 - 106 6,209
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and experience
refunds, and change in
actuarial liabilities 3,502 - - - 3,502
Commissions 330 235 - (16) 549
Operating expenses 698 163 - 158 1,019
Financing charges 77 22 - 14 113
-------------------------------------------------------------------------
4,607 420 - 156 5,183
-------------------------------------------------------------------------
775 301 - (50) 1,026
Share of earnings
(losses) of investments
at equity - - 100 (3) 97
Other income (charges),
net - - 4 (2) 2
-------------------------------------------------------------------------
Earnings from continuing
operations before
income taxes and
non-controlling
interests 775 301 104 (55) 1,125
Income taxes 170 85 - 5 260
Non-controlling interests 351 128 35 (31) 483
-------------------------------------------------------------------------
Contribution to
consolidated earnings
from continuing
operations 254 88 69 (29) 382
Contribution to
consolidated earnings
from discontinued
operations 313 - - - 313
-------------------------------------------------------------------------
Contribution to
consolidated net
earnings 567 88 69 (29) 695
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INFORMATION ON PROFIT MEASURE
-------------------------------------------------------------------------
Six months ended Par-
June 30, 2009 Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 9,373 - - - 9,373
Net investment income
Regular net investment
income 3,127 117 - 17 3,261
Change in fair value
on held-for-trading
assets 305 (29) - - 276
-------------------------------------------------------------------------
3,432 88 - 17 3,537
Fee and media income 1,346 1,059 - 165 2,570
-------------------------------------------------------------------------
14,151 1,147 - 182 15,480
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and experience
refunds, and change in
actuarial liabilities 10,839 - - - 10,839
Commissions 660 390 - (43) 1,007
Operating expenses 1,461 317 - 303 2,081
Financing charges 181 51 - 36 268
-------------------------------------------------------------------------
13,141 758 - 296 14,195
-------------------------------------------------------------------------
1,010 389 - (114) 1,285
Share of earnings
(losses) of investments
at equity - - 67 (5) 62
Other income (charges),
net - - (59) 10 (49)
-------------------------------------------------------------------------
Earnings from continuing
operations before
income taxes and
non-controlling
interests 1,010 389 8 (109) 1,298
Income taxes 200 111 - (21) 290
Non-controlling interests 473 177 3 (23) 630
-------------------------------------------------------------------------
Contribution to
consolidated earnings
from continuing
operations 337 101 5 (65) 378
Contribution to
consolidated earnings
from discontinued
operations - - - - -
-------------------------------------------------------------------------
Contribution to
consolidated net
earnings 337 101 5 (65) 378
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INFORMATION ON PROFIT MEASURE
-------------------------------------------------------------------------
Six months ended Par-
June 30, 2008 Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 21,313 - - - 21,313
Net investment income
Regular net investment
income 3,000 117 - 20 3,137
Change in fair value
on held-for-trading
assets (2,535) - - - (2,535)
-------------------------------------------------------------------------
465 117 - 20 602
Fee and media income 1,603 1,319 - 189 3,111
-------------------------------------------------------------------------
23,381 1,436 - 209 25,026
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and experience
refunds, and change in
actuarial liabilities 19,786 - - - 19,786
Commissions 652 470 - (32) 1,090
Operating expenses 1,408 330 - 318 2,056
Financing charges 183 44 - 29 256
-------------------------------------------------------------------------
22,029 844 - 315 23,188
-------------------------------------------------------------------------
1,352 592 - (106) 1,838
Share of earnings
(losses) of investments
at equity - - 117 (7) 110
Other income (charges),
net - - 13 7 20
-------------------------------------------------------------------------
Earnings from continuing
operations before
income taxes and
non-controlling
interests 1,352 592 130 (106) 1,968
Income taxes 279 164 - 6 449
Non-controlling interests 534 259 44 (55) 782
-------------------------------------------------------------------------
Contribution to
consolidated earnings
from continuing
operations 539 169 86 (57) 737
Contribution to
consolidated earnings
from discontinued
operations 334 - - - 334
-------------------------------------------------------------------------
Contribution to
consolidated net
earnings 873 169 86 (57) 1,071
-------------------------------------------------------------------------
-------------------------------------------------------------------------