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Press release from CNW Group

Power Corporation of Canada - First quarter financial results and dividends

Thursday, May 13, 2010

Power Corporation of Canada - First quarter financial results and dividends11:14 EDT Thursday, May 13, 2010Readers are referred to the sections entitled "Forward-looking Statements" and "Non-GAAP Financial Measures" at the end of this release.MONTREAL, May 13 /CNW Telbec/ - Power Corporation of Canada's operating earnings for the three-month period ended March 31, 2010 were $219 million or $0.46 per share, compared with $189 million or $0.39 per share in the corresponding period of 2009.The increase in operating earnings reflects a higher contribution from Power Financial Corporation, partly offset by a lower level of income from investments.For the three-month period ended March 31, 2010, subsidiaries contributed $239 million to the Corporation's operating earnings, compared with $147 million in the corresponding period of 2009.For the first quarter of 2010, other items were a positive contribution of $5 million or $0.01 per share, compared with a charge of $38 million or $0.08 per share in the first quarter of 2009, and consisted of the Corporation's share of non-operating results recorded by Power Financial.Net earnings, including other items, for the three-month period ended March 31, 2010, were $224 million or $0.47 per share, compared with $151 million or $0.31 per share in the first quarter of 2009. << RESULTS OF POWER FINANCIAL CORPORATION -------------------------------------- >> Power Financial Corporation's operating earnings for the three-month period ended March 31, 2010 were $381 million or $0.51 per share, compared with $252 million or $0.32 per share in the corresponding period in 2009.The increase in operating earnings reflects the increase in the contribution from Power Financial's subsidiaries and Parjointco.For the first quarter of 2010, other items were a positive contribution of $8 million or $0.01 per share, compared with a net charge of $57 million or $0.08 per share in the first quarter of 2009, and consisted of Power Financial's share of non-operating earnings recorded by Pargesa.Net earnings, including other items, for the three-month period ended March 31, 2010 were $389 million or $0.52 per share, compared with $195 million or $0.24 per share in the first quarter of 2009. << 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 June 23, 2010 July 15, 2010 To be determined in accordance with the articles of the Corporation ------------------------------------------------------------------------- Series A June 23, 2010 July 15, 2010 35 cents ------------------------------------------------------------------------- Series B June 23, 2010 July 15, 2010 33.4375 cents ------------------------------------------------------------------------- Series C June 23, 2010 July 15, 2010 36.25 cents ------------------------------------------------------------------------- Series D June 23, 2010 July 15, 2010 31.25 cents ------------------------------------------------------------------------- DIVIDENDS ON PARTICIPATING SHARES --------------------------------- >> The Board of Directors also declared a dividend of 29 cents per share on the Participating Preferred and Subordinate Voting Shares of the Corporation, payable June 30, 2010 to shareholders of record June 9, 2010.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 the reader is 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", "seeks", "intends", "targets", "projects", "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could".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, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of 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 to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances, including that the foregoing list of factors, collectively, are not expected to have a material impact on the Corporation and its subsidiaries. While the Corporation considers these assumptions to be reasonable base on information currently available to management, they may prove to be incorrect.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.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 ------------------------------------------------------------------------- March 31, 2010 December 31, (in millions of Canadian dollars) (unaudited) 2009 ------------------------------------------------------------------------- Assets Cash and cash equivalents 5,725 5,385 ------------------------------------------------------------------------- Investments Shares 7,490 7,463 Bonds 67,328 67,942 Mortgages and other loans 16,950 17,356 Loans to policyholders 6,824 6,957 Real estate 2,973 3,101 ------------------------------------------------------------------------- 101,565 102,819 Funds held by ceding insurers 10,130 10,839 Investments at equity 2,446 2,677 Intangible assets 4,433 4,502 Goodwill 8,766 8,760 Future income taxes 1,179 1,281 Other assets 6,940 6,744 ------------------------------------------------------------------------- 141,184 143,007 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities Policy liabilities Actuarial liabilities 96,759 98,059 Other 4,582 4,592 Deposits and certificates 902 907 Funds held under reinsurance contracts 319 186 Debentures and other borrowings 6,454 6,375 Preferred shares of subsidiaries 300 503 Capital trust securities and debentures 538 540 Future income taxes 1,198 1,136 Other liabilities 6,185 6,402 ------------------------------------------------------------------------- 117,237 118,700 ------------------------------------------------------------------------- Non-controlling interests 14,450 14,478 ------------------------------------------------------------------------- Shareholders' Equity Stated capital Non-participating shares 786 787 Participating shares 536 526 Contributed surplus 121 117 Retained earnings 8,823 8,742 Accumulated other comprehensive income (loss) (769) (343) ------------------------------------------------------------------------- 9,497 9,829 ------------------------------------------------------------------------- 141,184 143,007 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF EARNINGS ------------------------------------------------------------------------- Three months ended March 31 (unaudited) (in millions of Canadian dollars, except per share amounts) 2010 2009 ------------------------------------------------------------------------- Revenues Premium income 4,610 4,709 Net investment income Regular net investment income 1,458 1,607 Change in fair value on held-for-trading assets 1,502 (1,974) ------------------------------------------------------------------------- 2,960 (367) Fee and media income 1,425 1,269 ------------------------------------------------------------------------- 8,995 5,611 ------------------------------------------------------------------------- Expenses Policyholder benefits, dividends and experience refunds, and change in actuarial liabilities 6,571 3,366 Commissions 553 479 Operating expenses 1,019 1,047 Financing charges 113 112 ------------------------------------------------------------------------- 8,256 5,004 ------------------------------------------------------------------------- 739 607 Share of earnings (losses) of investments at equity (3) (21) Other income (charges), net 8 (57) ------------------------------------------------------------------------- Earnings before income taxes and non-controlling interests 744 529 Income taxes 154 118 Non-controlling interests 366 260 ------------------------------------------------------------------------- Net earnings 224 151 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per participating share - Basic 0.47 0.31 ------------------------------------------------------------------------- - Diluted 0.47 0.31 ------------------------------------------------------------------------- SEGMENTED INFORMATION INFORMATION ON PROFIT MEASURE ------------------------------------------------------------------------- Three months ended Par- March 31, 2010 Lifeco IGM jointco Other Total ------------------------------------------------------------------------- Revenues Premium income 4,610 - - - 4,610 Net investment income Regular net investment income 1,422 38 - (2) 1,458 Change in fair value on held-for-trading assets 1,502 - - - 1,502 ------------------------------------------------------------------------- 2,924 38 - (2) 2,960 Fee and media income 736 611 - 78 1,425 ------------------------------------------------------------------------- 8,270 649 - 76 8,995 ------------------------------------------------------------------------- Expenses Policyholder benefits, dividends and experience refunds, and change in actuarial liabilities 6,571 - - - 6,571 Commissions 363 215 - (25) 553 Operating expenses 718 161 - 140 1,019 Financing charges 69 27 - 17 113 ------------------------------------------------------------------------- 7,721 403 - 132 8,256 ------------------------------------------------------------------------- 549 246 - (56) 739 Share of earnings (losses) of investments at equity - - (3) - (3) Other income (charges), net - - 8 - 8 ------------------------------------------------------------------------- Earnings before income taxes and non- controlling interests 549 246 5 (56) 744 Income taxes 86 65 - 3 154 Non-controlling interests 262 114 2 (12) 366 ------------------------------------------------------------------------- Contribution to consolidated net earnings 201 67 3 (47) 224 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three months ended Par- March 31, 2009 Lifeco IGM jointco Other Total ------------------------------------------------------------------------- Revenues Premium income 4,709 - - - 4,709 Net investment income Regular net investment income 1,511 62 - 34 1,607 Change in fair value on held-for-trading assets (1,967) (9) - 2 (1,974) ------------------------------------------------------------------------- (456) 53 - 36 (367) Fee and media income 680 510 - 79 1,269 ------------------------------------------------------------------------- 4,933 563 - 115 5,611 ------------------------------------------------------------------------- Expenses Policyholder benefits, dividends and experience refunds, and change in actuarial liabilities 3,366 - - - 3,366 Commissions 307 192 - (20) 479 Operating expenses 740 159 - 148 1,047 Financing charges 75 27 - 10 112 ------------------------------------------------------------------------- 4,488 378 - 138 5,004 ------------------------------------------------------------------------- 445 185 - (23) 607 Share of earnings (losses) of investments at equity - - (20) (1) (21) Other income (charges), net - - (57) - (57) ------------------------------------------------------------------------- Earnings before income taxes and non- controlling interests 445 185 (77) (24) 529 Income taxes 78 52 - (12) 118 Non-controlling interests 218 88 (26) (20) 260 ------------------------------------------------------------------------- Contribution to consolidated net earnings 149 45 (51) 8 151 ------------------------------------------------------------------------- ------------------------------------------------------------------------- >> For further information: Mr. Edward Johnson, Senior Vice-President, General Counsel and Secretary, (514) 286-7400