Readers are referred to the sections entitled "Forward-looking
Statements" and "Non-GAAP Financial Measures" at the end of this release.
MONTREAL, Nov. 11 /CNW Telbec/ - Power Corporation of Canada's operating
earnings for the nine-month period ended September 30, 2008 were $1,019
million or $2.16 per share, compared with $1,149 million or $2.47 per share in
the corresponding period of 2007.
For the nine-month period ended September 30, 2008, subsidiaries
contributed $984 million to the Corporation's operating earnings, compared
with $1,003 million in 2007. The decrease in operating earnings in 2008 also
reflects a lower level of income from investments compared with 2007 when the
Corporation recorded substantial gains in its QFII operations in China.
Other income was $384 million or $0.84 per share in the nine-month period
ended September 30, 2008, compared with a charge of $36 million or $0.08 per
share in the corresponding period of 2007, and consisted mainly of the
Corporation's share of non-operating earnings recorded by Power Financial.
As a result, net earnings for the period were $1,403 million or $3.00 per
share, compared with $1,113 million or $2.39 per share in the corresponding
period of 2007.
THIRD-QUARTER RESULTS
---------------------
For the quarter ended September 30, 2008, operating earnings of the
Corporation were $334 million or $0.71 per share, compared with $392 million
or $0.84 per share in the third quarter of 2007.
For the three-month period ended September 30, 2008, subsidiaries
contributed $293 million to the Corporation's operating earnings, compared
with $338 million in 2007. Also contributing to the decrease in operating
earnings were lower earnings from the Corporation's QFII operations in China.
Other items for the third quarter of 2008 were a charge of $2 million or
$0.01 per share. For the corresponding period in 2007, other items were a
charge of $38 million or $0.08 per share.
Net earnings for the quarter were $332 million or $0.70 per share in
2008, compared with $354 million or $0.76 per share in 2007.
RESULTS OF POWER FINANCIAL CORPORATION
--------------------------------------
Power Financial Corporation's operating earnings for the nine-month
period ended September 30, 2008 were $1,540 million or $2.10 per share,
compared with $1,583 million or $2.16 per share in the corresponding period in
2007.
Other income was $570 million or $0.81 per share for the nine-month
period ended September 30, 2008 and essentially consisted of Power Financial's
share of non-operating earnings recorded by Great-West Lifeco as well as by
Pargesa. For the nine-month period ended September 30, 2007, other items
represented a charge of $71 million or $0.10 per share. Net earnings,
including other income, for the nine-month period ended September 30, 2008
were $2,110 million or $2.91 per share, compared with $1,512 million or $2.06
per share in 2007.
For the quarter ended September 30, 2008, Power Financial's operating
earnings were $459 million or $0.62 per share, compared with $531 million or
$0.73 per share in the third quarter of 2007.
Other items for the third quarter of 2008 were a charge of $2 million,
compared with a charge of $74 million or $0.11 per share for the same quarter
in 2007.
Net earnings for the quarter were therefore $457 million or $0.62 per
share in 2008, unchanged from 2007.
DIVIDENDS ON PREFERRED SHARES
-----------------------------
The Board of Directors today declared quarterly dividends on the
Corporation's preferred shares, as follows:
-------------------------------------------------------------------------
Type of Record Date Payment Date Amount
shares
-------------------------------------------------------------------------
1986 Series December 23, 2008 January 15, 2009 To be determined in
accordance with the
articles of the
Corporation
-------------------------------------------------------------------------
Series A December 23, 2008 January 15, 2009 35 cents
-------------------------------------------------------------------------
Series B December 23, 2008 January 15, 2009 33.4375 cents
-------------------------------------------------------------------------
Series C December 23, 2008 January 15, 2009 36.25 cents
-------------------------------------------------------------------------
Series D December 23, 2008 January 15, 2009 31.25 cents
-------------------------------------------------------------------------
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 December 31, 2008 to shareholders of record December 10, 2008.
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
-------------------------------------------------------------------------
September 30, December 31,
2008 2007
(in millions of Canadian dollars) (unaudited)
-------------------------------------------------------------------------
Assets
Cash and cash equivalents 5,929 6,320
-------------------------------------------------------------------------
Investments
Shares 7,451 8,426
Bonds 62,010 65,069
Mortgages and other loans 17,993 16,423
Loans to policyholders 6,814 6,317
Real estate 3,232 2,549
-------------------------------------------------------------------------
97,500 98,784
Funds held by ceding insurers 12,527 1,512
Investments at equity 2,966 3,527
Assets of operations held for sale - 697
Intangible assets 5,212 5,072
Goodwill 9,717 9,343
Future income taxes 904 632
Other assets 6,848 7,064
-------------------------------------------------------------------------
141,603 132,951
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities
Policy liabilities
Actuarial liabilities 96,723 87,487
Other 4,522 4,385
Deposits and certificates 904 857
Funds held under reinsurance contracts 164 164
Liabilities of operations held for sale - 428
Debentures and other borrowings 5,767 6,875
Preferred shares of subsidiaries 1,612 1,603
Capital trust securities and debentures 642 639
Future income taxes 754 841
Other liabilities 6,962 6,854
-------------------------------------------------------------------------
118,050 110,133
-------------------------------------------------------------------------
Non-controlling interests 13,333 12,781
-------------------------------------------------------------------------
Shareholders' equity
Stated capital
Non-participating shares 792 794
Participating shares 509 475
Contributed surplus 101 78
Retained earnings 9,303 8,304
Accumulated other comprehensive income (loss) (485) 386
-------------------------------------------------------------------------
10,220 10,037
-------------------------------------------------------------------------
141,603 132,951
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
-------------------------------------------------------------------------
(unaudited) (in millions of 2008 2007 2008 2007
Canadian dollars, except per
share amounts)
-------------------------------------------------------------------------
Revenues
Premium income 3,912 3,637 25,225 12,989
Net investment income
Regular net investment income 1,656 1,521 4,791 4,637
Change in fair value on held-
for-trading assets (2,258) 425 (4,793) (1,919)
-------------------------------------------------------------------------
(602) 1,946 (2) 2,718
Fee and media income 1,501 1,506 4,612 4,133
-------------------------------------------------------------------------
4,811 7,089 29,835 19,840
-------------------------------------------------------------------------
Expenses
Policyholder benefits, dividends
and experience refunds and
change in actuarial liabilities 2,173 4,458 21,959 12,282
Commissions 556 538 1,646 1,648
Operating expenses 1,034 1,090 3,090 2,708
Financing charges 112 118 366 294
-------------------------------------------------------------------------
3,875 6,204 27,061 16,932
-------------------------------------------------------------------------
936 885 2,774 2,908
Share of earnings of investments
at equity 61 26 171 113
Other income (charges), net (2) 8 18 11
-------------------------------------------------------------------------
Earnings from continuing operations
before income taxes and non-
controlling interests 995 919 2,963 3,032
Income taxes 279 182 728 718
Non-controlling interests 384 407 1,166 1,279
-------------------------------------------------------------------------
Earnings from continuing operations 332 330 1,069 1,035
Earnings from discontinued operations - 24 334 78
-------------------------------------------------------------------------
Net earnings 332 354 1,403 1,113
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per participating share
Basic 0.70 0.76 3.00 2.39
-------------------------------------------------------------------------
Diluted 0.70 0.75 2.99 2.36
-------------------------------------------------------------------------
SEGMENTED INFORMATION
Information on Profit Measure
-------------------------------------------------------------------------
Three months ended Par-
September 30, 2008 Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 3,912 - - - 3,912
Net investment income
Regular net invest-
ment income 1,539 49 - 68 1,656
Change in fair
value on held-for-
trading assets (2,258) - - - (2,258)
-------------------------------------------------------------------------
(719) 49 - 68 (602)
Fee and media income 778 635 - 88 1,501
-------------------------------------------------------------------------
3,971 684 - 156 4,811
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and expe-
rience refunds and
change in actuarial
liabilities 2,173 - - - 2,173
Commissions 341 230 - (15) 556
Operating expenses 732 155 - 147 1,034
Financing charges 76 22 - 14 112
-------------------------------------------------------------------------
3,322 407 - 146 3,875
-------------------------------------------------------------------------
649 277 - 10 936
Share of earnings of
investments at equity - - 64 (3) 61
Other income (charges),
net - - (1) (1) (2)
-------------------------------------------------------------------------
Earnings from continuing
operations before income
taxes and non-controlling
interests 649 277 63 6 995
Income taxes 187 78 - 14 279
Non-controlling interests 259 125 21 (21) 384
-------------------------------------------------------------------------
Contribution to consoli-
dated earnings from
continuing operations 203 74 42 13 332
Contribution to consoli-
dated earnings from
discontinued operations - - - - -
-------------------------------------------------------------------------
Contribution to
consolidated net earnings 203 74 42 13 332
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Information on Profit Measure
-------------------------------------------------------------------------
Three months ended Par-
September 30, 2007 Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 3,637 - - - 3,637
Net investment income
Regular net invest-
ment income 1,402 44 - 75 1,521
Change in fair value
on held-for-trading
assets 425 - - - 425
-------------------------------------------------------------------------
1,827 44 - 75 1,946
Fee and media income 735 687 - 84 1,506
-------------------------------------------------------------------------
6,199 731 - 159 7,089
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and expe-
rience refunds and
change in actuarial
liabilities 4,458 - - - 4,458
Commissions 316 238 - (16) 538
Operating expenses 798 155 - 137 1,090
Financing charges 81 22 - 15 118
-------------------------------------------------------------------------
5,653 415 - 136 6,204
-------------------------------------------------------------------------
546 316 - 23 885
Share of earnings of
investments at equity - - 30 (4) 26
Other income (charges),
net - - - 8 8
-------------------------------------------------------------------------
Earnings from continuing
operations before income
taxes and non-controlling
interests 546 316 30 27 919
Income taxes 73 96 - 13 182
Non-controlling interests 282 140 10 (25) 407
-------------------------------------------------------------------------
Contribution to consoli-
dated earnings from
continuing operations 191 80 20 39 330
Contribution to consoli-
dated earnings from
discontinued operations 24 - - - 24
-------------------------------------------------------------------------
Contribution to
consolidated net earnings 215 80 20 39 354
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Information on Profit Measure
-------------------------------------------------------------------------
Nine months ended Par-
September 30, 2008 Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 25,225 - - - 25,225
Net investment income
Regular net
investment income 4,539 166 - 86 4,791
Change in fair value
on held-for-trading
assets (4,793) - - - (4,793)
-------------------------------------------------------------------------
(254) 166 - 86 (2)
Fee and media income 2,381 1,954 - 277 4,612
-------------------------------------------------------------------------
27,352 2,120 - 363 29,835
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and expe-
rience refunds and
change in actuarial
liabilities 21,959 - - - 21,959
Commissions 993 700 - (47) 1,646
Operating expenses 2,140 485 - 465 3,090
Financing charges 259 66 - 41 366
-------------------------------------------------------------------------
25,351 1,251 - 459 27,061
-------------------------------------------------------------------------
2,001 869 - (96) 2,774
Share of earnings of
investments at equity - - 181 (10) 171
Other income (charges),
net - - 12 6 18
-------------------------------------------------------------------------
Earnings from continuing
operations before
income taxes and non-
controlling interests 2,001 869 193 (100) 2,963
Income taxes 466 242 - 20 728
Non-controlling interests 793 384 65 (76) 1,166
-------------------------------------------------------------------------
Contribution to
consolidated earnings
from continuing
operations 742 243 128 (44) 1,069
Contribution to
consolidated earnings
from discontinued
operations 334 - - - 334
-------------------------------------------------------------------------
Contribution to
consolidated net
earnings 1,076 243 128 (44) 1,403
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Information on Profit Measure
-------------------------------------------------------------------------
Nine months ended Par-
September 30, 2007 Lifeco IGM jointco Other Total
-------------------------------------------------------------------------
Revenues
Premium income 12,989 - - - 12,989
Net investment income
Regular net
investment income 4,261 152 - 224 4,637
Change in fair value
on held-for-trading
assets (1,919) - - - (1,919)
-------------------------------------------------------------------------
2,342 152 - 224 2,718
Fee and media income 1,842 2,022 - 269 4,133
-------------------------------------------------------------------------
17,173 2,174 - 493 19,840
-------------------------------------------------------------------------
Expenses
Policyholder benefits,
dividends and expe-
rience refunds and
change in actuarial
liabilities 12,282 - - - 12,282
Commissions 992 706 - (50) 1,648
Operating expenses 1,805 466 - 437 2,708
Financing charges 185 66 - 43 294
-------------------------------------------------------------------------
15,264 1,238 - 430 16,932
-------------------------------------------------------------------------
1,909 936 - 63 2,908
Share of earnings of
investments at equity - - 128 (15) 113
Other income (charges),
net - - 3 8 11
-------------------------------------------------------------------------
Earnings from
continuing operations
before income taxes
and non-controlling
interests 1,909 936 131 56 3,032
Income taxes 384 288 - 46 718
Non-controlling interests 892 409 44 (66) 1,279
-------------------------------------------------------------------------
Contribution to
consolidated earnings
from continuing
operations 633 239 87 76 1,035
Contribution to
consolidated earnings
from discontinued
operations 78 - - - 78
-------------------------------------------------------------------------
Contribution to
consolidated net
earnings 711 239 87 76 1,113
-------------------------------------------------------------------------
-------------------------------------------------------------------------
