2014

Power Corporation of Canada Reports 2013 Third Quarter and Nine-Month Financial Results and Dividends

Readers are referred to the sections entitled "Non-IFRS Financial Measures" and "Forward-Looking Statements" at the end of this release.

TORONTO, Nov. 14, 2013 /CNW Telbec/ - Power Corporation of Canada (TSX: POW) today reported earnings results for the third quarter and nine months ended September 30, 2013.

THIRD QUARTER RESULTS

Operating earnings attributable to participating shareholders, a non-IFRS financial measure, for the quarter ended September 30, 2013 were $234 million or $0.51 per share, compared with $236 million or $0.51 per share in the corresponding period in 2012.

Excluding the impact of acquisition and restructuring costs associated with the Irish Life Group Limited (Irish Life) acquisition by Great-West Lifeco Inc. (Lifeco), operating earnings attributable to participating shareholders were $262 million or $0.57 per share.

Subsidiaries contributed $267 million to Power Corporation's operating earnings, compared with $295 million in the same period in 2012. Results from corporate activities were a net charge of $20 million, compared with a net charge of $47 million in the corresponding period in 2012.

Other items, not included in operating earnings, resulted in a net charge of $28 million, representing an impairment charge recorded by Square Victoria Communications Group Inc. In the corresponding quarter of 2012, other items represented a net charge of $36 million. Additional details on other items can be found in the section entitled "Other Items" below.

Net earnings attributable to participating shareholders were $206 million or $0.45 per share, compared with $200 million or $0.43 per share in the corresponding period in 2012.

NINE-MONTH RESULTS

Operating earnings attributable to participating shareholders for the nine months ended September 30, 2013 were $741 million or $1.61 per share, compared with $728 million or $1.58 per share in the corresponding period in 2012.

Excluding the impact of acquisition and restructuring costs associated with the Irish Life acquisition by Lifeco, operating earnings attributable to participating shareholders were $775 million or $1.68 per share.

Other items, not included in operating earnings, resulted in a net charge of $64 million, compared with a contribution of $9 million in the corresponding period in 2012.

Net earnings attributable to participating shareholders were $677 million or $1.47 per share, compared with $737 million or $1.60 per share for the same period in 2012.

RESULTS OF POWER FINANCIAL

Power Financial reported net and operating earnings attributable to common shareholders for the quarter ended September 30, 2013 of $434 million or $0.61 per share, compared with $458 million or $0.65 per share in the corresponding period in 2012.

For the nine months ended September 30, 2013, Power Financial reported operating earnings attributable to common shareholders of $1,305 million or $1.83 per share, compared with $1,273 million or $1.80 per share in the corresponding period in 2012.

Including other items, net earnings attributable to common shareholders were $1,303 million or $1.83 per share for the nine months ended September 30, 2013, compared with $1,341 million or $1.90 per share for the same period in 2012.

At September 30, 2013, Power Corporation held a 65.8% interest in Power Financial. Power Financial's contribution to Power Corporation's operating earnings was $286 million for the quarter ended September 30, 2013, compared with $302 million in the same period in 2012. For the nine months ended September 30, 2013, Power Financial contributed $859 million to Power Corporation's operating earnings, compared with $840 million for the same period in 2012.

DIVIDENDS ON NON-PARTICIPATING PREFERRED SHARES

The Board of Directors today declared quarterly dividends on the Corporation's preferred shares, as follows:

SERIES - STOCK SYMBOL RECORD DATE PAYMENT DATE AMOUNT
1986 Series - POW.PR.F  December 24, 2013 January 15, 2014 At a floating rate equal to one quarter of 70% of the average prime rate of two major Canadian chartered banks [1]
Series A - POW.PR.A December 24, 2013 January 15, 2014 35¢
Series B - POW.PR.B December 24, 2013 January 15, 2014 33.4375¢
Series C - POW.PR.C December 24, 2013 January 15, 2014 36.25¢
Series D - POW.PR.D December 24, 2013 January 15, 2014 31.25¢
Series G - POW.PR.G December 24, 2013 January 15, 2014 35¢
[1] In accordance with the articles of the Corporation


DIVIDENDS ON PARTICIPATING SHARES

The Board of Directors also declared a quarterly dividend of 29 cents per share on the Participating Preferred Shares and the Subordinate Voting Shares of the Corporation, payable December 31, 2013 to shareholders of record on December 10, 2013.

For purposes of the Income Tax Act (Canada) and any similar provincial legislation, all of the above dividends on the Corporation's preferred shares (including the Participating Preferred Shares) and Subordinate Voting Shares are eligible dividends.

ABOUT POWER CORPORATION

Power Corporation of Canada is a diversified international management and holding company with interests in companies in the financial services, communications and other business sectors in North America, Europe and Asia. To learn more, visit www.powercorporation.com.

EARNINGS SUMMARY
(unaudited) Nine months ended   Three months ended  
  September 30,
2013
  September 30,
2012
(1) September 30,
2013
  September 30,
2012
(1)
Contribution to operating earnings from subsidiaries (2) 815   826   267   295  
Results from corporate activities                
  Income from investments 56   28   11   (19)  
  Operating and other expenses (91)   (89)   (31)   (28)  
Dividends on non-participating shares (39)   (37)   (13)   (12)  
Operating earnings attributable to participating shareholders 741   728   234   236  
Other items (see below) (64)   9   (28)   (36)  
Net earnings attributable to participating shareholders 677   737   206   200  
Earnings per share (attributable to participating shareholders)                
  - operating earnings 1.61   1.58   0.51   0.51  
  - non-operating earnings (0.14)   0.02   (0.06)   (0.08)  
  - net earnings 1.47   1.60   0.45   0.43  
 
OTHER ITEMS
(unaudited) Nine months ended   Three months ended  
  September 30,
2013
  September 30,
2012
  September 30,
2013
  September 30,
2012
 
Power Corporation's share of Power Financial's other items:                
  IGM     (3)          
  Pargesa (2)   48          
  (2)   45          
Impairment charge on CITIC Pacific (21)   (36)       (36)  
Charges recorded by Square Victoria Communications Group (41)       (28)      
  (64)   9   (28)   (36)  
(1) Effective January 1, 2013, the Corporation adopted revised IAS 19 (IAS 19R), Employee Benefits. In accordance with the required transitional provisions, the Corporation retrospectively applied the revised standard. The 2012 comparative financial information in this News Release has been restated accordingly.
(2) Includes Power Financial and other subsidiaries of the Corporation.


Non-IFRS Financial Measures

In analyzing the financial results of the Corporation and consistent with the presentation in previous years, net earnings attributable to participating shareholders are classified into the following components:

  • operating earnings attributable to participating shareholders; and
  • other items or non-operating earnings, 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 manner by its subsidiaries and jointly controlled corporations and associates.

Management uses these financial measures 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 attributable to participating shareholders and operating earnings per share are non-IFRS financial measures that do not have a standard meaning and may not be comparable to similar measures used by other entities.

Forward-Looking Statements

Certain statements in this News Release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect the Corporation's current expectations, or with respect to disclosure regarding the Corporation's public subsidiaries, reflect such subsidiaries' disclosed current expectations. Forward-looking statements are provided for the purposes of assisting the reader in understanding the Corporation's financial performance, financial position and cash flows 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, 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 list of factors in the previous paragraph, collectively, are not expected to have a material impact on the Corporation and its subsidiaries. While the Corporation considers these assumptions to be reasonable based on information currently available to management, they may prove to be incorrect.

Other than as specifically required by applicable Canadian 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 and material factors or assumptions on which information contained in forward-looking statements is based 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 and available at www.sedar.com.

SOURCE Power Corporation of Canada




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