2014

Power Corporation of Canada Reports Fourth Quarter and 2012 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.

MONTREAL, March 13, 2013 /CNW Telbec/ - Power Corporation of Canada (TSX: POW) today reported earnings results for the fourth quarter and the year ended December 31, 2012.

FOURTH QUARTER RESULTS

Operating earnings attributable to participating shareholders, a non-IFRS financial measure, for the quarter ended December 31, 2012 were $222 million or $0.48 per share, compared with $241 million or $0.52 per share in the corresponding period in 2011.

Subsidiaries contributed $268 million to Power Corporation's operating earnings for the quarter ended December 31, 2012, compared with $279 million in the same period in 2011. Results from corporate activities were a net charge of $33 million, compared with a net charge of $28 million in the corresponding period in 2011.

Other items in the quarter, not included in operating earnings, represented a net charge of $140 million. Power Corporation's share of other items at Power Financial Corporation (Power Financial), a subsidiary, was $84 million. In addition, other items included impairment charges totalling $56 million recorded by Square Victoria Communications Group Inc., a subsidiary of the Corporation. In the corresponding quarter of 2011, other items represented a net contribution of $73 million. Additional details on other items can be found in this news release and in the Earnings Summary below.

Net earnings attributable to participating shareholders for the quarter ended December 31, 2012 were $82 million or $0.18 per share, compared with $314 million or $0.68 per share in the corresponding period in 2011.

2012 RESULTS

For the year ended December 31, 2012, operating earnings attributable to participating shareholders were $963 million or $2.09 per share, compared with $1,152 million or $2.50 per share in 2011.

Subsidiaries contributed $1,108 million to Power Corporation's operating earnings for the year ended December 31, 2012, compared with $1,150 million in 2011. Results from corporate activities represented a net charge of $95 million, compared with a net contribution of $43 million in 2011.

Other items, not included in operating earnings, were a net charge of $131 million in 2012, compared with a net charge of $77 million in 2011. Other items include those recorded by Power Financial totalling $39 million described below, the impairment charge of $56 million at Square Victoria Communications Group Inc. and an impairment charge of $36 million on the Corporation's investment in CITIC Pacific Limited recorded in the third quarter of 2012. Additional details on other items can be found in this news release and in the Earnings Summary below.

Net earnings attributable to participating shareholders for the year ended December 31, 2012 were $832 million or $1.81 per share, compared with $1,075 million or $2.34 per share in 2011.

RESULTS OF POWER FINANCIAL CORPORATION

Power Financial reported operating earnings attributable to common shareholders for the quarter ended December 31, 2012 of $406 million or $0.57 per share, compared with $422 million or $0.60 per share in the corresponding period in 2011.

Other items, not included in operating earnings, for the fourth quarter of 2012 were a net charge of $128 million, and were comprised of a charge relating to a litigation provision adjustment reported by Great-West Lifeco Inc., a subsidiary of Power Financial, and the share of Pargesa's impairment charge on its subsidiary's (Groupe Bruxelles Lambert - GBL) investment in GDF Suez. For the quarter ended December 31, 2011, other items at Power Financial were a net contribution of $111 million.

Net earnings attributable to common shareholders for the quarter ended December 31, 2012 were $278 million or $0.39 per share, compared with $533 million or $0.75 per share in the corresponding quarter of 2011.

Operating earnings attributable to common shareholders for the year ended December 31, 2012 were $1,686 million or $2.38 per share, compared with $1,729 million or $2.44 per share in 2011.

Other items, not included in operating earnings, at Power Financial for the year ended December 31, 2012 were a net charge of $60 million. In addition to the items described above, other items in 2012 included a share of the gains realized by GBL in the first quarter on the partial disposal of its interest in Pernod Ricard and on the disposal of its interest in Arkema, and a share of the amount recorded by IGM Financial Inc., a subsidiary of Power Financial, relating to changes in the status of certain income tax filings. Other items for the year ended December 31, 2011 were a net charge of $7 million.

Net earnings attributable to common shareholders of Power Financial for the year ended December 31, 2012 were $1,626 million or $2.30 per share, compared with $1,722 million or $2.43 per share in 2011.

At December 31, 2012, Power Corporation held a 66.0% economic interest in Power Financial. Power Financial's contribution to Power Corporation's operating earnings was $268 million for the quarter ended December 31, 2012, compared with $279 million in the same period in 2011. For the year ended December 31, 2012, Power Financial's contribution to Power Corporation's operating earnings was $1,114 million, compared with $1,142 million in 2011.

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  March 25, 2013 April 15, 2013 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 March 25, 2013 April 15, 2013 35¢
Series B - POW.PR.B March 25, 2013 April 15, 2013 33.4375¢
Series C - POW.PR.C March 25, 2013 April 15, 2013 36.25¢
Series D - POW.PR.D March 25, 2013 April 15, 2013 31.25¢
Series G - POW.PR.G March 25, 2013 April 15, 2013 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 March 28, 2013 to shareholders of record March 22, 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.

EARNINGS SUMMARY
 
(unaudited) Twelve months ended   Three months ended
  December 31,
2012
  December 31,
2011
  December 31,
2012
  December 31,
2011
Contribution to operating earnings from subsidiaries(1) 1,108   1,150   268   279
Results from corporate activities              
  Income from investments 27   159   (1)   -
  Operating and other expenses (122)   (116)   (32)   (28)
Dividends on non-participating shares (50)   (41)   (13)   (10)
Operating earnings attributable to participating shareholders 963   1,152   222   241
Other items (see below) (131)   (77)   (140)   73
Net earnings attributable to participating shareholders 832   1,075   82   314
Earnings per share (attributable to participating shareholders)              
  - operating earnings 2.09   2.50   0.48   0.52
  - non-operating earnings (0.28)   (0.16)   (0.30)   0.16
  - net earnings 1.81   2.34   0.18   0.68
 
 OTHER ITEMS
 
(unaudited) Twelve months ended   Three months ended
  December 31,
2012
  December 31,
2011
  December 31,
2012
  December 31,
2011
Power Corporation's share of Power Financial's other items:              
  Lifeco (65)   58   (65)   58
  IGM (2) 7   23   10   12
  Pargesa 19   (86)   (29)   3
  (39)   (5)   (84)   73
Impairment charges recorded by Square Victoria Communications Group (56)       (56)    
Impairment charge on CITIC Pacific (36)   (72)        
  (131)   (77)   (140)   73
(1) Includes Power Financial and other subsidiaries of the Corporation.
(2) The gain on the disposal of M.R.S. Trust Company and M.R.S. Inc. is an other item not included in operating earnings. However, earnings
from discontinued operations are included in operating earnings.


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 subdivided 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.

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 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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