2014

Power Financial Corporation Reports 2012 Third Quarter Financial Results and Dividends

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

TORONTO, Nov. 14, 2012 /CNW Telbec/ - Power Financial Corporation (TSX: PWF) today reported operating earnings attributable to common shareholders for the nine-month period ended September 30, 2012 of $1,280 million or $1.80 per share, compared with $1,307 million or $1.84 per share in the corresponding period in 2011.

For the nine-month period ended September 30, 2012, other items represented a net contribution of $68 million mainly composed of the Corporation's share of the gains realized by Groupe Bruxelles Lambert in the first quarter on the partial disposal of its interest in Pernod Ricard ($46 million) and the disposal of its interest in Arkema ($43 million), as previously disclosed. These gains were partially offset in the second quarter by the Corporation's share ($4 million) of a non-cash income tax charge recorded by IGM Financial Inc. (IGM) resulting from increases in Ontario corporate income tax rates and the Corporation's share of non-operating earnings of Pargesa Holding SA (Pargesa) ($17 million), mainly composed of a charge for goodwill impairment and restructuring charges recorded by Lafarge SA.

For the nine-month period ended September 30, 2011, other items represented a net charge of $118 million and consisted mainly of the Corporation's share ($133 million) of Pargesa's impairment charge recorded in the third quarter on its indirect investment in Lafarge SA.

Taking into account these other items, net earnings attributable to common shareholders for the nine-month period ended September 30, 2012 were $1,348 million or $1.90 per share, compared with $1,189 million or $1.68 per share in the corresponding period in 2011.

THIRD QUARTER RESULTS
For the quarter ended September 30, 2012, operating earnings attributable to common shareholders were $460 million or $0.65 per share, compared with $428 million or $0.60 per share in the third quarter of 2011. There were no other items in the quarter, compared with a net charge of $116 million in the corresponding period in 2011, as described above.

As a result, net earnings attributable to common shareholders for the quarter ended September 30, 2012 were $460 million or $0.65 per share, compared with $312 million or $0.44 per share in the corresponding period in 2011.

RESULTS OF SUBSIDIARIES AND PARJOINTCO

GREAT-WEST LIFECO INC.
For the nine-month period ended September 30, 2012, Great-West Lifeco Inc. (Lifeco) reported net earnings attributable to common shareholders of $1,462 million or $1.539 per share, compared with $1,398 million or $1.473 per share in the corresponding period in 2011.

For the quarter ended September 30, 2012, Lifeco reported net earnings attributable to common shareholders of $520 million or $0.547 per share, compared with $457 million or $0.481 per share in the corresponding period of 2011.

Lifeco's contribution to Power Financial's operating earnings was $998 million for the nine-month period ended September 30, 2012, compared with $956 million for the corresponding period in 2011. For the quarter ended September 30, 2012, Lifeco's contribution to Power Financial's operating earnings was $356 million, compared with $312 million in the same period in 2011.

IGM FINANCIAL INC.
For the nine-month period ended September 30, 2012, IGM reported operating earnings available to common shareholders of $566 million or $2.21 per share, compared with $637 million or $2.46 per share in the same period in 2011.

For the quarter ended September 30, 2012, IGM reported operating earnings available to common shareholders of $187 million or $0.73 per share, compared with $213 million or $0.82 per share in the same period in 2011.

IGM's contribution to Power Financial's operating earnings was $327 million for the nine-month period ended September 30, 2012, compared with $367 million for the corresponding period in 2011. For the quarter ended September 30, 2012, IGM's contribution to Power Financial's operating earnings was $109 million, compared with $121 million in the same period in 2011.

PARJOINTCO N.V.
Power Financial held a 50% interest in Parjointco N.V., which in turn held a 56.5% equity interest in Pargesa at September 30, 2012.

For the nine-month period ended September 30, 2012, Pargesa reported operating earnings of SF322 million, compared with operating earnings of SF319 million in the corresponding period in 2011. For the quarter ended September 30, 2012, operating earnings were SF144 million, compared with SF109 million in the corresponding period of 2011.

Pargesa's contribution to Power Financial's operating earnings, expressed in Canadian dollars, was $95 million for the nine-month period ended September 30, 2012, compared with a contribution of $103 million in the corresponding period in 2011. For the quarter ended September 30, 2012, Pargesa's contribution to Power Financial's operating earnings was $41 million, compared with a contribution of $36 million in the corresponding period in 2011.

DIVIDENDS ON 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
Series A - PWF.PR.A January 25, 2013 February 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 D - PWF.PR.E January 10, 2013 January 31, 2013 34.375¢
Series E - PWF.PR.F January 10, 2013 January 31, 2013 32.8125¢
Series F - PWF.PR.G January 10, 2013 January 31, 2013 36.875¢
Series H - PWF.PR.H January 10, 2013 January 31, 2013 35.9375¢
Series I - PWF.PR.I January 10, 2013 January 31, 2013 37.50¢
Series K - PWF.PR.K January 10, 2013 January 31, 2013 30.9375¢
Series L - PWF.PR.L January 10, 2013 January 31, 2013 31.875¢
Series M - PWF.PR.M January 10, 2013 January 31, 2013 37.50¢
Series O - PWF.PR.O January 10, 2013 January 31, 2013 36.25¢
Series P - PWF.PR.P January 10, 2013 January 31, 2013 27.50¢
Series R - PWF.PR.R January 10, 2013 January 31, 2013 34.375¢

[1] In accordance with the articles of the Corporation

DIVIDEND ON COMMON SHARES
The Board of Directors also declared a quarterly dividend of 35 cents per share on the Corporation's common shares payable February 1, 2013 to shareholders of record December 31, 2012.

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

SUPPLEMENTARY INFORMATION

EARNINGS SUMMARY - CONDENSED SUPPLEMENTARY STATEMENTS OF EARNINGS

The following table shows a reconciliation of non-IFRS[1] financial measures used herein for the periods indicated, with the reported results in accordance with IFRS for net earnings attributable to common shareholders and earnings per share.

               
  Nine months ended   Three months ended
  September 30,
2012
  September 30,
2011
  September 30,
2012
  September 30,
2011
Contribution to operating earnings from subsidiaries and investment in associate              
  Lifeco 998   956   356   312
  IGM 327   367   109   121
  Pargesa 95   103   41   36
  1,420   1,426   506   469
Results from corporate activities (53)   (41)   (17)   (15)
Dividends on perpetual preferred shares (87)   (78)   (29)   (26)
Operating earnings attributable to common shareholders 1,280   1,307   460   428
Other items 68   (118)   -   (116)
Net earnings attributable to common shareholders 1,348   1,189   460   312
Earnings per share (attributable to common shareholders)              
  - operating earnings 1.80   1.84   0.65   0.60
  - non-operating earnings 0.10   (0.16)   -   (0.16)
  - net earnings 1.90   1.68   0.65   0.44

OTHER ITEMS

The following table provides details on other items for the periods indicated:

               
  Nine months ended   Three months ended
  September 30,
2012
  September 30,
2011
  September 30,
2012
  September 30,
2011
Share of IGM's other items              
  Non-cash income tax charge (4)            
  Changes in the status of certain income tax filings     17       17
Share of Pargesa's other items              
  Impairment charge     (133)       (133)
  Gain on partial disposal of Pernod Ricard 46            
  Gain on disposal of Arkema 43            
  Other (17)   (2)        
  68   (118)   -   (116)

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 prior 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.

Non-IFRS Financial Measures
In analyzing the financial results of the Corporation and consistent with the presentation in previous years, net earnings attributable to common shareholders are subdivided into the following components:

  • operating earnings attributable to common 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 Financial, and believes that they provide additional meaningful information to readers in their analysis of the results of the Corporation.

Operating earnings attributable to common 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.

[1] IFRS refers to International Financial Reporting Standards.

 

SOURCE POWER FINANCIAL CORPORATION




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