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Power Corporation of Canada Reports Fourth Quarter and 2013 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 19, 2014 /CNW Telbec/ - Power Corporation of Canada (TSX: POW) today reported earnings results for the fourth quarter and the year ended December 31, 2013.

FOURTH QUARTER RESULTS

Operating earnings attributable to participating shareholders (a non-IFRS financial measure) for the quarter ended December 31, 2013 were $218 million or $0.47 per share, compared with $219 million or $0.48 per share 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), a subsidiary of Power Financial, and mark-to-market losses on macro capital hedges, operating earnings attributable to participating shareholders were $259 million or $0.56 per share, compared with $219 million or $0.48 per share in 2012.

Other items, not included in operating earnings, represented a contribution of $82 million. Other items included the Corporation's share of other items at Power Financial as well as charges related to Square Victoria Communications Group Inc., a subsidiary of the Corporation, for an amount of $43 million, which comprised a one-time cash payment related to new terms and conditions of the contract to print the La Presse newspaper. In 2012, other items represented a net charge of $140 million. Additional details on other items can be found in this news release and in the section entitled "Other Items" below.

Net earnings attributable to participating shareholders were $300 million or $0.65 per share, compared with $79 million or $0.18 per share in 2012.

2013 RESULTS

For the year ended December 31, 2013, operating earnings attributable to participating shareholders were $959 million or $2.08 per share, compared with $947 million or $2.06 per share in 2012.

Excluding the impact of acquisition and restructuring costs associated with the Irish Life acquisition and mark-to-market losses on macro capital hedges, operating earnings attributable to participating shareholders were $1,035 million or $2.24 per share.

Other items, not included in operating earnings, were a contribution of $18 million. In addition to the items discussed above, other items in 2013 included a restructuring provision and impairment charges recorded by Square Victoria Communications Group Inc. Other items represented a net charge of $131 million in 2012.

Net earnings attributable to participating shareholders were $977 million or $2.12 per share, compared with $816 million or $1.78 per share in 2012.

RESULTS OF POWER FINANCIAL CORPORATION

FOURTH QUARTER RESULTS

Power Financial reported operating earnings attributable to common shareholders for the quarter ended December 31, 2013 of $403 million or $0.57 per share, compared with $405 million or $0.57 per share in 2012.

Other items, not included in operating earnings, were a contribution of $190 million, and were mainly comprised of a litigation provision recovery reported by Lifeco, and the share of Pargesa's gain recorded by Groupe Bruxelles Lambert on the partial disposal of its investment in Total SA. In 2012, other items were a net charge of $128 million.

Net earnings attributable to common shareholders were $593 million or $0.84 per share, compared with $277 million or $0.39 per share in 2012.

2013 RESULTS

Operating earnings attributable to common shareholders for the year ended December 31, 2013 were $1,708 million or $2.40 per share, compared with $1,678 million or $2.37 per share in 2012.

Other items, not included in operating earnings, were a contribution of $188 million. Other items were a net charge of $60 million in 2012.

Net earnings attributable to common shareholders were $1,896 million or $2.67 per share, compared with $1,618 million or $2.29 per share in 2012.

At December 31, 2013, Power Corporation held a 65.8% economic interest in Power Financial. Power Financial's contribution to Power Corporation's operating earnings was $265 million for the quarter ended December 31, 2013, compared with $268 million in 2012. For the year ended December 31, 2013, Power Financial's contribution to Power Corporation's operating earnings was $1,124 million, compared with $1,108 million in 2012.

DIVIDENDS ON NON-PARTICIPATING PREFERRED SHARES

On February 19, 2014, as previously disclosed, the Board of Directors 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, 2014 April 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 March 25, 2014 April 15, 2014 35¢
Series B - POW.PR.B March 25, 2014 April 15, 2014 33.4375¢
Series C - POW.PR.C March 25, 2014 April 15, 2014 36.25¢
Series D - POW.PR.D March 25, 2014 April 15, 2014 31.25¢
Series G - POW.PR.G March 25, 2014 April 15, 2014 35¢
[1] In accordance with the articles of the Corporation

DIVIDENDS ON PARTICIPATING SHARES

On February 19, 2014, as previously disclosed, 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 31, 2014 to shareholders of record March 10, 2014.

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,
2013
  December 31,
2012
  December 31,
2013
  December 31,
2012
Contribution to operating earnings from:              
  Power Financial 1,124   1,108   265   268
  Other subsidiaries (76)   (16)   (32)   (2)
  1,048   1,092   233   266
Results from corporate activities              
  Income from investments 88   27   32   (1)
  Operating and other expenses (125)   (122)   (34)   (33)
Dividends on non-participating shares (52)   (50)   (13)   (13)
Operating earnings attributable to   participating shareholders 959   947   218   219
Other items (see below)              
  Power Financial 123   (39)   125   (84)
  Other subsidiaries (84)   (56)   (43)   (56)
  Corporate activities of Power Corporation (21)   (36)   -   -
  18   (131)   82   (140)
Net earnings attributable to participating shareholders 977   816   300   79
Earnings per share (attributable to participating shareholders)              
- operating earnings 2.08   2.06   0.47   0.48
- non-operating earnings 0.04   (0.28)   0.18   (0.30)
- net earnings 2.12   1.78   0.65   0.18
 
OTHER ITEMS
(unaudited) Twelve months ended   Three months ended  
  December 31,
2013
  December 31,
2012
  December 31,
2013
  December 31,
2012  
Power Financial:              
  Lifeco 99   (62)   99   (62)
  IGM (1)   4   (1)   7  
  Pargesa 25   19   27   (29)
  123   (39)   125   (84)
Other subsidiaries (84)   (56)   (43)   (56)
Impairment charge on CITIC Pacific Limited (21)   (36)   -   -
  18   (131)   82   (140)

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 as follows:
• 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 its 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, as defined by the Corporation, helps the reader to compare the current period's results to those of previous periods as items of a non-recurring nature have been excluded from this non-IFRS measure.
The Corporation also uses the equity method to present and explain its results, financial position and cash flows. This method is useful as it isolates the corporate activities from those of operating subsidiaries and shows their respective contributions separately.
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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