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Power Corporation of Canada Reports 2014 Second Quarter and Six-Month Financial Results and Dividends

All figures are in Canadian dollars unless otherwise noted. Readers are referred to the sections entitled "Non-IFRS Financial Measures" and "Forward-Looking Statements" at the end of this release.

WINNIPEG, Aug. 8, 2014 /CNW Telbec/ - Power Corporation of Canada (TSX: POW) today reported earnings results for the second quarter and six months ended June 30, 2014.

SECOND QUARTER RESULTS

Operating earnings attributable to participating shareholders (a non-IFRS financial measure) for the quarter ended June 30, 2014 were $324 million or $0.70 per share, compared with $260 million or $0.56 per share in 2013.

Other items, not included in operating earnings, were a net charge of $10 million comprised of restructuring and other charges at IGM Financial Inc. (IGM) and Square Victoria Communications Group Inc., partially offset by the Corporation's share of the gains realized by Groupe Bruxelles Lambert (GBL) on the sale of part of its interest in Total SA (Total) and on the exchange of Suez Environnement Company (Suez Environnement) shares as further described below. In the corresponding period of 2013, other items represented a net charge of $14 million. Additional details on other items can be found in the table entitled "Other Items" below.

Net earnings attributable to participating shareholders were $314 million or $0.68 per share, compared with $246 million or $0.53 per share in 2013.

SIX-MONTH RESULTS

Operating earnings attributable to participating shareholders for the six months ended June 30, 2014 were $548 million or $1.19 per share, compared with $507 million or $1.10 per share in 2013. 

Other items, not included in operating earnings, resulted in a contribution of $8 million, compared with a net charge of $36 million in 2013.

Net earnings attributable to participating shareholders were $556 million or $1.21 per share, compared with $471 million or $1.02 per share in 2013.

RESULTS OF POWER FINANCIAL CORPORATION

SECOND QUARTER RESULTS

Power Financial reported operating earnings attributable to common shareholders for the quarter ended June 30, 2014 of $545 million or $0.77 per share, compared with $464 million or $0.65 per share in 2013.   

Other items, not included in operating earnings, were a contribution of $23 million, representing Power Financial's share of the gains realized by GBL on the sale of a part of its interest in Total and on the exchange of Suez Environnement shares (1), partially offset by restructuring and other charges at IGM. In the corresponding period of 2013, other items represented a contribution of $11 million.

Net earnings attributable to common shareholders were $568 million or $0.80 per share, compared with $475 million or $0.67 per share in 2013.

______________________

(1)

In 2012, GBL issued bonds exchangeable for Suez Environnement shares. During the second quarter of 2014, holders of Suez Environnement exchangeable bonds exercised their right to exchange approximately 85% of the bonds outstanding for shares of Suez Environnement. Pargesa's share of the gain recorded by GBL on this exchange was SF129 million, of which SF55 million was recorded as operating earnings. The remaining portion of SF74 million, which essentially represents the economic gain measured at the exchange price set at the time of the issuance of the exchangeable bonds, has been recognized as non-operating earnings.

 

SIX-MONTH RESULTS

For the six months ended June 30, 2014, operating earnings attributable to common shareholders were $985 million or $1.39 per share, compared with $871 million or $1.22 per share in 2013. 

Other items, not included in operating earnings, were a contribution of $50 million, compared with a net charge of $2 million in 2013.

Net earnings attributable to common shareholders were $1,035 million or $1.46 per share, compared with $869 million or $1.22 per share in 2013.

As at June 30, 2014, Power Corporation held a 65.8% economic interest in Power Financial. Power Financial's contribution to Power Corporation's operating earnings was $358 million for the quarter ended June 30, 2014, compared with $306 million in 2013. For the six months ended June 30, 2014, Power Financial contributed $648 million to Power Corporation's operating earnings, compared with $574 million in 2013.

(1) In 2012, GBL issued bonds exchangeable for Suez Environnement shares. During the second quarter of 2014, holders of Suez Environnement exchangeable bonds exercised their right to exchange approximately 85% of the bonds outstanding for shares of Suez Environnement. Pargesa's share of the gain recorded by GBL on this exchange was SF129 million, of which SF55 million was recorded as operating earnings. The remaining portion of SF74 million, which essentially represents the economic gain measured at the exchange price set at the time of the issuance of the exchangeable bonds, has been recognized as non-operating earnings.

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 

September 24, 2014

October 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

September 24, 2014

October 15, 2014

35¢

Series B – POW.PR.B

September 24, 2014

October 15, 2014

33.4375¢

Series C – POW.PR.C

September 24, 2014

October 15, 2014

36.25¢

Series D – POW.PR.D

September 24, 2014

October 15, 2014

31.25¢

Series G – POW.PR.G

September 24, 2014

October 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 September 30, 2014 to shareholders of record September 9, 2014.

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)
(in millions of Canadian dollars, except per share amounts)

Three months ended

Six months ended


June 30,
2014

June 30,
2013

June 30,
2014

June 30,
2013

Contribution to operating earnings from:






Power Financial

358

306

648

574


Other subsidiaries (1)

(13)

(17)

(34)

(26)


345

289

614

548

Results from corporate activities






Income from investments

23

14

22

45


Operating and other expenses

(31)

(30)

(62)

(60)

Dividends on non-participating shares

(13)

(13)

(26)

(26)

Operating earnings attributable to participating shareholders

324

260

548

507

Other items (see below)

(10)

(14)

8

(36)

Net earnings attributable to participating shareholders

314

246

556

471






Earnings per share (attributable to participating shareholders)






– operating earnings

0.70

0.56

1.19

1.10


– non-operating earnings

(0.02)

(0.03)

0.02

(0.08)


– net earnings

0.68

0.53

1.21

1.02







(1) Comprised of Square Victoria Communications Group Inc., Sagard SAS and Power Energy Corporation.



OTHER ITEMS




(unaudited)
(in millions of Canadian dollars)

Three months ended

Six months ended


June 30,
2014

June 30,
2013

June 30,
2014

June 30,
2013

Power Financial:






IGM

(5)


(5)



Pargesa

20

7

38

(2)


15

7

33

(2)

Impairment and other charges at Square Victoria Communications Group Inc.

(25)


(25)

(13)

Impairment charge on CITIC Pacific Limited


(21)


(21)


(10)

(14)

8

(36)

 

Eligible Dividends
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.

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, assist the reader in comparing the current period's results to those of previous periods as items of a non-recurring nature are not included in this non-IFRS measure.

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.

The Corporation also uses a non-consolidated basis of presentation to present and explain its results, financial position and cash flows. This non-consolidated basis, which is a non-IFRS presentation, is useful as it isolates the parent's corporate activities from those of operating subsidiaries, reflecting their respective contributions.

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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