Readers are referred to the sections entitled "Forward-looking Statements" and "Non-IFRS Financial Measures" at the end of this release. The Corporation's financial results are reported under International Financial Reporting Standards (IFRS).
MONTREAL, May 14, 2012 /CNW Telbec/ - Power Financial Corporation (TSX: PWF) today reported operating earnings attributable to common shareholders for the three-month period ended March 31, 2012 of $372 million or $0.52 per share, the same as in the corresponding period in 2011.
Other items represented a contribution of $83 million, compared with a charge of $2 million in the first quarter of 2011. Other items in the first quarter of 2012 were mainly composed of the Corporation's share of the gains realized by Groupe Bruxelles Lambert (GBL) on the partial disposal of Pernod Ricard (a producer of wines and spirits) shares ($46 million) and the disposal of Arkema (a French chemicals producer) shares ($43 million).
As a result, net earnings attributable to common shareholders for the three-month period ended March 31, 2012 were $455 million or $0.64 per share, compared with $370 million or $0.52 per share in the corresponding period in 2011.
RESULTS OF SUBSIDIARIES AND PARJOINTCO
GREAT-WEST LIFECO INC.
For the three-month period ended March 31, 2012, Great-West Lifeco Inc. (Lifeco) reported operating earnings and net earnings attributable to common shareholders of $451 million or $0.475 per share, compared with $415 million or $0.438 per share in the corresponding period in 2011. This represents an increase of 8.4% on a per share basis.
Included in operating earnings for the first quarter of 2011 was the establishment of catastrophe provisions relating to earthquake events in Japan and New Zealand with an after-tax impact of $75 million. Power Financial's share of these provisions was $53 million.
Lifeco's contribution to Power Financial's operating earnings was $306 million for the three-month period ended March 31, 2012, compared with $284 million for the corresponding period in 2011.
IGM FINANCIAL INC.
For the three-month period ended March 31, 2012, IGM Financial Inc. (IGM) reported operating earnings and net earnings available to common shareholders of $200 million or $0.78 per share, compared with operating earnings available to common shareholders of $211 million or $0.81 per share in the same period in 2011, a decrease of 3.7% on a per share basis. Net earnings available to common shareholders in the first quarter of 2011 were $212 million.
IGM's contribution to Power Financial's operating earnings was $114 million for the three-month period ended March 31, 2012, compared with $121 million for the corresponding period in 2011.
Power Financial held a 50% interest in Parjointco N.V., which in turn held a 56.5% equity interest in Pargesa SA (Pargesa) at March 31, 2012.
For the three-month period ended March 31, 2012, Pargesa reported an operating loss of SF6 million, compared with operating earnings of SF14 million in the corresponding period in 2011. These results reflect that, although the results of Imerys were 9.8% higher than in the corresponding period in 2011, the contribution from Imerys to Pargesa's earnings decreased by 26.8% in the first quarter of 2012, due to a smaller percentage of ownership as Pargesa's direct interest in Imerys was sold to GBL in April 2011 as previously disclosed.
Including the gains realized by GBL as referred to above, Pargesa's net earnings for the three-month period ended March 31, 2012 were SF266 million, compared with SF6 million in the corresponding period in 2011.
Expressed in Canadian dollars, Pargesa's contribution to Power Financial's operating earnings was a charge of $2 million for the three-month period ended March 31, 2012, compared with earnings of $4 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||July 25, 2012||August 15, 2012||To be determined in accordance with the articles of the Corporation|
|Series D - PWF.PR.E||July 10, 2012||July 31, 2012||34.375¢|
|Series E - PWF.PR.F||July 10, 2012||July 31, 2012||32.8125¢|
|Series F - PWF.PR.G||July 10, 2012||July 31, 2012||36.875¢|
|Series H - PWF.PR.H||July 10, 2012||July 31, 2012||35.9375¢|
|Series I - PWF.PR.I||July 10, 2012||July 31, 2012||37.50¢|
|Series K - PWF.PR.K||July 10, 2012||July 31, 2012||30.9375¢|
|Series L - PWF.PR.L||July 10, 2012||July 31, 2012||31.875¢|
|Series M - PWF.PR.M||July 10, 2012||July 31, 2012||37.50¢|
|Series O - PWF.PR.O||July 10, 2012||July 31, 2012||36.25¢|
|Series P - PWF.PR.P||July 10, 2012||July 31, 2012||27.50¢|
|Series R - PWF.PR.R||July 10, 2012||July 31, 2012||34.375¢|
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 August 1, 2012 to shareholders of record June 29, 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.
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, reflects 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 foregoing list of factors, 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 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.
|POWER FINANCIAL CORPORATION|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|[in millions of Canadian dollars]||
|Cash and cash equivalents||2,829||3,385|
|Mortgages and other loans||21,740||21,518|
|Loans to policyholders||7,013||7,162|
|Funds held by ceding insurers||10,127||9,923|
|Investment in associates||2,294||2,222|
|Derivative financial instruments||997||1,056|
|Deferred tax assets||1,179||1,207|
|Segregated funds for the risk of unit holders||100,474||96,582|
|Insurance contract liabilities||114,798||114,730|
|Investment contract liabilities||763||782|
|Deposits and certificates||147||151|
|Funds held under reinsurance contracts||169||169|
|Obligation to securitization entities||4,018||3,827|
|Debentures and other borrowings||6,001||5,888|
|Capital trust securities||534||533|
|Derivative financial instruments||370||427|
|Deferred tax liabilities||1,228||1,258|
|Insurance and investment contracts on account of unit holders||100,474||96,582|
|Perpetual preferred shares||2,255||2,005|
|Total shareholders' equity||13,901||13,521|
|Total liabilities and equity||258,108||252,678|
|CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS|
Three months ended March 31
(unaudited) [in millions of Canadian dollars, except per share amounts]
|Gross premiums written||5,198||4,941|
|Total net premiums||4,529||4,295|
|Net investment income|
|Regular net investment income||1,460||1,456|
|Change in fair value||(197)||(198)|
|Insurance and investment contracts|
|Policyholder dividends and experience refunds||364||353|
|Change in insurance and investment contract liabilities||160||136|
|Total paid or credited to policyholders||4,743||4,579|
|Operating and administrative expenses||924||899|
|Share of earnings of investment in associates||81||2|
|Earnings before income taxes - continuing operations||827||751|
|Net earnings - continuing operations||712||615|
|Net earnings - discontinued operations||-||1|
|Perpetual preferred shareholders||29||26|
|Earnings per common share|
|Net earnings attributable to common shareholders|
|Net earnings from continuing operations attributable to common shareholders|
INFORMATION ON PROFIT MEASURE
|Three months ended March 31, 2012||Lifeco||IGM||Parjointco||Other||Total|
|Premium income, net||4,529||-||-||-||4,529|
|Investment income, net||1,243||46||-||(26)||1,263|
|Total paid or credited to policyholders||4,743||-||-||-||4,743|
|Operating and administrative expenses||738||171||-||15||924|
|Share of earnings of investment in associates||-||-||81||-||81|
|Earnings before income taxes - continuing operations||533||257||81||(44)||827|
|Contribution to net earnings - continuing operations||476||201||81||(46)||712|
|Contribution to net earnings - discontinued operations||-||-||-||-||-|
|Contribution to net earnings||476||201||81||(46)||712|
|Perpetual preferred shareholders||-||-||-||29||29|
|Three months ended March 31, 2011||Lifeco||IGM||Parjointco||Other||Total|
|Premium income, net||4,295||-||-||-||4,295|
|Investment income, net||1,240||39||-||(21)||1,258|
|Total paid or credited to policyholders||4,579||-||-||-||4,579|
|Operating and administrative expenses||724||162||-||13||899|
|Share of earnings of investment in associates||-||-||2||-||2|
|Earnings before income taxes - continuing operations||503||285||2||(39)||751|
|Contribution to net earnings - continuing operations||434||213||2||(34)||615|
|Contribution to net earnings - discontinued operations||-||1||-||-||1|
|Contribution to net earnings||434||214||2||(34)||616|
|Perpetual preferred shareholders||-||-||-||26||26|
Attachments: Financial Information
For further information, please contact:
Mr. Edward Johnson
General Counsel and Secretary