Power Financial Corporation - First quarter financial results and dividends
Readers are referred to the sections entitled "Forward-looking Statements" and "Non-GAAP Financial Measures" at the end of this release.
MONTREAL, May 12 /CNW Telbec/ - Power Financial Corporation's operating earnings for the three-month period ended March 31, 2010 were $381 million or $0.51 per share, compared with $252 million or $0.32 per share in the corresponding period in 2009.
The increase in operating earnings reflects the increase in the contribution from the Corporation's subsidiaries and Parjointco.
For the first quarter of 2010, other items were a positive contribution of $8 million or $0.01 per share, compared with a net charge of $57 million or $0.08 per share in the first quarter of 2009, and consisted of Power Financial's share of non-operating earnings recorded by Pargesa as discussed below.
Net earnings, including other items, for the three-month period ended March 31, 2010 were $389 million or $0.52 per share, compared with $195 million or $0.24 per share in the first quarter of 2009.
RESULTS OF SUBSIDIARIES AND PARJOINTCO
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Great-West Lifeco Inc.
Great-West Lifeco reported net income attributable to common shareholders of $441 million for the three months ended March 31, 2010, compared with $326 million in the corresponding period of 2009.
Lifeco's contribution to Power Financial's operating earnings was $304 million for the three-month period ended March 31, 2010, compared with $224 million for the corresponding period of 2009.
IGM Financial Inc.
IGM Financial reported net income for the three-month period ended March 31, 2010 of $179 million, compared with net income of $134 million in the corresponding period of 2009.
For the three months ended March 31, 2010, the contribution from IGM to Power Financial's operating earnings was $101 million, compared with $68 million in the corresponding period of 2009.
Parjointco N.V.
Power Financial holds a 50% interest in Parjointco N.V., which in turn holds a 54.1% interest in Pargesa Holding SA. Pargesa reported an operating loss of SF8 million in the three-month period ended March 31, 2010, compared with an operating loss of SF69 million in the corresponding period in 2009. Expressed in Canadian dollars, the contribution from the investment at equity to Power Financial's operating earnings was a charge of $3 million for the three-month period ended March 31, 2010, compared with a charge of $20 million in the corresponding period in 2009.
Pargesa reported non-recurring earnings of SF22 million in the first quarter of 2010, compared with a non-recurring charge of SF196 million in the first quarter of 2009. The charge in the first quarter of 2009 consisted of the adjustment of the carrying value of Pernod Ricard and Iberdrola to their market value.
As a result, Pargesa reported net earnings of SF14 million in the first quarter of 2010, compared with net loss of SF265 million in the same period of 2009.
PREFERRED SHARE DIVIDENDS
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The Board of Directors today declared quarterly dividends on the Corporation's preferred shares, as follows:
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Type of
Shares Record Date Payment Date Amount
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Series A July 23, 2010 August 15, 2010 To be determined in
accordance with the
articles of the
Corporation
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Series C July 9, 2010 July 31, 2010 32.50 cents
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Series D July 9, 2010 July 31, 2010 34.375 cents
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Series E July 9, 2010 July 31, 2010 32.8125 cents
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Series F July 9, 2010 July 31, 2010 36.875 cents
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Series H July 9, 2010 July 31, 2010 35.9375 cents
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Series I July 9, 2010 July 31, 2010 37.50 cents
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Series J July 9, 2010 July 31, 2010 29.375 cents
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Series K July 9, 2010 July 31, 2010 30.9375 cents
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Series L July 9, 2010 July 31, 2010 31.875 cents
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Series M July 9, 2010 July 31, 2010 37.50 cents
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Series O July 9, 2010 July 31, 2010 36.25 cents
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COMMON SHARE DIVIDEND
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The Board of Directors also declared a quarterly dividend of 35 cents per share on the Corporation's common shares payable July 30, 2010 to shareholders of record June 30, 2010.
For purposes of the Income Tax Act (Canada) and any similar provincial legislation, all of the above dividends of the Corporation's preferred and common shares are eligible dividends.
Forward-looking Statements
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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 and its subsidiaries' current expectations. Forward-looking statements are provided for the purposes of assisting the reader in understanding the Corporation's financial position and results of operations 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 (including adoption of International Financial Reporting Standards), 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 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 about the Corporation's business is provided in its disclosure materials, including its most recent Management's Discussion and Analysis of Operating Results and Annual Information Form, filed with the securities regulatory authorities in Canada, available at www.sedar.com.
Non-GAAP Financial Measures
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In analysing the financial results of the Corporation and consistent with the presentation in previous years, net earnings are subdivided into the following components:
- operating earnings; and
- other items, 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 Lifeco or IGM.
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 and operating earnings per share are non-GAAP financial measures that do not have a standard meaning and may not be comparable to similar measures used by other entities.
Attachments: Financial Information
POWER FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
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March 31,
2010 December 31,
(in millions of Canadian dollars) (unaudited) 2009
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Assets
Cash and cash equivalents 5,003 4,855
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Investments
Shares 6,482 6,392
Bonds 66,949 67,388
Mortgages and other loans 16,950 17,356
Loans to policyholders 6,824 6,957
Real estate 2,973 3,101
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100,178 101,194
Funds held by ceding insurers 10,130 10,839
Investment at equity 2,444 2,675
Intangible assets 4,299 4,366
Goodwill 8,661 8,655
Future income taxes 1,168 1,268
Other assets 6,584 6,379
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138,467 140,231
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Liabilities
Policy liabilities
Actuarial liabilities 96,759 98,059
Other 4,582 4,592
Deposits and certificates 902 907
Funds held under reinsurance contracts 319 186
Debentures and other borrowings 6,047 5,967
Preferred shares of the Corporation 300 300
Preferred shares of subsidiaries - 203
Capital trust securities and debentures 538 540
Future income taxes 1,161 1,098
Other liabilities 6,079 6,294
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116,687 118,146
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Non-controlling interests 8,986 8,878
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Shareholders' Equity
Stated capital
Perpetual preferred shares 1,725 1,725
Common shares 610 605
Contributed surplus 101 102
Retained earnings 11,282 11,165
Accumulated other comprehensive income (loss) (924) (390)
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12,794 13,207
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138,467 140,231
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CONSOLIDATED STATEMENTS OF EARNINGS
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Three months ended March 31
(unaudited) (in millions of Canadian dollars,
except per share amounts) 2010 2009
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Revenues
Premium income 4,610 4,709
Net investment income
Regular net investment income 1,439 1,545
Change in fair value on held-for-trading assets 1,502 (1,976)
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2,941 (431)
Fee income 1,323 1,170
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8,874 5,448
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Expenses
Policyholder benefits, dividends and experience
refunds, and change in actuarial liabilities 6,571 3,366
Commissions 553 479
Operating expenses 892 912
Financing charges 104 110
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8,120 4,867
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754 581
Share of earnings (losses) of investment at equity (3) (20)
Other income (charges), net 8 (57)
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Earnings before income taxes and non-controlling
interests 759 504
Income taxes 151 130
Non-controlling interests 219 179
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Net earnings 389 195
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Earnings per common share
- Basic 0.52 0.24
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- Diluted 0.52 0.24
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SEGMENTED INFORMATION
INFORMATION ON PROFIT MEASURE
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Three months ended Par-
March 31, 2010 Lifeco IGM jointco Other Total
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Revenues
Premium income 4,610 - - - 4,610
Net investment income
Regular net investment
income 1,422 38 - (21) 1,439
Change in fair value
on held-for-trading
assets 1,502 - - - 1,502
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2,924 38 - (21) 2,941
Fee income 736 611 - (24) 1,323
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8,270 649 - (45) 8,874
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Expenses
Policyholder benefits,
dividends and
experience refunds,
and change in
actuarial liabilities 6,571 - - - 6,571
Commissions 363 215 - (25) 553
Operating expenses 718 161 - 13 892
Financing charges 69 27 - 8 104
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7,721 403 - (4) 8,120
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549 246 - (41) 754
Share of earnings
(losses) of investment
at equity - - (3) - (3)
Other income (charges),
net - - 8 - 8
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Earnings before income
taxes and
non-controlling
interests 549 246 5 (41) 759
Income taxes 86 65 - - 151
Non-controlling
interests 159 80 - (20) 219
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Contribution to
consolidated net
earnings 304 101 5 (21) 389
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Three months ended Par-
March 31, 2009 Lifeco IGM jointco Other Total
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Revenues
Premium income 4,709 - - - 4,709
Net investment income
Regular net investment
income 1,511 62 - (28) 1,545
Change in fair value
on held-for-trading
assets (1,967) (9) - - (1,976)
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(456) 53 - (28) (431)
Fee income 680 510 - (20) 1,170
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4,933 563 - (48) 5,448
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Expenses
Policyholder benefits,
dividends and
experience refunds,
and change in
actuarial liabilities 3,366 - - - 3,366
Commissions 307 192 - (20) 479
Operating expenses 740 159 - 13 912
Financing charges 75 27 - 8 110
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4,488 378 - 1 4,867
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445 185 - (49) 581
Share of earnings
(losses) of investment
at equity - - (20) - (20)
Other income (charges),
net - - (57) - (57)
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Earnings before income
taxes and
non-controlling
interests 445 185 (77) (49) 504
Income taxes 78 52 - - 130
Non-controlling
interests 143 65 - (29) 179
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Contribution to
consolidated net
earnings 224 68 (77) (20) 195
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For further information: Mr. Edward Johnson, Senior Vice-President, General Counsel and Secretary, (514) 286-7400
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