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November 14, 2014

Power Corporation of Canada Reports 2014 Third Quarter and Nine-Month Financial Results and Dividends

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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.

TORONTO, Nov. 14, 2014 /CNW Telbec/ - Power Corporation of Canada (TSX: POW) today reported earnings results for the third quarter and nine months ended September 30, 2014.

THIRD QUARTER RESULTS

Operating earnings (a non-IFRS financial measure) and net earnings attributable to participating shareholders for the quarter ended September 30, 2014 were $350 million or $0.76 per share. In the corresponding period of 2013, operating earnings attributable to participating shareholders were $234 million or $0.51 per share and net earnings attributable to participating shareholders were $206 million or $0.45 per share.

NINE-MONTH RESULTS

Operating earnings attributable to participating shareholders for the nine months ended September 30, 2014 were $898 million or $1.95 per share, compared with $741 million or $1.61 per share in 2013.

Other items, not included in operating earnings, were a contribution of $8 million comprised of 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, partially offset by restructuring and other charges at IGM Financial Inc. (IGM) and Square Victoria Communications Group Inc. In the corresponding period of 2013, other items represented a net charge of $64 million. Additional details can be found in the table entitled "Other Items" below.

Net earnings attributable to participating shareholders were $906 million or $1.97 per share, compared with $677 million or $1.47 per share in 2013.

RESULTS OF POWER FINANCIAL CORPORATION

THIRD QUARTER RESULTS

Power Financial reported operating and net earnings attributable to common shareholders for the quarter ended September 30, 2014 of $595 million or $0.83 per share, compared with $434 million or $0.61 per share in 2013.

NINE-MONTH RESULTS

For the nine months ended September 30, 2014, operating earnings attributable to common shareholders were $1,580 million or $2.22 per share, compared with $1,305 million or $1.83 per share in 2013.

Other items, not included in operating earnings, were a contribution of $50 million and consisted of 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 net charge of $2 million.

Net earnings attributable to common shareholders were $1,630 million or $2.29 per share, compared with $1,303 million or $1.83 per share in 2013.

At September 30, 2014, Power Corporation held a 65.7% economic interest in Power Financial. Power Financial's contribution to Power Corporation's operating earnings was $391 million for the quarter ended September 30, 2014, compared with $285 million in 2013. For the nine months ended September 30, 2014, Power Financial contributed $1,039 million to Power Corporation's operating earnings, compared with $859 million in 2013.

(1) As reported in 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 Holding SA (Pargesa) share of the gain recorded by GBL on this exchange was SF129 million, of which SF55 million (representing the reversal of the accumulated mark-to-market adjustments on options related to Suez Environnement) was recorded as operating earnings. The remaining portion of SF74 million, which represents the economic gain measured at the exchange price set at the time of the issuance of the exchangeable bonds in 2012, 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  December 24, 2014 January 15, 2015 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 December 24, 2014 January 15, 2015 35¢
Series B - POW.PR.B December 24, 2014 January 15, 2015 33.4375¢
Series C - POW.PR.C December 24, 2014 January 15, 2015 36.25¢
Series D - POW.PR.D December 24, 2014 January 15, 2015 31.25¢
Series G - POW.PR.G December 24, 2014 January 15, 2015 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 December 31, 2014 to shareholders of record December 10, 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   Nine months ended
  September 30,
2014
  September 30,
2013
  September 30,
2014
  September 30,
2013
Contribution to operating earnings from:              
  Power Financial 391   285   1,039   859
  Other subsidiaries (1) (16)   (18)   (50)   (44)
  375   267   989   815
Results from corporate activities              
  Income from investments 21   11   43   56
  Operating and other expenses (33)   (31)   (95)   (91)
Dividends on non-participating shares (13)   (13)   (39)   (39)
Operating earnings attributable to participating shareholders 350   234   898   741
Other items (see below) -   (28)   8   (64)
Net earnings attributable to participating shareholders 350   206   906   677
Earnings per share attributable to participating shareholders              
  Operating earnings 0.76   0.51   1.95   1.61
  Non-operating earnings -   (0.06)   0.02   (0.14)
  Net earnings 0.76   0.45   1.97   1.47

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

OTHER ITEMS

                 
(unaudited)
(in millions of Canadian dollars)
Three months ended   Nine months ended  
  September 30,
2014
  September 30,
2013
  September 30,
2014
  September 30,
2013
 
Share of Power Financial's other items:                
  IGM                
    Restructuring and other charges         (5)      
  Pargesa                
    Gain on partial disposal of Total 1       29      
    Gain on partial exchange of Suez Environnement         11      
    Impairment charges on GDF Suez             (9)  
    Gain on partial disposal of GDF Suez             7  
    Other (charge) income (1)       (2)      
  -   -   33   (2)  
Impairment and other charges at Square Victoria Communications Group Inc.     (28)   (25)   (41)  
Impairment charge on CITIC Limited             (21)  
  -   (28)   8   (64)

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 and Presentation

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 in management's judgment would make the period-over-period comparison of results from operations less meaningful. Other items 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 that are not part of ongoing activities are excluded from 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 analyze its results, financial position and cash flows. In this basis of presentation, Power Corporation's interests in Power Financial and other subsidiaries are accounted for using the equity method. This non-consolidated basis, which is a non-IFRS presentation, is useful for the reader as it isolates the parent's activities from those of operating subsidiaries and reflects their individual 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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