Operating earnings increase 25.3% over 2006



    Readers are referred to the sections entitled "Forward-looking
    Statements" and "Non-GAAP Financial Measures" at the end of this release.

    MONTREAL, March 13 /CNW Telbec/ - Power Corporation of Canada reported
today operating earnings of $1,458 million or $3.12 per participating share
for the year ended December 31, 2007, compared with $1,166 million or $2.49
per share in 2006. This represents a 25.3% increase on a per share basis.
    Growth in operating earnings reflect an increase of $186 million or 16.3%
in the contribution from subsidiaries, primarily driven by the growth of 15.8%
in operating earnings recorded by Power Financial in 2007, as well as a
significant increase from income from investments, which was primarily
recorded in previous quarters.
    Other items, not included in operating earnings, were $5 million or $0.01
per share in 2007, compared with $227 million or $0.51 per share in 2006,
which included an amount of $236 million or $0.52 per share representing the
impact of the gain recorded by Groupe Bruxelles Lambert on the sale of its
interest in Bertelsmann.
    As a result, net earnings were $1,463 million or $3.13 per share in 2007,
compared with $1,393 million or $3.00 per share in 2006.

    FOURTH-QUARTER RESULTS
    ----------------------

    The Corporation's operating earnings for the three-month period ended
December 31, 2007 were $309 million or $0.66 per share, compared with
$300 million or $0.64 per share in the same period in 2006. This represents a
2.7% increase on a per share basis.
    Growth in operating earnings reflects a $20 million decrease in results
from corporate activities resulting in particular from a lower contribution
from investment funds in 2007, and a 6.0% increase in Power Financial's
operating earnings, as discussed below.
    Other items in the fourth quarter of 2007 were $41 million or $0.09 per
share, compared with a charge of $11 million or $0.02 per share in the same
period in 2006. Other items in the period in 2007 include the Corporation's
share of other items recorded by Power Financial, as well as other items
recorded by the Corporation and Power Technology Investment Corporation, a
subsidiary.
    As a result, net earnings for the fourth quarter of 2007 were
$350 million or $0.75 per share, compared with $289 million or $0.62 per share
for the same period in 2006.

    POWER FINANCIAL CORPORATION'S RESULTS
    -------------------------------------

    Power Financial Corporation's operating earnings for the year ended
December 31, 2007 were $2,082 million or $2.84 per share, compared with
$1,802 million or $2.46 per share in 2006. This represents a 15.8% increase on
a per share basis.
    Growth in operating earnings reflect primarily an increase of
$276 million or 14.8% in the contribution from the subsidiaries and
Parjointco, from $1,871 million to $2,147 million. Based upon Lifeco's growth
in net income on a constant currency basis, Power Financial's operating
earnings on a per share basis for the year would have increased by 17.0%.
    Other items, not included in operating earnings, were a net charge of
$38 million or $0.05 per share in 2007, reflecting primarily the impact of a
provision recorded by Lifeco during the third quarter, partly offset by the
Power Financial's share of non-operating earnings recorded in the fourth
quarter. In 2006, other items were $353 million or $0.50 per share, including
an amount of $356 million representing the impact of the gain recorded by
Groupe Bruxelles Lambert on the sale of its interest in Bertelsmann.
    As a result, net earnings were $2,044 million or $2.79 per share in 2007,
compared with $2,155 million or $2.96 per share in 2006.
    Power Financial Corporation's operating earnings for the three-month
period ended December 31, 2007 were $500 million or $0.68 per share, compared
with $472 million or $0.65 per share in the same period in 2006. This
represents a 6.0% increase on a per share basis.
    Based upon Lifeco's growth in net income on a constant currency basis,
Power Financial's operating earnings on a per share basis for the quarter
would have increased by 12.1%.
    Growth in operating earnings also reflects the negative impact of a
timing difference relating to Pargesa's share of the interim dividend from
Total which was recorded in the third quarter in 2007 whereas it was recorded
in the fourth quarter in 2006.
    Other items in the fourth quarter of 2007 were $32 million or $0.05 per
share, compared with $2 million in the same period in 2006.
    As a result, net earnings for the fourth quarter of 2007 were
$532 million or $0.73 per share, compared with $474 million or $0.65 per share
for the same period in 2006.

    RESULTS OF POWER FINANCIAL'S SUBSIDIARIES AND PARJOINTCO
    --------------------------------------------------------

    Great-West Lifeco Inc.

    Great-West Lifeco reported adjusted net income attributable to common
shareholders of $2,153 million or $2.413 per share in 2007, compared with
$1,875 million or $2.104 per share in 2006, an increase of 15%. Adjusted net
income in 2007 excludes a provision for certain Canadian retirement plans of
$97 million after tax, which was recorded in the third quarter. Net income
attributable to common shareholders after this provision was $2,056 million or
$2.304 per share for the twelve months ended December 31, 2007. On a constant
currency basis, adjusted net income attributable to common shareholders
increased 16% over 2006.
    For the three months ended December 31, 2007, Lifeco reported net income
attributable to common shareholders of $537 million, compared with
$491 million for the same period in 2006. This represents $0.601 per share for
the period in 2007, compared with $0.550 for the corresponding period in 2006,
an increase of 9%. On a constant currency basis, net income attributable to
common shareholders increased 17% over 2006.
    Net income includes $203 million in 2007 and $191 million in 2006
representing the contribution from Lifeco's healthcare business, which has
been designated as discontinued operations. For the three-month periods ended
December 31, the contribution from the healthcare business amounted to
$43 million in 2007 and to $50 million in 2006.

    IGM Financial Inc.

    IGM Financial reported adjusted net income for the year ended December
31, 2007 of $864 million, compared with $763 million in 2006. Adjusted net
earnings per share were $3.23 in 2007, compared with $2.85 in 2006, an
increase of 13.3%. Adjusted net income in both years excludes a non-cash
income tax benefit resulting from decreases in the federal corporate income
tax rates and their effect on the future income tax liability related to
indefinite life intangible assets. A benefit of $15 million was reported in
the fourth quarter of 2007 and of $14 million was reported in the second
quarter of 2006. Including these items, net income in 2007 was $879 million or
$3.29 per share, compared with $777 million or $2.90 per share in 2006.
    For the three months ended December 31, 2007, adjusted net income,
excluding the non-cash tax benefit mentioned above, was $219 million or $0.82
per share, compared with net income of $200 million or $0.75 per share for the
same period in 2006. This represents an increase of 9.3% on a per share basis.
Including the non-cash tax benefit, net income for the fourth quarter of 2007
was $234 million or $0.88 per share.

    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 operating
earnings of SF609 million in 2007, compared with SF539 million in 2006.
Non-operating earnings were SF113 million in 2007, compared with
SF1,754 million in 2006, composed primarily of Pargesa's share of the gain
recorded by GBL on the sale of its interest in Bertelsmann. As a result, net
earnings reported by Pargesa were SF722 million in 2007, compared with
SF2,293 million in 2006.
    For the fourth quarter of 2007, operating earnings were SF72 million,
compared with SF137 million in the same period in 2006. Non-operating earnings
in the fourth quarter were SF101 million and a net charge of SF8 million in
2007 and 2006, respectively. As a result, Pargesa's net earnings were
SF173 million in the period in 2007, compared with SF129 million in 2006.

    Forward-looking Information
    ---------------------------

    Certain statements in this press release, other than statements of
historical fact, are forward-looking statements based on certain assumptions
and reflect Power's or its subsidiaries' current expectations. Forward looking
statements are provided for the purpose of presenting information about
management's current expectations and plans relating to the future and readers
are cautionned that such statements may not be appropriate for other
purposes.These statements may include without limitation, statements regarding
the operations, business, financial condition, priorities, ongoing objectives,
strategies and outlook of Power or its subsidiaries 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", "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".
    This information is based upon certain material factors or assumptions
that were applied in drawing a conclusion or making a forecast or projection
as reflected in the forward-looking statements, including the perception of
historical trends, current conditions and expected future developments as well
as other factors that are believed to be appropriate in the circumstances.
    By its nature, this information is subject to inherent risks and
uncertainties that may be general or specific. A variety of material factors,
many of which are beyond Power's and its subsidiaries' control, affect the
operations, performance and results of Power 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,
technological change, changes in government regulation and legislation,
changes in tax laws, unexpected judicial or regulatory proceedings,
catastrophic events, Power's and its subsidiaries' ability to complete
strategic transactions and integrate acquisitions and Power's and its
subsidiaries' success in anticipating and managing the foregoing factors.
    The reader is cautioned that the foregoing list of factors is not
exhaustive of the factors that may affect any of Power's and its subsidiaries'
forward-looking statements. The reader is also cautioned to consider these and
other factors carefully and not to put undue reliance on forward-looking
statements.
    Other than as specifically required by law, Power 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 otherwise.
    Additional information concerning the risks and uncertainties associated
with Power's business 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, available at
www.sedar.com.

    
    Non-GAAP Financial Measures
    ---------------------------

    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 item manner by its subsidiaries.

    Management has used these financial measures for many years 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.
    As a consequence of the announcement by Lifeco of the signing of a
definitive agreement by GWL&A to sell its healthcare insurance business, the
results from Lifeco's U.S. healthcare business are presented in the 2007
consolidated financial statements as "discontinued operations", in accordance
with GAAP. Power Corporation's share of these results is included in operating
earnings.
    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 Corporation of Canada

                         CONSOLIDATED BALANCE SHEETS

                                                   December 31,  December 31,
    (in millions of dollars) (unaudited)                  2007          2006
    -------------------------------------------------------------------------
    Assets
    Cash and cash equivalents                            6,320         5,761
    -------------------------------------------------------------------------
    Investments
      Shares                                             8,426         5,598
      Bonds                                             65,069        64,946
      Mortgages and other loans                         16,423        15,823
      Loans to policyholders                             6,317         6,776
      Real estate                                        2,549         2,218
    -------------------------------------------------------------------------
                                                        98,784        95,361
    Funds held by ceding insurers                        1,512        12,371
    Investments at equity                                3,527         2,182
    Assets of operations held for sale                     697           866
    Intangible assets                                    5,072         2,740
    Goodwill                                             9,343         8,403
    Future income taxes                                    826           472
    Other assets                                         7,064         4,611
    -------------------------------------------------------------------------
                                                       133,145       132,767
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
    Policy liabilities
      Actuarial liabilities                             87,681        89,379
      Other                                              4,385         4,268
    Deposits and certificates                              857           778
    Funds held under reinsurance contracts                 164         1,822
    Liabilities of operations held for sale                428           599
    Debentures and other borrowings                      6,875         3,534
    Preferred shares of subsidiaries                     1,603         1,625
    Capital trust securities and debentures                639           646
    Future income taxes                                    841           910
    Other liabilities                                    6,854         8,622
    -------------------------------------------------------------------------
                                                       110,327       112,183
    -------------------------------------------------------------------------
    Non-controlling interests                           12,781        11,983
    -------------------------------------------------------------------------

    Shareholder's Equity
    Stated capital
      Non-participating shares                             794           795
      Participating shares                                 475           442
    Contributed surplus                                     78            59
    Retained earnings                                    8,304         7,480
    Accumulated other comprehensive income (loss)          386          (175)
    -------------------------------------------------------------------------
                                                        10,037         8,601
    -------------------------------------------------------------------------
                                                       133,145       132,767
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    For additional information, refer to the 2007 audited Consolidated
    Financial Statements to be published in March 2008.


                     CONSOLIDATED STATEMENTS OF EARNINGS

    (in millions of dollars,      Three months ended     For the years ended
     except per share amounts)         December 31             December 31
     (unaudited)                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    Revenues
    Premium income                 5,764       5,997      18,753      17,752
    Net investment income
      Regular net investment
       income                      1,346       1,534       5,983       6,077
      Change in fair value on
       held for trading assets       821           -      (1,098)          -
                                 --------------------------------------------
                                   2,167       1,534       4,885       6,077
    Fees and media income          1,637       1,228       5,770       4,622
    -------------------------------------------------------------------------
                                   9,568       8,759      29,408      28,451
    -------------------------------------------------------------------------
    Expenses
    Policyholder benefits,
     dividends and experience
     refunds and change in
     actuarial liabilities         6,858       6,447      19,224      19,660
    Commissions                      592         566       2,240       2,024
    Operating expenses             1,032         827       3,740       3,049
    Financing charges                121          86         415         344
    -------------------------------------------------------------------------
                                   8,603       7,926      25,619      25,077
    -------------------------------------------------------------------------
                                     965         833       3,789       3,374
    Share of earnings of
     investments at equity            13          26         126         110
    Other income (charges), net       38         (10)         49         338
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before income
     taxes and non-controlling
     interests                     1,016         849       3,964       3,822
    Income taxes                     236         189         870         847
    Non-controlling interests        450         396       1,729       1,675
    -------------------------------------------------------------------------
    Earnings from continuing
     operations                      330         264       1,365       1,300
    Earnings from discontinued
     operations                       20          25          98          93
    -------------------------------------------------------------------------
    Net earnings                     350         289       1,463       1,393
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic earnings per
     participating share
      From continuing operations    0.70        0.57        2.91        2.79
      From discontinued operations  0.05        0.05        0.22        0.21
    -------------------------------------------------------------------------
                                    0.75        0.62        3.13        3.00
    -------------------------------------------------------------------------

    Diluted earnings per
     participating share
      From continuing operations    0.69        0.56        2.88        2.76
      From discontinued operations  0.05        0.05        0.22        0.21
    -------------------------------------------------------------------------
                                    0.74        0.61        3.10        2.97
    -------------------------------------------------------------------------


                            SEGMENTED INFORMATION

    Information on Profit Measure
     (in millions of dollars)
     (unaudited)
    Three months ended                               Par-
     December 31, 2007        Lifeco       IGM   jointco     Other     Total
    -------------------------------------------------------------------------
    Revenues
      Premium income           5,764         -         -         -     5,764
      Net investment income
        Regular net
         investment income     1,304        42         -         -     1,346
        Change in fair value
         on held for trading
         assets                  821         -         -         -       821
                             ------------------------------------------------
                               2,125        42         -         -     2,167

      Fees and media income      861       679         -        97     1,637
    -------------------------------------------------------------------------
                               8,750       721         -        97     9,568
    -------------------------------------------------------------------------
    Expenses
      Policyholder benefits,
       dividends and
       experience refunds,
       and change in
       actuarial liabilities   6,858         -         -         -     6,858
      Commissions                374       241         -       (23)      592
      Operating expenses         712       157         -       163     1,032
      Financing charges           84        22         -        15       121
    -------------------------------------------------------------------------
                               8,028       420         -       155     8,603
    -------------------------------------------------------------------------
                                 722       301         -       (58)      965
    Share of earnings of
     investments at equity         -         -        17        (4)       13
    Other income, net              -         -        23        15        38
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before
     income taxes and
     non-controlling
     interests                   722       301        40       (47)    1,016
    Income taxes                 180        67         -       (11)      236
    Non-controlling interests    312       147        14       (23)      450
    -------------------------------------------------------------------------
    Contribution to
     consolidated earnings
     from continuing
     operations                  230        87        26       (13)      330
    Contribution to
     consolidated earnings
     from discontinued
     operations                   20        -          -         -        20
    -------------------------------------------------------------------------
    Contribution to
     consolidated net
     earnings                    250       87         26       (13)      350
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Information on Profit Measure
    Three months ended                               Par-
     December 31, 2006        Lifeco       IGM   jointco     Other     Total
    -------------------------------------------------------------------------
    Revenues
      Premium income           5,997         -         -         -     5,997
      Net investment income
        Regular net
         investment income     1,473        50         -        11     1,534
        Change in fair value
         on held for trading
         assets                    -         -         -         -         -
                             ------------------------------------------------
                               1,473        50         -        11     1,534

      Fees and media income      503       628         -        97     1,228
    -------------------------------------------------------------------------
                               7,973       678         -       108     8,759
    -------------------------------------------------------------------------
    Expenses
      Policyholder benefits,
       dividends and
       experience refunds,
       and change in
       actuarial liabilities   6,447         -         -         -     6,447
      Commissions                364       219         -       (17)      566
      Operating expenses         526       148         -       153       827
      Financing charges           50        22         -        14        86
    -------------------------------------------------------------------------
                               7,387       389         -       150     7,926
    -------------------------------------------------------------------------
                                 586       289         -       (42)      833
    Share of earnings of
     investments at equity         -         -        32        (6)       26
    Other income (charges),
     net                           -         -        (2)       (8)      (10)
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before
     income taxes and
     non-controlling
     interests                   586       289        30       (56)      849
    Income taxes                 101        89         -        (1)      189
    Non-controlling interests    281       126        10       (21)      396
    -------------------------------------------------------------------------
    Contribution to
     consolidated earnings
     from continuing
     operations                  204        74        20       (34)      264
    Contribution to
     consolidated earnings
     from discontinued
     operations                   25         -         -         -        25
    -------------------------------------------------------------------------
    Contribution to
     consolidated net
     earnings                    229        74        20       (34)      289
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            SEGMENTED INFORMATION

    Information on Profit Measure
    For the year ended                               Par-
     December 31, 2007        Lifeco       IGM   jointco     Other     Total
    -------------------------------------------------------------------------
    Revenues
      Premium income          18,753         -         -         -    18,753
      Net investment income
        Regular net
         investment income     5,565       194         -       224     5,983
        Change in fair value
         on held for trading
         assets               (1,098)        -         -       -      (1,098)
                             ------------------------------------------------
                               4,467       194         -       224     4,885

      Fees and media income    2,703     2,701         -       366     5,770
    -------------------------------------------------------------------------
                              25,923     2,895         -       590    29,408
    -------------------------------------------------------------------------
    Expenses
      Policyholder benefits,
       dividends and
       experience refunds
       and change in
       actuarial liabilities  19,224         -         -         -    19,224
      Commissions              1,366       947         -       (73)    2,240
      Operating expenses       2,517       623         -       600     3,740
      Financing charges          269        88         -        58       415
    -------------------------------------------------------------------------
                              23,376     1,658         -       585    25,619
    -------------------------------------------------------------------------
                               2,547     1,237         -         5     3,789
    Share of earnings of
     investments at equity         -         -       145       (19)      126
    Other income, net              -         -        26        23        49
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before
     income taxes and
     non-controlling
     interests                 2,547     1,237       171         9     3,964
    Income taxes                 480       355         -        35       870
    Non-controlling interests  1,204       556        58       (89)    1,729
    -------------------------------------------------------------------------
    Contribution to
     consolidated earnings
     from continuing
     operations                  863       326       113        63     1,365
    Contribution to
     consolidated earnings
     from discontinued
     operations                   98         -         -         -        98
    -------------------------------------------------------------------------
    Contribution to
     consolidated net
     earnings                    961       326       113        63     1,463
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Information on Profit Measure
    For the year ended                               Par-
     December 31, 2006        Lifeco       IGM   jointco     Other     Total
    -------------------------------------------------------------------------
    Revenues
      Premium income          17,752         -         -         -    17,752
      Net investment income
        Regular net
         investment income     5,836       212         -        29     6,077
        Change in fair value
         on held for trading
         assets                    -         -         -         -         -
                             ------------------------------------------------
                               5,836       212         -        29     6,077

      Fees and media income    1,894     2,392         -       336     4,622
    -------------------------------------------------------------------------
                              25,482     2,604         -       365    28,451
    -------------------------------------------------------------------------
    Expenses
      Policyholder benefits,
       dividends and
       experience refunds
       and change in
       actuarial liabilities  19,660         -         -         -    19,660
      Commissions              1,254       833         -       (63)    2,024
      Operating expenses       1,946       573         -       530     3,049
      Financing charges          202        88         -        54       344
    -------------------------------------------------------------------------
                              23,062     1,494         -       521    25,077
    -------------------------------------------------------------------------
                               2,420     1,110         -      (156)    3,374
    Share of earnings of
     investments at equity         -         -       126       (16)      110
    Other income (charges),
     net                           -         -       341        (3)      338
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before
     income taxes and
     non-controlling
     interests                 2,420     1,110       467      (175)    3,822
    Income taxes                 522       331         -        (6)      847
    Non-controlling interests  1,115       491       157       (88)    1,675
    -------------------------------------------------------------------------
    Contribution to
     consolidated earnings
     from continuing
     operations                 783        288       310       (81)    1,300
    Contribution to
     consolidated earnings
     from discontinued
     operations                  93          -         -         -        93
    -------------------------------------------------------------------------
    Contribution to
     consolidated net
     earnings                   876        288       310       (81)    1,393
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

For further information: Edward Johnson, Senior Vice-President, General
Counsel and Secretary, (514) 286-7400


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