Power Corporation of Canada - 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 13 /CNW Telbec/ - Power Corporation of Canada's operating
earnings for the three-month period ended March 31, 2009 were $189 million or
$0.39 per share, compared with $304 million or $0.64 per share in the
corresponding period of 2008.
    The decrease in operating earnings in 2009 reflects a lower contribution
from Power Financial Corporation, partly offset by a higher level of income
from investments resulting from the Corporation's disposal of its investment
in Virochem Pharma Inc.
    Other items were a charge of $38 million or $0.08 per share in the first
quarter of 2009, compared with earnings of $72 million or $0.16 per share in
the first quarter of 2008, and consisted of the Corporation's share of
non-operating results recorded by Power Financial, as discussed below.
    As a result, net earnings for the period were $151 million or $0.31 per
share, compared with $376 million or $0.80 per share in the first quarter of
2008.

    RESULTS OF POWER FINANCIAL CORPORATION
    --------------------------------------

    Power Financial Corporation's operating earnings for the three-month
period ended March 31, 2009 were $252 million or $0.32 per share, compared
with $491 million or $0.67 per share in the corresponding period in 2008.
    The decrease in operating earnings reflects primarily the decrease in the
contribution from Power Financial's subsidiaries and Parjointco.
    Other items were a 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
results recorded by Pargesa. For the first quarter of 2008, other items were
earnings of $95 million or $0.13 per share and consisted of Power Financial's
share of non-operating earnings recorded by Lifeco and Pargesa.
    Net earnings, including other items, for the three-month period ended
March 31, 2009 were $195 million or $0.24 per share, compared with $586
million or $0.80 per share in the first quarter of 2008.

    DIVIDENDS ON PREFERRED SHARES
    -----------------------------

    The Board of Directors today declared quarterly dividends on the
Corporation's preferred shares, as follows:

    
    -------------------------------------------------------------------------

    Type of shares      Record Date      Payment Date    Amount
    -------------------------------------------------------------------------
    1986 Series         June 23, 2009    July 15, 2009   To be determined
                                                         In accordance with
                                                         the articles of the
                                                         Corporation
    -------------------------------------------------------------------------
    Series A            June 23, 2009    July 15, 2009   35 cents
    -------------------------------------------------------------------------
    Series B            June 23, 2009    July 15, 2009   33.4375 cents
    -------------------------------------------------------------------------
    Series C            June 23, 2009    July 15, 2009   36.25 cents
    -------------------------------------------------------------------------
    Series D            June 23, 2009    July 15, 2009   31.25 cents
    -------------------------------------------------------------------------

    DIVIDENDS ON PARTICIPATING SHARES
    ---------------------------------

    The Board of Directors also declared a dividend of 29 cents on the
Participating Preferred and Subordinate Voting Shares of the Corporation,
payable June 30, 2009 to shareholders of record June 9, 2009.
    For purposes of the Income Tax Act (Canada) and any similar provincial
legislation, all of the above dividends of the Corporation's preferred and
subordinate voting shares are eligible dividends.

    Forward-looking Statements
    --------------------------

    Certain statements in this press 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 readers are 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", "intends", "seeks",
"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 and which give rise to the
possibility that expectations, forecasts, predictions, projections or
conclusions will not prove to be accurate, the assumptions may not be correct
and that objectives, strategic goals and priorities will not be achieved. A
variety of material 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 that the foregoing list of factors is not
exhaustive of the factors that may affect any of the Corporation's and its
subsidiaries' forward-looking statements. The reader is also cautioned to
consider these and other factors, uncertainties and potential events carefully
and not to put undue reliance on forward-looking statements.
    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 of the
Corporation'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.
    Following the announcement in 2007 of GWL&A's sale of its health care
business, which closed on April 1, 2008, the results from Lifeco's U.S. health
care business are presented in the consolidated financial statements as
"discontinued operations", in accordance with GAAP. Power Corporation's share
of these results is included in operating earnings, while the Corporation's
share of the gain realized on the sale is included in Other items.
    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 (unaudited)


                         POWER CORPORATION OF CANADA

                         CONSOLIDATED BALANCE SHEETS

    -------------------------------------------------------------------------
                                                      March 31,
                                                          2009   December 31
    (in millions of Canadian dollars)               (unaudited)         2008
    -------------------------------------------------------------------------
    Assets
    Cash and cash equivalents                            5,561         5,323
    -------------------------------------------------------------------------
    Investments
      Shares                                             6,264         6,240
      Bonds                                             67,563        66,801
      Mortgages and other loans                         17,997        18,034
      Loans to policyholders                             7,842         7,622
      Real estate                                        3,259         3,190
    -------------------------------------------------------------------------
                                                       102,925       101,887
    Funds held by ceding insurers                       10,820        11,447
    Investments at equity                                2,385         2,820
    Intangible assets                                    4,847         4,792
    Goodwill                                             8,731         8,712
    Future income taxes                                  1,863         1,796
    Other assets                                         6,387         6,894
    -------------------------------------------------------------------------
                                                       143,519       143,671
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Liabilities
    Policy liabilities
      Actuarial liabilities                             97,245        97,895
      Other                                              4,765         4,732
    Deposits and certificates                            1,045           959
    Funds held under reinsurance contracts                 191           192
    Debentures and other borrowings                      5,894         5,745
    Preferred shares of subsidiaries                     1,565         1,569
    Capital trust securities and debentures                755           658
    Future income taxes                                    844           808
    Other liabilities                                    7,722         7,376
    -------------------------------------------------------------------------
                                                       120,026       119,934
    -------------------------------------------------------------------------

    Non-controlling interests                           13,904        13,980
    -------------------------------------------------------------------------
    Shareholders' Equity
    Stated capital
      Non-participating shares                             790           791
      Participating shares                                 509           509
    Contributed surplus                                    107           103
    Retained earnings                                    8,647         8,612
    Accumulated other comprehensive income (loss)         (464)         (258)
    -------------------------------------------------------------------------
                                                         9,589         9,757
    -------------------------------------------------------------------------
                                                       143,519       143,671
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                     CONSOLIDATED STATEMENTS OF EARNINGS

    -------------------------------------------------------------------------
    Three months ended
    (unaudited) (in millions
     of Canadian dollars,               March 31,  December 31,     March 31,
     except per share amounts)              2009          2008          2008
    -------------------------------------------------------------------------
    Revenues
    Premium income                         4,709         4,782        16,790
    Net investment income
      Regular net investment income        1,607         1,481         1,425
      Change in fair value on
       held-for-trading assets            (1,974)         (368)         (940)
    -------------------------------------------------------------------------
                                            (367)        1,113           485
    Fee and media income                   1,269         1,366         1,542
    -------------------------------------------------------------------------
                                           5,611         7,261        18,817
    -------------------------------------------------------------------------
    Expenses
    Policyholder benefits, dividends
     and experience refunds, and change
     in actuarial liabilities              3,366         4,815        16,284
    Commissions                              479           526           541
    Operating expenses                     1,047         1,057         1,037
    Financing charges                        112            76           143
    -------------------------------------------------------------------------
                                           5,004         6,474        18,005
    -------------------------------------------------------------------------
                                             607           787           812
    Share of earnings (losses) of
     investments at equity                   (21)           (2)           13
    Other income (charges), net              (57)       (2,401)           18
    -------------------------------------------------------------------------
    Earnings from continuing operations
     before income taxes and
     non-controlling interests               529        (1,616)          843
    Income taxes                             118          (690)          189
    Non-controlling interests                260          (391)          299
    -------------------------------------------------------------------------
    Earnings from continuing operations      151          (535)          355
    Earnings from discontinued operations      -             -            21
    -------------------------------------------------------------------------
    Net earnings                             151          (535)          376
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per participating share
      - Basic                               0.31         (1.20)         0.80
    -------------------------------------------------------------------------
      - Diluted                             0.31         (1.20)         0.80
    -------------------------------------------------------------------------


                            SEGMENTED INFORMATION

                        INFORMATION ON PROFIT MEASURE
    -------------------------------------------------------------------------
    Three months ended                               Par-
    March 31, 2009            Lifeco       IGM   jointco     Other     Total
    -------------------------------------------------------------------------
    Revenues
    Premium income             4,709         -         -         -     4,709
    Net investment income
      Regular net investment
       income                  1,511        58         -        38     1,607
      Change in fair value
       on held-for-trading
       assets                 (1,967)       (9)        -         2    (1,974)
    -------------------------------------------------------------------------
                                (456)       49         -        40      (367)
    Fee and media income         680       510         -        79     1,269
    -------------------------------------------------------------------------
                               4,933       559         -       119     5,611
    -------------------------------------------------------------------------
    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         -       148     1,047
    Financing charges             75        23         -        14       112
    -------------------------------------------------------------------------
                               4,488       374         -       142     5,004
    -------------------------------------------------------------------------
                                 445       185         -       (23)      607
    Share of earnings
     (losses) of
     investments
     at equity                     -         -       (20)       (1)      (21)
    Other income
     (charges), net                -         -       (57)        -       (57)
    -------------------------------------------------------------------------
    Earnings from
     continuing
     operations
     before income
     taxes and non-
     controlling
     interests                   445       185       (77)      (24)      529
    Income taxes                  78        52         -       (12)      118
    Non-controlling
     interests                   218        88       (26)      (20)      260
    -------------------------------------------------------------------------
    Contribution to
     consolidated
     earnings from
     continuing
     operations                  149        45       (51)        8       151
    Contribution to
     consolidated
     earnings from
     discontinued
     operations                    -         -         -         -         -
    -------------------------------------------------------------------------
    Contribution to
     consolidated
     net earnings                149        45       (51)        8       151
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            SEGMENTED INFORMATION

                        INFORMATION ON PROFIT MEASURE

    -------------------------------------------------------------------------
    Three months ended                               Par-
     December 31, 2008        Lifeco       IGM   jointco     Other     Total
    -------------------------------------------------------------------------
    Revenues
    Premium income             4,782         -         -         -     4,782
    Net investment income
      Regular net
       investment income       1,423        36         -        22     1,481
      Change in fair value
       on held-for-trading
       assets                   (368)        -         -         -      (368)
    -------------------------------------------------------------------------
                               1,055        36         -        22     1,113
    Fee and media income         743       549         -        74     1,366
    -------------------------------------------------------------------------
                               6,580       585         -        96     7,261
    -------------------------------------------------------------------------
    Expenses
    Policyholder benefits,
     dividends and
     experience refunds,
     and change in
     actuarial liabilities     4,815         -         -         -     4,815
    Commissions                  360       206         -       (40)      526
    Operating expenses           746       163         -       148     1,057
    Financing charges             37        25         -        14        76
    -------------------------------------------------------------------------
                               5,958       394         -       122     6,474
    -------------------------------------------------------------------------
                                 622       191         -       (26)      787
    Share of earnings
     (losses) of
     investments
     at equity                     -         -         2        (4)       (2)
    Other income
     (charges), net           (2,248)        -      (376)      223    (2,401)
    -------------------------------------------------------------------------
    Earnings from
     continuing
     operations
     before income
     taxes and non-
     controlling
     interests                (1,626)      191      (374)      193    (1,616)
    Income taxes                (744)       51         -         3      (690)
    Non-controlling
     interests                  (459)      110      (126)       84      (391)
    -------------------------------------------------------------------------
    Contribution to
     consolidated
     earnings from
     continuing
     operations                 (423)       30      (248)      106      (535)
    Contribution to
     consolidated
     earnings from
     discontinued
     operations                    -         -         -         -         -
    -------------------------------------------------------------------------
    Contribution to
     consolidated
     net earnings               (423)       30      (248)      106      (535)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            SEGMENTED INFORMATION

                        INFORMATION ON PROFIT MEASURE

    -------------------------------------------------------------------------
    Three months ended                               Par-
     March 31, 2008           Lifeco       IGM   jointco     Other     Total
    -------------------------------------------------------------------------
    Revenues
    Premium income            16,790         -         -         -    16,790
    Net investment income
      Regular net
       investment income       1,352        61         -        12     1,425
      Change in fair value
       on held-for-trading
       assets                   (940)        -         -         -      (940)
    -------------------------------------------------------------------------
                                 412        61         -        12       485
    Fee and media income         797       654         -        91     1,542
    -------------------------------------------------------------------------
                              17,999       715         -       103    18,817
    -------------------------------------------------------------------------
    Expenses
    Policyholder benefits,
     dividends and
     experience refunds,
     and change in
     actuarial liabilities    16,284         -         -         -    16,284
    Commissions                  322       235         -       (16)      541
    Operating expenses           710       167         -       160     1,037
    Financing charges            106        22         -        15       143
    -------------------------------------------------------------------------
                              17,422       424         -       159    18,005
    -------------------------------------------------------------------------
                                 577       291         -       (56)      812
    Share of earnings
     (losses) of
     investments
     at equity                     -         -        17        (4)       13
    Other income
     (charges), net                -         -         9         9        18
    -------------------------------------------------------------------------
    Earnings from
     continuing
     operations
     before income
     taxes and non-
     controlling
     interests                   577       291        26       (51)      843
    Income taxes                 109        79         -         1       189
    Non-controlling
     interests                   183       131         9       (24)      299
    -------------------------------------------------------------------------
    Contribution to
     consolidated
     earnings from
     continuing
     operations                  285        81        17       (28)      355
    Contribution to
     consolidated
     earnings from
     discontinued
     operations                   21         -         -         -        21
    -------------------------------------------------------------------------
    Contribution to
     consolidated
     net earnings                306        81        17       (28)      376
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

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


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