Six-month results and dividend



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

    WINNIPEG, Aug. 7 /CNW Telbec/ - Power Corporation of Canada's operating
earnings for the six-month period ended June 30, 2009 were $412 million or
$0.86 per share, compared with $685 million or $1.45 per share in the
corresponding period of 2008. Subsidiaries contributed $420 million to Power
Corporation's operating earnings for the six-month period ended June 30, 2009,
compared with $692 million in the corresponding period of 2008.
    The decrease in operating earnings reflects a lower contribution from
Power Financial Corporation.
    Other items were a charge of $34 million or $0.08 per share in the
six-month period ended June 30, 2009, compared with earnings of $386 million
or $0.85 per share in the corresponding period of 2008, and consisted mainly
of the Corporation's share of non-operating results recorded by Power
Financial. Included in the 2008 amount is $313 million representing the
Corporation's share of the gain recorded by Great-West Lifeco on the disposal
of its U.S. healthcare business.
    As a result, net earnings for the six-month period ended June 30, 2009
were $378 million or $0.78 per share, compared with $1,071 million or $2.30
per share in the corresponding period of 2008.

    
    SECOND-QUARTER RESULTS
    ----------------------
    

    For the quarter ended June 30, 2009, operating earnings of the
Corporation were $223 million or $0.47 per share, compared with $381 million
or $0.81 per share in the second quarter of 2008. Subsidiaries contributed
$273 million to Power Corporation's operating earnings in the second quarter
of 2009, compared with $383 million in the second quarter of 2008.
    Other items for the second quarter in 2009 were earnings of $4 million or
$0.01 per share, compared with $314 million or $0.69 per share in same quarter
of 2008.
    Net earnings for the quarter were $227 million or $0.48 per share in
2009, compared with $695 million or $1.50 per share in 2008.

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

    Power Financial Corporation's operating earnings for the six-month period
ended June 30, 2009 were $694 million or $0.92 per share, compared with $1,081
million or $1.48 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 $47 million or $0.06 per share for the
six-month period ended June 30, 2009 and consisted mainly of Power Financial's
share of non operating results recorded by Pargesa. For the six-month period
ended June 30, 2008, other items were earnings of $572 million or $0.81 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 six-month period ended June
30, 2009 were $647 million or $0.86 per share, compared with $1,653 million or
$2.29 per share in 2008.
    For the quarter ended June 30, 2009, operating earnings of Power
Financial were $442 million or $0.60 per share, compared with $590 million or
$0.81 per share in the second quarter of 2008.
    Other items for the second quarter of 2009 were earnings of $10 million
or $0.01 per share, compared with $477 million or $0.68 per share for the same
quarter in 2008.
    Net earnings of Power Financial for the quarter were $452 million or
$0.61 per share in 2009, compared with $1,067 million or $1.49 per share in
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     September 24, 2009   October 15, 2009  To be determined
                                                           in accordance with
                                                           the articles of
                                                           the Corporation
    -------------------------------------------------------------------------
    Series A        September 24, 2009   October 15, 2009  35¢
    -------------------------------------------------------------------------
    Series B        September 24, 2009   October 15, 2009  33.4375¢
    -------------------------------------------------------------------------
    Series C        September 24, 2009   October 15, 2009  36.25¢
    -------------------------------------------------------------------------
    Series D        September 24, 2009   October 15, 2009  31.25¢
    -------------------------------------------------------------------------

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

    The Board of Directors also declared a quarterly dividend of 29 cents on
the Participating Preferred and Subordinate Voting Shares of the Corporation,
payable September 30, 2009 to shareholders of record September 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

    -------------------------------------------------------------------------
                                                       June 30,
                                                          2009   December 31,
    (in millions of Canadian dollars)               (unaudited)         2008
    -------------------------------------------------------------------------
    Assets
    Cash and cash equivalents                            6,284         5,323
    -------------------------------------------------------------------------
    Investments
      Shares                                             7,054         6,240
      Bonds                                             68,311        66,801
      Mortgages and other loans                         18,090        18,034
      Loans to policyholders                             7,416         7,622
      Real estate                                        3,380         3,190
    -------------------------------------------------------------------------
                                                       104,251       101,887
    Funds held by ceding insurers                       11,761        11,447
    Investments at equity                                2,477         2,820
    Intangible assets                                    4,692         4,792
    Goodwill                                             8,746         8,712
    Future income taxes                                  1,615         1,796
    Other assets                                         6,441         6,894
    -------------------------------------------------------------------------
                                                       146,267       143,671
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Liabilities
    Policy liabilities
      Actuarial liabilities                            100,127        97,895
      Other                                              4,683         4,732
    Deposits and certificates                              997           959
    Funds held under reinsurance contracts                 169           192
    Debentures and other borrowings                      6,236         5,745
    Preferred shares of subsidiaries                     1,596         1,569
    Capital trust securities and debentures                786           658
    Future income taxes                                    934           808
    Other liabilities                                    6,920         7,376
    -------------------------------------------------------------------------
                                                       122,448       119,934
    -------------------------------------------------------------------------

    Non-controlling interests                           14,003        13,980
    -------------------------------------------------------------------------
    Shareholders' Equity
    Stated capital
      Non-participating shares                             789           791
      Participating shares                                 517           509
    Contributed surplus                                    111           103
    Retained earnings                                    8,728         8,612
    Accumulated other comprehensive income (loss)         (329)         (258)
    -------------------------------------------------------------------------
                                                         9,816         9,757
    -------------------------------------------------------------------------
                                                       146,267       143,671
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                     CONSOLIDATED STATEMENTS OF EARNINGS

    -------------------------------------------------------------------------
                                      Three months ended    Six months ended
                                             June 30             June 30
    -------------------------------------------------------------------------
    (unaudited) (in millions of
     Canadian dollars, except per
     share amounts)                       2009      2008      2009      2008
    -------------------------------------------------------------------------
    Revenues
    Premium income                       4,664     4,523     9,373    21,313
    Net investment income
      Regular net investment income      1,654     1,712     3,261     3,137
      Change in fair value on
       held-for-trading assets           2,250    (1,595)      276    (2,535)
    -------------------------------------------------------------------------
                                         3,904       117     3,537       602
    Fee and media income                 1,301     1,569     2,570     3,111
    -------------------------------------------------------------------------
                                         9,869     6,209    15,480    25,026
    -------------------------------------------------------------------------
    Expenses
    Policyholder benefits, dividends
     and experience refunds, and
     change in actuarial liabilities     7,473     3,502    10,839    19,786
    Commissions                            528       549     1,007     1,090
    Operating expenses                   1,034     1,019     2,081     2,056
    Financing charges                      156       113       268       256
    -------------------------------------------------------------------------
                                         9,191     5,183    14,195    23,188
    -------------------------------------------------------------------------
                                           678     1,026     1,285     1,838
    Share of earnings (losses) of
     investments at equity                  83        97        62       110
    Other income (charges), net              8         2       (49)       20
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before income taxes
     and non-controlling interests         769     1,125     1,298     1,968
    Income taxes                           172       260       290       449
    Non-controlling interests              370       483       630       782
    -------------------------------------------------------------------------
    Earnings from continuing
     operations                            227       382       378       737
    Earnings from discontinued
     operations                              -       313         -       334
    -------------------------------------------------------------------------
    Net earnings                           227       695       378     1,071
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per participating share
      - Basic                             0.48      1.50      0.78      2.30
    -------------------------------------------------------------------------
      - Diluted                           0.48      1.49      0.78      2.29
    -------------------------------------------------------------------------


                            SEGMENTED INFORMATION

                        INFORMATION ON PROFIT MEASURE

    -------------------------------------------------------------------------
    Three months ended                               Par-
     June 30, 2009            Lifeco       IGM   jointco     Other     Total
    -------------------------------------------------------------------------
    Revenues
    Premium income             4,664         -         -         -     4,664
    Net investment income
      Regular net investment
       income                  1,616        59         -       (21)    1,654
      Change in fair value
       on held-for-trading
       assets                  2,272       (20)        -        (2)    2,250
    -------------------------------------------------------------------------
                               3,888        39         -       (23)    3,904
    Fee and media income         666       549         -        86     1,301
    -------------------------------------------------------------------------
                               9,218       588         -        63     9,869
    -------------------------------------------------------------------------
    Expenses
    Policyholder benefits,
     dividends and experience
     refunds, and change in
     actuarial liabilities     7,473         -         -         -     7,473
    Commissions                  353       198         -       (23)      528
    Operating expenses           721       158         -       155     1,034
    Financing charges            106        28         -        22       156
    -------------------------------------------------------------------------
                               8,653       384         -       154     9,191
    -------------------------------------------------------------------------
                                 565       204         -       (91)      678
    Share of earnings
     (losses) of investments
     at equity                     -         -        87        (4)       83
    Other income (charges),
     net                           -         -        (2)       10         8
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before
     income taxes and
     non-controlling
     interests                   565       204        85       (85)      769
    Income taxes                 122        59         -        (9)      172
    Non-controlling interests    255        89        29        (3)      370
    -------------------------------------------------------------------------
    Contribution to
     consolidated earnings
     from continuing
     operations                  188        56        56       (73)      227
    Contribution to
     consolidated earnings
     from discontinued
     operations                    -         -         -         -         -
    -------------------------------------------------------------------------
    Contribution to
     consolidated net
     earnings                    188        56        56       (73)      227
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                        INFORMATION ON PROFIT MEASURE

    -------------------------------------------------------------------------
    Three months ended                               Par-
     June 30, 2008            Lifeco       IGM   jointco     Other     Total
    -------------------------------------------------------------------------
    Revenues
    Premium income             4,523         -         -         -     4,523
    Net investment income
      Regular net investment
       income                  1,648        56         -         8     1,712
      Change in fair value
       on held-for-trading
       assets                 (1,595)        -         -         -    (1,595)
    -------------------------------------------------------------------------
                                  53        56         -         8       117
    Fee and media income         806       665         -        98     1,569
    -------------------------------------------------------------------------
                               5,382       721         -       106     6,209
    -------------------------------------------------------------------------
    Expenses
    Policyholder benefits,
     dividends and experience
     refunds, and change in
     actuarial liabilities     3,502         -         -         -     3,502
    Commissions                  330       235         -       (16)      549
    Operating expenses           698       163         -       158     1,019
    Financing charges             77        22         -        14       113
    -------------------------------------------------------------------------
                               4,607       420         -       156     5,183
    -------------------------------------------------------------------------
                                 775       301         -       (50)    1,026
    Share of earnings
     (losses) of investments
     at equity                     -         -       100        (3)       97
    Other income (charges),
     net                           -         -         4        (2)        2
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before
     income taxes and
     non-controlling
     interests                   775       301       104       (55)    1,125
    Income taxes                 170        85         -         5       260
    Non-controlling interests    351       128        35       (31)      483
    -------------------------------------------------------------------------
    Contribution to
     consolidated earnings
     from continuing
     operations                  254        88        69       (29)      382
    Contribution to
     consolidated earnings
     from discontinued
     operations                  313         -         -         -       313
    -------------------------------------------------------------------------
    Contribution to
     consolidated net
     earnings                    567        88        69       (29)      695
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                        INFORMATION ON PROFIT MEASURE

    -------------------------------------------------------------------------
    Six months ended                                 Par-
     June 30, 2009            Lifeco       IGM   jointco     Other     Total
    -------------------------------------------------------------------------
    Revenues
    Premium income             9,373         -         -         -     9,373
    Net investment income
      Regular net investment
       income                  3,127       117         -        17     3,261
      Change in fair value
       on held-for-trading
       assets                    305       (29)        -         -       276
    -------------------------------------------------------------------------
                               3,432        88         -        17     3,537
    Fee and media income       1,346     1,059         -       165     2,570
    -------------------------------------------------------------------------
                              14,151     1,147         -       182    15,480
    -------------------------------------------------------------------------
    Expenses
    Policyholder benefits,
     dividends and experience
     refunds, and change in
     actuarial liabilities    10,839         -         -         -    10,839
    Commissions                  660       390         -       (43)    1,007
    Operating expenses         1,461       317         -       303     2,081
    Financing charges            181        51         -        36       268
    -------------------------------------------------------------------------
                              13,141       758         -       296    14,195
    -------------------------------------------------------------------------
                               1,010       389         -      (114)    1,285
    Share of earnings
     (losses) of investments
     at equity                     -         -        67        (5)       62
    Other income (charges),
     net                           -         -       (59)       10       (49)
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before
     income taxes and
     non-controlling
     interests                 1,010       389         8      (109)    1,298
    Income taxes                 200       111         -       (21)      290
    Non-controlling interests    473       177         3       (23)      630
    -------------------------------------------------------------------------
    Contribution to
     consolidated earnings
     from continuing
     operations                  337       101         5       (65)      378
    Contribution to
     consolidated earnings
     from discontinued
     operations                    -         -         -         -         -
    -------------------------------------------------------------------------
    Contribution to
     consolidated net
     earnings                    337       101         5       (65)      378
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                        INFORMATION ON PROFIT MEASURE

    -------------------------------------------------------------------------
    Six months ended                                 Par-
     June 30, 2008            Lifeco       IGM   jointco     Other     Total
    -------------------------------------------------------------------------
    Revenues
    Premium income            21,313         -         -         -    21,313
    Net investment income
      Regular net investment
       income                  3,000       117         -        20     3,137
      Change in fair value
       on held-for-trading
       assets                 (2,535)        -         -         -    (2,535)
    -------------------------------------------------------------------------
                                 465       117         -        20       602
    Fee and media income       1,603     1,319         -       189     3,111
    -------------------------------------------------------------------------
                              23,381     1,436         -       209    25,026
    -------------------------------------------------------------------------
    Expenses
    Policyholder benefits,
     dividends and experience
     refunds, and change in
     actuarial liabilities    19,786         -         -         -    19,786
    Commissions                  652       470         -       (32)    1,090
    Operating expenses         1,408       330         -       318     2,056
    Financing charges            183        44         -        29       256
    -------------------------------------------------------------------------
                              22,029       844         -       315    23,188
    -------------------------------------------------------------------------
                               1,352       592         -      (106)    1,838
    Share of earnings
     (losses) of investments
     at equity                     -         -       117        (7)      110
    Other income (charges),
     net                           -         -        13         7        20
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before
     income taxes and
     non-controlling
     interests                 1,352       592       130      (106)    1,968
    Income taxes                 279       164         -         6       449
    Non-controlling interests    534       259        44       (55)      782
    -------------------------------------------------------------------------
    Contribution to
     consolidated earnings
     from continuing
     operations                  539       169        86       (57)      737
    Contribution to
     consolidated earnings
     from discontinued
     operations                  334         -         -         -       334
    -------------------------------------------------------------------------
    Contribution to
     consolidated net
     earnings                    873       169        86       (57)    1,071
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

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


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