Readers are referred to the sections "Non-IFRS Financial
Measures and Presentation" and "Forward-Looking Statements"
at the end of this release.
MONTRÉAL, March 18, 2020 /CNW
Telbec/ - Power Corporation of Canada (Power Corporation or the Corporation)
(TSX: POW) today reported earnings results for the fourth
quarter and twelve months ended December 31,
2019.
Power Corporation
Consolidated results for the period ended December 31
Highlights
- On December 13, 2019, Power
Corporation and Power Financial Corporation (Power Financial)
announced a reorganization transaction pursuant to which each
common share of Power Financial (PFC Common Shares) held by holders
of PFC Common Shares other than Power Corporation and certain of
its affiliates, were exchanged for 1.05 Subordinate Voting Shares
of Power Corporation and $0.01 in
cash.
- The reorganization was completed on February 13, 2020. Power Corporation now holds
100% of the issued and outstanding PFC Common Shares.
- The Corporation's net asset value per share was $40.07 at December 31,
2019, compared with $30.74 at
December 31, 2018, representing an
increase of 30.4%.
- As announced on December 13,
2019, today Power Corporation declared a 10.5% increase in
its quarterly dividend to 44.75 cents
per participating share.
- On February 18, 2020, Power
Corporation announced that the Toronto Stock Exchange had accepted
its notice of intention to make a normal course issuer bid whereby
the Corporation may purchase for cancellation, on the open market,
up to 30,000,000 Subordinate Voting Shares, representing
approximately 5.2% of the public float of Subordinate Voting Shares
outstanding.
- Great-West Lifeco (Lifeco) declared a quarterly common dividend
of $0.4380 per common share payable
March 31, 2020, a 6% increase from
the previous quarter.
- Lifeco's consolidated assets under administration at
December 31, 2019 grew to over
$1.6 trillion, a 16% increase from
December 31, 2018.
- IGM Financial Inc. (IGM) reported record high assets under
management at December 31, 2019 of
$166.8 billion, an increase of 11.9%
from the prior year driven by favourable investment returns. Assets
under administration of $190.2
billion increased by 11.8% from the prior year.
- Parjointco N.V. and Pargesa Holding SA (Pargesa) announced on
March 11, 2020 a public exchange
offer for all Pargesa shares not held by Parjointco to be exchanged
for Groupe Bruxelles Lambert (GBL) shares. The transaction is
subject to shareholder approvals. Pargesa to be delisted upon
completion of the transaction.
COVID-19
Since December 31, 2019, the outbreak
of the novel strain of coronavirus, specifically identified as
"COVID-19", has resulted in governments worldwide enacting
emergency measures to combat the spread of the virus. These
measures, which include the implementation of travel bans,
self-imposed quarantine periods and social distancing, have caused
material disruption to businesses globally resulting in an economic
slowdown. Global equity markets have experienced significant
volatility and weakness. Governments and central banks have reacted
with significant monetary and fiscal interventions designed to
stabilize economic conditions. The duration and impact of the
COVID-19 outbreak is unknown at this time, as is the efficacy of
the government and central bank interventions. It is not possible
to reliably estimate the length and severity of these developments
and the impact on the financial results and condition of the
Corporation and its operating subsidiaries in future periods.
Fourth Quarter
Net earnings attributable to participating shareholders were
$179 million or $0.42 per share, compared with $229 million
or $0.49 per share in 2018.
Adjusted net earnings attributable to participating shareholders
(a non-IFRS financial measure, see Non-IFRS Financial Measures and
Presentation below) were $317 million or $0.74 per share, compared with $283 million or $0.60 per share in 2018.
Contributions to Power Corporation's net earnings per share and
adjusted net earnings per share were:
|
|
2019
|
|
|
|
2018
|
|
(in dollars per Power
Corporation share)
|
Net
Earnings [1]
|
Adjusted Net
Earnings [1]
|
|
Net
Earnings
|
|
Adjusted Net
Earnings
|
|
- Power Financial
[2]
|
0.61
|
0.89
|
|
0.68
|
|
0.65
|
|
- China Asset
Management Corporation (China AMC)
|
0.02
|
0.02
|
|
0.02
|
|
0.02
|
|
- Investment
Platforms and other [3]
|
(0.11)
|
(0.07)
|
|
(0.15)
|
|
(0.01)
|
|
- Corporate
Operations [4]
|
(0.10)
|
(0.10)
|
|
(0.06)
|
|
(0.06)
|
|
0.42
|
0.74
|
|
0.49
|
|
0.60
|
|
[1]
|
The Corporation
completed a substantial issuer bid in the second quarter of
2019 and repurchased 9.8% of its Subordinated Voting
Shares.
|
|
[2]
|
As a result of the
Corporation's participation in Power Financial's substantial issuer
bid, in the second quarter of 2019, the number of PFC Common Shares
held by the Corporation decreased by 9.1%.
|
|
[3]
|
Investment platforms
and other includes earnings (losses) from Power Energy Corporation
(Power Energy), IntegraMed America, Inc. (IntegraMed) and Square
Victoria Communications Group Inc. (up to the date of disposal in
July 2018).
|
|
[4]
|
Includes Operating
and other expenses and Dividends on non-participating
shares.
|
Other items in 2019, not included in adjusted net earnings, were
a net charge of $138 million or $0.32 per share consisting of the Corporation's
share of other items at Power Financial of $122 million or $0.28 per share and IntegraMed's goodwill
impairment charge of $16 million or
$0.04 per share. Other items in
2018 were a net charge of $54 million
or $0.11 per share.
Twelve Months
Net earnings attributable to participating shareholders were
$1,108 million or $2.53 per share, compared with $1,287 million or $2.77 per share in 2018.
Adjusted net earnings attributable to participating shareholders
were $1,313 million or $3.00 per share, compared with $1,438 million or $3.09 per share in 2018.
Contributions to Power Corporation's net earnings per share
and adjusted net earnings per share were:
|
|
2019
|
|
|
|
2018
|
|
(in dollars per Power
Corporation share)
|
Net
Earnings [1]
|
Adjusted Net
Earnings [1]
|
|
Net
Earnings
|
|
Adjusted Net
Earnings
|
|
- Power Financial
[2]
|
2.89
|
3.39
|
|
3.17
|
|
3.22
|
|
- China
AMC
|
0.07
|
0.07
|
|
0.06
|
|
0.06
|
|
- Investment
Platforms and other [3]
|
(0.06)
|
(0.02)
|
|
0.05
|
|
0.19
|
|
- Corporate
Operations [4]
|
(0.37)
|
(0.44)
|
|
(0.51)
|
|
(0.38)
|
|
2.53
|
3.00
|
|
2.77
|
|
3.09
|
|
[1] [2] [3]
[4]
|
See notes
above.
|
Other items, not included in adjusted net earnings, were a net
charge of $205 million or
$0.47 per share, compared with a
charge of $151 million or
$0.32 per share in 2018.
Power Financial
Consolidated results for the period ended December 31
Fourth Quarter
Net earnings attributable to common shareholders were $401 million or $0.60 per share, compared with $478 million
or $0.67 per share in 2018.
Adjusted net earnings attributable to common shareholders were
$591 million or $0.89 per share, compared with $460 million or $0.65 per share in 2018.
Other items in 2019, not included in adjusted net earnings, were
a net charge of $190 million or
$0.29 per share consisting of Power
Financial's share of other items at Lifeco of $151 million, IGM of $6
million and Pargesa of $24
million and costs incurred by Power Financial related
to the reorganization of $9 million.
Other items in 2018, not included in adjusted net earnings, were a
positive impact of $18 million or
$0.02 per share.
Twelve Months
Net earnings attributable to common shareholders were $1,964 million or $2.89 per share, compared with $2,245 million or $3.15 per share in 2018.
Adjusted net earnings attributable to common shareholders were
$2,306 million or $3.40 per share, compared with $2,282 million or $3.20 per share in 2018.
Other items, not included in adjusted net earnings, were a net
charge of $342 million or
$0.51 per share, compared with a net
charge of $37 million or $0.05
per share in 2018.
Great-West Lifeco, IGM Financial and Pargesa
Results for the period ended December
31
GREAT-WEST LIFECO INC.
Fourth Quarter
Net earnings attributable to common shareholders were
$513 million or $0.55 per share,
compared with $710 million or $0.72 per share in 2018. As a result of the sale
of U.S. individual life insurance and annuity business during the
second quarter of 2019, Lifeco's net earnings for the fourth
quarter of 2019 do not include any earnings from this business,
which contributed $36 million to net
earnings in the fourth quarter of 2018.
Adjusted net earnings attributable to common shareholders were
$740 million or $0.80 per share, compared with $710 million or $0.72 per share in 2018. Other items, not
included in adjusted net earnings, in the fourth quarter of 2019
were a net charge of $227 million and included the impact of
the revaluation of a deferred tax asset of $199 million, restructuring charges of
$36 million and the net gain of
$8 million on the completion of the
Scottish Friendly Assurance Society Limited transaction.
Twelve Months
Net earnings attributable to common shareholders were $2,359 million or $2.49 per share, compared with $2,961 million or $3.00 per share in 2018.
Adjusted net earnings attributable to common shareholders were
$2,785 million or $2.94 per share, compared with $3,017 million or $3.05 per share in 2018. In addition to the
above, other items in 2019 include a net charge of
$199 million relating to the sale of the U.S. individual life
insurance and annuity business in the second quarter. Other
items in 2018 were charges of $56 million.
IGM FINANCIAL INC.
Fourth Quarter
Net earnings available to common shareholders were $192 million or $0.80 per share, compared with $180 million
or $0.75 per share in 2018.
Adjusted net earnings available to common shareholders were
$201 million or $0.84 per share, compared with $180 million
or $0.75 per share in 2018. Other
items, not included in adjusted net earnings, in the fourth quarter
of 2019 were a net charge of $9
million consisting of IGM's proportionate share of Lifeco's
other items.
Assets under management at December 31,
2019 were $166.8 billion, an
increase of 2.6% in the quarter and 11.9% from the prior year
driven by favourable investment returns.
Twelve Months
Net earnings available to common shareholders were $747 million or $3.12 per share, compared with $767 million
or $3.18 per share in 2018.
Adjusted net earnings available to common shareholders were
$764 million or $3.19 per share, compared with $792 million or $3.29 per share in 2018. Other items were a net
charge of $17 million, compared with
a charge of $25 million in the
comparative period.
PARGESA HOLDING SA
Fourth Quarter
Pargesa reported net earnings of SF75 million, compared with SF110
million in 2018.
Adjusted net earnings were SF139 million, compared with SF57
million in 2018. Other items, not included in adjusted net
earnings, were a charge of SF64 million in the fourth quarter and
were comprised of Pargesa's share of other items at Imerys, Parques
Reunidos Servicios Centrales, S.A. (Parques), and transaction costs
incurred by GBL to complete the acquisition of Webhelp Group. Other
items in 2018 were a net positive earnings impact of
SF53 million.
Pargesa adopted IFRS 9 in 2019. Power Financial continues to
apply IAS 39; this results in an increase in its share of the
contribution from Pargesa by $5 million in the fourth quarter
of 2019.
Twelve Months
Net earnings were SF391 million, compared with SF361 million in
2018.
Adjusted net earnings were SF492 million, compared with SF317
million in 2018. Other items in 2019 were SF101 million and,
in addition to the items detailed above, included restructuring and
other charges at Imerys. Other items in 2018 were a positive
earnings impact of SF44 million.
Power Financial's IAS 39 adjustment to Pargesa's contribution
was $49 million in the twelve-month
period.
Pargesa reported a net asset value at December 31, 2019 of SF10,946 million,
representing SF129.2 per share, compared with SF8,973 million or
SF105.9 per share at December 31,
2018.
Investment Platforms and Other
For the period ended December
31
Investment platforms and other includes income earned from
management fees net of investment platform expenses, income earned
on the capital invested by the Corporation in each platform and the
share of earnings of controlled and consolidated subsidiaries,
associates and jointly controlled investments. For additional
information, refer to the table further in this news release.
Fourth Quarter
Loss from the Corporation's investment platforms and other,
excluding other items, was $29
million, compared with a loss of $2
million in 2018.
Twelve Months
Loss from the Corporation's investment platforms and other,
excluding other items, was $10
million, compared with income of $88 million in
2018.
Dividend on Power Corporation Participating Shares
The Board of Directors today declared a 10.5% increase in the
quarterly dividend from 40.50 cents
to 44.75 cents per share on the
Participating Preferred Shares and the Subordinate Voting Shares of
the Corporation, payable May 1, 2020
to shareholders of record March 31,
2020.
Dividend on Power Corporation Non-Participating Preferred
Shares
The Board of Directors also declared quarterly dividends on the
Corporation's preferred shares, payable April 15, 2020 to
shareholders of record March 31,
2020:
|
Series
|
Stock
Symbol
|
Amount
|
|
Series
|
Stock
Symbol
|
Amount
|
|
1986
Series
|
POW.PR.F
|
Floating rate
[1]
|
|
Series C
|
POW.PR.C
|
36.25¢
|
|
Series A
|
POW.PR.A
|
35¢
|
|
Series D
|
POW.PR.D
|
31.25¢
|
|
Series B
|
POW.PR.B
|
33.4375¢
|
|
Series G
|
POW.PR.G
|
35¢
|
|
[1]
|
Equal to one quarter
of 70% of the average prime rate of two major Canadian chartered
banks for the period December 1, 2019 to February 29,
2020.
|
About Power Corporation
Power Corporation is an international management and holding
company that focuses on financial services in North America, Europe and Asia. Its core holdings are leading insurance,
retirement, wealth management and investment businesses, including
a portfolio of alternative asset investment platforms. To learn
more, visit www.PowerCorporation.com.
At December 31, 2019, Power
Corporation held the following economic interests:
- 64.1% – Power Financial www.powerfinancial.com
-
- 66.9% – Great-West Lifeco (TSX: GWO)
www.greatwestlifeco.com
- 62.1% – IGM Financial (TSX: IGM) www.igmfinancial.com
- 27.8% – Pargesa Holding (SIX: PARG) www.pargesa.ch
- 84.9% – Wealthsimple Financial Corp. [1]
www.wealthsimple.com
- Investment Platforms and Other
-
- 100% – Sagard SAS (Europe)
[2] www.sagard.com
- 100% – Sagard Holdings [2]
www.sagardholdings.com
- 100% – Power Sustainable Capital
-
- Power Pacific Investment Management www.powerpacificim.com
- Power Energy www.powerenergycorporation.com
- 27.8% – China AMC [3] www.chinaamc.com
|
[1]
|
Undiluted equity
interest held by Lifeco, IGM and Power Financial.
|
|
[2]
|
Refer to the
Corporation's most recent MD&A for interest in the Sagard
Europe Funds and investments held by Sagard Holdings.
|
|
[3]
|
IGM and the
Corporation each hold a 13.9% interest in China AMC.
|
|
Earnings
Summary
|
|
|
|
|
|
|
|
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
Three months
ended
|
|
Twelve months
ended
|
|
(in millions of
Canadian dollars)
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Adjusted net
earnings
|
|
|
|
|
|
|
|
|
Power Financial
[1]
|
|
|
|
|
|
|
|
|
Lifeco [1]
|
314
|
|
315
|
|
1,201
|
|
1,337
|
|
IGM [1]
|
77
|
|
73
|
|
298
|
|
306
|
|
Pargesa [1]
|
37
|
|
(35)
|
|
149
|
|
25
|
|
Corporate operations
of Power Financial
|
|
|
|
|
|
|
|
|
Income (loss) from
investments
|
(4)
|
|
(6)
|
|
(5)
|
|
(10)
|
|
Operating and other
expenses
|
(20)
|
|
(19)
|
|
(68)
|
|
(69)
|
|
Dividends on perpetual
preferred shares
|
(23)
|
|
(23)
|
|
(90)
|
|
(91)
|
|
381
|
|
305
|
|
1,485
|
|
1,498
|
|
|
|
|
|
|
|
|
|
China AMC
|
7
|
|
7
|
|
30
|
|
29
|
|
Investment platforms
and other [2]
|
(29)
|
|
(2)
|
|
(10)
|
|
88
|
|
Operating and other
expenses
|
(29)
|
|
(14)
|
|
(140)
|
|
(125)
|
|
Dividends on
non-participating shares
|
(13)
|
|
(13)
|
|
(52)
|
|
(52)
|
|
Adjusted net
earnings [3]
|
317
|
|
283
|
|
1,313
|
|
1,438
|
|
Other items – see
below
|
(138)
|
|
(54)
|
|
(205)
|
|
(151)
|
|
Net
earnings [3]
|
179
|
|
229
|
|
1,108
|
|
1,287
|
|
Earnings per
Share
|
|
|
|
|
|
|
|
|
(unaudited)
|
Three months
ended
|
|
Twelve months
ended
|
|
(in dollars per
share)
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Adjusted net
earnings per share - basic
|
|
|
|
|
|
|
|
|
Power Financial
[1]
|
0.89
|
|
0.65
|
|
3.39
|
|
3.22
|
|
China AMC
|
0.02
|
|
0.02
|
|
0.07
|
|
0.06
|
|
Investment platforms
and other [2]
|
(0.07)
|
|
(0.01)
|
|
(0.02)
|
|
0.19
|
|
Operating and other
expenses, and dividends on
non-participating shares
|
(0.10)
|
|
(0.06)
|
|
(0.44)
|
|
(0.38)
|
|
Adjusted net
earnings per share [3]
|
0.74
|
|
0.60
|
|
3.00
|
|
3.09
|
|
Other items – see
below
|
(0.32)
|
|
(0.11)
|
|
(0.47)
|
|
(0.32)
|
|
Net earnings per
share [3]
|
0.42
|
|
0.49
|
|
2.53
|
|
2.77
|
|
[1]
|
The contributions
from Lifeco and IGM include an allocation of the results of
Wealthsimple Financial Corp., Koho Financial Inc., Portag3 Ventures
Limited Partnership and Portag3 Ventures II Limited Partnership,
based on their respective interest. The contributions from IGM and
Pargesa reflect adjustments in accordance with IAS 39.
|
|
[2]
|
Investment platforms
and other includes earnings (losses) from Power Energy, IntegraMed
and Square Victoria Communications Group Inc. (up to the date of
disposal in July 2018).
|
|
[3]
|
Attributable to
participating shareholders.
|
|
Investment
Platforms and Other
|
|
|
|
|
|
(unaudited)
|
Three months
ended
|
|
Twelve months
ended
|
|
(in millions of
Canadian dollars)
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Sagard Europe [1]
[2]
|
(3)
|
|
37
|
|
(18)
|
|
200
|
|
Sagard Holdings [1]
[3]
|
(24)
|
|
(40)
|
|
(72)
|
|
(91)
|
|
Power Pacific [1]
[4]
|
16
|
|
(42)
|
|
101
|
|
(29)
|
|
Power Energy
[5]
|
(22)
|
|
29
|
|
(46)
|
|
6
|
|
Other
|
|
|
|
|
|
|
|
|
Investment and hedge
funds
|
4
|
|
2
|
|
24
|
|
6
|
|
Other [6]
|
−
|
|
12
|
|
1
|
|
(4)
|
|
(29)
|
|
(2)
|
|
(10)
|
|
88
|
|
[1]
|
Income (loss) from
investments for Sagard Europe, Sagard Holdings and Power Pacific is
presented net of expenses of their separate dedicated
teams.
|
|
[2]
|
Income in 2018
includes gains distributed by the funds in the first and fourth
quarters on the sale of investments.
|
|
[3]
|
Includes the
Corporation's share of the operating results of IntegraMed, a
controlled investment, and the share of earnings (losses) from
investments in a jointly controlled corporation and
associates.
|
|
[4]
|
Mainly comprised of
gains (losses) realized on the disposal of investments and
dividends received. The 2018 results include realized losses
of $46 million.
|
|
[5]
|
The 2018 results
include a gain of $62 million ($54 million net of tax)
recognized on the sale of Eagle Creek Renewable Energy, LLC.
|
|
[6]
|
Consists mainly of
foreign exchange gains or losses and interest on cash and cash
equivalents and includes the results of Square Victoria
Communications Group Inc. (up to date of disposal in July
2018).
|
|
Other
Items
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
Three months
ended
|
|
Twelve months
ended
|
|
(in millions of
Canadian dollars, except per share amounts)
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Power
Financial
|
|
|
|
|
|
|
|
|
Share of Lifeco's
other items:
|
|
|
|
|
|
|
|
|
Net charge on the sale
of U.S. individual life insurance and annuity
business
|
−
|
|
−
|
|
(86)
|
|
−
|
|
Net charge on the
revaluation of a deferred tax asset
|
(85)
|
|
−
|
|
(85)
|
|
−
|
|
Restructuring
charges
|
(15)
|
|
−
|
|
(15)
|
|
(25)
|
|
Net gain on the
Scottish Friendly Assurance Society Limited transaction
|
3
|
|
−
|
|
3
|
|
−
|
|
(97)
|
|
−
|
|
(183)
|
|
(25)
|
|
Per
share
|
(0.23)
|
|
−
|
|
(0.42)
|
|
(0.06)
|
|
Share of IGM's other
items:
|
|
|
|
|
|
|
|
|
Restructuring and
other charges
|
−
|
|
−
|
|
−
|
|
(7)
|
|
Premium paid on early
redemption of debentures
|
−
|
|
−
|
|
−
|
|
(3)
|
|
Share of Lifeco's
other items
|
(4)
|
|
−
|
|
(7)
|
|
(1)
|
|
(4)
|
|
−
|
|
(7)
|
|
(11)
|
|
Per
share
|
(0.01)
|
|
−
|
|
(0.02)
|
|
(0.02)
|
|
Share of Pargesa's
other items:
|
|
|
|
|
|
|
|
|
Imerys – Disposal of
roofing activity
|
−
|
|
56
|
|
−
|
|
56
|
|
Imerys – Impairments,
restructuring charges and other
|
(7)
|
|
(44)
|
|
(12)
|
|
(44)
|
|
Parques and other
charges
|
(8)
|
|
−
|
|
(12)
|
|
−
|
|
(15)
|
|
12
|
|
(24)
|
|
12
|
|
Per
share
|
(0.03)
|
|
0.03
|
|
(0.05)
|
|
0.03
|
|
Power Financial
corporate operations
|
|
|
|
|
|
|
|
|
Reorganization
charges
|
(6)
|
|
−
|
|
(6)
|
|
−
|
|
Per
share
|
(0.01)
|
|
−
|
|
(0.01)
|
|
−
|
|
(122)
|
|
12
|
|
(220)
|
|
(24)
|
|
Per
share
|
(0.28)
|
|
0.03
|
|
(0.50)
|
|
(0.05)
|
|
Investment platforms
and other
|
|
|
|
|
|
|
|
|
Sagard Holdings –
Share of IntegraMed's goodwill impairment charge
|
(16)
|
|
(66)
|
|
(16)
|
|
(66)
|
|
(16)
|
|
(66)
|
|
(16)
|
|
(66)
|
|
Per
share
|
(0.04)
|
|
(0.14)
|
|
(0.04)
|
|
(0.14)
|
|
Corporate
operations
|
|
|
|
|
|
|
|
|
Operating and other
expenses
|
|
|
|
|
|
|
|
|
Reduction of income
tax estimates
|
−
|
|
−
|
|
31
|
|
−
|
|
Divestiture of La
Presse operations
|
−
|
|
−
|
|
−
|
|
(54)
|
|
Premium paid on early
redemption of debentures
|
−
|
|
−
|
|
−
|
|
(7)
|
|
−
|
|
−
|
|
31
|
|
(61)
|
|
Per
share
|
−
|
|
−
|
|
0.07
|
|
(0.13)
|
|
(138)
|
|
(54)
|
|
(205)
|
|
(151)
|
|
Per
share
|
(0.32)
|
|
(0.11)
|
|
(0.47)
|
|
(0.32)
|
Net Asset Value
Net asset value represents management's estimate of the fair
value of the participating shareholders' equity of the Corporation.
Net asset value is the fair value of Power Corporation's
non-consolidated assets less its net debt and preferred shares.
|
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
|
Non-
consolidated
balance sheet
|
|
Reclassifications
|
|
Fair value
adjustment
|
|
Net asset
value
|
|
Non-
consolidated
balance sheet
|
|
Reclassifications
|
|
Fair value
adjustment
|
|
Net asset
value
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power
Financial [1]
|
11,530
|
|
−
|
|
3,334
|
|
14,864
|
|
12,295
|
|
−
|
|
(211)
|
|
12,084
|
|
Sagard
Europe [2]
|
478
|
|
−
|
|
−
|
|
478
|
|
391
|
|
−
|
|
−
|
|
391
|
|
Sagard
Holdings [2] [3]
|
306
|
|
156
|
|
74
|
|
536
|
|
395
|
|
181
|
|
3
|
|
579
|
|
Power
Pacific [2] [3]
|
730
|
|
9
|
|
−
|
|
739
|
|
510
|
|
159
|
|
−
|
|
669
|
|
Power
Energy
|
655
|
|
−
|
|
420
|
|
1,075
|
|
561
|
|
−
|
|
363
|
|
924
|
|
China
AMC [4]
|
658
|
|
−
|
|
−
|
|
658
|
|
679
|
|
−
|
|
−
|
|
679
|
|
Other
investments
|
149
|
|
−
|
|
49
|
|
198
|
|
171
|
|
−
|
|
18
|
|
189
|
|
Cash and cash
equivalents [3]
|
564
|
|
(178)
|
|
−
|
|
386
|
|
750
|
|
(347)
|
|
−
|
|
403
|
|
Other
assets
|
451
|
|
−
|
|
−
|
|
451
|
|
471
|
|
−
|
|
−
|
|
471
|
|
Total assets
|
15,521
|
|
(13)
|
|
3,877
|
|
19,385
|
|
16,223
|
|
(7)
|
|
173
|
|
16,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and
non-participating shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debentures and other
debt instruments
|
683
|
|
−
|
|
−
|
|
683
|
|
646
|
|
−
|
|
−
|
|
646
|
|
Other
liabilities [5]
|
664
|
|
(13)
|
|
−
|
|
651
|
|
459
|
|
(7)
|
|
−
|
|
452
|
|
Non-participating
shares
|
960
|
|
−
|
|
−
|
|
960
|
|
962
|
|
−
|
|
−
|
|
962
|
|
Total liabilities and
non-participating shares
|
2,307
|
|
(13)
|
|
−
|
|
2,294
|
|
2,067
|
|
(7)
|
|
−
|
|
2,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participating
shareholders' equity / Net asset value
|
13,214
|
|
−
|
|
3,877
|
|
17,091
|
|
14,156
|
|
−
|
|
173
|
|
14,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per
share
|
30.98
|
|
|
|
|
|
40.07
|
|
30.38
|
|
|
|
|
|
30.74
|
|
[1]
|
As a result of the
Corporation's participation in the Power Financial substantial
issuer bid in the second quarter of 2019, the number of shares held
by the Corporation decreased by 9.1% or 42,436,370 from 467,839,296
to 425,402,926 (equity interest decreased from 65.5% to
64.1%).
|
|
[2]
|
The management
companies of the investment funds are presented at their carrying
value in accordance with IFRS.
|
|
[3]
|
Cash of
$178 million related to Sagard Holdings and Power Pacific has
been included in the fair value ($347 million at
December 31, 2018).
|
|
[4]
|
Valued at carrying
value in accordance with IFRS.
|
|
[5]
|
Performance-related
compensation payable of $13 million is presented in the fair
value of Power Pacific ($3 million in Power Pacific and
$4 million in Sagard Holdings at December 31,
2018).
|
The Corporation's net asset value, presented on a look-through
basis, where the investment in Power Financial is based on the
Corporation's share of Power Financial's net asset value, was
$19.2 billion or $44.98 per share at December 31, 2019 ($17.7 billion or $37.91 per share at December 31, 2018). The additional fair value
adjustment of $2.1 billion
($3.3 billion at December 31, 2018) mainly relates to the
Corporation's share of its investment in Lifeco, IGM and Pargesa at
market value. For additional information, please refer to the
Corporation's Management's Discussion and Analysis for the
twelve-month and three-month periods ended December 31, 2019.
The Corporation's net asset value per share was $33.08, presented on a look-through basis, based
on: i) market values of publicly listed investments at March 17, 2020 and ii) fair values for
non-publicly listed investments at December
31, 2019.
Non-IFRS Financial Measures and Presentation
Net earnings attributable to participating shareholders are
comprised of:
- Adjusted net earnings attributable to participating
shareholders; and
- Other items, which include the after-tax impact of any item
that in management's judgment would make the period-over-period
comparison of results from operations less meaningful. Other items
include the Corporation's share of items presented as other items
by a subsidiary or a jointly controlled corporation.
Management uses these financial measures in its presentation and
analysis of the financial performance of Power Corporation and
believes that they provide additional meaningful information to
readers in their analysis of the results of the Corporation.
Adjusted net earnings, as defined by the Corporation, assist the
reader in comparing the current period's results to those of
previous periods as items that are not considered to be part of
ongoing activities are excluded from this non-IFRS financial
measure.
Adjusted net earnings attributable to participating shareholders
and adjusted net earnings per share are non-IFRS financial measures
that do not have a standard meaning and may not be comparable to
similar measures used by other entities.
The Corporation also uses a non-consolidated basis of
presentation to present and analyze its results whereby the
Corporation's interests in Power Financial and other subsidiaries
are accounted for using the equity method. Presentation on a
non-consolidated basis is a non-IFRS presentation. However, it is
useful to the reader as it presents the holding company's (parent)
results separately from the results of its operating
subsidiaries.
Net asset value is commonly used by holding companies to
determine their value. Net asset value is the fair value of Power
Corporation's non-consolidated assets less its net debt and
preferred shares. The investments held in public entities
(including Power Financial) are measured at their market value and
investments in private entities and investment funds are measured
at management's estimate of fair value. Pargesa's net asset
value is determined on the basis of current market values for
listed shareholdings, plus the fair value of private equity
activities and Groupe Bruxelles Lambert treasury shares, less net
debt. This measure presents the fair value of the net assets of the
holding company to management and investors and assists the reader
in determining the value of the holding company.
This news release may also contain other non-IFRS financial
measures which are publicly disclosed by the Corporation's
subsidiaries such as sales, assets under management and assets
under administration. Refer to the "Non-IFRS Financial Measures and
Presentation" section of the Corporation's most recent Management's
Discussion and Analysis for the definition of non-IFRS financial
measures and their reconciliation with IFRS financial measures.
Eligible Dividends
For purposes of the Income Tax Act (Canada) and any similar provincial
legislation, all of the above dividends on the Corporation's
preferred shares (including the Participating Preferred Shares) and
Subordinate Voting Shares are eligible dividends.
Forward-Looking Statements
Certain statements in this news release, other than statements
of historical fact, are forward-looking statements based on certain
assumptions and reflect the Corporation's current expectations, or
with respect to disclosure regarding the Corporation's public
subsidiaries, reflect such subsidiaries' disclosed current
expectations. Forward-looking statements are provided for the
purposes of assisting the reader in understanding the Corporation's
financial performance, financial position and cash flows as at and
for the periods ended on certain dates and to present information
about management's current expectations and plans relating to the
future and the reader is cautioned that such statements may not be
appropriate for other purposes. These statements may include,
without limitation, statements regarding the operations, business,
financial condition, expected financial results, performance,
prospects, opportunities, priorities, targets, goals, ongoing
objectives, strategies and outlook of the Corporation and its
subsidiaries, including the fintech strategy, as well as the
outlook for North American and international economies for the
current fiscal year and subsequent periods and the normal course
issuer bid. Forward-looking statements include statements that are
predictive in nature, depend upon or refer to future events or
conditions, or include words such as "expects", "anticipates",
"plans", "believes", "estimates", "seeks", "intends", "targets",
"projects", "forecasts" or negative versions thereof and other
similar expressions, or future or conditional verbs such as "may",
"will", "should", "would" and "could".
By its nature, this information is subject to inherent risks and
uncertainties that may be general or specific and which give rise
to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate, that
assumptions may not be correct and that objectives, strategic goals
and priorities will not be achieved. A variety of factors, many of
which are beyond the Corporation's and its subsidiaries' control,
affect the operations, performance and results of the Corporation
and its subsidiaries and their businesses, and could cause actual
results to differ materially from current expectations of estimated
or anticipated events or results. These factors include, but are
not limited to: the impact or unanticipated impact of general
economic, political and market factors in North America and internationally,
fluctuations in interest rates, inflation and foreign exchange
rates, monetary policies, business investment and the health of
local and global equity and capital markets, management of market
liquidity and funding risks, risks related to investments in
private companies and illiquid securities, risks associated with
financial instruments, changes in accounting policies and methods
used to report financial condition (including uncertainties
associated with significant judgments, estimates and assumptions),
the effect of applying future accounting changes, business
competition, operational and reputational risks, technological
changes, cybersecurity risks, changes in government regulation and
legislation, changes in tax laws, unexpected judicial or regulatory
proceedings, catastrophic events, man-made disasters, terrorist
attacks, wars and other conflicts, or an outbreak of a public
health pandemic or other public health crises, the Corporation's
and its subsidiaries' ability to complete strategic transactions,
integrate acquisitions and implement other growth strategies, and
the Corporation's and its subsidiaries' success in anticipating and
managing the foregoing factors.
The reader is cautioned to consider these and other factors,
uncertainties and potential events carefully and not to put undue
reliance on forward-looking statements. Information contained in
forward-looking statements is based upon certain material
assumptions that were applied in drawing a conclusion or making a
forecast or projection, including management's perceptions of
historical trends, current conditions and expected future
developments, as well as other considerations that are believed to
be appropriate in the circumstances, including the availability of
cash to complete purchases under the normal course issuer bid and
that the list of factors in the previous paragraph, collectively,
are not expected to have a material impact on the Corporation and
its subsidiaries. While the Corporation considers these assumptions
to be reasonable based on information currently available to
management, they may prove to be incorrect.
Other than as specifically required by applicable Canadian law,
the Corporation undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after
the date on which such statement is made, or to reflect the
occurrence of unanticipated events, whether as a result of new
information, future events or results, or otherwise.
Additional information about the risks and uncertainties of the
Corporation's business and material factors or assumptions on which
information contained in forward-looking statements is based is
provided in its disclosure materials, including its most recent
Management's Discussion and Analysis and Annual Information Form,
filed with the securities regulatory authorities in Canada and available at www.sedar.com.
SOURCE Power Corporation of Canada