Readers are referred to
the sections Non-IFRS Financial Measures and Forward-Looking
Statements later in this release. All figures are expressed in
Canadian dollars unless otherwise noted.
|
|
MONTRÉAL, May 15, 2023
/CNW/ - Power Corporation of Canada (Power Corporation or the Corporation)
(TSX: POW) today reported earnings results for the three months
ended March 31, 2023.
Power Corporation
Consolidated results for the
period ended March 31, 2023
HIGHLIGHTS [1]
Power Corporation
- Net earnings [2] were $313
million or $0.47 per share
[3] for the first quarter of 2023, compared with
$862 million or $1.28 per share in 2022.
Adjusted net earnings [2][4] were $514 million or $0.77 per share, compared with $442 million or $0.65 per share in the first quarter of
2022.
- Adjusted net asset value per share [4] was
$46.89 at March 31, 2023, compared with $41.91 at December 31,
2022, an increase of 11.9%. The Corporation's book value per
participating share [5] was $31.81 at March 31,
2023, compared with $31.37 at
December 31, 2022.
- The Corporation purchased for cancellation 1.2 million
subordinate voting shares for a total of $42
million.
- Contribution to net earnings from the publicly traded operating
companies was $535 million in the
first quarter of 2023, compared with $1,043
million in 2022.
Contribution to adjusted net earnings from the publicly traded
operating companies was $682 million
in the first quarter of 2023, compared with $613 million in 2022.
Great-West Lifeco Inc. (Lifeco)
- First quarter net earnings were $595
million, compared with $1,334
million in the first quarter of 2022.
Adjusted net earnings [6] were $808 million, compared with $712 million in the first quarter of 2022.
- Results reported for the first quarter of 2023 are in
accordance with IFRS 17, Insurance Contracts (IFRS 17) and
IFRS 9, Financial Instruments (IFRS 9), a milestone
which marks the successful implementation of IFRS 17 and
culmination of a multi-year enterprise-wide initiative.
- On April 3, 2023, Lifeco
announced an agreement to acquire Investment Planning Counsel Inc.
(IPC), a leading independent wealth management firm, from IGM
Financial.
- Putnam Investments, LLC ranked 2nd, 3rd
and 9th on a ten-, five- and one-year performance basis,
respectively, in the 2022 Barron's Annual Best Fund Families
rankings.
IGM Financial Inc. (IGM or IGM
Financial)
- First quarter net earnings were $381.3
million, compared with $219.3
million in the first quarter of 2022.
Adjusted net earnings were $206.5
million for the first quarter of 2023, compared with
$219.3 million in 2022.
- Assets under management and advisement [5] were
$260.4 billion at March 31, 2023, a decrease of 2.9% from
March 31, 2022 and an increase of
4.4% from December 31, 2022.
- Net inflows [7] were $990
million in the first quarter of 2023, compared with net
inflows of $2.5 billion in the first
quarter of 2022.
- On January 12, 2023, IGM and
Power Corporation closed the transaction to combine the group's
interest in China Asset Management
Co., Ltd. (ChinaAMC) under IGM, increasing IGM's investment in
ChinaAMC to 27.8%.
- In April 2023, IGM announced the
acquisition of a 20.5% interest in Rockefeller Capital
Management.
Groupe Bruxelles Lambert (GBL)
- On March 30, 2023, GBL's largest
private asset, Webhelp Group (Webhelp), a global business process
outsourcer, announced a transaction to combine with Concentrix
Corporation (Concentrix) (Nasdaq: CNXC) to create a prominent
global player in customer experience.
- GBL reported a net asset value [5] of €18.6 billion
at March 31, 2023, or €121.54 per
share, compared with €17.8 billion or €116.18 per share at
December 31, 2022.
- In the first quarter of 2023, GBL completed €147 million of
share buybacks.
|
|
[1]
|
Comparative periods
have been restated subsequent to the adoption of IFRS 17 and IFRS
9. See the Basis of Presentation and Non-IFRS Financial Measures
sections later in this news release.
|
[2]
|
Attributable to
participating shareholders.
|
[3]
|
All per share amounts
are per participating share of the Corporation.
|
[4]
|
Adjusted net earnings
and adjusted net asset value are non-IFRS financial measures.
Adjusted net earnings per share and adjusted net asset value per
share are non-IFRS ratios. See
the Non-IFRS Financial Measures section later in this
news release.
|
[5]
|
See the Other Measures
section later in this news release.
|
[6]
|
Defined as "base
earnings" by Lifeco, a non-IFRS financial measure; see
the Non-IFRS Financial Measures section later in this
news release.
|
[7]
|
Related to assets
under management and advisement.
|
FIRST QUARTER
Net earnings attributable to participating shareholders were
$313 million or $0.47 per share, compared with $862 million or $1.28 per share in 2022.
Adjusted net earnings attributable to participating shareholders
[1] were $514 million or
$0.77 per share, compared with
$442 million or $0.65 per share in 2022.
Contributions to Power Corporation's Earnings
(in millions of
dollars, except per share amounts)
|
Adjusted Net
Earnings
|
Net
Earnings
|
|
2023
|
2022
|
2023
|
2022
|
Lifeco
[2]
|
549
|
474
|
404
|
888
|
IGM
[2]
|
128
|
135
|
237
|
135
|
GBL
[2]
|
19
|
(29)
|
19
|
(29)
|
Effect of consolidation
[3]
|
(14)
|
33
|
(125)
|
49
|
Publicly traded
operating companies
|
682
|
613
|
535
|
1,043
|
|
|
|
|
|
Sagard and Power
Sustainable [4]
|
(88)
|
(81)
|
(88)
|
(91)
|
ChinaAMC
|
2
|
13
|
(52)
|
13
|
Other investments and
standalone businesses [5]
|
16
|
(1)
|
16
|
(1)
|
|
612
|
544
|
411
|
964
|
Corporate operations
and Other [6]
|
(98)
|
(102)
|
(98)
|
(102)
|
|
514
|
442
|
313
|
862
|
|
|
|
|
|
Per participating
share
|
0.77
|
0.65
|
0.47
|
1.28
|
Average shares
outstanding (in millions)
|
666.8
|
675.8
|
666.8
|
675.8
|
Publicly traded operating companies: contribution to
net earnings was $535 million and to
adjusted net earnings was $682 million, representing a
decrease of 48.7% and an increase of 11.3%, respectively, from the
first quarter of 2022:
Lifeco: contribution to net and
adjusted net earnings decreased by 54.5% and increased by 15.8%,
respectively. The adoption of IFRS 17 on January 1, 2023 has introduced net earnings
volatility, primarily driven by the removal of the direct link
between asset and liability measurement and Lifeco's accounting
policy decisions that were made to maintain regulatory capital
stability.
IGM: contribution to net and
adjusted net earnings increased by 75.6% and decreased by 5.2%,
respectively. Net earnings in the first quarter of 2023 include
IGM's gain recognized on the sale of a portion of its interest in
Lifeco to the Corporation, eliminated in the Effect of
consolidation.
GBL: contribution to net earnings of
$19 million. Results include the Corporation's share of a
charge of $20 million in the first quarter of 2023 for losses
due to an increase in the put right liability of the
non-controlling interests in Webhelp and charges related to
Webhelp's employee incentive plan. Upon completion of the Webhelp
and Concentrix combination transaction, expected by the end of
2023, GBL's liabilities to non-controlling interests will be
extinguished without any cash impact for GBL.
Sagard Holdings Inc. (Sagard) and Power Sustainable Capital Inc.
(Power Sustainable): net earnings include a negative
contribution of $77 million from Power
Sustainable, mainly related to a charge for the revaluation of
non-controlling interests of $33
million due to fair value increases within the Power
Sustainable Energy Infrastructure Partnership (PSEIP) and operating
losses in its energy infrastructure platform. Sagard had a
negative contribution of $11 million.
ChinaAMC: net earnings include a charge of
$54 million related to the sale of
the Corporation's interest in ChinaAMC to IGM, primarily consisting
of transaction costs and income taxes. As the Power group continues
to hold a 27.8% interest in ChinaAMC, the Corporation did not
recognize a gain on the disposal of its interest.
Adjustments in the first quarter of 2023, excluded from adjusted
net earnings, were a negative net impact to earnings of
$201 million or $0.30 per share, mainly related to the
Corporation's share of Lifeco's adjustments and charges incurred by
the Corporation related to the combination of the group's interest
in ChinaAMC under IGM, including transaction costs and income
taxes. Adjustments in the first quarter of 2022 were a positive net
impact to earnings of $420 million or $0.63 per share, mainly related to the
Corporation's share of Lifeco's adjustments and the Corporation's
share of an impairment charge of $10
million recognized by Power Sustainable on direct
investments in energy assets.
|
|
[1]
|
A non-IFRS financial
measure; see the Non-IFRS Financial Measures section later in this
news release.
|
[2]
|
As reported by
Lifeco, IGM and GBL.
|
[3]
|
Refer to the detailed
table in the Contribution to Net Earnings and Adjusted Net Earnings
section of the Corporation's most recent Management's Discussion
and Analysis (MD&A) for additional information.
|
[4]
|
Consists of earnings
(losses) from the alternative asset investment platforms, including
controlled and consolidated subsidiaries.
|
[5]
|
Includes earnings
(losses) from the Corporation's other investments and standalone
businesses.
|
[6]
|
Includes operating and
other expenses, dividends on non-participating shares of the
Corporation and Power Financial Corporation (Power Financial)
corporate operations; refer to the Earnings Summary
below.
|
Great-West Lifeco, IGM Financial and Groupe Bruxelles
Lambert
Results for the quarter ended March 31,
2023
The information below
is derived from Lifeco and IGM's first quarter MD&As, as
prepared and disclosed by the respective companies in accordance
with applicable securities legislation, and which are also
available either directly from SEDAR (www.sedar.com) or from their
websites, www.greatwestlifeco.com and www.igmfinancial.com. The
information below related to GBL is derived from publicly disclosed
information, as issued by GBL in its first quarter press release at
March 31, 2023. Further information on GBL's results is available
on its website at www.gbl.be.
|
GREAT-WEST LIFECO INC.
FIRST QUARTER
Net earnings attributable to common shareholders were
$595 million or $0.64 per share, compared with $1,334 million or $1.43 per share in 2022.
Adjusted net earnings [1] attributable to common
shareholders were $808 million or $0.87 per share, compared with $712 million
or $0.76 per share in 2022.
Adjustments in the first quarter of 2023, excluded from adjusted
net earnings, were a net negative impact of $213 million, compared with a net positive impact
of $622 million in 2022. Lifeco's adjustments consisted
of:
- Market experience losses of $168
million;
- Restructuring and integration costs of $19 million in the
United States segment; and
- Amortization of acquisition-related finite life intangibles of
$33 million.
Partially offset by:
- Positive earnings impact from assumption changes and management
actions of $7 million.
IGM FINANCIAL INC.
FIRST QUARTER
Net earnings available to common shareholders were $381.3 million or $1.60 per share, compared with $219.3 million or $0.91 per share in 2022.
Adjusted net earnings [2] available to common
shareholders were $206.5 million or
$0.87 per share for the first quarter
of 2023, compared with $219.3 million
or $0.91 per share in 2022.
Adjustments in the first quarter of 2023, excluded from adjusted
net earnings, were a positive impact of $174.8 million consisting of a gain on the sale
of Lifeco's shares.
Assets under management and advisement [3] at
March 31, 2023 were $260.4 billion, a decrease of 2.9% from the
first quarter of 2022 and an increase of 4.4% from
December 31, 2022.
GROUPE BRUXELLES
LAMBERT
FIRST QUARTER
GBL reported net earnings of €77 million, compared with a
net loss of €126 million in 2022.
GBL reported a net asset value [3] of
€18,596 million at March 31, 2023, or €121.54 per share,
compared with €17,775 million or €116.18 per share at
December 31, 2022.
|
|
[1]
|
Defined as "base
earnings" by Lifeco. For additional information, please refer to
the Non-IFRS Financial Measures section later in this news
release.
|
[2]
|
Adjusted net earnings
is a non-IFRS financial measure. For additional information,
please refer to the Non-IFRS Financial Measures section
later in this news release.
|
[3]
|
See the Other Measures
section later in this news release.
|
Sagard and Power
Sustainable
Results for the quarter ended March 31,
2023
Sagard and Power
Sustainable comprise the results of the Corporation's alternative
asset investment platforms, which includes income earned from asset
management and investing activities. Asset management activities
includes fee-related earnings (a non-IFRS financial measure, see
the Non-IFRS Financial Measures section later in this news
release), which is comprised of management fees less investment
platform expenses. Asset management activities also includes
carried interest and income from other management activities.
Investing activities comprises income earned on the capital
invested by the Corporation (proprietary capital) in the investment
funds managed by each platform and the share of earnings (losses)
of controlled and consolidated subsidiaries held within the
alternative asset investment platforms. For additional information,
refer to the table later in this news release.
|
FIRST QUARTER
Net loss and adjusted net loss [1] of the
alternative asset investment platforms was $88 million,
compared with net loss of $91 million and adjusted net loss of
$81 million in the corresponding
period in 2022.
Net loss in the first quarter is comprised of:
- A negative contribution of $22
million from the asset management activities of Sagard and Power Sustainable;
- A negative contribution of $66
million from investing activities, which is primarily
related to Power Sustainable and is comprised of:
i. losses before the revaluation of
non-controlling interests liabilities of $30
million in its energy infrastructure platform due to
seasonality; and
ii. fair value increases within the Power Sustainable Energy
Infrastructure Partnership resulting in a revaluation of
non-controlling interests liabilities [2] of
$33 million.
Summary of assets under
management [3] (including unfunded
commitments):
(in billions of dollars)
|
March 31, 2023
|
March 31, 2022
|
Sagard [4]
|
18.0
|
16.4
|
Power
Sustainable
|
3.5
|
2.6
|
Total
|
21.5
|
19.0
|
Percentage of
third-party and associated companies
|
87 %
|
83 %
|
|
|
[1]
|
Adjusted net earnings
is a non-IFRS financial measure. For additional information, please
refer to the Non-IFRS Financial Measures section later in this news
release.
|
[2]
|
The Corporation
controls and consolidates the activities of PSEIP on a
historical cost basis; however, limited partner equity interests
held by third parties have redemption features and are classified
as a financial liability which are remeasured at their
redemption value. The net asset
value [3] of PSEIP was $1,159
million at March 31, 2023, compared with $1,035 million at
December 31, 2022.
|
[3]
|
See the Other Measures
section later in this news release.
|
[4]
|
Includes ownership in
Wealthsimple Financial Corp. (Wealthsimple) valued at
$0.9 billion at March 31, 2023 ($1.7 billion at March 31,
2022) and excludes assets under management
of Sagard's wealth management business.
|
Other Investments and Standalone Businesses
Results
for the quarter ended March 31, 2023
Other investments and
standalone businesses includes the Corporation's investments in
investment and hedge funds and the share of earnings (losses) of
standalone businesses.
|
FIRST QUARTER
OTHER INVESTMENTS
The Corporation holds an investment in Bellus Health Inc.
(Bellus), with a carrying value of nil at March 31, 2023. On
April 18, 2023, subsequent to quarter-end, Bellus announced an
agreement in which it will be acquired by GSK Inc. for US$14.75 per share in cash. The Corporation
expects to receive proceeds of approximately US$73 million.
The transaction is expected to close in the third quarter of
2023.
STANDALONE BUSINESSES
Net loss of the standalone businesses in the first quarter of
2023 was $5 million, compared with net earnings of
$4 million in 2022.
At March 31, 2023, the fair value of standalone businesses
was $0.8 billion, compared with
$1.3 billion at March 31,
2022.
Adjusted Net Asset Value and Participating Shareholders'
Equity
At March 31, 2023
ADJUSTED NET ASSET VALUE
Adjusted net asset
value is presented for Power Corporation and represents
management's estimate of the fair value of the participating
shareholders' equity of the Corporation. Adjusted net asset value
is calculated as the fair value of the assets of the combined Power
Corporation and Power Financial holding company (the gross asset
value) less their net debt and preferred shares. Refer to the
Non-IFRS Financial Measures section later in this news release for
a description and reconciliation.
|
The Corporation's adjusted net asset value per share was
$46.89 at March 31, 2023,
compared with $41.91 at
December 31, 2022, representing an increase of 11.9%.
|
(in millions of
dollars, except per share amounts)
|
March 31,
2023
|
December 31,
2022
|
Variation %
|
Publicly
Traded
Operating
Companies
|
Lifeco
[1]
|
22,762
|
19,414
|
17
|
IGM
|
5,975
|
5,592
|
7
|
GBL
|
2,560
|
2,388
|
7
|
|
|
31,297
|
27,394
|
14
|
|
|
|
|
|
Alternative
Asset
Investment
Platforms
|
Sagard
[2]
|
1,041
|
977
|
7
|
Power Sustainable
[2]
|
1,520
|
1,478
|
3
|
|
2,561
|
2,455
|
4
|
|
|
|
|
|
Other
|
ChinaAMC
[1]
|
−
|
1,150
|
(100)
|
Standalone businesses
[3]
|
813
|
829
|
(2)
|
Other assets and
investments
|
536
|
559
|
(4)
|
Cash and cash
equivalents
|
1,663
|
1,277
|
30
|
|
|
3,012
|
3,815
|
(21)
|
|
|
|
|
|
|
Gross asset
value
|
36,870
|
33,664
|
10
|
|
Liabilities and
preferred shares
|
(5,637)
|
(5,701)
|
1
|
|
Adjusted net asset
value
|
31,233
|
27,963
|
12
|
|
|
|
|
|
|
Shares outstanding
(millions)
|
666.0
|
667.1
|
|
|
Adjusted net asset
value per share
|
46.89
|
41.91
|
12
|
[1]
|
On January 12, 2023,
the Corporation and IGM completed a transaction in which the
interest in ChinaAMC was combined under IGM. In a separate
agreement, IGM sold approximately 15.2 million common shares of
Lifeco, representing a 1.6% interest in Lifeco, to Power
Financial.
|
[2]
|
Includes the management
companies of the investment platforms at their carrying
value.
|
[3]
|
Includes The Lion
Electric Company (Lion), LMPG Inc. (LMPG) and Peak Achievement
Athletics Inc. (Peak).
|
Power Corporation's Ownership in Publicly Traded Operating
Companies
|
|
Shares
held [1]
(in millions)
|
Share
price
|
|
Ownership [1]
(%)
|
March 31,
2023
|
December 31,
2022
|
Lifeco
|
68.2
|
635.5
|
$35.82
|
$31.30
|
IGM
|
62.1
|
147.9
|
$40.39
|
$37.80
|
GBL [2]
|
14.9
|
22.8
|
€78.50
|
€74.58
|
[1]
|
At March 31,
2023.
|
[2]
|
Held through Parjointco
SA (Parjointco), a jointly controlled corporation (50%).
|
PARTICIPATING SHAREHOLDERS' EQUITY
Book value per
participating share represents Power Corporation's participating
shareholders' equity divided by the number of participating shares
outstanding at the end of the reporting period. Participating
shareholders' equity is calculated as the total assets of the
combined Power Corporation and Power Financial holding company,
including investments in subsidiaries presented using the equity
method, less their net debt and preferred shares.
|
The Corporation's book value per participating share was
$31.81 at March 31, 2023,
compared with $31.37 at
December 31, 2022, representing an increase of 1.4%.
|
(in millions of
dollars, except per share amounts)
|
March 31,
2023
|
December 31,
2022
|
Variation %
|
Publicly
Traded
Operating
Companies
|
Lifeco
|
15,032
|
14,579
|
3
|
IGM
|
3,556
|
3,607
|
(1)
|
GBL
|
3,582
|
3,314
|
8
|
|
|
22,170
|
21,500
|
3
|
|
|
|
|
|
Alternative
Asset
Investment
Platforms
|
Sagard
|
779
|
714
|
9
|
Power
Sustainable
|
1,103
|
1,134
|
(3)
|
|
1,882
|
1,848
|
2
|
|
|
|
|
|
Other
|
ChinaAMC
|
−
|
783
|
(100)
|
Standalone businesses
[1]
|
675
|
678
|
−
|
Other assets and
investments
|
437
|
504
|
(13)
|
Cash and cash
equivalents
|
1,663
|
1,277
|
30
|
|
|
2,775
|
3,242
|
(14)
|
|
|
|
|
|
|
Total assets
|
26,827
|
26,590
|
1
|
|
Liabilities and
preferred shares
|
(5,637)
|
(5,664)
|
−
|
|
Participating
shareholders' equity
|
21,190
|
20,926
|
1
|
|
|
|
|
|
|
Shares outstanding
(millions)
|
666.0
|
667.1
|
|
|
Book value per
participating share
|
31.81
|
31.37
|
1
|
[1]
|
Includes Lion, LMPG and
Peak.
|
Transition to IFRS 17 and IFRS 9
The Corporation and its subsidiaries adopted IFRS
17, Insurance Contracts (IFRS 17) which replaced
IFRS 4, Insurance Contracts (IFRS 4)
effective January 1, 2023. IFRS 17
impacted only Lifeco due to its insurance activities. While the new
standard changes Lifeco's recognition and measurement of insurance
contracts and the corresponding presentation and disclosures in the
Corporation's financial statements, it did not have a material
impact. The accounting change does not impact the underlying
economics of Lifeco's business activities nor change Lifeco's
business strategy. The Corporation and its subsidiaries also
adopted IFRS 9, Financial Instruments (IFRS
9) which replaced IAS 39, Financial Instruments:
Recognition and Measurement effective January 1,
2023, which did not lead to a material change in the level of
investments. The Corporation has also applied IFRS 9 as at
January 1, 2023 when applying the equity method of accounting
to GBL's results. Lifeco expects an increase in net earnings
volatility primarily driven by the de-linking of asset and
liability measurement and accounting policy decisions to maintain
regulatory capital stability.
The Corporation's January 1, 2022
participating shareholders' equity decreased by approximately 10%
on the adoption of IFRS 17 on January 1,
2023, in line with original expectations, primarily due to
Lifeco's establishment of the contractual service margin (CSM),
partially offset by the removal of provisions no longer required
under IFRS 17.
Dividend on Power Corporation Participating Shares
The Board of Directors declared a quarterly dividend of
52.50 cents per share on the Participating Preferred Shares
and the Subordinate Voting Shares of the Corporation, payable
August 1, 2023 to shareholders of
record June 30, 2023.
Dividends on Power Corporation Non-Participating Preferred
Shares
The Board of Directors also declared quarterly dividends on the
Corporation's preferred shares, payable July
15, 2023 to shareholders of record June 23, 2023:
Series
|
Stock
Symbol
|
Amount
|
Series
|
Stock
Symbol
|
Amount
|
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¢
|
Series C
|
POW.PR.C
|
36.25¢
|
|
|
|
Investor Information
Access to Quarterly
Results Materials:
|
|
Quarterly Earnings Conference
Call:
|
The first quarter
earnings
news release and shareholder
report are available on the
Power Corporation website at
www.powercorporation.com/en/
investors
|
|
Power Corporation will
host an earnings call and live audio webcast on Tuesday,
May 16, 2023 at 8:30 a.m. (Eastern Time). A
question-and-answer period with analysts will follow the
presentation. Shareholders, investors, and other stakeholders are
welcome to participate on a listen-only basis.
The live audio webcast
and presentation materials will be available at:
www.powercorporation.com/en/investors/events-presentations/.
To listen via
telephone, please dial 1-800-319-4610 toll-free in North America or
416-915-3239 for local calls made in the Toronto area.
A replay of the
conference call will be available from May 16, 2023 at 11:30 a.m.
(Eastern Time) until August 9, 2023 by calling 1-855-669-9658
toll-free in North America, using the access code 3002#. A webcast
archive will also be available on Power Corporation's
website.
|
Investor Relations Contact:
|
|
Treasury
514-286-7400
investor.relations@powercorp.com
|
|
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 March 31, 2023, Power Corporation held the following
economic interests:
100% – Power Financial
|
www.powerfinancial.com
|
68.2 %
|
Great-West
Lifeco (TSX: GWO)
|
www.greatwestlifeco.com
|
62.1 %
|
IGM Financial
(TSX: IGM)
|
www.igmfinancial.com
|
14.9 %
|
GBL [1] (Euronext:
GBLB)
|
www.gbl.be
|
54.2 %
|
Wealthsimple [2]
|
www.wealthsimple.com
|
|
Investment Platforms
|
|
100 %
|
Sagard [3]
|
www.sagard.com
|
100 %
|
Power
Sustainable
|
www.powersustainable.com
|
[1]
|
Held through
Parjointco, a jointly controlled corporation (50%).
|
[2]
|
Undiluted equity
interest held by Portag3 Ventures Limited Partnership (Portage
Ventures I), Power Financial and IGM, representing a fully diluted
equity interest of 42.5%.
|
[3]
|
The Corporation holds
an 79.0% interest in Sagard Holdings Management Inc.
|
Earnings Summary
Contribution to Adjusted Net Earnings and Net
Earnings
(in millions of
dollars, except per share amounts)
|
|
Three months ended
March 31,
|
|
|
|
2023
|
2022
(restated)
|
Adjusted net
earnings [1]
|
|
|
|
|
Lifeco [2]
|
|
|
549
|
474
|
IGM [2]
|
|
|
128
|
135
|
GBL [2]
|
|
|
19
|
(29)
|
Effect of consolidation
[3]
|
|
|
(14)
|
33
|
|
|
|
682
|
613
|
Sagard and Power
Sustainable [4]
|
|
|
(88)
|
(81)
|
ChinaAMC
|
|
|
2
|
13
|
Other investments and
standalone businesses [5]
|
|
|
16
|
(1)
|
Corporate operating and
other expenses
|
|
|
(51)
|
(56)
|
Dividends on
non-participating and perpetual preferred shares
|
|
|
(47)
|
(46)
|
Adjusted net
earnings [6]
|
|
|
514
|
442
|
Adjustments
[7]
|
|
|
(201)
|
420
|
Net
earnings
|
|
|
|
|
Lifeco
[2]
|
|
|
404
|
888
|
IGM
[2]
|
|
|
237
|
135
|
GBL
[2]
|
|
|
19
|
(29)
|
Effect of consolidation
[3]
|
|
|
(125)
|
49
|
|
|
|
535
|
1,043
|
Sagard and Power
Sustainable [4]
|
|
|
(88)
|
(91)
|
ChinaAMC
|
|
|
(52)
|
13
|
Other investments and
standalone businesses [5]
|
|
|
16
|
(1)
|
Corporate operating and
other expenses
|
|
|
(51)
|
(56)
|
Dividends on
non-participating and perpetual preferred shares
|
|
|
(47)
|
(46)
|
Net
earnings [6]
|
|
|
313
|
862
|
|
|
|
|
|
Earnings per share –
basic [6]
|
|
|
|
|
Adjusted net
earnings
|
|
|
0.77
|
0.65
|
Adjustments
|
|
|
(0.30)
|
0.63
|
Net
earnings
|
|
|
0.47
|
1.28
|
[1]
|
For a reconciliation of
Lifeco, IGM, and Sagard and Power Sustainable's non-IFRS adjusted
net earnings to their net earnings, refer to the Non-IFRS Financial
Measures, and Sagard and Power Sustainable sections
below.
|
[2]
|
As reported by Lifeco,
IGM and GBL.
|
[3]
|
Effect of consolidation
reflects: i) the elimination of intercompany transactions; ii) the
application of the Corporation's accounting method for investments
under common control to the reported net earnings of the publicly
traded operating companies, which include: a) an adjustment related
to Lifeco's investment in PSEIP; and b) an allocation of the
results of the fintech portfolio, including Wealthsimple, Portage
Ventures I, Portag3 Ventures II Limited Partnership (Portage
Ventures II) and Portage Ventures III Limited Partnership (Portage
Ventures III), to the contributions from Lifeco and IGM based on
their respective interest; and iii) adjustments in accordance with
IAS 39 for IGM and GBL for comparative periods presented prior to
the Corporation's adoption of IFRS 9 on January 1, 2023. Refer to
the detailed table in the Contribution to Net Earnings and Adjusted
Net Earnings section of the Corporation's most recent
MD&A.
|
[4]
|
Consists of earnings of
the Corporation's alternative asset investment platforms, including
investments held through Power Financial.
|
[5]
|
Includes the results of
Lion, LMPG and Peak.
|
[6]
|
Attributable to
participating shareholders.
|
[7]
|
Refer to the detailed
table of Adjustments in the Non-IFRS Financial Measures section
below.
|
Sagard and Power
Sustainable
(in millions of
dollars)
|
|
Three months ended
March 31,
|
|
|
|
2023
|
2022
|
Adjusted net
earnings (loss)
|
|
|
|
|
Asset management
activities [1]
|
|
|
|
|
Sagard
|
|
|
(10)
|
(14)
|
Power
Sustainable
|
|
|
(12)
|
(12)
|
Investing activities
(proprietary capital)
|
|
|
|
|
Sagard
[2]
|
|
|
(1)
|
14
|
Power
Sustainable
|
|
|
|
|
China public equity
[3]
|
|
|
(2)
|
(70)
|
Energy
Infrastructure
|
|
|
|
|
Earnings (losses)
before changes in non-controlling interests liabilities
[4]
|
|
|
(30)
|
1
|
Revaluation of
non-controlling interests liabilities [5]
|
|
|
(33)
|
−
|
Adjusted net
earnings (loss)
|
|
|
(88)
|
(81)
|
Adjustments
[6]
|
|
|
−
|
(10)
|
Net earnings
(loss)
|
|
|
(88)
|
(91)
|
[1]
|
Includes management
fees charged by the investment platforms on proprietary capital and
management of standalone businesses. Management fees paid by the
Corporation are deducted from income from investing
activities.
|
[2]
|
Includes the
Corporation's share of earnings (losses) of Wealthsimple. The first
quarter of 2022 included a reversal of carried interest payable of
$13 million, due to a decrease in the fair value of Wealthsimple in
the quarter. The net decrease in fair value of the Corporation's
investments, including its investments held through Power
Financial, in Portage Ventures I, Portage Ventures II, Portage
Ventures III, and Wealthsimple was $6 million in the three-month
period ended March 31, 2023, compared with a decrease of $143
million in fair value in the corresponding period in
2022.
|
[3]
|
The fair value of the
Corporation's investments was $664 million at March 31, 2023,
compared with $666 million at December 31, 2022. On adoption of
IFRS 9 on January 1, 2023, the Corporation has classified its
investments in Chinese public equities as fair value through other
comprehensive income (FVOCI), an elective classification for equity
instruments in which all fair value changes remain permanently in
equity. Going forward, the contribution from investing activities
will consist of dividend income and management and performance fee
expenses. In the first quarter of 2022, the Corporation recognized
realized losses on the disposal of investments in Power Sustainable
China of $54 million, and recognized $13 million in impairments due
to declines in Chinese equity markets.
|
[4]
|
The first quarter of
2023 includes the Corporation's share of carried interest expense
of $9 million, which resulted from an increase in fair value of
assets held in PSEIP and operating losses mainly related to
seasonality. The first quarter of 2022 included a gain on
derivative contracts hedging energy infrastructure projects of $12
million and excluded a charge of $10 million due to impairments on
direct investments in energy infrastructure assets, recorded as an
Adjustment (see the section Adjustments below).
|
[5]
|
The first quarter of
2023 includes a charge of $33 million related to the Corporation's
share of the revaluation of non-controlling interests liabilities
which mainly resulted from an increase in fair value of assets held
in PSEIP. The NAV of PSEIP was $1,159 million at March 31, 2023,
compared with $1,035 million at December 31, 2022. The Corporation
controls and consolidates the activities of PSEIP on a historical
cost basis; however, equity interests held by third parties have
redemption features and are classified as a financial liability
which are remeasured at their redemption value.
|
[6]
|
Refer to the detailed
table of Adjustments in the Non-IFRS Financial Measures section
below.
|
Other Investments and Standalone Businesses
(in millions of
dollars)
|
|
Three months ended
March 31,
|
|
|
|
2023
|
2022
|
Net earnings
(loss)
|
|
|
|
|
Investment and hedge
funds and Other [1]
|
|
|
21
|
(5)
|
Standalone businesses
[2]
|
|
|
(5)
|
4
|
Net earnings
(loss)
|
|
|
16
|
(1)
|
[1]
|
Other consists mainly
of foreign exchange gains or losses and interest on cash and cash
equivalents.
|
[2]
|
Includes the
Corporation's share of earnings (losses) of Lion, LMPG, and
Peak.
|
BASIS OF PRESENTATION
The condensed consolidated interim unaudited financial
statements for the period ended March 31,
2023 of the Corporation, which reflect the adoption of IFRS
17 and IFRS 9 that resulted in the restatement of certain
comparative amounts, have been prepared in accordance with
International Financial Reporting Standards (IFRS) unless otherwise
noted and are the basis for the figures presented in this news
release, unless otherwise noted.
NON-IFRS FINANCIAL MEASURES
Net earnings attributable to participating shareholders are
comprised of:
- Adjusted net earnings attributable to participating
shareholders; and
- Adjustments, which include the after-tax impact of any item
that in management's judgment, including those identified by
management of its publicly traded operating companies, would make
the period-over-period comparison of results from operations less
meaningful. Includes the Corporation's share of Lifeco's impact of
market-related impacts, where actual market returns in the current
period are different than longer-term expected returns on assets
and liabilities, assumption changes and management actions that
impact the measurement of assets and liabilities, realized gains
(losses) on the sale of assets measured at FVOCI, direct equity and
interest rate impacts on the measurement of surplus assets and
liabilities and amortization of acquisition-related finite life
intangible assets, as well as items that management believes are
not indicative of the underlying business results which include
those identified by a subsidiary or a jointly controlled
corporation. Items that management and management of its
subsidiaries believe are not indicative of the underlying business
results include restructuring or reorganization costs, integration
costs related to business acquisitions, material legal settlements,
material impairment charges, impact of substantially enacted income
tax rate changes and other tax impairments, certain non-recurring
material items, and net gains, losses or costs related to the
disposition or acquisition of a business.
Effective the first quarter of 2023, the Corporation introduced
a refined definition of its non-IFRS financial measure, adjusted
net earnings. This change is consistent with the introduction of a
refined definition of base earnings (losses) by Lifeco with the
adoption of IFRS 17 on January 1, 2023. Lifeco's base
earnings (losses) continues to represent its management's view of
the underlying business performance of Lifeco and provides an
alternate measure to understand the underlying business performance
of Lifeco compared to its IFRS-reported net earnings. The
definition of Adjustments continues to include what the Corporation
previously presented, including Lifeco's impact of assumption
changes and management actions that impact the measurement of
assets and liabilities, and market-related impacts where actual
market returns in the current period are different than longer-term
expected returns on assets and liabilities. The definition of
Lifeco's base earnings has been refined to also exclude the
following impacts that are included in IFRS-reported net earnings
for an improved representation of Lifeco's underlying business
performance, as well as for consistency and comparability with its
financial services peers:
- Realized gains (losses) on the sale of assets measured at fair
value through other comprehensive income;
- The direct equity and interest rate impacts on the measurement
of surplus assets and liabilities; and
- Amortization of acquisition-related finite life intangible
assets.
The Corporation updated its definition of adjusted net earnings
in line with Lifeco's change. The comparative periods have been
restated to reflect this change.
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, assists the
reader in comparing the current period's results to those of
previous periods as it reflects management's view of the operating
performance of the Corporation and its subsidiaries and excludes
items that are not considered to be part of the underlying business
results.
Fee-related earnings is presented for Sagard and Power Sustainable and includes
revenues from management fees earned across all asset classes, less
i) fee-related compensation including salary, bonus, and
benefits, and ii) operating expenses. Fee-related earnings is
presented on a gross basis, including non-controlling interests.
Fee-related earnings excludes i) share-based compensation expenses,
ii) amortization of acquisition-related intangibles,
iii) foreign exchange-related gains and losses, iv) net
interest, and v) other items that in management's judgment are not
indicative of underlying operating performance of the alternative
asset investment platforms, which include restructuring costs,
transaction and integration costs related to business acquisitions
and certain non-recurring material items. Management uses this
measure to assess the profitability of the asset management
activities of the alternative asset investment platforms. This
financial measure provides insight as to whether recurring revenues
from management fees, which are not based on future realization
events, are sufficient to cover associated operating expenses.
Adjusted net asset value is commonly used by holding companies
to assess their value. Adjusted net asset value represents the fair
value of the participating shareholders' equity of Power
Corporation. Adjusted net asset value is calculated as the fair
value of the assets of the combined Power Corporation and Power
Financial holding company less their net debt and preferred shares.
The investments held in public entities (including Lifeco, IGM and
GBL) are measured at their market value and investments in private
entities and investment funds are measured at management's estimate
of fair value. This measure presents the fair value of the
participating shareholders' equity of the holding company, and
assists the reader in determining or comparing the fair value of
investments held by the holding company or its overall fair
value.
Adjusted net earnings attributable to participating
shareholders, fee-related earnings, adjusted net asset value, gross
asset value, adjusted net earnings per share and adjusted net asset
value per share are non-IFRS financial measures and ratios that do
not have a standard meaning and may not be comparable to similar
measures used by other entities.
Presentation of Holding Company Activities
The Corporation's reportable segments include Lifeco, IGM and
GBL, which represent the Corporation's investments in publicly
traded operating companies, as well as the holding company. These
reportable segments, in addition to the asset management
activities, reflect Power Corporation's management structure and
internal financial reporting. The Corporation evaluates its
performance based on the operating segment's contribution to
earnings.
The holding company comprises the corporate activities of the
Corporation and Power Financial, on a combined basis, and presents
the investment activities of the Corporation. The investment
activities of the holding company, including the investments in
Lifeco, IGM and controlled entities within the alternative asset
investment platforms, are presented using the equity method. The
holding company activities present the holding company's assets and
liabilities, including cash, investments, debentures and
non-participating shares. The discussions included in the sections
Financial Position and Cash Flows of the Corporation's most recent
MD&A present the segmented balance sheet and cash flow
statement of the holding company, which are presented in Note 23 of
the Interim Consolidated Financial Statements. This presentation is
useful to the reader as it presents the holding company's (parent)
results separately from the results of its consolidated operating
subsidiaries.
RECONCILIATIONS OF NON-IFRS FINANCIAL MEASURES
Power Corporation
ADJUSTED NET EARNINGS
(in millions of
dollars)
|
|
Three months ended
March 31,
|
|
|
|
2023
|
2022
(restated)
|
Adjusted net earnings –
Non-IFRS financial measure [1]
|
|
|
514
|
442
|
Share of Adjustments
[2], net of tax
|
|
|
|
|
Lifeco
|
|
|
(145)
|
415
|
IGM
|
|
|
(2)
|
15
|
ChinaAMC
|
|
|
(54)
|
−
|
Sagard and Power
Sustainable
|
|
|
−
|
(10)
|
|
|
|
(201)
|
420
|
Net earnings – IFRS
financial measure [1]
|
|
|
313
|
862
|
[1]
|
Attributable to
participating shareholders of Power Corporation.
|
[2]
|
Refer to the
Adjustments section for more detail on Adjustments from Lifeco,
IGM, ChinaAMC, Sagard and Power Sustainable.
|
ADJUSTMENTS (excluded from Adjusted net earnings)
(in millions of
dollars)
|
|
Three months ended
March 31,
|
|
|
|
2023
|
2022
(restated)
|
Lifeco [1]
|
|
|
|
|
Market experience
gains and losses (pre-tax)
|
|
|
(142)
|
576
|
Income tax (expense)
benefit
|
|
|
28
|
(119)
|
Assumption changes and
management actions (pre-tax)
|
|
|
6
|
(13)
|
Income tax (expense)
benefit
|
|
|
(1)
|
1
|
Transaction costs
related to acquisitions (pre-tax)
|
|
|
−
|
(6)
|
Income tax (expense)
benefit
|
|
|
−
|
1
|
Restructuring and
integration costs (pre-tax)
|
|
|
(18)
|
(11)
|
Income tax (expense)
benefit
|
|
|
5
|
3
|
Amortization of
acquisition-related finite life intangible assets
(pre-tax)
|
|
|
(31)
|
(23)
|
Income tax (expense)
benefit
|
|
|
8
|
5
|
|
|
|
(145)
|
414
|
Effect of consolidation
(pre-tax) [2]
|
|
|
−
|
1
|
Income tax (expense)
benefit
|
|
|
−
|
−
|
|
|
|
(145)
|
415
|
IGM [1]
|
|
|
|
|
Gain on disposal of
Lifeco shares (pre-tax)
|
|
|
112
|
−
|
Income tax (expense)
benefit
|
|
|
(3)
|
−
|
|
|
|
109
|
−
|
Effect of consolidation
(pre-tax) [2]
|
|
|
(121)
|
19
|
Income tax (expense)
benefit
|
|
|
10
|
(4)
|
|
|
|
(2)
|
15
|
ChinaAMC
|
|
|
|
|
Transaction costs on
disposal of ChinaAMC (pre-tax)
|
|
|
(14)
|
−
|
Income tax (expense)
benefit
|
|
|
−
|
−
|
Income taxes on
disposal of ChinaAMC
|
|
|
(40)
|
−
|
|
|
|
(54)
|
−
|
Sagard and Power
Sustainable
|
|
|
|
|
Impairment charges on
direct investments in energy infrastructure (pre-tax)
|
|
|
−
|
(13)
|
Income tax (expense)
benefit
|
|
|
−
|
3
|
|
|
|
−
|
(10)
|
|
|
|
(201)
|
420
|
[1]
|
As reported by Lifeco
and IGM.
|
[2]
|
Effect of consolidation
reflects i) the elimination of intercompany transactions, including
the gain recognized by IGM on the sale of a portion of its interest
in Lifeco to the Corporation in the first quarter of 2023; ii) the
application of the Corporation's accounting method for investments
under common control to the Adjustments reported by Lifeco and IGM;
iii) IGM's share of Lifeco's Adjustments, in accordance with the
Corporation's definition of Adjusted net earnings; and iv)
adjustments in accordance with IAS 39 for IGM for comparative
periods presented prior to the Corporation's adoption of IFRS 9 on
January 1, 2023.
|
ADJUSTED NET ASSET VALUE
Adjusted net asset
value represents management's estimate of the fair value of the
participating shareholders' equity of the Corporation. Adjusted net
asset value is calculated as the fair value of the assets of the
combined Power Corporation and Power Financial holding company less
their net debt and preferred shares. The Corporation's adjusted net
asset value per share is presented on a look-through
basis.
|
The following table presents a reconciliation of the
participating shareholders' equity reported in accordance with IFRS
to the adjusted net asset value, a non-IFRS financial measure:
(in millions of
dollars, except per share amounts)
|
March 31,
2023
|
|
December 31,
2022
(restated)
|
|
Participating
shareholders' equity – IFRS financial measure
|
|
|
|
|
Stated capital –
participating shares
|
9,472
|
|
9,486
|
|
Retained
earnings
|
9,350
|
|
9,099
|
|
Reserves
|
2,368
|
|
2,341
|
|
|
21,190
|
|
20,926
|
|
Fair value
adjustments [1]
|
|
|
|
|
Lifeco
|
7,730
|
|
4,835
|
|
IGM
|
2,419
|
|
1,985
|
|
GBL
|
(1,022)
|
|
(926)
|
|
Alternative asset
investment platforms
|
679
|
|
607
|
|
ChinaAMC
|
−
|
|
367
|
|
Other investments and
standalone businesses
|
237
|
|
206
|
|
Adjustments to
Other liabilities [1]
|
−
|
|
(37)
|
|
|
10,043
|
|
7,037
|
|
Adjusted net asset
value – Non-IFRS financial measure
|
31,233
|
|
27,963
|
|
Per
share [2]
|
|
|
|
|
Participating
shareholders' equity (book value)
|
31.81
|
|
31.37
|
|
Adjusted net asset
value
|
46.89
|
|
41.91
|
|
[1]
|
Refer to the table
below for more details on the fair value and other
adjustments.
|
[2]
|
Attributable to
participating shareholders.
|
The Corporation's adjusted net asset value per share was
$46.89 at March 31, 2023,
compared with $41.91 at
December 31, 2022, representing an increase of 11.9%. The
Corporation's book value per participating share was $31.81 at March 31, 2023, comparable with
$31.37 at December 31, 2022.
|
|
|
March 31,
2023
|
|
|
|
December 31,
2022
|
|
(in millions of
dollars, except per share amounts)
|
Holding
company
balance sheet
|
Fair value
adjustment
|
Adjusted net
asset value
|
|
Holding
company
balance sheet
|
Fair value
adjustment
|
Adjusted net
asset value
|
|
Holding company
assets
|
|
|
|
|
(restated)
|
(restated)
|
|
|
Investments
|
|
|
|
|
|
|
|
|
Power
Financial
|
|
|
|
|
|
|
|
|
Lifeco
|
15,032
|
7,730
|
22,762
|
|
14,579
|
4,835
|
19,414
|
|
IGM
|
3,556
|
2,419
|
5,975
|
|
3,607
|
1,985
|
5,592
|
|
GBL
[1]
|
3,582
|
(1,022)
|
2,560
|
|
3,314
|
(926)
|
2,388
|
|
Alternative asset
investment platforms
|
|
|
|
|
|
|
|
|
Asset management
companies [2]
|
|
|
|
|
|
|
|
|
Sagard
|
60
|
−
|
60
|
|
60
|
−
|
60
|
|
Power
Sustainable
|
21
|
−
|
21
|
|
33
|
−
|
33
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
Sagard
[3]
|
719
|
262
|
981
|
|
654
|
263
|
917
|
|
Power
Sustainable
|
1,082
|
417
|
1,499
|
|
1,101
|
344
|
1,445
|
|
ChinaAMC
|
−
|
−
|
−
|
|
783
|
367
|
1,150
|
|
Other investments and
standalone businesses
|
|
|
|
|
|
|
|
|
Other investments
[4]
|
174
|
99
|
273
|
|
192
|
55
|
247
|
|
Standalone businesses
[5]
|
675
|
138
|
813
|
|
678
|
151
|
829
|
|
Cash and cash
equivalents
|
1,663
|
−
|
1,663
|
|
1,277
|
−
|
1,277
|
|
Other assets
|
263
|
−
|
263
|
|
312
|
−
|
312
|
|
Total holding company
assets
|
26,827
|
10,043
|
36,870
|
|
26,590
|
7,074
|
33,664
|
|
Holding company
liabilities and
non-participating shares
|
|
|
|
|
|
|
|
|
Debentures and other
debt instruments
|
897
|
−
|
897
|
|
897
|
−
|
897
|
|
Other liabilities
[6][7]
|
960
|
−
|
960
|
|
987
|
37
|
1,024
|
|
Non-participating
shares and perpetual
preferred shares
|
3,780
|
−
|
3,780
|
|
3,780
|
−
|
3,780
|
|
Total holding company
liabilities and non-
participating shares
|
5,637
|
−
|
5,637
|
|
5,664
|
37
|
5,701
|
|
Net
value
|
|
|
|
|
|
|
|
|
Participating
shareholders' equity (IFRS) /
Adjusted net asset value (non-IFRS)
|
21,190
|
10,043
|
31,233
|
|
20,926
|
7,037
|
27,963
|
|
Per
share
|
31.81
|
|
46.89
|
|
31.37
|
|
41.91
|
|
[1]
|
The Corporation's share
of GBL's reported net asset value was $4.1 billion (€2.8 billion)
at March 31, 2023 ($3.8 billion (€2.6 billion) at December 31,
2022).
|
[2]
|
The management
companies of the investment funds are presented at their carrying
value and are primarily composed of cash and net carried interest
receivable.
|
[3]
|
Includes the
Corporation's investments in Portage Ventures I, Portage Ventures
II and Wealthsimple, held by Power Financial.
|
[4]
|
Includes the
Corporation's interest of 3.9% held in Bellus. At March 31, 2023,
the fair value of the investment in Bellus is based on the
transaction price of US$14.75 per share announced on April 18,
2023, subsequent to quarter-end.
|
[5]
|
An additional deferred
tax liability of $9 million has been included in the adjusted net
asset value at March 31, 2023 ($13 million at December 31, 2022)
with respect to the investments in standalone businesses at fair
value, without taking into account possible tax planning
strategies. The Corporation has tax attributes (not otherwise
recognized on the balance sheet) that could be available to
minimize the tax if the Corporation were to dispose of its
interests held in the standalone businesses.
|
[6]
|
In accordance with IAS
12, Income Taxes, no deferred tax liability is recognized
with respect to temporary differences associated with investments
in subsidiaries and jointly controlled corporations as the
Corporation is able to control the timing of the reversal of the
temporary differences and it is probable that the temporary
differences will not reverse in the foreseeable future. If the
Corporation were to dispose of an investment in a subsidiary or a
jointly controlled corporation, income taxes payable on such
disposition would be minimized through careful and prudent tax
planning and structuring, as well as with the use of available tax
attributes not otherwise recognized on the balance sheet, including
tax losses, tax basis, safe income and foreign tax surplus
associated with the subsidiary or jointly controlled
corporation.
|
[7]
|
At December 31, 2022,
an additional deferred tax liability of $37 million was included in
the adjusted net asset value related to the investment in ChinaAMC
at fair value.
|
This news release also contains other non-IFRS financial
measures which are publicly disclosed by the Corporation's
subsidiaries including adjusted net earnings, adjusted net earnings
per share and Lifeco's assets under administration. The section
below includes the description and reconciliation of the non-IFRS
financial measures included in this news release as reported by the
Corporation's subsidiaries. The information below is derived from
Lifeco's and IGM's first quarter MD&As, as prepared and
disclosed by the respective companies in accordance with applicable
securities legislation, and which are also available either
directly from SEDAR (www.sedar.com) or from their websites,
www.greatwestlifeco.com and www.igmfinancial.com.
Lifeco
ADJUSTED NET EARNINGS ATTRIBUTABLE TO
LIFECO'S COMMON SHAREHOLDERS
Adjusted net earnings (loss) [1] reflects
Lifeco management's view of the underlying business performance of
Lifeco and provides an alternate measure to understand the
underlying business performance compared with IFRS net earnings.
Adjusted net earnings (loss) excludes the following items from IFRS
reported net earnings:
- Market-related impacts, where actual market returns in the
current period are different than longer-term expected returns on
assets and liabilities;
- Assumption changes and management actions that impact the
measurement of assets and liabilities;
- Acquisition transaction costs;
- Restructuring and integration costs;
- Material legal settlements, material impairment charges related
to goodwill and intangible assets, impacts of income tax rate
changes and other tax impairments, net gains, losses or costs
related to the disposition or acquisition of a business; and
- Other items that, when removed, assist in explaining Lifeco's
underlying business performance.
The definition of adjusted net earnings (loss) has been refined
(in 2023 and applied to 2022 comparative results) to also exclude
the following impacts that are included in IFRS reported net
earnings for an improved representation of Lifeco's underlying
business performance, as well as for consistency and comparability
with its financial services industry peers:
- Realized gains (losses) on the sale of assets measured at fair
value through other comprehensive income;
- The direct equity and interest rate impacts on the measurement
of surplus assets and liabilities; and
- Amortization of acquisition-related finite life intangible
assets.
(in millions of
dollars)
|
|
Three months ended
March 31,
|
|
|
|
2023
|
2022
(restated)
|
Adjusted net earnings –
Non-IFRS financial measure [1][2]
|
|
|
808
|
712
|
Adjustments
|
|
|
|
|
Market experience
gains and losses (pre-tax)
|
|
|
(209)
|
864
|
Income tax (expense)
benefit
|
|
|
41
|
(178)
|
Assumption changes and
management actions (pre-tax)
|
|
|
9
|
(19)
|
Income tax (expense)
benefit
|
|
|
(2)
|
1
|
Transaction costs
related to acquisitions (pre-tax)
|
|
|
−
|
(8)
|
Income tax (expense)
benefit
|
|
|
−
|
1
|
Restructuring and
integration costs (pre-tax)
|
|
|
(26)
|
(17)
|
Income tax (expense)
benefit
|
|
|
7
|
5
|
Amortization of
acquisition-related finite life intangible assets
(pre-tax)
|
|
|
(45)
|
(35)
|
Income tax (expense)
benefit
|
|
|
12
|
8
|
|
|
|
(213)
|
622
|
Net earnings – IFRS
financial measure [2]
|
|
|
595
|
1,334
|
[1]
|
Defined as "base
earnings" and identified as a non-GAAP financial measure by
Lifeco.
|
[2]
|
Attributable to Lifeco
common shareholders.
|
LIFECO'S ASSETS UNDER MANAGEMENT AND ASSETS UNDER
ADMINISTRATION
Assets under management and assets under administration are
non-IFRS financial measures that provide an indicator of the size
and volume of Lifeco's overall business. Total assets under
administration includes total assets per Lifeco's financial
statements, proprietary mutual funds and institutional assets, and
other assets under administration. Please refer to the section
"Glossary" of Lifeco's most recent Management's Discussion and
Analysis for additional information regarding other assets under
management and other assets under administration.
(in billions of dollars)
|
March 31,
2023
|
December 31,
2022
(restated)
|
Total assets per
financial statements
|
692
|
672
|
Other assets under
management
|
348
|
332
|
Assets under
management
|
1,040
|
1,004
|
Other assets under
administration
|
1,556
|
1,464
|
Assets under
administration
|
2,596
|
2,468
|
IGM Financial
ADJUSTED NET EARNINGS
ATTRIBUTABLE TO IGM'S COMMON SHAREHOLDERS
Adjusted net earnings attributable to common shareholders
excludes Adjustments [1], which includes 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.
(in millions of
dollars)
|
|
Three months ended
March 31,
|
|
|
|
2023
|
2022
|
Adjusted net earnings –
Non-IFRS financial measure [2]
|
|
|
206.5
|
219.3
|
Adjustments
[1]
|
|
|
|
|
Gain on disposal of
Lifeco shares (pre-tax)
|
|
|
179.1
|
−
|
Income tax (expense)
benefit
|
|
|
(4.3)
|
−
|
|
|
|
174.8
|
−
|
Net earnings – IFRS
financial measure [2]
|
|
|
381.3
|
219.3
|
[1]
|
Described as "Other
items" by IGM.
|
[2]
|
Available to IGM common
shareholders.
|
OTHER MEASURES
This news release and other continuous disclosure documents also
include other measures used to discuss activities of the
Corporation's consolidated publicly traded operating companies and
alternative asset investment platforms including, but not limited
to, "assets under management", "assets under administration",
"assets under management and advisement", "book value per
participating share", "carried interest", "net asset value", and
"unfunded commitments". Refer to the section "Other Measures" in
the Corporation's most recent MD&A, which can be located in the
Corporation's profile on SEDAR at www.sedar.com, for definitions of
such measures, which definitions are incorporated herein by
reference.
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, and pending transactions involving each of IPC,
Webhelp and Bellus. 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 (such as the invasion of
Ukraine), or an outbreak of a
public health pandemic or other public health crises (such as
COVID-19), the Corporation's and its subsidiaries' ability to
complete strategic transactions, integrate acquisitions and
implement other growth strategies, the Corporation's and its
subsidiaries' success in anticipating and managing the foregoing
factors and with respect to forward-looking statements of the
Corporation's subsidiaries disclosed in this news release, the
factors identified by such subsidiaries in their respective
MD&A.
The reader is cautioned to consider these and other factors,
uncertainties and potential events carefully and not to put undue
reliance on forward-looking statements. Information contained in
forward-looking statements is based upon certain material
assumptions that were applied in drawing a conclusion or making a
forecast or projection, including management's perceptions of
historical trends, current conditions and expected future
developments, as well as other considerations that are believed to
be appropriate in the circumstances, including that the list of
risks and uncertainties in the previous paragraph, collectively,
are not expected to have a material impact on the Corporation and
its subsidiaries and with respect to forward-looking statements of
the Corporation's subsidiaries disclosed in this news release, the
risks identified by such subsidiaries in their respective MD&A
and Annual Information Form most recently filed with the securities
regulatory authorities in Canada
and available at www.sedar.com. 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