Q4 - Power Corporation of Canada

POWER CORPORATION OF CANADACASHFLOWS–EQUITYBASISFor the years ended December 31 2012 2011Cash flow from operating activitiesNet earnings before dividends on non‐participating shares 882 1,116Earnings from subsidiaries not received in cash (358) (490)Impairment charges 96 91Net gains on disposal of investments (80) (169)Other 13 41553 589Cash flow from financing activitiesDividends paid on participating and non‐participating shares (582) (574)Issuance of subordinate voting shares 2 22Issuance of non‐participating shares 200 Other (7) (4)(387) (556)Cash flow from investing activitiesProceeds from disposal of investments 267 332Investment in subsidiaries (126) (7)Purchase of investments (347) (567)Other (2) (8)(208) (250)Increase (decrease) in cash and cash equivalents (42) (217)Cash and cash equivalents, beginning of period 666 883Cash and cash equivalents, end of period 624 666Power Corporation is a holding company. As such, corporate cash flows from operations, before payment ofdividends on non‐participating shares and on participating shares, are principally made up of dividends receivedfrom its subsidiaries and income from investments, less operating expenses, financing charges, and income taxes.Dividends received from Power Financial, which is also a holding company, represent a significant component ofthe Corporation’s corporate cash flows. In each quarter of 2012, Power Financial declared dividends on itsCommon Shares of $0.35 per share, the same as in the corresponding quarters of 2011. Power Corporationreceived dividends of $655 million from Power Financial in 2012, the same as in 2011.The ability of Power Financial to meet its obligations generally and pay dividends depends in particular uponreceipt of sufficient funds from its subsidiaries. The payment of interest and dividends by Power Financial’sprincipal subsidiaries is subject to restrictions set out in relevant corporate and insurance laws and regulations,which require that solvency and capital standards be maintained. As well, the capitalization of certain of PowerFinancial’s subsidiaries takes into account the views expressed by the various credit rating agencies that provideratings related to financial strength and other measures relating to those companies.In the twelve‐month period ended December 31, 2012, the dividends declared on the Corporation’s participatingshares amounted to $1.16 per share, the same as in the corresponding period in 2011.Investment in subsidiaries is comprised of a loan to Square Victoria Communications Group and an investment inthe common shares of Victoria Square Ventures.A 18POWER CORPORATION OF CANADA