Power Corporation of Canada - Six Month Operating Earnings Increase 29%

    WINNIPEG, July 27 /CNW/ -

    NET OPERATING EARNINGS
    Power Corporation's share of operating earnings of its subsidiaries for
the six months ended June 30, 2000 increased to $234 million from $195 million
during the corresponding period in 1999, due primarily to an increase in
operating earnings at Power Financial Corporation.
    The Corporation's other operating items, which include income from
investments, brought its total operating earnings for the period to $241
million or $1.07 per participating share as against $187 million or $0.83 per
share during the corresponding period in 1999, representing an increase of 29
per cent on a per share basis.

    OTHER INCOME
    The Corporation recorded other income of a non-recurring nature of $117
million or $0.53 per share in 2000 as against $127 million or $0.57 per share
during the same period in 1999. Other income of a non-recurring nature in 2000
consists primarily of gains recorded by Power Broadcasting Inc. on the
disposal of its radio and television assets as well as the disposal of its
U.S. operations.  In 1999, other income consisted mainly of the gain resulting
from the PetroFina - Total merger during the first quarter.

    NET EARNINGS
    The Corporation's net earnings for the six months ended June 30, 2000
were $358 million or $1.60 per participating share, compared with $314 million
or $1.40 per share for the same period in 1999.

    THREE MONTH RESULTS
    For the three months ended June 30, 2000, the Corporation's share of
earnings from its subsidiaries was $132 million compared with $108 million
during the corresponding period in 1999. Operating earnings during the quarter
were $0.57 per share compared with $0.45 in 1999. Other income of a
non-recurring nature was $98 million or $0.44 per share, compared with $8
million or $0.04 in 1999. Consolidated net earnings were $226 million or $1.01
per share as against $111 million or $0.49 per share in 1999.

    SUBSIDIARIES' RESULTS
    Power Financial Corporation Power Financial Corporation reported an
increase in consolidated net earnings to $379 million or $1.05 per share for
the six months ended June 30, 2000 as against $499 million or $1.39 per share
during the same period in 1999.

    GESCA LTEE AND POWER BROADCASTING INC.
    The combined earnings from operations of Gesca Ltée and Power
Broadcasting Inc. decreased in 2000, as against the same period in 1999, due
to the disposal of assets of Power Broadcasting Inc. which contributed to
earnings for only part of the period.

    DIVIDENDS
    The Board of Directors today declared a dividend on the First Preferred
Shares, 1986 Series payable October 15, 2000 to shareholders of record
September 22, 2000 in an amount per share to be determined in accordance with
the Articles of Continuance of the Corporation.
    A dividend of $0.35 per share was declared on the First Preferred Shares,
Series A payable October 15, 2000 to shareholders of record September 22,
2000. A dividend of $0.15 per share was declared on the participating
preferred and subordinate voting shares payable September 29, 2000 to
shareholders of record September 8, 2000.

    Attachments:       Consolidated Statements of Earnings
                       and Cash Flows (unaudited),
                       Segmented Information (unaudited),
                       Change in Accounting Policies and
                       Capital Stock and Option Plan (unaudited), and
                       Supplementary Financial Information (unaudited)

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                      	    POWER CORPORATION OF CANADA
                  	    CONSOLIDATED STATEMENTS OF EARNINGS

                                            Millions
                          -------------------------------------------
                             For the three months  For the six months
                                ended June 30        ended June 30
                               2000      1999        2000      1999
    -----------------------------------------------------------------
    Revenues

     Premium income          $ 2,407  $ 2,034      $ 4,720  $ 4,107
     Investment income           977      935        1,939    1,863
     Fees and media income       720      590        1,433    1,172
                          -------------------------------------------
                               4,104    3,559        8,092    7,142
                          -------------------------------------------
    Expenses

     Paid or credited to
       policyholders
       and beneficiaries
       including
       policyholder
       dividends and
       experience refunds      2,741    2,363        5,370    4,773
     Commissions and
       operating expenses        886      797        1,808    1,617
     Interest expense             21       24           40       44
                          -------------------------------------------
                               3,648    3,184        7,218    6,434
                          -------------------------------------------
                                 456      375          874      708
    Share of earnings of
     affiliate                    27       17           34       24
    Other income, net            146       12          174      196
                          -------------------------------------------

    Earnings before income
     taxes and non-controlling
     interests                   629      404        1,082      928

    Income taxes                 243      151          419      279
    Non-controlling
     interests                   160      142          305      335
                          -------------------------------------------
    Net earnings             $   226   $  111      $   358  $   314

                          ===========================================
    Earnings per
      participating share    $  1.01   $ 0.49      $  1.60  $  1.40
                          ===========================================

                              	    (unaudited)



                      	    POWER CORPORATION OF CANADA
                 	    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                      Millions
                                               ----------------------
                                                 For the six months
                                                    ended June 30
                                                   2000       1999
    -----------------------------------------------------------------
    Operating activities
      Net earnings                              $   358    $   314
      Non-cash charges (credits)
        Increase (decrease)
         in policy liabilities                      283       (543)
        Decrease (increase) in funds
         withheld by ceding insurers               (607)       123
        Amortization and depreciation                55         47
        Deferred income taxes                        49         24
        Non-controlling interests                   305        335
      Other                                        (327)      (484)
                                               ----------------------
      Cash from operating activities                116       (184)
                                               ----------------------
    Financing activities
      Dividends paid
        By subsidiaries to
          non-controlling interests                (123)      (111)
        Non-participating shares                     (6)        (2)
        Participating shares                        (60)       (53)
                                               ----------------------
                                                   (189)      (166)

      Acquisition of participating shares,
        for cancellation                            (23)        (2)
      Issue of subordinate voting shares              1          1
      Issue of non-participating shares                        150
      Repurchase of non-participating shares,
        for cancellation                             (2)
      Issue of common shares by subsidiaries          3          6
      Issue of preferred shares by a subsidiary                200
      Repurchase of preferred shares
        by a subsidiary                                       (200)
      Repurchase of common shares by subsidiaries   (39)       (14)
      Issue of subordinated capital income
        securities                                             247
      Issue of long-term debt, commercial paper
        and other loans                             106
      Repayment of long-term debt, commercial
        paper and other loans                        (1)      (200)
      Increase (decrease) in demand deposits         22         (1)
      Decrease in term deposits                     (76)       (31)
      Decrease in certificates                       (5)       (11)
      Other                                          (1)        (6)
                                               ----------------------
                                                   (204)       (27)
                                               ----------------------
    Investment activities
      Bond sales and maturities                   8,703     10,793
      Mortgage loan repayments                    1,741      1,866
      Sale of shares                                145        153
      Real estate sales                              20         19
      Change in loans to policyholders             (217)       267
      Change in repurchase agreements              (118)      (241)
      Investment in subsidiaries                    (12)
      Investment in bonds                        (7,754)   (11,131)
      Investment in mortgage loans               (1,762)    (1,466)
      Investment in shares                         (734)      (172)
      Investment in real estate                     (78)       (29)
      Other                                          72        (16)
                                               ----------------------
                                                      6         43
                                               ----------------------
    Decrease in cash and cash equivalents           (82)      (168)

    Cash and cash equivalents,
      beginning of year                           1,891      1,978
                                               ----------------------
    Cash and cash equivalents,
      end of period                             $ 1,809    $ 1,810
                                               ======================

                              	    (unaudited)


                      	    POWER CORPORATION OF CANADA
                         	    SEGMENTED INFORMATION


    Information on Profit Measure
    -----------------------------------------------------------------
    June 30, 2000        Lifeco  Investors  Parjointco  Other  Total
    (in millions
     of dollars)
    -----------------------------------------------------------------
    Revenues
     Premium income      4,720                                 4,720
     Investment income   1,806      57                   76    1,939
     Fees and media
      income               793     514                  126    1,433
    -----------------------------------------------------------------
                         7,319     571                  202    8,092
    -----------------------------------------------------------------
    Expenses
     Insurance claims    5,370                                 5,370
     Commissions, other
       operating
       expenses          1,325     329                  154    1,808
     Interest expense               11                   29       40
    -----------------------------------------------------------------
                         6,695     340                  183    7,218
    -----------------------------------------------------------------
                           624     231                   19      874
    Share of earnings
     of affiliate                               34                34
    Other income - net                          29      145      174
    -----------------------------------------------------------------
    Earnings before
     income taxes and
     non-controlling
     interests             624     231          63      164    1,082
    Income taxes           251     103                   65      419
    Non-controlling
     interests             215      68          20        2      305
    -----------------------------------------------------------------
    Contribution to
     consolidated
     net earnings          158      60          43       97      358
    =================================================================
    Information on Profit Measure
    -----------------------------------------------------------------
    June 30, 1999      Lifeco  Investors  Parjointco   Other   Total
    (in millions
     of dollars)
    -----------------------------------------------------------------
    Revenues
     Premium income      4,107                                 4,107
     Investment income   1,780      56                   27    1,863
     Fees and media
      income               589     453                  130    1,172
    -----------------------------------------------------------------
                         6,476     509                  157    7,142
    -----------------------------------------------------------------
    Expenses
     Insurance claims    4,773                                 4,773
     Commissions,
      other operating
      expenses           1,167     302                  148    1,617
     Interest expense               20                   24       44
    -----------------------------------------------------------------
                         5,940     322                  172    6,434
    -----------------------------------------------------------------
                           536     187                  (15)     708
    Share of earnings
     of affiliate                               24                24
    Other income - net                         221      (25)     196
    -----------------------------------------------------------------
    Earnings before
     income taxes and
     non-controlling
     interests             536     187         245      (40)     928
    Income taxes           201      81                   (3)     279
    Non-controlling
     interests             202      56          80       (3)     335
    -----------------------------------------------------------------
    Contribution to
     consolidated
     net earnings          133      50         165      (34)     314
    =================================================================



    Geographic information
    -----------------------------------------------------------------
                                                     United
    June 30 (in millions of dollars)       Canada    States    Total
    -----------------------------------------------------------------

    Revenues - 2000                         5,189     2,903    8,092
    Revenues - 1999                         4,623     2,519    7,142
    =================================================================

                              	    (unaudited)
    >>


                      	    POWER CORPORATION OF CANADA

    CHANGES IN ACCOUNTING POLICIES

    The interim unaudited consolidated financial statements of Power
Corporation of Canada (PCC) at June 30, 2000 have been prepared in accordance
with the generally accepted accounting policies and methods of computation
followed at the most recent annual report as at December 31, 1999, except for
the adoption of the Canadian Institute of Chartered Accountants (CICA)
handbook Section 3461 Employee Future Benefits and Section 3465 Income Taxes.
    The adoption of Section 3461 by PCC effective January 1, 2000 results in
the recognition or accrual of all post retirement health and life insurance
benefits over the period of the employee's service. The adoption of Section
3465 by PCC, also effective January 1, 2000, results in the use of the
liability method of tax allocation whereby future income taxes represent
temporary differences between the tax basis of assets and liabilities and
their carrying values for accounting purposes. In addition, the liability
method requires all future income tax assets and liabilities to be remeasured
at the tax rate that is expected to apply when the temporary differences
reverse.
    These changes in accounting policy have been applied retroactively
without restatement of prior years' financial statements and result in a total
charge to retained earnings of $41 million. These changes did not have a
material impact on the results of the current period.

    <<
    CAPITAL STOCK AND OPTION PLAN

         Stated Capital
                                                      June 30,
         (in millions)                                  2000
         ------------------------------------------------------

         Non-participating shares
            Cumulative Redeemable First Preferred
            Shares, 1986 Series
            Authorized - Unlimited number of shares
            Issued       1,279,878 shares              $  63

            Series A First Preferred Shares
            Authorized - Unlimited number of shares
            Issued       6,000,000 shares                150
                                                      ---------
                                                       $ 213
                                                      =========
         Participating shares
            Participating Preferred Shares
            Authorized - Unlimited number of shares
            Issued       24,427,386 shares             $  27

         Subordinate Voting Shares
            Authorized - Unlimited number of shares
            Issued       195,539,622 shares              322
                                                      ---------
                                                       $ 349
                                                      =========

    STOCK OPTION PLAN
    Options were outstanding at June 30, 2000 to purchase, until
    April 3, 2010, 8,975,930 shares at various prices from $7.28125
    to $27.43125 per Share.

                              	    (unaudited)


                      	    POWER CORPORATION OF CANADA
                  	    SUPPLEMENTARY FINANCIAL INFORMATION

    The sources of the consolidated net earnings of the Corporation
    are as follows:
                                              Millions
                            -----------------------------------------
                             For the three months  For the six months
                                ended June 30         ended June 30
                                 2000     1999        2000     1999
    -----------------------------------------------------------------
    Share of earnings
     of subsidiaries          $   132   $  108     $   234   $  195

    Corporate activities*        (4)      (5)          7       (8)
                              ---------------------------------------
    Earnings from operations      128      103         241      187

    Other income, net              98        8         117      127
                              ---------------------------------------
    Net earnings              $   226   $  111     $   358   $  314
                              =======================================

    Earnings per
      participating share

      Earnings from
       operations             $  0.57   $ 0.45     $  1.07   $ 0.83
                              =======================================
      Net earnings            $  1.01   $ 0.49     $  1.60   $ 1.40
                              =======================================

    *  Corporate activities consist of income from investments less
         operating expenses, amortization and depreciation, and
         income taxes.

                              	    (unaudited)