POW Power Corp of Canada

Readers are referred to the sections entitled "Forward-looking Statements" and "Non-IFRS Financial Measures" at the end of this release. The Corporation's financial results are reported under International Financial Reporting Standards (IFRS)

MONTREAL, May 15, 2012 /CNW Telbec/ - Power Corporation of Canada (TSX: POW) today reported operating earnings attributable to participating shareholders for the three-month period ended March 31, 2012 of $209 million or $0.45 per share, compared with $218 million or $0.47 per share in the corresponding period in 2011.

Subsidiaries contributed $244 million to Power Corporation's operating earnings, compared with $248 million for the first quarter of 2011, a decrease of 1.6%. Results from corporate activities were a net charge of $23 million in the three-month period ended March 31, 2012, compared with a net charge of $20 million in the corresponding period in 2011.

Other items not included in operating earnings in the three-month period ended March 31, 2012 were $55 million, compared with a net charge of $2 million in the corresponding period in 2011. Other items in the first quarter of 2012 were mainly composed of the Corporation's share of the gains realized by Groupe Bruxelles Lambert (GBL) on the partial disposal of Pernod Ricard (a producer of wines and spirits) shares ($30 million) and the disposal of Arkema (a French chemicals producer) shares ($28 million).

As a result, net earnings attributable to participating shareholders for the three-month period ended March 31, 2012 were $264 million or $0.57 per share, compared with $216 million or $0.47 per share in the corresponding period in 2011.

RESULTS OF POWER FINANCIAL CORPORATION

Power Financial reported operating earnings attributable to common shareholders of $372 million or $0.52 per share for the three-month period ended March 31, 2012, the same as in the corresponding period in 2011.

Other items represented a contribution of $83 million, compared with a charge of $2 million in the first quarter of 2011. Other items in the first quarter of 2012 were mainly composed of the Corporation's share of the gains realized by GBL on the partial disposal of Pernod Ricard shares ($46 million) and the disposal of Arkema shares ($43 million).

Included in operating earnings for the first quarter of 2011 was the establishment of catastrophe provisions recorded by Great-West Lifeco Inc., a subsidiary of Power Financial, relating to earthquake events in Japan and New Zealand with an after-tax impact of $75 million which negatively impacted Power Financial's operating earnings by $53 million. Power Corporation's share of these provisions was $35 million.

As a result, net earnings attributable to common shareholders for the three-month period ended March 31, 2012 were $455 million or $0.64 per share, compared with $370 million or $0.52 per share in the corresponding period in 2011.

DIVIDENDS ON NON-PARTICIPATING PREFERRED SHARES

The Board of Directors today declared quarterly dividends on the Corporation's preferred shares, as follows:

DIVIDENDS ON PARTICIPATING SHARES

The Board of Directors also declared a dividend of 29 cents per share on the Participating Preferred and Subordinate Voting Shares of the Corporation, payable June 29, 2012 to shareholders of record June 8, 2012.

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, reflects 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, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "plans", "believes", "estimates", "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, interest and foreign exchange rates, global equity and capital markets, management of market liquidity and funding risks, changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates), the effect of applying future accounting changes, business competition, operational and reputational risks, technological change, changes in government regulation and legislation, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, the Corporation's and its subsidiaries' ability to complete strategic transactions, integrate acquisitions and implement other growth strategies, and the Corporation's and its subsidiaries' success in anticipating and managing the foregoing factors. The reader is cautioned 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 foregoing list of factors, 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 this MD&A and its Annual Information Form filed with the securities regulatory authorities in Canada and available at www.sedar.com.

Non-IFRS Financial Measures

In analyzing the financial results of the Corporation and consistent with the presentation in previous years, net earnings are subdivided into the following components:

• operating earnings attributable to participating shareholders; and

• other items or non-operating earnings, which include the after-tax impact of any item that management considers to be of a non-recurring nature or that could make the period-over-period comparison of results from operations less meaningful, and also include the Corporation's share of any such item presented in a comparable manner by its subsidiaries.

Management has used these financial measures for many years in its presentation and analysis of the financial performance of Power Corporation, and believes that they provide additional meaningful information to readers in their analysis of the results of the Corporation.

Operating earnings attributable to participating shareholders and operating 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.

Attachments:

FINANCIAL  INFORMATION

SOURCE POWER CORPORATION OF CANADA