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) and all comparative figures have been restated accordingly.

WINNIPEG, MB, Aug. 5, 2011 /CNW Telbec/ - Power Financial Corporation's operating earnings for the six-month period ended June 30, 2011 were $931 million or $1.24 per share, compared with $829 million or $1.11 per share in the corresponding period in 2010. This represents an increase of 11.9% on a per share basis.

Other items were a charge of $2 million for the six months ended June 30, 2011, compared with a positive contribution of $2 million in the corresponding period of 2010, and consisted, for both periods, of Power Financial's share of non-operating earnings recorded by Pargesa Holding SA (Pargesa).

Net earnings attributable to common shareholders (including other items and after dividends on perpetual preferred shares) for the six-month period ended June 30, 2011 were $877 million or $1.24 per share, compared with $785 million or $1.11 per share in the corresponding period of 2010.

SECOND QUARTER RESULTS

For the quarter ended June 30, 2011, operating earnings of the Corporation were $533 million or $0.72 per share, compared with $449 million or $0.61 per share in the second quarter of 2010. This represents an increase of 18.7% on a per share basis.

For the three-month period ended June 30, 2011, other items were nil, compared with a charge of $4 million for the same period in 2010.

Net earnings attributable to common shareholders (including other items and after dividends on perpetual preferred shares) for the quarter ended June 30, 2011 were $507 million or $0.72 per share, compared with $422 million or $0.60 per share in the corresponding period of 2010.

RESULTS OF SUBSIDIARIES AND PARJOINTCO

GREAT-WEST LIFECO INC.

Great-West Lifeco Inc. (Lifeco) reported net and operating earnings attributable to common shareholders of $941 million or $0.991 per share for the six-month period ended June 30, 2011, compared with $883 million or $0.932 per share in the corresponding period of 2010. This represents an increase of 6.3% on a per share basis.

For the three-month period ended June 30, 2011, Lifeco reported net and operating earnings attributable to common shareholders of $526 million or $0.553 per share, compared with $455 million or $0.480 per share in the corresponding period of 2010, an increase of 15.2% on a per share basis.

Included in net earnings for the second quarter of 2011 was a release of a legal provision in Putnam Investments, LLC resulting from a settlement of a lawsuit pertaining to certain private equity investments with a net earnings impact of $55 million (Power Financial's share: $39 million).

Lifeco's contribution to Power Financial's operating earnings was $644 million for the six-month period ended June 30, 2011, compared with $607 million in the corresponding period in 2010. For the three-month period ended June 30, 2011, Lifeco's contribution to Power Financial's operating earnings was $360 million, compared with $312 million in the same period in 2010.

IGM FINANCIAL INC.

IGM Financial Inc. (IGM) reported net and operating earnings available to common shareholders of $429 million or $1.65 per share for the six-month period ended June 30, 2011, compared with $370 million or $1.40 per share in the same period in 2010, an increase of 17.9% on a per share basis.

For the three-month period ended June 30, 2011, IGM reported net and operating earnings available to common shareholders of $217 million or $0.84 per share, compared with $178 million or $0.68 per share in the same period in 2010, an increase of 23.5% on a per share basis.

IGM's contribution to Power Financial's operating earnings was $246 million for the six-month period ended June 30, 2011, compared with $209 million in the same period in 2010. For the three-month period ended June 30, 2011, IGM's contribution to Power Financial's operating earnings was $125 million, compared with $101 million in the corresponding period in 2010.

PARJOINTCO N.V.

Power Financial holds a 50% interest in Parjointco N.V., which in turn held a 56.5% interest in Pargesa as at June 30, 2011. Pargesa reported operating earnings for the six-month period ended June 30, 2011 of SF210 million, compared with SF221 million in the corresponding period in 2010. For the three-month period ended June 30, 2011, operating earnings were SF196 million, compared with SF229 million in the corresponding period of 2010.

Expressed in Canadian dollars, the contribution from Pargesa to Power Financial's operating earnings was $67 million for the six-month period ended June 30, 2011, compared with $55 million for the corresponding period in 2010. The strength of the Swiss franc and the euro against the Canadian dollar when compared to 2010 had a positive effect on the Corporation's share of Pargesa's earnings in the second quarter of 2011. For the three-month period ended June 30, 2011, the contribution from Pargesa to Power Financial's operating earnings was $63 million, compared with $57 million in the second quarter of 2010.

DIVIDENDS ON PREFERRED SHARES

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

TYPE OF SHARES	RECORD DATE	PAYMENT DATE	AMOUNT
Series A	October 25, 2011	November 15, 2011	To be determined in accordance with the articles of the Corporation
Series D	October 10, 2011	October 31, 2011	34.375¢
Series E	October 10, 2011	October 31, 2011	32.8125¢
Series F	October 10, 2011	October 31, 2011	36.875¢
Series H	October 10, 2011	October 31, 2011	35.9375¢
Series I	October 10, 2011	October 31, 2011	37.50¢
Series K	October 10, 2011	October 31, 2011	30.9375¢
Series L	October 10, 2011	October 31, 2011	31.875¢
Series M	October 10, 2011	October 31, 2011	37.50¢
Series O	October 10, 2011	October 31, 2011	36.25¢
Series P	October 10, 2011	October 31, 2011	27.50¢

DIVIDEND ON COMMON SHARES

The Board of Directors also declared a quarterly dividend of 35 cents per share on the Corporation's common shares payable November 1, 2011 to shareholders of record September 30, 2011.

For purposes of the Income Tax Act (Canada) and any similar provincial legislation, all of the above dividends on the Corporation's preferred and common 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 its most recent Management's Discussion and Analysis and Annual Information Form, filed with the securities regulatory authorities in Canada, available at www.sedar.com.

Non-IFRS Financial Measures

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

• operating earnings; and

• other items, 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 Lifeco or IGM.

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

Operating earnings 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.

POWER FINANCIAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) [in millions of Canadian dollars]		June 30, 2011	December 31, 2010	January 1, 2010
Assets
Cash and cash equivalents		2,874	3,656	4,855
Investments
	Bonds	73,293	73,582	67,388
	Mortgages and other loans	20,940	20,209	20,613
	Shares	6,653	6,415	6,392
	Investment properties	3,206	2,959	2,615
		104,092	103,165	97,008
Loans to policyholders		6,765	6,827	6,957
Funds held by ceding insurers		9,659	9,856	10,984
Reinsurance assets		2,642	2,533	2,800
Investment in associates		2,498	2,448	2,829
Deferred tax assets		1,160	1,249	1,300
Other assets		7,102	7,179	7,065
Intangible assets		4,184	4,231	4,359
Goodwill		8,751	8,713	8,655
Segregated funds for the risk of unit holders		96,776	94,827	87,495
Total assets		246,503	244,684	234,307
Liabilities
Insurance contract liabilities		108,225	107,367	104,988
Investment contract liabilities		775	791	841
Deposits and certificates		778	835	907
Funds held under reinsurance contracts		160	149	331
Obligation to securitization entities		3,507	3,505	3,310
Debentures and other borrowings		5,903	6,313	5,931
Capital trust securities and debentures		534	535	540
Preferred shares of the Corporation		-	-	300
Preferred shares of subsidiaries		-	-	199
Deferred tax liabilities		1,125	1,136	1,018
Other liabilities		6,733	7,624	6,955
Insurance and investment contracts on account of unit holders		96,776	94,827	87,495
Total liabilities		224,516	223,082	212,815
Equity
Stated capital
	Perpetual preferred shares	2,005	2,005	1,725
	Common shares	636	636	605
Retained earnings		10,410	10,012	9,553
Reserves		77	188	969
Total shareholders' equity		13,128	12,841	12,852
Non-controlling interests		8,859	8,761	8,640
Total equity		21,987	21,602	21,492
Total liabilities and equity		246,503	244,684	234,307

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
		Three months ended June 30		Six months ended June 30
(unaudited) [in millions of Canadian dollars, except per share amounts]		2011	2010	2011	2010
Revenues
Premium income
	Gross premiums written	4,980	4,887	9,921	10,135
	Ceded premiums	(708)	(672)	(1,354)	(1,310)
Total net premiums		4,272	4,215	8,567	8,825
Net investment income
	Regular net investment income	1,426	1,326	2,881	2,775
	Change in fair value	715	1,170	524	2,746
		2,141	2,496	3,405	5,521
Fee income		1,381	1,294	2,750	2,605
Total revenues		7,794	8,005	14,722	16,951
Expenses
Policyholder benefits		3,690	3,860	7,780	7,748
Policyholder dividends and experience refunds		377	351	730	734
Change in insurance and investment contract liabilities		1,231	1,447	1,367	3,808
		5,298	5,658	9,877	12,290
Commissions		593	542	1,178	1,094
Operating expenses		835	878	1,741	1,768
Financing charges		102	109	209	218
Total expenses		6,828	7,187	13,005	15,370
		966	818	1,717	1,581
Share of earnings of investment in associates		63	53	65	57
Earnings before income taxes		1,029	871	1,782	1,638
Income taxes		226	182	363	341
Net earnings before non-controlling interests		803	689	1,419	1,297
Attributable to non-controlling interests		(270)	(244)	(490)	(466)
Net earnings attributable to shareholders		533	445	929	831
Perpetual preferred share dividends		(26)	(23)	(52)	(46)
Net earnings attributable to common shareholders		507	422	877	785
Earnings per common share
	- Basic	0.72	0.60	1.24	1.11
	- Diluted	0.71	0.59	1.23	1.10

SEGMENTED INFORMATION INFORMATION ON PROFIT MEASURE
Three months ended June 30, 2011		Lifeco	IGM	Parjointco	Other	Total
Revenues
Premium income		4,272	-	-	-	4,272
Net investment income
	Regular net investment income	1,416	34	-	(24)	1,426
	Change in fair value	707	8	-	-	715
		2,123	42	-	(24)	2,141
Fee income		739	668	-	(26)	1,381
		7,134	710	-	(50)	7,794
Expenses
Policyholder benefits, dividends and experience refunds, and change in insurance and investment contract liabilities		5,298	-	-	-	5,298
Commissions		390	229	-	(26)	593
Operating expenses		651	172	-	12	835
Financing charges		72	26	-	4	102
		6,411	427	-	(10)	6,828
		723	283	-	(40)	966
Share of earnings of investment in associates		-	-	63	-	63
Earnings before income taxes		723	283	63	(40)	1,029
Income taxes		161	64	-	1	226
Contribution to net earnings before non-controlling interests		562	219	63	(41)	803
Attributable to non-controlling interests		(202)	(94)	-	26	(270)
Contribution to net earnings attributable to  shareholders		360	125	63	(15)	533
Three months ended June 30, 2010		Lifeco	IGM	Parjointco	Other	Total
Revenues
Premium income		4,215	-	-	-	4,215
Net investment income
	Regular net investment income	1,335	12	-	(21)	1,326
	Change in fair value	1,160	10	-	-	1,170
		2,495	22	-	(21)	2,496
Fee income		703	617	-	(26)	1,294
		7,413	639	-	(47)	8,005
Expenses
Policyholder benefits, dividends and experience refunds, and change in insurance and investment contract liabilities		5,658	-	-	-	5,658
Commissions		355	212	-	(25)	542
Operating expenses		705	160	-	13	878
Financing charges		70	28	-	11	109
		6,788	400	-	(1)	7,187
		625	239	-	(46)	818
Share of earnings of investment in associates		-	-	53	-	53
Earnings before income taxes		625	239	53	(46)	871
Income taxes		126	57	-	(1)	182
Contribution to net earnings before non-controlling interests		499	182	53	(45)	689
Attributable to non-controlling interests		(187)	(81)	-	24	(244)
Contribution to net earnings attributable to shareholders		312	101	53	(21)	445

 

SEGMENTED INFORMATION (CONTINUED) INFORMATION ON PROFIT MEASURE (continued)
Six months ended June 30, 2011		Lifeco	IGM	Parjointco	Other	Total
Revenues
Premium income		8,567	-	-	-	8,567
Net investment income
	Regular net investment income	2,843	83	-	(45)	2,881
	Change in fair value	520	4	-	-	524
		3,363	87	-	(45)	3,405
Fee income		1,459	1,343	-	(52)	2,750
		13,389	1,430	-	(97)	14,722
Expenses
Policyholder benefits, dividends and experience refunds, and change in insurance and investment contract liabilities		9,877	-	-	-	9,877
Commissions		767	463	-	(52)	1,178
Operating expenses		1,375	341	-	25	1,741
Financing charges		144	56	-	9	209
		12,163	860	-	(18)	13,005
		1,226	570	-	(79)	1,717
Share of earnings of investment in associates		-	-	65	-	65
Earnings before income taxes		1,226	570	65	(79)	1,782
Income taxes		230	137	-	(4)	363
Contribution to net earnings before non-controlling interests		996	433	65	(75)	1,419
Attributable to non-controlling interests		(352)	(187)	-	49	(490)
Contribution to net earnings attributable to shareholders		644	246	65	(26)	929
Six months ended June 30, 2010		Lifeco	IGM	Parjointco	Other	Total
Revenues
Premium income		8,825	-	-	-	8,825
Net investment income
	Regular net investment income	2,752	65	-	(42)	2,775
	Change in fair value	2,736	10	-	-	2,746
		5,488	75	-	(42)	5,521
Fee income		1,427	1,228	-	(50)	2,605
		15,740	1,303	-	(92)	16,951
Expenses
Policyholder benefits, dividends and experience refunds, and change in insurance and investment contract liabilities		12,290	-	-	-	12,290
Commissions		718	426	-	(50)	1,094
Operating expenses		1,423	319	-	26	1,768
Financing charges		144	55	-	19	218
		14,575	800	-	(5)	15,370
		1,165	503	-	(87)	1,581
Share of earnings of investment in associates		-	-	57	-	57
Earnings before income taxes		1,165	503	57	(87)	1,638
Income taxes		215	127	-	(1)	341
Contribution to net earnings before non-controlling interests		950	376	57	(86)	1,297
Attributable to non-controlling interests		(343)	(167)	-	44	(466)
Contribution to net earnings attributable to shareholders		607	209	57	(42)	831

For further information:

Attachments:	Financial Information
For further information, please contact:	Mr. Edward Johnson Senior Vice-President, General Counsel and Secretary 514-286-7400