Operating earnings for 2007 increase 15.8% over 2006



    Readers are referred to the sections entitled "Forward-looking
    Statements" and "Non-GAAP Financial Measures" at the end of this release.

    MONTREAL, March 13 /CNW Telbec/ - Power Financial Corporation's operating
earnings for the year ended December 31, 2007 were $2,082 million or $2.84 per
share, compared with $1,802 million or $2.46 per share in 2006. This
represents a 15.8% increase on a per share basis.
    Growth in operating earnings reflect primarily an increase of
$276 million or 14.8% in the contribution from the subsidiaries and
Parjointco, from $1,871 million to $2,147 million. Based upon Lifeco's growth
in net income on a constant currency basis, Power Financial's operating
earnings on a per share basis for the year would have increased by 17.0%.
    Other items, not included in operating earnings, were a net charge of
$38 million or $0.05 per share in 2007, reflecting primarily the impact of a
provision recorded by Lifeco during the third quarter, partly offset by the
Corporation's share of non-operating earnings recorded in the fourth quarter.
In 2006, other items were $353 million or $0.50 per share, including an amount
of $356 million representing the impact of the gain recorded by Groupe
Bruxelles Lambert on the sale of its interest in Bertelsmann. As a result, net
earnings were $2,044 million or $2.79 per share in 2007, compared with
$2,155 million or $2.96 per share in 2006.

    FOURTH-QUARTER RESULTS
    ----------------------

    Power Financial Corporation's operating earnings for the three-month
period ended December 31, 2007 were $500 million or $0.68 per share, compared
with $472 million or $0.65 per share in the same period in 2006. This
represents a 6.0% increase on a per share basis.
    Based upon Lifeco's growth in net income on a constant currency basis,
Power Financial's operating earnings on a per share basis for the quarter
would have increased by 12.1%.
    Growth in operating earnings also reflects the negative impact of a
timing difference relating to Pargesa's share of the interim dividend from
Total which was recorded in the third quarter in 2007 whereas it was recorded
in the fourth quarter in 2006.
    Other items in the fourth quarter of 2007 were $32 million or $0.05 per
share, compared with $2 million in the same period in 2006.
    As a result, net earnings for the fourth quarter of 2007 were
$532 million or $0.73 per share, compared with $474 million or $0.65 per share
for the same period in 2006.

    RESULTS OF SUBSIDIARIES AND PARTJOINTCO
    ---------------------------------------

    Great-West Lifeco Inc.

    Great-West Lifeco reported adjusted net income attributable to common
shareholders of $2,153 million or $2.413 per share in 2007, compared with
$1,875 million or $2.104 per share in 2006, an increase of 15%. Adjusted net
income in 2007 excludes a provision for certain Canadian retirement plans of
$97 million after tax, which was recorded in the third quarter. Net income
attributable to common shareholders after this provision was $2,056 million or
$2.304 per share for the twelve months ended December 31, 2007. On a constant
currency basis, adjusted net income attributable to common shareholders
increased 16% over 2006.
    For the three months ended December 31, 2007, Lifeco reported net income
attributable to common shareholders of $537 million, compared with
$491 million for the same period in 2006. This represents $0.601 per share for
the period in 2007, compared with $0.550 for the corresponding period in 2006,
an increase of 9%. On a constant currency basis, net income attributable to
common shareholders increased 17% over 2006.
    Net income includes $203 million in 2007 and $191 million in 2006
representing the contribution from Lifeco's healthcare business, which has
been designated as discontinued operations. For the three-month periods ended
December 31, the contribution from the healthcare business amounted to
$43 million in 2007 and to $50 million in 2006.

    IGM Financial Inc.

    IGM Financial reported adjusted net income for the year ended December
31, 2007 of $864 million, compared with $763 million in 2006. Adjusted net
earnings per share were $3.23 in 2007, compared with $2.85 in 2006, an
increase of 13.3%. Adjusted net income in both years excludes a non-cash
income tax benefit resulting from decreases in the federal corporate income
tax rates and their effect on the future income tax liability related to
indefinite life intangible assets. A benefit of $15 million was reported in
the fourth quarter of 2007 and of $14 million was reported in the second
quarter of 2006. Including these items, net income in 2007 was $879 million or
$3.29 per share, compared with $777 million or $2.90 per share in 2006.
    For the three months ended December 31, 2007, adjusted net income,
excluding the non-cash tax benefit mentioned above, was $219 million or
$0.82 per share, compared with net income of $200 million or $0.75 per share
for the same period in 2006. This represents an increase of 9.3% on a per
share basis. Including the non-cash tax benefit, net income for the fourth
quarter of 2007 was $234 million or $0.88 per share.

    Parjointco N.V.

    Power Financial holds a 50% interest in Parjointco N.V., which in turn
holds a 54.1% interest in Pargesa Holding SA. Pargesa reported operating
earnings of SF609 million in 2007, compared with SF539 million in 2006.
Non-operating earnings were SF113 million in 2007, compared with SF1,754
million in 2006, composed primarily of Pargesa's share of the gain recorded by
GBL on the sale of its interest in Bertelsmann. As a result, net earnings
reported by Pargesa were SF722 million in 2007, compared with SF2,293 million
in 2006.
    For the fourth quarter of 2007, operating earnings were SF72 million,
compared with SF137 million in the same period in 2006. Non-operating earnings
in the fourth quarter were SF101 million and a net charge of SF8 million in
2007 and 2006, respectively. As a result, Pargesa's net earnings were
SF173 million in the period in 2007, compared with SF129 million in 2006.

    PREFERRED SHARE DIVIDENDS
    -------------------------

    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        April 24, 2008    May 15, 2008     To be determined
                                                       In accordance with the
                                                       articles of the
                                                       Corporation
    -------------------------------------------------------------------------
    Series C        April 2, 2008     April 30, 2008   32.50 cents
    -------------------------------------------------------------------------
    Series D        April 2, 2008     April 30, 2008   34.375 cents
    -------------------------------------------------------------------------
    Series E        April 2, 2008     April 30, 2008   32.8125 cents
    -------------------------------------------------------------------------
    Series F        April 2, 2008     April 30, 2008   36.875 cents
    -------------------------------------------------------------------------
    Series H        April 2, 2008     April 30, 2008   35.9375 cents
    -------------------------------------------------------------------------
    Series I        April 2, 2008     April 30, 2008   37.50 cents
    -------------------------------------------------------------------------
    Series J        April 2, 2008     April 30, 2008   29.375 cents
    -------------------------------------------------------------------------
    Series K        April 2, 2008     April 30, 2008   30.9375 cents
    -------------------------------------------------------------------------
    Series L        April 2, 2008     April 30, 2008   31.875 cents
    -------------------------------------------------------------------------

    COMMON SHARE DIVIDEND
    ---------------------

    The Board of Directors also declared a quarterly dividend of 31.25 cents
per share on the Corporation's common shares payable May 1, 2008 to
shareholders of record April 2, 2008.

    For purposes of the Income Tax Act (Canada) and any similar provincial
legislation, all of the above dividends of 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 and its subsidiaries' current expectations.
Forward-looking statements are provided for the purpose of presenting
information about management's current expectations and plans relating to the
future and readers are cautioned that such statements may not be appropriate
for other purposes. These statements may include, without limitation,
statements regarding the operations, business, financial condition,
priorities, ongoing objectives, strategies and outlook of the Corporation's
and its subsidiaries' 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", "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".
    This information is based upon certain material factors or assumptions
that were applied in drawing a conclusion or making a forecast or projection
as reflected in the forward-looking statements, including the perception of
historical trends, current conditions and expected future developments, as
well as other factors that are believed to be appropriate in the
circumstances.
    By its nature, this information is subject to inherent risks and
uncertainties that may be general or specific. A variety of material 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, 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 and integrate acquisitions, and the
Corporation's and its subsidiaries' success in anticipating and managing the
foregoing factors.
    The reader is cautioned that the foregoing list of factors is not
exhaustive of the factors that may affect any of the Corporation's and its
subsidiaries' forward-looking statements. The reader is also cautioned to
consider these and other factors carefully and not to put undue reliance on
forward-looking statements.
    Other than as specifically required by 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 concerning the risks and uncertainties associated
with the Corporation's business is provided in its disclosure materials,
including its most recent Management Discussion and Analysis of Operating
Results and Annual Information Form, filed with the securities regulatory
authorities in Canada, available at www.sedar.com.

    Non-GAAP 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.
    As a consequence of the announcement by Lifeco of the signing of a
definitive agreement by GWL&A to sell its healthcare insurance business, the
results from Lifeco's U.S. healthcare insurance business are presented in the
2007 consolidated financial statements as "discontinued operations" in
accordance with GAAP. Power Financial's share of these results is included in
operating earnings
    Operating earnings and operating earnings per share are non-GAAP financial
measures that do not have a standard meaning and may not be comparable to
similar measures used by other entities.


    Attachments: Financial Information


                         Power Financial Corporation

                         CONSOLIDATED BALANCE SHEETS

                                                    December 31, December 31,
    (in millions of dollars)(unaudited)                    2007         2006
    -------------------------------------------------------------------------
    Assets
    Cash and cash equivalents                             5,625        5,114
    -------------------------------------------------------------------------
    Investments
      Shares                                              6,927        4,602
      Bonds                                              65,069       64,946
      Mortgages and other loans                          16,423       15,823
      Loans to policyholders                              6,317        6,776
      Real estate                                         2,549        2,218
    -------------------------------------------------------------------------
                                                         97,285       94,365
    Funds held by ceding insurers                         1,512       12,371
    Investment at equity                                  3,503        2,137
    Assets of operations held for sale                      697          866
    Intangible assets                                     4,946        2,610
    Goodwill                                              9,230        8,291
    Future income taxes                                     809          455
    Other assets                                          6,701        4,277
    -------------------------------------------------------------------------
                                                        130,308      130,486
    -------------------------------------------------------------------------
    Liabilities
    Policy liabilities
      Actuarial liabilities                              87,681       89,379
      Other                                               4,385        4,268
    Deposits and certificates                               857          778
    Funds held under reinsurance contracts                  164        1,822
    Liabilities of operations held for sale                 428          599
    Debentures and other borrowings                       6,791        3,430
    Preferred shares of the Corporation                     300          300
    Preferred shares of subsidiaries                      1,303        1,325
    Capital trust securities and debentures                 639          646
    Future income taxes                                     743          853
    Other liabilities                                     6,633        8,451
    -------------------------------------------------------------------------
                                                        109,924      111,851
    -------------------------------------------------------------------------

    Non-controlling interests                             7,519        7,213
    -------------------------------------------------------------------------
    Shareholders' Equity
    Stated capital
      Perpetual preferred shares                          1,400        1,400
      Common shares                                         594          593
    Contributed surplus                                      69           56
    Retained earnings                                    10,504        9,621
    Accumulated other comprehensive income (loss)           298         (248)
    -------------------------------------------------------------------------
                                                         12,865       11,422
    -------------------------------------------------------------------------
                                                        130,308      130,486
    -------------------------------------------------------------------------
    For additional information, refer to the 2007 audited Consolidated
    Financial Statements to be published in March 2008.


                     CONSOLIDATED STATEMENTS OF EARNINGS

                                     Three months ended   For the years ended
    (in millions of dollars,              December 31           December 31
     except per share amounts)         2007       2006       2007       2006
    -------------------------------------------------------------------------
    Revenues
    Premium income                    5,764      5,997     18,753     17,752
    Net investment income
      Regular net investment income   1,330      1,503      5,685      5,962
      Change in fair value on held
       for trading assets               821          -     (1,098)         -
                                    -----------------------------------------
                                      2,151      1,503      4,587      5,962
      Fee income                      1,516      1,113      5,331      4,223
    -------------------------------------------------------------------------
                                      9,431      8,613     28,671     27,937
    -------------------------------------------------------------------------
    Expenses
    Policyholder benefits,
     dividends and experience
     refunds and change in
     actuarial liabilities            6,858      6,447     19,224     19,660
    Commissions                         592        566      2,240      2,024
    Operating expenses                  885        689      3,199      2,575
    Financing charges                   119         84        406        338
    -------------------------------------------------------------------------
                                      8,454      7,786     25,069     24,597
    -------------------------------------------------------------------------
                                        977        827      3,602      3,340
    Share of earnings of investment
     at equity                           17         32        145        126
    Other income, net                    24          2         24        345
    -------------------------------------------------------------------------

    Earnings from continuing
     operations before income
     taxes and non-controlling
     interests                        1,018        861      3,771      3,811
    Income taxes                        248        187        836        844
    Non-controlling interests           269        237      1,039        952
    -------------------------------------------------------------------------
    Earnings from continuing
     operations                         501        437      1,896      2,015
    Earnings from discontinued
     operations                          31         37        148        140
    -------------------------------------------------------------------------
    Net earnings                        532        474      2,044      2,155
    -------------------------------------------------------------------------

    Basic earnings per common share
      From continuing operations       0.69       0.60       2.58       2.76
      From discontinued operations     0.04       0.05       0.21       0.20
    -------------------------------------------------------------------------
                                       0.73       0.65       2.79       2.96
    -------------------------------------------------------------------------

    Diluted earnings per common
     share
      From continuing operations       0.68       0.59       2.57       2.74
      From discontinued operations     0.04       0.05       0.21       0.20
    -------------------------------------------------------------------------
                                       0.72       0.64       2.78       2.94
    -------------------------------------------------------------------------


                            SEGMENTED INFORMATION

    Information on Profit
     Measure (in millions
     of dollars) (unaudited)
    Three months ended                                 Par-
     December 31, 2007            Lifeco      IGM  jointco    Other    Total
    -------------------------------------------------------------------------
    Revenues
      Premium income               5,764        -        -        -    5,764
      Net investment income
        Regular net investment
         income                    1,304       42        -      (16)   1,330
        Change in fair value
         on held for trading
         assets                      821        -        -        -      821
                                ---------------------------------------------
                                   2,125       42        -      (16)   2,151
                                                         -
      Fee income                     861      679        -      (24)   1,516
    -------------------------------------------------------------------------
                                   8,750      721        -      (40)   9,431
    -------------------------------------------------------------------------
    Expenses
      Policyholder benefits,
       dividends and experience
       refunds, and change in
       actuarial liabilities       6,858        -        -        -    6,858
      Commissions                    374      241        -      (23)     592
      Operating expenses             712      157        -       16      885
      Financing charges               84       22        -       13      119
    -------------------------------------------------------------------------
                                   8,028      420        -        6    8,454
    -------------------------------------------------------------------------
                                     722      301        -      (46)     977
    Share of earnings of
     investment at equity              -        -       17        -       17
    Other income, net                  -        -       23        1       24
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before income
     taxes and non-controlling
     interests                       722      301       40      (45)   1,018
    Income taxes                     180       67        -        1      248
    Non-controlling interests        195      103        -      (29)     269
    -------------------------------------------------------------------------
    Contribution to consolidated
     earnings from continuing
     operations                      347      131       40      (17)     501
    Contribution to consolidated
     earnings from discontinued
     operations                       31        -        -        -       31
    -------------------------------------------------------------------------
    Contribution to consolidated
     net earnings                    378      131       40      (17)     532
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Information on Profit Measure
    Three months ended                                 Par-
     December 31, 2006            Lifeco      IGM  jointco    Other    Total
    -------------------------------------------------------------------------
    Revenues
      Premium income               5,997        -        -        -    5,997
      Net investment income
        Regular net investment
         income                    1,473       50        -      (20)   1,503
    Change in fair value on
     held for trading assets           -        -        -        -        -
                                ---------------------------------------------
                                   1,473       50        -      (20)   1,503
                                                         -
      Fee income                     503      628        -      (18)   1,113
    -------------------------------------------------------------------------
                                   7,973      678        -      (38)   8,613
    -------------------------------------------------------------------------
    Expenses
      Policyholder benefits,
       dividends and experience
       refunds, and change in
       actuarial liabilities       6,447        -        -        -    6,447
      Commissions                    364      219        -      (17)     566
      Operating expenses             526      148        -       15      689
      Financing charges               50       22        -       12       84
    -------------------------------------------------------------------------
                                   7,387      389        -       10    7,786
    -------------------------------------------------------------------------
                                     586      289        -      (48)     827
    Share of earnings of
     investment at equity              -        -       32        -       32
    Other income (charges), net        -        -       (2)       4        2
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before income
     taxes and non-controlling
     interests                       586      289       30      (44)     861
    Income taxes                     101       89        -       (3)     187
    Non-controlling interests        177       89        -      (29)     237
    -------------------------------------------------------------------------
    Contribution to consolidated
     earnings from continuing
     operations                      308      111       30      (12)     437
    Contribution to consolidated
     earnings from discontinued
     operations                       37        -        -        -       37
    -------------------------------------------------------------------------
    Contribution to consolidated
     net earnings                    345      111       30      (12)     474
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            SEGMENTED INFORMATION

    Information on Profit Measure
    For the year ended                                 Par-
     December 31, 2007            Lifeco      IGM  jointco    Other    Total
    -------------------------------------------------------------------------
    Revenues
      Premium income              18,753        -        -        -   18,753
      Net investment income
        Regular net investment
         income                    5,565      194        -      (74)   5,685
        Change in fair value on
         held for trading assets  (1,098)       -        -        -   (1,098)
                                 --------------------------------------------
                                   4,467      194        -      (74)   4,587
                                                         -
      Fee income                   2,703    2,701        -      (73)   5,331
    -------------------------------------------------------------------------
                                  25,923    2,895        -     (147)  28,671
    -------------------------------------------------------------------------
    Expenses
      Policyholder benefits,
       dividends and experience
       refunds and change in
       actuarial liabilities      19,224        -        -        -   19,224
      Commissions                  1,366      947        -      (73)   2,240
      Operating expenses           2,517      623        -       59    3,199
      Financing charges              269       88        -       49      406
    -------------------------------------------------------------------------
                                  23,376    1,658        -       35   25,069
    -------------------------------------------------------------------------
                                   2,547    1,237        -     (182)   3,602
    Share of earnings of
     investment at equity              -        -      145        -      145
    Other income (charges),
     net                               -        -       26       (2)      24
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before income
     taxes and non-controlling
     interests                     2,547    1,237      171     (184)   3,771
    Income taxes                     480      355        -        1      836
    Non-controlling interests        766      391        -     (118)   1,039
    -------------------------------------------------------------------------
    Contribution to consolidated
     earnings from continuing
     operations                    1,301      491      171      (67)   1,896
    Contribution to consolidated
     earnings from discontinued
     operations                      148        -        -        -      148
    -------------------------------------------------------------------------
    Contribution to consolidated
     net earnings                  1,449      491      171      (67)   2,044
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Information on Profit Measure
    For the year ended                                 Par-
     December 31, 2006            Lifeco      IGM  jointco    Other    Total
    -------------------------------------------------------------------------
    Revenues
      Premium income              17,752        -        -        -   17,752
      Net investment income
        Regular net investment
         income                    5,836      212        -      (86)   5,962
        Change in fair value
         on held for trading
         assets                        -        -        -        -        -
    -------------------------------------------------------------------------
                                   5,836      212        -      (86)   5,962

      Fee income                   1,894    2,392        -      (63)   4,223
    -------------------------------------------------------------------------
                                  25,482    2,604        -     (149)  27,937
    -------------------------------------------------------------------------
    Expenses
      Policyholder benefits,
       dividends and experience
       refunds and change in
       actuarial liabilities      19,660        -        -        -   19,660
      Commissions                  1,254      833        -      (63)   2,024
      Operating expenses           1,946      573        -       56    2,575
      Financing charges              202       88        -       48      338
    -------------------------------------------------------------------------
                                  23,062    1,494        -       41   24,597
    -------------------------------------------------------------------------
                                   2,420    1,110        -     (190)   3,340
    Share of earnings of
     investment at equity              -        -      126        -      126
    Other income, net                  -        -      341        4      345
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before income
     taxes and non-controlling
     interests                     2,420    1,110      467     (186)   3,811
    Income taxes                     522      331        -       (9)     844
    Non-controlling interests        719      345        -     (112)     952
    -------------------------------------------------------------------------
    Contribution to consolidated
     earnings from continuing
     operations                    1,179      434      467      (65)   2,015
    Contribution to consolidated
     earnings from discontinued
     operations                      140        -        -        -      140
    -------------------------------------------------------------------------
    Contribution to consolidated
     net earnings                  1,319      434      467      (65)   2,155
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

For further information: Mr. Edward Johnson, Senior Vice-President,
General Counsel and Secretary, (514) 286-7400


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