Market Release

CHALLENGER LIMITED HY2012 RESULTS Record interim total annuity product sales of $1.27 billion, up 74% Record interim retail annuity sales of $983 million, up 38% Funds management FUM of $27.7 billion, up 27% and back to pre-GFC levels Record normalised interim net profit after tax of $127 million, up 5% Statutory interim net profit after tax of $20 million Operating cash flow of $140 million, up 10% Interim dividend of 7.5 cents, up 7% Increases FY2012 retail annuity sales growth target from 25% to 30% Upgrades FY2012 Life cash operating earnings guidance from $430 million to $435 million 20 February 2012, Sydney - Challenger Limited (ASX:CGF) today announced a normalised interim net profit after tax (NPAT) of $127 million for the six months to 31 December 2011. Statutory NPAT was $20 million due to negative investment experience following a further dislocation of debt and equity markets during late 2011. It includes realised and unrealised gains and losses arising from the revaluation of assets and liabilities, as required by life insurance accounting standards.*

Normalised earnings per share (EPS) of 25.3 cents remained consistent with the previous corresponding period (pcp) due to increased earnings offsetting the dilutive effect of share issuance pursuant to the exercise of options granted in 2003. Statutory earnings of 4.0 cents per share decreased compared to the prior period.
The interim dividend has increased to 7.5 cents unfranked, up 7% on the pcp.
Newly-appointed Chief Executive Officer and Managing Director Brian Benari said: "It