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La Société de Gestion AGF Limitée annonce ses résultats du deuxième trimestre



TORONTO, le 28 juin /CNW/ -- L'actif de tous les secteurs augmente grâce au modèle de gestion axée sur

la clientèle

TORONTO, le 28 juin /CNW/ - Aujourd'hui, La Société de Gestion AGF Limitée (AGF) a annoncé ses résultats financiers pour le deuxième trimestre terminé le 31 mai 2006. AGF a enregistré des ventes nettes positives de fonds communs de placement pour le trimestre terminé le 31 mai 2006, car les ventes brutes de fonds communs de placement se sont accrues de 76,9 pour 100 et les rachats ont diminué de 10,7 pour 100 comparativement au même trimestre un an plus tôt. L'actif des mandats institutionnels et de gestion privée des investissements a progressé et l'actif de Fiducie AGF a continué d'augmenter.

Pour le deuxième trimestre de l'exercice 2006, les produits consolidés tirés des activités poursuivies se sont établis à 174,2 millions de dollars, contre 147,1 millions de dollars un an plus tôt. Pour le trimestre terminé le 31 mai 2006, le bénéfice net consolidé tiré des activités poursuivies a atteint 21,7 millions de dollars, ou 0,24$ par action après dilution, contre 19,7 millions de dollars, ou 0,22$ par action après dilution, pour la même période un an plus tôt. Pour le trimestre terminé le 31 mai 2006, le bénéfice net s'est établi à 33,0 millions de dollars, contre 22,4 millions de dollars un an plus tôt. Pour le trimestre terminé le 31 mai 2006, le bénéfice net comprend un gain après impôt de 13,3 millions de dollars par suite du remboursement d'une créance et une perte de 2,1 millions de dollars par suite d'un redressement après la vente d'Unisen. Pour le trimestre terminé le 31 mai 2006, le bénéfice avant intérêts, impôts et amortissement (BAIIA) s'est élevé à 65,6 millions de dollars, contre 63,6 millions de dollars au 31 mai 2005.

"Les résultats du deuxième trimestre de 2006 sont meilleurs que ceux pour la même période un an plus tôt", a déclaré Blake Goldring, président et chef de la direction d'AGF. "L'actif de chacun de nos secteurs d'activités a également augmenté, car notre approche centrée sur la clientèle continue de porter ses fruits."

L'actif géré global a augmenté de 17,8 pour 100, passant de 32,0 milliards de dollars au 31 mai 2005 à 37,7 milliards de dollars à la fin du deuxième trimestre de 2006. Au cours de cette même période, l'actif de clients institutionnels a crû de 58,5 pour 100 et celui de gestion privée des investissements de 13,5 pour 100. L'actif du secteur des activités de société de fiducie a continué d'augmenter considérablement, enregistrant une croissance de 82,6 pour 100.

En novembre 2005, AGF a annoncé le lancement d'Éléments AGF, une solution de portefeuilles révolutionnaire qui offre un engagement sans précédent envers l'excellence en matière de gestion financière, en plus d'une caractéristique qui permet aux épargnants de recevoir des nouvelles parts de fonds si leur portefeuille n'enregistre pas au moins le même rendement que son indice repère personnalisé. Grâce à une commercialisation efficace, l'actif d'Éléments AGF a atteint 555 millions de dollars au 31 mai 2006.

Au sujet de La Société de Gestion AGF Limitée

La Société de Gestion AGF Limitée (AGF) est une des principales sociétés de gestion de placements du pays, avec des bureaux à travers le Canada et des filiales dans le monde entier. Avec un actif géré d'environ 38 milliards de dollars, AGF offre à plus de un million d'épargnants une vaste gamme de produits et services, y compris une famille diversifiée de plus de 50 fonds communs de placement, le programme d'investissement personnalisé Harmony AGF, les portefeuilles Éléments AGF, Gestion privée des investissements AGF et les CPG, prêts et prêts hypothécaires de Fiducie AGF. AGF est inscrite à la Bourse de Toronto sous le symbole "AGF.NV".

    <<
                             AGF Management Ltd.
                         Consolidated Balance Sheets

    -------------------------------------------------------------------------
                                                          May 31,   November
                                                            2006    30, 2005
                                                      (unaudited)   (audited,
    (in thousands of dollars)                                         note 3)
    -------------------------------------------------------------------------

    Assets
      Current Assets
        Cash and term deposits                        $  301,576  $  159,974
        Short-term investments                            26,266      23,105
        Accounts receivable and prepaid expenses          77,913      50,086
        Mortgages and consumer loans due within
         one year (note 8)                               399,823     315,987
    -------------------------------------------------------------------------
                                                         805,578     549,152

      Mortgages and consumer loans (note 8(a))         1,299,770   1,079,280
      Retained interest from securitization (note 2)      31,931           -
      Investment in associated company (note 5)          100,379      96,000
      Other investments                                    5,530       7,142
      Management contracts                               478,749     478,749
      Customer contracts, relationships and
       investment advisory contracts, net of
       accumulated amortization                           67,640      75,281
      Deferred selling commissions, net of
       accumulated amortization                          272,800     275,015
      Property, equipment and other intangible assets,
       net of accumulated amortization                    21,021      21,639
      Goodwill (note 6)                                  126,399     126,183
      Other assets                                         1,749       1,226
    -------------------------------------------------------------------------
                                                      $3,211,546  $2,709,667
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
      Current Liabilities
        Accounts payable and accrued liabilities      $  126,433  $   95,197
        Long-term debt due within one year (note 9)       45,500       8,277
        Income taxes payable                              14,502      14,252
        Deposits due within one year (note 8(c))         625,027     467,317
    -------------------------------------------------------------------------
                                                         811,462     585,043

      Deposits (note 8(c))                             1,219,489     940,435
      Long-term debt (note 9)                                  -      17,364
      Participation units (note 9(c))                          -       6,157
      Future income taxes                                240,922     242,188
      Leasehold inducements                                  140         154
    -------------------------------------------------------------------------
                                                       2,272,013   1,791,341
    -------------------------------------------------------------------------

      Shareholders' Equity
        Capital stock (note 10)                          396,499     394,154
        Contributed surplus (note 10(d))                   8,168       5,900
        Retained earnings                                542,076     527,197
        Foreign currency translation adjustment           (7,210)     (8,925)
    -------------------------------------------------------------------------
                                                         939,533     918,326
    -------------------------------------------------------------------------
                                                      $3,211,546  $2,709,667
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See accompanying notes to consolidated financial statements.)



                             AGF Management Ltd.
                      Consolidated Statements of Income

    -------------------------------------------------------------------------
                                  Three months ended        Six months ended
                                        May 31,                  May 31,
                             ------------------------------------------------
    (in thousands of dollars)       2006        2005        2006        2005
    (unaudited)                              (note 3)                (note 3)
    -------------------------------------------------------------------------

    Revenue
      Net management and
       advisory fees          $  109,189  $  101,739  $  211,295  $  205,332
      Administration fees,
       interest and other
       revenue                    56,886      35,517     106,009      66,621
      Deferred sales charges       7,065       9,815      14,374      20,403
      Gain on sale of RSP
       loan securitization
       and related income
       (note 2)                      815           -      10,665           -
      Investment income              269          62       1,056         365
    -------------------------------------------------------------------------
                                 174,224     147,133     343,399     292,721

    Expenses
      Selling, general and
       administrative             51,018      40,046      99,202      80,176
      Trailing commissions        31,318      28,392      60,257      54,682
      Investment advisory fees     7,089       6,604      14,019      13,721
      Amortization of deferred
       selling commissions        27,244      28,492      54,394      57,005
      Amortization of customer
       contracts, relationships
       and investment advisory
       contracts                   3,820       3,676       7,641       7,353
      Amortization of property,
       equipment and other
       intangible assets           2,772       2,681       5,554       5,417
      Interest on Trust
       Company deposits           17,276       7,141      31,234      12,773
      Interest expense               821       1,417       1,337       2,837
      Provision for Trust
       Company loan losses         1,835       1,303       4,322       2,681
    -------------------------------------------------------------------------
                                 143,193     119,752     277,960     236,645

    Income from continuing
     operations before
     income taxes                 31,031      27,381      65,439      56,076

    Income taxes
      Current                     11,792       8,035      24,867      17,447
      Future                      (2,482)       (345)     (5,235)     (1,278)
    -------------------------------------------------------------------------
                                   9,310       7,690      19,632      16,169
    -------------------------------------------------------------------------

    Net income from continuing
     operations for the period    21,721      19,691      45,807      39,907
    Gain on repayment of debt,
     net of taxes (note 9(c))     13,309           -      13,309           -
    Loss on sale of
     discontinued operations,
     net of income taxes
     (note 3)                     (2,050)          -      (2,050)          -
    Net earnings from
     discontinued operations
     for the period (note 3)           -       2,668           -       3,629
    -------------------------------------------------------------------------
    Net income for the period $   32,980  $   22,359  $   57,066  $   43,536
    -------------------------------------------------------------------------

    Earnings Per Share
     (note 10(e))
      Basic from continuing
       operations             $     0.24  $     0.22  $     0.51  $     0.44
      Diluted from continuing
       operations             $     0.24  $     0.22  $     0.51  $     0.44
      Basic                   $     0.37  $     0.25  $     0.64  $     0.48
      Diluted                 $     0.37  $     0.25  $     0.63  $     0.48
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See accompanying notes to consolidated financial statements.)



                             AGF Management Ltd.
                 Consolidated Statements of Retained Earnings

    -------------------------------------------------------------------------
                                  Three months ended       Six months ended
                                        May 31,                 May 31,
                             ------------------------------------------------
    (in thousands of dollars)       2006        2005        2006        2005
    (unaudited)                              (note 3)                (note 3)
    -------------------------------------------------------------------------

    Retained earnings,
     beginning of period      $  534,475  $  527,876  $  527,197  $  517,681

    Net income for the period     32,980      22,359      57,066      43,536
    -------------------------------------------------------------------------
                                 567,455     550,235     584,263     561,217

    Deduct:
      Dividends on AGF Class A
       Voting Common Shares and
       AGF Class B Non-Voting
       Shares                     16,059      13,614      29,430      23,602

      Excess paid over book value
       of AGF Class B Non-Voting
       Shares purchased for
       cancellation (note 10)      9,320      13,330      12,757      14,324
    -------------------------------------------------------------------------
                                  25,379      26,944      42,187      37,926
    -------------------------------------------------------------------------

    Retained earnings,
     end of period            $  542,076  $  523,291  $  542,076  $  523,291
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See accompanying notes to consolidated financial statements.)



                             AGF Management Ltd.
                     Consolidated Statements of Cash Flow

    -------------------------------------------------------------------------
                                   Three months ended       Six months ended
                                         May 31,                 May 31,
                             ------------------------------------------------
    (in thousands of dollars)       2006        2005        2006        2005
    (unaudited)                              (note 3)                (note 3)
    -------------------------------------------------------------------------
    Operating Activities
      Net income for the
       period                 $   32,980  $   22,359  $   57,066  $   43,536
      Loss on sale of
       discontinued operation,
       net of income taxes         2,050           -       2,050           -
      Results of discontinued
       operations                      -      (2,668)          -      (3,629)
    -------------------------------------------------------------------------
                                  35,030      19,691      59,116      39,907

      Items not affecting cash
        Amortization of
         deferred selling
         commissions              27,244      28,492      54,394      57,005
        Amortization of
         customer contracts,
         relationships and
         investment advisory
         contracts                 3,820       3,676       7,641       7,353
        Amortization of
         property, equipment
         and other intangible
         assets                    2,772       2,681       5,554       5,417
        Future income taxes       (2,482)       (345)     (5,235)     (1,278)
        Gain on sale of RSP
         loan securitization           -           -      (9,850)          -
        Gain on early
         retirement of debt,
         net of income taxes     (13,309)          -     (13,309)          -
        Mark-to-market on swap
         transactions               (117)       (169)       (233)       (270)
        Provision for AGF
         Trust Loan Losses         1,835       1,303       4,322       2,681
        Other                       (489)      2,362       2,042       3,772
    -------------------------------------------------------------------------
                                  54,304      57,691     104,442     114,587
      Net increase in non-cash
       balances related to
       operations                 12,264      19,323     (21,246)     (6,532)
    -------------------------------------------------------------------------
      Net cash provided by
       continuing operating
       activities                 66,568      77,014      83,196     108,055
      Net cash provided by
       discontinued operating
       activities                      -       5,703           -       7,309
    -------------------------------------------------------------------------
      Net cash provided by
       operating activities       66,568      82,717      83,196     115,364
    -------------------------------------------------------------------------

    Financing Activities
      Purchase of Class B
       non-voting shares for
       cancellation              (11,542)    (18,048)    (15,865)    (19,368)
      Issuance of Class B
       non-voting shares           4,778       1,164       5,453       1,487
      Dividends                  (16,059)    (13,614)    (29,430)    (23,602)
      Increase (decrease)
       in bank loan               11,000     (16,850)     39,000        (700)
      Decrease in other
       long-term debt               (122)       (198)     (1,324)       (986)
      Increase in Trust
       Company deposits          141,448     158,165     436,764     258,100
    -------------------------------------------------------------------------
      Net cash provided by
       continuing financing
       activities                129,503     110,619     434,598     214,931
      Net cash used in
       discontinued financing
       activities                      -        (186)          -        (370)
    -------------------------------------------------------------------------
      Net cash provided by
       financing activities      129,503     110,433     434,598     214,561
    -------------------------------------------------------------------------

    Investing Activities
      Deferred selling
       commissions paid          (29,936)    (17,266)    (52,179)    (32,167)
      Proceeds of RSP loan
       securitization                  -           -     206,274           -
      Acquisition of
       subsidiaries                    -           -        (216)     (1,476)
      Payments associated
       with sale of
       discontinued operation      4,207           -       2,178           -
      Purchase of property,
       equipment and other
       intangible assets          (2,186)       (752)     (5,836)     (1,299)
      Purchase of investments     (3,487)       (385)     (4,336)     (2,932)
      Sale of investments            463           -       3,190           -
      Increase in Trust
       Company mortgages and
       consumer loans           (275,968)   (180,732)   (525,267)   (344,154)
    -------------------------------------------------------------------------
      Net cash used in
       continuing investing
       activities               (306,907)   (199,135)   (376,192)   (382,028)
      Net cash used in
       discontinued investing
       activities                      -      (1,188)          -      (2,621)
    -------------------------------------------------------------------------
      Net cash used in
       investing activities     (306,907)   (200,323)   (376,192)   (384,649)
    -------------------------------------------------------------------------

    Increase (decrease)
     in cash and cash
     equivalents during
     the period                 (110,836)     (7,173)    141,602     (54,724)

    Balance of cash and cash
     equivalents, beginning
     of period                   412,412      71,254     159,974     118,805
    -------------------------------------------------------------------------

    Balance of cash and cash
     equivalents, end of
     period                   $  301,576  $   64,081  $  301,576  $   64,081
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash and cash equivalents
     related to:
      Continuing operations                           $  301,576  $   63,404
      Discontinued operations                                  -         677
    -------------------------------------------------------------------------
                                                      $  301,576  $   64,081
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Represented by:
      Cash and cash
       equivalents                                    $    6,477  $   10,169
      Trust Company cash and
       cash equivalents                                  295,099      53,912
    -------------------------------------------------------------------------
                                                      $  301,576  $   64,081
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Notes to Consolidated Financial Statements

    For the three and six months ended May 31, 2006 and May 31, 2005 (tabular
    amounts in thousands of dollars, except per share amounts) (unaudited)

    These unaudited interim consolidated financial statements of AGF
    Management Limited ('AGF' or the 'Company') have been prepared in
    accordance with Canadian generally accepted accounting principles using
    the same significant accounting policies as AGF's consolidated financial
    statements for the year ended November 30, 2005. These financial
    statements do not contain all the disclosures required by Canadian
    generally accepted accounting principles for annual financial statements
    and should be read in conjunction with the consolidated financial
    statements for the year ended November 30, 2005, as set out in AGF's 2005
    Annual Report.

    As the Company concluded the sale of its wholly owned subsidiary Unisen
    Holdings Inc. ('Unisen') during the fourth quarter of 2005, Unisen's
    operations for the comparative 2005 periods presented have been reported
    as discontinued operations as outlined in Note 3.

    Note 1: New Accounting Policies

    (a) AGF Elements

        In November 2005, the Company launched AGF Elements, which consists
        of five diversified fund of fund portfolios. If an AGF Elements
        portfolio does not match or outperform its customized benchmark over
        a three-year period, each individual investor will receive up to 90
        basis points in additional units, calculated based on the value of
        such investment at the end of the three-year period.

        The Company will include in other liabilities up to 30 basis points
        per year of each investor's assets under management, adjusted for
        redemptions (forfeitures), until the end of the three-year
        measurement period of each investment made by such investor. At that
        time if an individual investor's returns match or exceed the
        corresponding benchmark, the Company will recognize the entire amount
        as management fee revenue. If an individual investor's actual returns
        are below the customized benchmark, a corresponding amount will be
        distributed to the investor in the form of individual units.

    (b) Accounting for Securitizations

        Under AcG-12, in order for a securitization to be treated as a sale,
        the Company must surrender control over those loans included in the
        securitization. To surrender control, the securitized assets must be
        isolated from the Company and its creditors, even in the case of
        bankruptcy or receivership, and the Company must receive
        consideration other than the beneficial interest in the transferred
        assets.

        In determining the gain or loss on sale, management estimates future
        cash flows by relying on estimates of the amount of interest that
        will be collected on the securitized assets, the yield paid to
        investors, the portion of the securitized assets that will be prepaid
        before their scheduled maturity, expected credit losses, the cost of
        servicing the assets and the rate at which to discount these expected
        future cash flows. Actual cash flows may differ significantly from
        those estimated by management. If actual cash flows are different
        from management's estimate of future cash flows then the gains or
        losses on the securitization recognized in income will be adjusted.
        Note 2 provides additional disclosure regarding the securitizations
        and related balance sheet and income statement impacts.

    (c) Adoption of AcG-15 'Consolidation of Variable Interest Entities'

        The CICA issued AcG-15, 'Consolidation of Variable Interest
        Entities', which provides guidance for applying consolidation
        principles to certain entities that are subject to control on a basis
        other than ownership of voting interests. AcG-15 became effective for
        all annual and interim periods beginning on or after December 1,
        2004. An entity is a VIE when, by design, one or both of the
        following conditions exist: (i) total equity investment at risk is
        insufficient to permit the entity to finance its activities without
        additional subordinated support from others; (ii) as a group, the
        holders of the equity investment at risk lack certain essential
        characteristics of a controlling financial interest.

        The Company has reviewed its relationships and determined that there
        are no entities whose financial results would be required to be
        included or disclosed in the consolidated results for the three and
        six months ended May 31, 2006 and 2005.

    Note 2: Securitization of AGF Trust Loans

    On February 28, 2006, the Company, through its wholly owned subsidiary
    AGF Trust Company, securitized $218.4 million of RSP loans through the
    sale of these loans to a securitization trust. Cash flows of
    $206.3 million were received on the securitization and a gain net of
    transaction fees and expenses of $9.9 million was recorded in the three
    months ended February 28, 2006. As at May 31, 2006, the balance
    outstanding of securitized loans was equal to $191.5 million.

    When RSP loan receivables are sold in securitization to a securitization
    trust under terms that transfer control to third parties, the transaction
    is recognized as a sale and the related loan assets are removed from the
    consolidated balance sheet. As part of the securitization, certain
    financial assets are retained. The retained interests are carried at
    cost. A gain or loss on sale of the loan receivables is recognized
    immediately in income. The amount of the gain or loss is determined by
    estimating the fair value of future expected cash flows using
    management's best estimates of key assumptions - excess spread, discount
    rate on interest-only strip, expected credit losses, prepayment rates and
    expected weighted average life of RSP loans -  which are commensurate
    with the risks involved. Subsequent to the securitization, any retained
    interest that cannot be contractually settled in such a way that the
    Company can recover substantially all of its recorded investment will be
    adjusted  to fair value. The current fair value of retained interests is
    determined using the present value of future expected cash flows  as
    discussed above.

    The Company has recorded retained interests of $31.9 million
    (February 28, 2006 - $34.0 million) made up of i) the rights to future
    excess interest on these RSP loans after investors in the securitization
    trust have received the return for which they contracted, valued at
    $16.3 million (February 28, 2006 - $16.6 million), ii) cash collateral of
    $5.4 million (February 28, 2006 - $5.4 million) and iii) over-
    collateralization of $10.2 million (February 28, 2006 - $12.0 million).

    The impaired loans included in the securitized balances were equal to
    $0.4 million as of May 31, 2006 and during the quarter ended May 31, 2006
    $0.1 million of securitized RSP loans were written off.

    The Company's claim on the retained interests is subordinate to
    investors' interests. Recourse available to investors and the
    securitization trust is limited to the retained interests. Cash flows of
    $3.8 million were received on the securitized loans during the quarter
    ended May 31, 2006, of which $1.9 million related to the over-
    collateralization, and $1.9 million related to the interest-only strip.
    The total other income recognized from securitization during the quarter
    was equal to $0.8 million.

    The significant assumptions used to value the sold and retained interests
    were as follows:

                 Excess spread                             3.8%
                 Discount rate on interest-only strip      7.5%
                 Expected credit losses                    0.8%
                 Prepayment rate                          14.0%
                 Expected weighted average life
                  of RSP loans                            30.6 months

    The Company retained servicing responsibilities for the securitized
    loans. A servicing liability of $1.5 million was recorded as at May 31,
    2006 (February 28, 2006 - $1.7 million). This amount represents the
    estimated future cost of servicing the securitized loans and has been
    offset against the sale of the RSP loans. The amount amortized related to
    the servicing liability during the three months ended May 31, 2006, was
    $0.2 million.

    The following table presents key economic assumptions and the sensitivity
    of the current fair value of retained interests to two adverse changes
    in each key assumption as at May 31, 2006. As the sensitivity is
    hypothetical, it should be used with caution. The impact of changes in
    the fair value of retained interests was calculated using a discounted
    cash flow analysis.

    -------------------------------------------------------------------------
    Fair value of retained interests                              $   33,300
      Discount rate                                                     7.5%
        +10%                                                      $     (220)
        +20%                                                            (430)
      Prepayment rate                                                  14.0%
        +10%                                                      $     (295)
        +20%                                                            (580)
      Expected credit losses                                            0.8%
        +10%                                                      $     (340)
        +20%                                                            (680)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Note 3: Discontinued Operations and Assets Held for Sale

    On October 3, 2005 the Company sold 100% of wholly owned subsidiary
    Unisen Holdings Inc. ('Unisen') to Citifinancial Canada Inc.
    ('Citifinancial'), for cash consideration of US$97.5 million
    ($114.0 million). Expenses related to this transaction amounted to
    $5.0 million. The consideration was subject to two adjustments for which
    the Company had accrued a net amount owing to Citifinancial of
    $1.8 million. The two adjustments are a working capital adjustment that
    provides that any working capital above a threshold is payable to AGF, of
    which AGF received $5.1 million in the quarter, and the purchase price is
    subject to a clawback should Unisen's revenue fall below a threshold
    during the 12-month period ending June 30, 2006. A provision of
    $9.5 million is included in accounts payable related to this possible
    clawback. During the three months ended May 31, 2006, the aforementioned
    provision was increased by $2.5 million with the increase being recorded
    as a loss on sale of discontinued operations net of tax of $2.1 million.
    In addition, the Company has issued a put option in favour of
    Citifinancial relating to certain Unisen assets. The put option expires
    18 months after the date of acquisition. No value has been attributed to
    this option, as management does not believe it will be exercised.

    Concurrent with the sale of Unisen to Citifinancial, AGF has capped the
    management expense ratio on all of the AGF funds for three years at the
    lower of the actual levels reported in 2004 and 2005. In addition, the
    Company is committed for a 10-year period to reimburse Citifinancial
    should Citifinancial's annual revenues derived from AGF fund
    administration services fall below a pre-determined level.

    Unisen's operations for 2005 have been reported as discontinued
    operations and previously reported financial statements have been
    reclassified to reflect the following:

    Summary of discontinued operations

    -------------------------------------------------------------------------
                                                    Three months  Six months
                                                           ended       ended
                                                          May 31,     May 31,
                                                            2005        2005
    -------------------------------------------------------------------------
    Revenue                                           $   25,022  $   50,513
    Net earnings from discontinued operations              2,668       3,629
    Basic net earnings per share                      $     0.03  $     0.04
    Diluted net earnings per share                    $     0.03  $     0.04
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                                      May 31,
                                                                        2005
    -------------------------------------------------------------------------

    Current assets held for sale
      Cash and term deposits                                      $    5,006
      Accounts receivable and prepaid expenses                        28,618
      Income taxes receivable                                            611
    -------------------------------------------------------------------------
                                                                  $   34,235
    -------------------------------------------------------------------------

    Long-term assets held for sale
      Customer contracts                                          $   34,692
      Property, equipment and other intangible assets, net            25,132
      Goodwill                                                        34,755
    -------------------------------------------------------------------------
                                                                  $   94,579
    -------------------------------------------------------------------------

    Current liabilities related to assets held for sale
      Accounts payable and accrued liabilities                    $   29,989
      Long-term debt due within one year                                 771
    -------------------------------------------------------------------------
                                                                  $   30,760
    -------------------------------------------------------------------------

    Long-term liabilities related to assets held for sale
      Long-term debt                                              $   42,718
      Future income taxes                                              9,577
      Leasehold inducements                                            3,947
    -------------------------------------------------------------------------
                                                                  $   56,242
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Note 4: Acquisition of Mutual Fund Assets from ING Investment Management
    Inc.

    On August 5, 2005, the Company acquired the management rights to
    $276 million in mutual fund assets from ING Investment Management Inc.
    ('ING') for cash consideration of $9.1 million. Thirteen ING funds have
    been merged into corresponding AGF funds. The agreement also includes the
    acquisition of the management contract for the ING Canadian Dividend
    Income Fund, which has been renamed the AGF Dividend Income Fund.

    The purchase price for the assets acquired was allocated as follows:

    -------------------------------------------------------------------------

    Net assets acquired
      Management contracts                                        $    5,081
      Customer relationships                                           4,023
    -------------------------------------------------------------------------
                                                                  $    9,104
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The portion allocated to customer relationships is being amortized over
    their estimated useful life of seven years. The purchase price is also
    subject to a future reduction based on the level of mutual fund
    redemptions during the first year subsequent to acquisition. This amount,
    if any, will be determinable on the anniversary date of the purchase of
    assets.

    Note 5: Investment in Associated Company

    On May 27, 2005, Smith & Williamson Holdings Limited ('S&WHL') completed
    the acquisition of 100% of the outstanding shares of Solomon Hare
    Personal Finance Limited ('SHPF') and the business of Solomon Hare LLP.
    The total consideration paid by S&WHL of $20.6 million included cash of
    $4.9 million and the issuance of 2.3 million shares valued at
    $15.7 million. Prior to this transaction, the Company had a 31.8%
    interest in S&WHL. Subsequent to the aforementioned transaction, the
    Company holds a 30.9% interest in S&WHL. The dilution gain with respect
    to the completion of this transaction was $0.1 million.

    Note 6: Acquisition of P.J. Doherty & Associates Co. Ltd.

    On January 15, 2004, the Company acquired 100% of the shares of P.J.
    Doherty & Associates Co. Ltd. ('P.J. Doherty') for consideration of
    $12.2 million, including $0.3 million of acquisition costs. The
    acquisition was accounted for by the purchase method of accounting, with
    the results of operations of P.J. Doherty included in the consolidated
    financial statements from the date of acquisition. Cash consideration
    paid amounted to $9.4 million, with future payments of $2.8 million due
    in the year following the acquisition.

    There was additional consideration, which became payable based on revenue
    growth during the two-year period subsequent to completion of the
    acquisition. The value attributed to customer contracts is being
    amortized on a straight-line basis over 15 years.

    The fair value of the net assets acquired and consideration paid are
    summarized as follows:

    -------------------------------------------------------------------------

    Net assets acquired
      Cash                                                        $      468
      Other assets                                                       318
      Customer contracts                                              13,015
      Goodwill                                                         3,719
      Current liabilities                                               (233)
      Future income tax                                               (4,701)
    -------------------------------------------------------------------------
                                                                  $   12,586
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Consideration paid (including acquisition costs)
      Cash                                                        $    9,451
      Payments subsequent to acquisition date                          3,135
    -------------------------------------------------------------------------
                                                                  $   12,586
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    All payments subsequent to the acquisition date have been made. The
    Company also paid out $0.2 million on the first and second anniversaries
    of the acquisition date based on revenue growth during the years. The
    latter two payments were recorded as an increase in goodwill.

    Note 7: Acquisition of Cypress Capital Management Ltd.

    On June 30, 2004, the Company acquired 100% of the shares of Cypress
    Capital Management Ltd. ('Cypress') for consideration of $26.1 million,
    including $0.1 million of acquisition costs. The acquisition has been
    accounted for by the purchase method of accounting, with the results of
    operations of Cypress included in the consolidated financial statements
    from the date of the acquisition. In addition to the future payments
    detailed below, there is also potential additional consideration due
    three years after the completion of the acquisition, subject to Cypress
    achieving certain revenue levels. These amounts are not determinable at
    the present time. The value attributed to customer contracts is being
    amortized on a straight-line basis over 15 years.

    The fair value of the net assets acquired and consideration paid are
    summarized as follows:

    -------------------------------------------------------------------------

    Net Assets Acquired
      Cash                                                        $      351
      Other assets                                                     1,625
      Customer contracts                                              28,480
      Goodwill                                                         7,269
      Current liabilities                                             (1,351)
      Future income tax                                              (10,287)
    -------------------------------------------------------------------------
                                                                  $   26,087
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Consideration Paid (including acquisition costs)
      Cash                                                        $    7,887
      285,553 AGF Class B shares issued                                5,200
      June 30, 2005 payment                                            6,500
      Future payment due June 30, 2006
       (non-interest bearing and unsecured)                            6,500
    -------------------------------------------------------------------------
                                                                  $   26,087
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The June 30, 2005 payment consisted of $3.9 million in cash and issuance
    of 159,696 AGF Class B Non-Voting Shares valued at $2.6 million.

    Note 8: Trust Company

    (a) Mortgages and Consumer Loans

        The Trust Company's principal business activities are mortgages and
        consumer loans and deposit taking. Details relating to these
        activities are as follows:

        The following table represents the period to contractual repricing of
        the interest rates on amounts outstanding. Principal repayments on
        mortgages and consumer loans within one year are $399.8 million.

    -------------------------------------------------------------------------
                      Term to Contractual Repricing
                  -----------------------------------------------------------
                    Variable   1 Year or      1 to 5      May 31, November 30
                        Rate        Less       Years        2006        2005
    -------------------------------------------------------------------------

    Total mortgage
     loans        $   31,060  $  426,282  $  251,444  $  708,786  $  552,801
    Consumer loans   989,138           -      11,663   1,000,801     850,666
    -------------------------------------------------------------------------
                   1,020,198     426,282     263,107   1,709,587   1,403,467
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Less: allowance
     for loan losses                                       9,994       8,200
                                                     ------------------------
                                                      $1,699,593  $1,395,267
                                                     ------------------------
                                                     ------------------------

    Impaired loans
     included in above                                    12,445       5,199
    Less: specific
     allowance for
     loan losses                                           2,475       1,488
                                                     ------------------------
                                                      $    9,970  $    3,711
                                                     ------------------------
                                                     ------------------------
                                                     ------------------------
                                                          May 31,   February
                                                            2006    28, 2006
                                                     ------------------------
    The change in
     allowance for
     loan losses is
     as follows:
      Balance, beginning
       of period                                      $    8,651  $    8,200
      Amounts written-off                                   (559)       (325)
      Recoveries                                              67          59
      Reduction due to
       RSP loan
       securitization                                          -      (1,770)
      Provision for
       loan losses                                         1,835       2,487
                                                     ------------------------
      Balance, end of
       period                                         $    9,994  $    8,651
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

        As at May 31, 2006, the Company's mortgage portfolio was comprised of
        a combination of fixed rate and variable rate residential mortgages
        with a weighted average term to repricing of 1.3 years (2005 - 1.2
        years) and a weighted average yield of 6.13% (May 31, 2005 - 5.88%).
        Of the total mortgage portfolio, $345.4 million is insured (May 31,
        2005 -  $228.0 million). Consumer loans have interest rates that are
        generally based on prime. At quarter-end, the average interest rate
        on consumer loans was 7.58% (May 31, 2005 - 5.94%).

    (b) Interest Rate Swap Transactions

        To hedge its exposure to fluctuating interest rates, AGF Trust
        Company has entered into interest rate swap transactions with four
        Canadian chartered banks as noted below. The swap transactions expire
        between June 19, 2006 and  May 31, 2011 and involve the exchange of
        either the one-month bankers' acceptance rate or the three-month
        bankers' acceptance rate, to receive fixed interest rates. As at
        May 31, 2006, the aggregate notional amount of the swap transactions
        was $1,329.7 million (2005 - $759.7 million). The aggregate fair
        value of the swap transactions, which represents the amount that
        would be paid by AGF Trust Company if the transactions were
        terminated at May 31, was $15.6 million (2005 - AGF Trust would have
        received $11.5 million).

        ---------------------------------------------------------------------
        Notional Amount of Swap  Maturity Date   Fixed Interest Rate Received
        ---------------------------------------------------------------------
              $  117,000              2006               3.26% - 4.57%
                 353,700              2007               3.00% - 5.11%
                 327,000              2008               3.17% - 4.43%
                 232,000              2009               3.47% - 4.59%
                 190,000              2010               3.62% - 4.52%
                 110,000              2011               4.15% - 4.63%
        ---------------------------------------------------------------------

    (c) Trust Company Deposits

        ---------------------------------------------------------------------
                            Term to Maturity
                               1 Year or      1 to 5      May 31,   November
                      Demand        Less       Years        2006    30, 2005
        ---------------------------------------------------------------------
        Deposits  $    8,424  $  616,603  $1,219,489  $1,844,516  $1,407,752
        ---------------------------------------------------------------------

        On demand and deposits with maturity of one year or less have been
        classified as current liabilities. As at May 31, 2006, deposits were
        comprised substantially of guaranteed investment certificates with a
        weighted average term to maturity of 2.0 years (2005 - 2.1 years) and
        a weighted average interest rate of 3.85% (May 31, 2005 - 3.73%).

    Note 9: Long-Term Debt

    -------------------------------------------------------------------------
                                                          May 31,   November
                                                            2006    30, 2005
    -------------------------------------------------------------------------
    Revolving term loan                               $   39,000  $        -
    Payment re Consort Information Systems Limited
     due January 31, 2006                                      -       1,067
    Notes payable due April 30, 2013                           -      18,074
    Cypress payment due June 30, 2006                      6,500       6,500
    -------------------------------------------------------------------------
                                                          45,500      25,641
    Less: amount included in current liabilities          45,500       8,277
    -------------------------------------------------------------------------
                                                      $        -  $   17,364
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (a) Revolving Term Loan

        The Company has arranged a six-year prime-rate-based revolving term
        loan to a maximum of $200.0 million with a Canadian chartered bank.
        Under the loan agreement, the Company is permitted to draw down the
        revolving term loan by direct advances and/or bankers' acceptances
        (BAs). The revolving term loan is available at any time for a period
        of 364 days from commencement of the loan (the 'Commitment Period').
        The expiration of the current commitment period is June 30, 2007.
        However, the Company may request by April 15, 2007, and prior to
        April 15 in any calendar year thereafter, a recommencement of the
        six-year term at the expiry of the then-current commitment period. No
        repayment of the principal amount outstanding pursuant to the
        revolving term loan is required during the first three years of the
        then-applicable term. Thereafter, the loan balance shall be repaid in
        minimum monthly instalments of at least one-thirty-sixth of the
        amount of principal outstanding.

        As at May 31, 2006, the Company has drawn $39.0 million against the
        available loan amount in the form of six- to 91-day BAs at an
        effective average interest rate of 4.58% per annum. As this loan
        functions as a working capital facility, it has been included in
        current liabilities.

        Security for the bank loans includes a specific claim over the
        management fees owing from the mutual funds (subject to the existing
        claims of related limited partnerships) for which the Company acts as
        manager and, depending upon the amount of the loan outstanding, an
        assignment of AGF's investments in 20/20 Financial Corporation and
        AGF International Company Limited.

    (b) Payment re CISL Due January 31, 2006

        In 2003 the Company, through its wholly owned subsidiary Investmaster
        Group Limited, acquired all the outstanding shares of Consort
        Information Systems Limited ('CISL'). Cash consideration paid was
        $8.3 million with an additional payment of $1.1 million due, which
        was made on January 31, 2006.

    (c) Notes Payable Due April 30, 2013 and Participation Units

        During the three months ended, May 31, 2006, the Company reached an
        agreement with Multi-Fund Management Inc., the manager of Multi-Fund
        Income Trust ("Trust"), to terminate its obligations to the Trust for
        a cash payment of $3.4 million. The termination of the Company's cash
        flow obligation was subject to a Trust Unitholder meeting, which was
        held on June 8, 2006. The Trust Unitholders approved the agreement
        and on June 12, 2006, the Company repurchased the debt related to the
        Trust.

        Details of the gain on repayment of debt are as follows:

        ---------------------------------------------------------------------
                                                                      May 31,
                                                                        2006
        ---------------------------------------------------------------------
        Notes payable due April 30, 2013                          $   17,817
        Participation Units                                            6,157
        ---------------------------------------------------------------------
                                                                      23,974
        Amount due May 31, 2006                                        3,360
        ---------------------------------------------------------------------
        Gain on early repayment of debt                               20,614
        Income taxes                                                   7,305
        ---------------------------------------------------------------------
        Gain on early repayment of debt, net of income taxes      $   13,309
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    Note 10: Capital Stock

    (a) Authorized Capital

        The authorized capital of AGF consists of an unlimited number of
        Class B Non-Voting Shares ("Class B shares") and an unlimited number
        of Class A Voting Common Shares ("Class A shares"). The Class B
        shares are listed for trading on the Toronto Stock Exchange.

    (b) Change During the Period

        The change in capital stock during the six months ended May 31, 2006
        and 2005 is summarized as follows:

        ---------------------------------------------------------------------
                                                          Number
                                                       of shares      Amount
        ---------------------------------------------------------------------
        Class B shares

          Balance, November 30, 2005                  89,123,205  $  394,154

          Issued through dividend reinvestment plan       31,704         769
          Stock options exercised                        328,750       4,684
          Purchased for cancellation                    (700,000)     (3,108)
        ---------------------------------------------------------------------

          Balance, May 31, 2006                       88,783,659  $  396,499

        Class A shares

          Balance, November 30, 2005 and May 31, 2006     57,600           -
        ---------------------------------------------------------------------

        Total Capital Stock, May 31, 2006                         $  396,499
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
                                                          Number
                                                       of shares      Amount
        ---------------------------------------------------------------------

        Class B shares

          Balance, November 30, 2004                  90,739,463  $  394,125

          Issued through dividend reinvestment plan        7,098         119
          Stock options exercised                        132,583       1,368
          Purchased for cancellation                  (1,160,100)     (5,046)
        ---------------------------------------------------------------------

          Balance, May 31, 2005                       89,719,044  $  390,566

        Class A shares

          Balance, November 30, 2004 and May 31, 2005     57,600           -
        ---------------------------------------------------------------------

        Total Capital Stock, May 31, 2005                         $  390,566
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    (c) Class B Shares Purchased for Cancellation

        AGF has obtained applicable regulatory approval to purchase for
        cancellation, from time to time, certain of its Class B shares
        through the facilities of the Toronto Stock Exchange. Present
        approval for such purchases extends through to February 17, 2007.
        Under this issuer bid, the Company may purchase up to 10% of the
        public float outstanding on the date of the receipt of regulatory
        approval or up to 7,214,698 shares. During the six months ended
        May 31, 2006, 0.7 million (2005 - 1.2 million) Class B shares were
        purchased at a cost of $15.9 million (2005 - $19.4 million) and the
        excess paid of $12.8 million (2005 - $14.3 million) over the book
        value of the shares purchased for cancellation was charged to
        retained earnings.

    (d) Stock Option Plans

        Stock-based compensation
        Under the CICA Handbook Section 3870, 'Stock-Based Compensation and
        Other Stock-Based Payments' for stock options granted on or after
        December 31, 2002, the fair value of stock options is determined on
        the grant date and recorded as compensation expense over the period
        that the stock options vest. During the six months ended May 31,
        2006, the Company granted 90,000 options (2005 - 978,000) and
        recorded $2.3 million (2005 - $1.4 million) in compensation expense
        and contributed surplus in respect of the options granted since
        December 31, 2002.

        The change in outstanding stock options during the six months ended
        May 31, 2006 and 2005 is summarized as follows:

        ---------------------------------------------------------------------
                                                                    Weighted
                                                                     average
                                                        Number      exercise
                                                    of options         price
        ---------------------------------------------------------------------
        Class B Share Options
          Balance outstanding, November 30, 2005     4,781,875    $    18.72
            Options granted                             90,000    $    22.98
            Options cancelled                         (340,542)   $    20.87
            Options exercised                         (328,750)   $    14.31
        ---------------------------------------------------------------------

          Balance outstanding, May 31, 2006          4,202,583    $    18.99
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

          Balance outstanding, November 30, 2004     3,566,604    $    17.86
            Options granted                            978,000    $    17.09
            Options cancelled                          (28,750)   $    20.10
            Options exercised                         (132,583)   $    10.32
        ---------------------------------------------------------------------

          Balance outstanding, May 31, 2005          4,383,271    $    17.90
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The Company currently has authorized under the plan a total of
        11,661,498 Class B shares, of which 5,624,323 are available to be
        granted at May 31, 2006. Options granted under the plan are non-
        assignable and will expire seven years from their date of grant. The
        vesting period is generally four years, but may be adjusted by the
        Board of Directors.

    (e) Earnings Per Share

        The following table sets forth the calculation of both basic and
        diluted earnings per share as well as earnings per share and diluted
        earnings per share from continuing operations:

        ---------------------------------------------------------------------
                                  Three months ended        Six months ended
                                         May 31,                 May 31,
                             ------------------------------------------------
                                    2006        2005        2006        2005
        ---------------------------------------------------------------------
        Numerator
          Net Income from
           continuing
           operations for
           the period         $   21,721  $   19,691  $   45,807  $   39,907
          Gain on early
           retirement of debt,
           net of income taxes    13,309                  13,309
          Net earnings from
           discontinued
           operations, net of
           income taxes           (2,050)      2,668      (2,050)      3,629
        ---------------------------------------------------------------------
          Net Income for
           the period         $   32,980  $   22,359  $   57,066  $   43,536

        Denominator
          Weighted average
           number of shares
           - basic            89,006,364  90,533,323  89,097,176  90,688,014
          Dilutive effect
           of employee
           stock options         967,853     332,750     903,350     338,117
        ---------------------------------------------------------------------
          Weighted average
           number of shares
           - diluted          89,974,217  90,866,073  90,000,526  91,026,131

        Earnings per Share
          Basic from
           continuing
           operations         $     0.24  $     0.22  $     0.51  $     0.44
          Diluted from
           continuing
           operations         $     0.24  $     0.22  $     0.51  $     0.44
          Basic               $     0.37  $     0.25  $     0.64  $     0.48
          Diluted             $     0.37  $     0.25  $     0.63  $     0.48
        ---------------------------------------------------------------------

    Note 11: Supplemental Disclosure of Cash Flow Information

    Interest payments for the three months ended May 31, 2006 were
    $18.1 million (2005 - $8.6 million). Interest payments for the six months
    ended May 31, 2006 were $32.6 million (2005 - $15.6 million).

    Income tax payments for the three months ended May 31, 2006 were
    $8.6 million (2005 - $6.2 million). Income tax payments for the six
    months ended May 31, 2006 were $27.4 million (2005 - $13.9 million).

    Note 12: Segment Information

    AGF has three reportable segments: Investment Management Operations,
    Trust Company Operations and Other. The Investment Management Operations
    segment provides investment management and advisory services and is
    responsible for the management and distribution of the AGF investment
    products. AGF Trust Company offers a wide range of trust services
    including GICs, mortgages, investment loans and RSP loans. In prior
    periods the Company had reported a Fund Administration Operations
    segment, which consisted of Unisen Holdings Inc. ('Unisen') and
    Investmaster Group Limited ('Investmaster'). As a result of the sale of
    Unisen (see note 3) Unisen's operations have been reported as
    discontinued operations. The results of Investmaster and S&WHL have been
    included in Other as these entities do not meet the criteria for separate
    disclosure. AGF's reportable segments are strategic business units that
    offer different products and services.

    The results of the reportable segments are based upon the internal
    financial reporting systems of AGF. The accounting policies used in these
    segments are generally consistent with those described in the summary of
    significant accounting policies detailed in AGF's 2005 annual financial
    statements.

    -------------------------------------------------------------------------
    Three             Investment       Trust                Inter-
    months ended      Management     Company               Segment
    May 31, 2006      Operations  Operations   Other   Elimination     Total
    -------------------------------------------------------------------------

    External revenue  $  136,468 $   31,740 $    6,016 $        - $  174,224
    Intersegment
     revenue                 249        297          -       (546)         -
    -------------------------------------------------------------------------
    Segment revenue      136,717     32,037      6,016       (546)   174,224
    Operating
     expenses             79,877     26,800      3,226       (546)   109,357
    Amortization          32,739        288        809          -     33,836
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segment income
     before taxes     $   24,101 $    4,949 $    1,981 $        - $   31,031

    Included in
     External Revenue
      Interest
       revenue        $      207 $   30,960 $        - $        - $   31,167
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Three             Investment       Trust                Inter-
    months ended      Management     Company               Segment
    May 31, 2005      Operations  Operations   Other   Elimination     Total
    -------------------------------------------------------------------------

    External revenue  $  127,550 $   15,674 $    3,909 $        - $  147,133
    Intersegment
     revenue                (297)       297          -          -          -
    -------------------------------------------------------------------------
    Segment revenue      127,253     15,971      3,909          -    147,133
    Operating
     expenses             66,348     12,564      5,991          -     84,903
    Amortization          33,825        239        785          -     34,849
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segment income
     (loss) before
     taxes            $   27,080 $    3,168 $   (2,867)$        - $   27,381

    Included in
     External Revenue
      Interest
       revenue        $      211 $   11,107 $        - $        - $   11,318
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                      Investment       Trust                Inter-
    Six months ended  Management     Company               Segment
    May 31, 2006      Operations  Operations   Other   Elimination     Total
    -------------------------------------------------------------------------

    External revenue  $  264,024 $   68,241 $   11,134 $        - $  343,399
    Intersegment
     revenue                 445        594          -     (1,039)         -
    -------------------------------------------------------------------------
    Segment revenue      264,469     68,835     11,134     (1,039)   343,399
    Operating expenses   154,276     50,205      6,929     (1,039)   210,371
    Amortization          65,459        560      1,570          -     67,589
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segment income
     before taxes     $   44,734 $   18,070 $    2,635 $        - $   65,439

    Included in
     External Revenue
      Interest
       revenue        $      422 $   56,586 $        - $        - $   57,008
    Total assets      $1,043,120 $2,056,251 $  112,175 $        - $3,211,546
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                      Investment       Trust                Inter-
    Six months ended  Management     Company               Segment
    May 31, 2005      Operations  Operations   Other   Elimination     Total
    -------------------------------------------------------------------------

    External revenue  $  255,784 $   28,091 $    8,846 $        - $  292,721
    Intersegment
     revenue                (556)       556          -          -          -
    -------------------------------------------------------------------------
    Segment revenue      255,228     28,647      8,846          -    292,721
    Operating expenses   129,779     23,481     13,610          -    166,870
    Amortization          67,698        487      1,590          -     69,775
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segment income
     (loss) before
     taxes            $   57,751 $    4,679 $   (6,354)$        - $   56,076

    Included in
     External Revenue
      Interest
       revenue        $      711 $   23,151 $        - $        - $   23,862
    Total assets      $1,052,146 $1,126,452 $  122,849 $        - $2,301,447
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Note 13: Subsequent Event

    The 2006 federal budget announced on May 2, 2006 proposed to reduce the
    federal corporate income tax rate to 19% from 21% by 2010 and to
    eliminate the federal corporate surtax rate of 1.12% by 2008. On June 6,
    2006, these tax rate changes are considered to be substantively enacted.
    Consequently, the amount of reduction in future income tax liabilities
    and the increase in future income tax benefit of $16.2 million will be
    recognized in Q3 2006.
    >>


Management's Discussion and Analysis

of Financial Condition and Results of Operations

For the six months ended May 31, 2006

Management's Discussion and Analysis ('MD&A') presents an analysis of the financial condition of AGF Management Limited and its subsidiaries as at May 31, 2006 compared with November 30, 2005, and the results of operations for the three and six months ended May 31, 2006 compared with the corresponding periods of 2005. This discussion should be read in conjunction with our 2005 annual MD&A and 2005 annual audited Consolidated Financial Statements and Notes. The financial information presented herein has been prepared on the basis of Canadian generally accepted accounting principles ('GAAP'). Percentage changes are calculated using numbers rounded to the decimals that appear in this MD&A. All dollar amounts are in Canadian dollars unless otherwise indicated.

There have been no material changes to the information discussed in the following sections of the 2005 annual MD&A: 'Factors that May Affect Future Results', 'Disclosure Controls', 'Off Balance Sheet Arrangements', 'Intercompany and Related Party Transactions' and 'Government Regulations'. Please see the 'Critical Accounting Policies' section of this MD&A for details regarding changes since the annual 2005 MD&A. There has been a change to the 'Contractual Obligations' section due to the agreement with Multifund Mangement Inc. ('MultiFund'), which is described below. The 'Key Performance Indicators and Non-GAAP Measures section' contains a reconciliation of non-GAAP measures to GAAP measures.

Overview

AGF Management Limited ('AGF'), with approximately $38 billion in assets under management ('AUM'), is one of Canada's premier investment management companies, with operations in Canada, the United Kingdom, Ireland and Asia. Approaching 50 years in business, we commenced operations in 1957 with one of the first mutual funds available to Canadians wishing to invest internationally.

For purposes of this discussion, the operations of AGF Management Limited and our subsidiary companies are referred to as 'we', 'us', 'our' or the 'Company'. The financial results relating to the operations have been reported in three segments: Investment Management Operations, Trust Company Operations and Other. As a result of the sale of Unisen Holdings Inc. ('Unisen'), Unisen's operations have been reported as discontinued operations. The results of Investmaster Group Limited ('Investmaster') have been included in Other, as this entity does not meet the criteria for separate disclosure.

Strategy and Highlights

As stated in our 2005 annual MD&A, our overall business strategy is to help identify and facilitate opportunities for our business segments and ensure segment strategies are aligned with the overall corporate strategy of targeting sustainability, profitability and value for our shareholders over the long term.

    <<
    During the second quarter of 2006, we achieved the following:
    -   Addressed succession at the most senior level of management. We
        announced that on June 30, 2006, C. Warren Goldring, co-founder and
        chairman of the board, will step down and assume the role of honorary
        chairman, and Blake Goldring, president and chief executive officer
        of AGF Management Limited, will become chairman and CEO. We also
        appointed Randy Ambrosie to the role of president, AGF Funds Inc.
    -   Agreed to repurchase debt owed to Multi-Fund Income Trust ("Multi-
        Fund"), which is a financing vehicle that we used to fund selling
        commissions paid. The $3.4 million payment to Multi-Fund resulted in
        a $13.3 million gain net of tax and the removal from our balance
        sheet of $24.0 million in debt.
    -   Delivered value directly to our shareholders through dividend
        payments and our share buy back program.
        -  Dividends paid on Class A Voting Common and Class B Non-Voting
           Shares increased 18.4% to $16.1 million in Q2 2006, compared with
           $13.6 million in 2005.
        -  During the quarter, we repurchased 500,000 Class B Non-Voting
           Shares, compared with repurchases of 75,000 shares in the three
           months ended May 31, 2005.
    -   Including dividends and share repurchases, we returned 113.1% of our
        free cash flow to shareholders during the three months ended May 31,
        2006 versus 78.2% in the comparable period last year. We define free
        cash flow as cash flow from operations before net change in non-cash
        balances related to operations less deferred selling commissions
        paid.
    -   We continued to support the growth of AGF Trust and invested
        $16.0 million during the three months ended May 31, 2006, bringing
        our total investment in debt and equity capital to $106.4 million.
        This compares to the investment of $17.5 million for the three months
        ended May 31, 2005. AGF Trust mortgage loans have grown 84.1% over
        the prior year and consumer loans have grown 49.4%.
    >>


We remain focused on our strategy and are pleased with the results to date.

Key Performance Indicators and Non-GAAP Measures

We measure the success of our strategies using a number of key performance indicators that are defined and described in our 2005 annual MD&A. The following key performance indicators are not measurements in accordance with Canadian GAAP and should not be considered as an alternative to net income or any other measure of performance under Canadian GAAP. Segment discussions include a review of key performance indicators that are relevant to each segment. Key performance indicators include:

    <<
    -   assets under management
    -   investment performance (market appreciation of fund portfolios)
    -   net sales
    -   EBITDA
    -   EBITDA margin
    -   cash flow from operations
    -   free cash flow
    -   return on equity (ROE) and return on investment (ROI)
    -   loan asset growth
    -   net interest income
    -   efficiency ratio
    >>


The non-GAAP measures that we use throughout this discussion and related calculations are defined as follows. These non-GAAP measures are discussed as part of the business segment discussions included herein:

EBITDA

We define EBITDA as income before interest expense, income taxes, depreciation and amortization. EBITDA is a standard measure used in the mutual fund industry by management, investors and investment analysts in understanding and comparing results. We believe this is an important measure as it allows us to assess our ongoing businesses without the impact of amortization and is an indicator of our ability to incur or service debt, invest in our business, finance sales commissions, pay dividends and execute share repurchase programs. EBITDA for the Trust Company Operations segment includes interest expense related to deposits. These deposits fund our consumer loan and mortgage programs and therefore are considered an operating cost directly related to generating interest revenue. We include this interest expense in Trust Company Operations EBITDA to provide a meaningful comparison to our other business segments and our competitors.

Please see the 'Consolidated Operating Results' section of this MD&A for a schedule showing how EBITDA reconciles to our GAAP financial statements.

EBITDA Margin

EBITDA margin provides useful information to management and investors as an indicator of our operating performance. We believe EBITDA margin is a valuable measure as it assesses the extent to which we are able to earn profit from each dollar of revenue. We define EBITDA margin as the ratio of EBITDA to revenue.

    <<
    Consolidated

    -------------------------------------------------------------------------
                                    Three months ended      Six months ended
                                          May 31,                May 31,
                                 --------------------------------------------
    ($ millions)                       2006       2005       2006       2005
    -------------------------------------------------------------------------
    EBITDA (continuing
     operations)                  $    65.6  $    63.6  $   134.3  $   128.7
    Divided by revenue                174.2      147.1      343.4      292.7
    -------------------------------------------------------------------------
    EBITDA margin                     37.7%      43.2%      39.1%      44.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Investment Management Operations

    -------------------------------------------------------------------------
                                    Three months ended      Six months ended
                                          May 31,                May 31,
                                 --------------------------------------------
    ($ millions)                       2006       2005       2006       2005
    -------------------------------------------------------------------------
    EBITDA                        $    56.8  $    60.9  $   110.2  $   125.4
    Divided by revenue                136.7      127.2      264.5      255.2
    -------------------------------------------------------------------------
    EBITDA margin                     41.6%      47.9%      41.7%      49.1%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash Flow from Operations

    We report cash flow from operations before net changes in non-cash
balances related to operations. Cash flow from operations helps to assess the
ability of the business to generate cash, which is used to pay dividends,
repurchase shares, pay down debt and fund other needs.

    -------------------------------------------------------------------------
                                    Three months ended      Six months ended
                                          May 31,                May 31,
                                 --------------------------------------------
    ($ millions)                       2006       2005       2006       2005
    -------------------------------------------------------------------------
    Net cash provided by continuing
     operating activities         $    66.8  $    77.0  $    83.4  $   108.1
    Less: net changes in non-cash
     balances related to operations   (12.5)     (19.3)      21.0        6.5
    -------------------------------------------------------------------------
    Cash flow from continuing
     operations                   $    54.3  $    57.7  $   104.4  $   114.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Free Cash Flow

    We define free cash flow as cash flow from operations before net changes
in non-cash balances related to operations less selling commissions paid. This
is a relevant measure in the investment management business, as a substantial
amount of cash is spent in upfront commission payments. Free cash flow
represents cash available for distribution to our shareholders or for general
corporate purposes.

    -------------------------------------------------------------------------
                                    Three months ended      Six months ended
                                          May 31,                May 31,
                                 --------------------------------------------
    ($ millions)                       2006       2005       2006       2005
    -------------------------------------------------------------------------
    Cash flow from continuing
     operations (defined above)   $    54.3  $    57.7  $   104.4  $   114.6
    Less: selling commissions paid    (29.9)     (17.3)     (52.2)     (32.2)
    -------------------------------------------------------------------------
    Free cash flow                $    24.4  $    40.4  $    52.2  $    82.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net Interest Income

    Net interest income is a common lending industry performance indicator. We
monitor this figure to evaluate the growth of the financial contribution of
AGF Trust. The figure is calculated by subtracting interest expense from
interest income earned from AGF Trust loan assets.

    -------------------------------------------------------------------------
                                     Three months ended     Six months ended
                                          May 31,                May 31,
                                 --------------------------------------------
    ($ millions)                       2006       2005       2006       2005
    -------------------------------------------------------------------------
    Interest income               $    30.1  $    15.1  $    56.3  $    27.2
    Less: interest expense            (17.8)      (7.1)     (32.3)     (12.8)
    -------------------------------------------------------------------------
    Net interest income           $    12.3  $     8.0  $    24.0  $    14.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Efficiency Ratio

    The efficiency ratio is a key lending industry performance indicator. We
utilize this ratio to ensure expenses are contained as AGF Trust grows. The
ratio is calculated from AGF Trust results by dividing non-interest expenses
by the total of net interest income and non-interest income.

    -------------------------------------------------------------------------
                                    Three months ended      Six months ended
                                          May 31,                May 31,
                                 --------------------------------------------
    ($ millions)                       2006       2005       2006       2005
    -------------------------------------------------------------------------
    Non-interest expense          $     7.5  $     4.4  $    14.2  $     8.5
    -------------------------------------------------------------------------
    Net interest income           $    12.3  $     8.0  $    24.0  $    14.4
    Add: non-interest income            1.9        0.9       12.5        1.5
    -------------------------------------------------------------------------
    Divided by: total of net
     interest and non-interest
     income                            14.2        8.9       36.5       15.9
    -------------------------------------------------------------------------
    Efficiency ratio                  52.8%      49.4%      38.9%      53.5%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    >>


Critical Accounting Policies

In the six months ended May 31, 2006, two additional significant accounting policies were adopted by the Company and are supplemental to the 'Critical Accounting Policies' section of the 2005 annual MD&A. These policies are as follows:

1) Accounting for Securitizations

Under AcG-12, in order for a securitization to be treated as a sale, the Company must surrender control over those loans included in the securitization. To surrender control, the securitized assets must be isolated from the Company and its creditors, even in the case of bankruptcy or receivership, and the Company must receive consideration other than the beneficial interest in the transferred assets.

In determining the gain or loss on sale, management estimates future cash flows by relying on estimates of the amount of interest that will be collected on the securitized assets, the yield paid to investors, the portion of the securitized assets that will be prepaid before their scheduled maturity, expected credit losses, the cost of servicing the assets and the rate at which to discount these expected future cash flows. Actual cash flows may differ significantly from those estimated by management. If actual cash flows are different from management's estimate of future cash flows then the gains or losses on the securitization recognized in income will be adjusted. Note 2 to the financial statements provides additional disclosure regarding the securitizations and related balance sheet and income statement impacts.

2) AGF Elements

In November 2005, the Company launched AGF Elements, which consists of five diversified fund of fund portfolios. If an AGF Elements portfolio does not match or outperform its customized benchmark over a three-year period, each individual investor will receive up to 90 basis points in additional units, calculated based on the value of such investment at the end of the three-year period.

The Company will include in other liabilities up to 30 basis points per year of each investors assets under management, adjusted for redemptions (forfeitures), until the end of the three-year measurement period of each investment made by such investor. At that time if an individual investor's returns match or exceed the corresponding benchmark, the Company will recognize the entire amount as management fee revenue. If an individual investor's actual returns are below the customized benchmark, a corresponding amount will be distributed to the investor in the form of individual units.

    <<
    Consolidated Operating Results

    Our consolidated operating results for the three and six months ended
    May 31, 2006 and May 31, 2005 are as follows:

    -------------------------------------------------------------------------
                             Three Months Ended          Six Months Ended
                                   May 31,                     May 31,
                       ------------------------------------------------------
    ($ millions, except                      %                          %
     per share amounts)    2006     2005   change     2006     2005   change
    -------------------------------------------------------------------------
    Revenue
      Investment
       management
       operations       $ 136.7  $ 127.3     7.4%  $ 264.5  $ 255.2     3.6%
      Trust company
       operations          32.0     16.0   100.0%     68.8     28.7   139.7%
      Other                 6.0      3.8    57.9%     11.1      8.8    26.1%
      Intersegment
       eliminations        (0.5)     0.0      n/m     (1.0)     0.0      n/m
    -------------------------------------------------------------------------
                          174.2    147.1    18.4%    343.4    292.7    17.3%

    Expenses
      Investment
       management
       operations          79.9     66.3    20.5%    154.3    129.8    18.9%
      Trust company
       operations(1)       26.8     12.6   112.7%     50.2     23.5   113.6%
      Other                 2.4      4.6   (47.8%)     5.6     10.7   (47.7%)
      Intersegment
       eliminations        (0.5)     0.0      n/m     (1.0)     0.0      n/m
    -------------------------------------------------------------------------
                          108.6     83.5    30.1%    209.1    164.0    27.5%

    EBITDA(2)
     (continuing
     operations)           65.6     63.6     3.1%    134.3    128.7     4.4%
      Amortization         33.8     34.8    (2.9%)    67.6     69.8    (3.2%)
      Interest Expense      0.8      1.4   (42.9%)     1.3      2.8   (53.6%)
      Income Taxes          9.3      7.7    20.8%     19.6     16.2    21.0%
    -------------------------------------------------------------------------
    Net income from
     continuing
     operations         $  21.7  $  19.7    10.2%  $  45.8  $  39.9    14.8%
    Gain on repayment
     of debt, net of tax   13.3      0.0      n/m     13.3      0.0      n/m
    Loss on sale of
     discontinued
     operations,
     net of tax            (2.0)     0.0      n/m     (2.0)     0.0      n/m
    Net earnings of
     discontinued
     operations, net
     of tax                 0.0      2.7      n/m      0.0      3.6      n/m
    -------------------------------------------------------------------------
    Net income          $  33.0  $  22.4    47.3%  $  57.1  $  43.5    31.3%
    -------------------------------------------------------------------------

    Earnings per share
     from continuing
     operations -
     diluted            $  0.24  $  0.22     9.1%  $  0.51  $  0.44    15.9%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Includes interest expense related to deposits, the funds of which are
        used in our consumer loan and mortgage programs. See the 'Key
        Performance Indicators and Non-GAAP Measures - EBITDA' section.
    (2) As previously defined, see the 'Key Performance Indicators and Non-
        GAAP Measures - EBITDA' section. The items required to reconcile
        EBITDA to net income, a defined term under Canadian GAAP, are
        detailed above.
    >>


Revenue for the three and six months ended May 31, 2006 increased by 18.4% and 17.3%, respectively, as compared with the corresponding period in 2005. For the three months ended May 31, 2006, the increase is attributable to an increase of 7.4% in Investment Management Operations and revenue growth of 100% in Trust Company Operations. For the six months ended May 31, 2006, revenue from Investment Management was up from the prior year by 3.6% while revenue from Trust Company Operations was up by 139.7%. Other, which includes revenue of Investmaster and our 30.9% equity interest in Smith & Williamson Holdings Limited ('S&WHL'), was higher for the three and six months ended May 31, 2006 as compared with the corresponding periods in 2005, due to strong performance at S&WHL.

Expenses for the three and six months ended May 31, 2006 increased by 30.1% and 27.5%, respectively, as compared with the corresponding periods in 2005. Investment Management Operations expenses increased by 20.5% and 18.9%, respectively, for the three and six months ended May 31, 2006 as compared with the corresponding periods in 2005. Expenses are higher due to sales and marketing efforts, fund absorption related to the capping of management expense ratios in all of our funds, and increased expenses in the private investment management business. Trust Company Operations expenses increased by 112.7% and 113.6%, respectively, for the three and six months ended May 31, 2006 as compared with the corresponding periods in 2005. These increases were consistent with increases in funding of mortgage and consumer loans. The declining expenses in the Other segment relates solely to Investmaster's operations, which have been significantly restructured to reduce costs.

The revenue and expense impact contributed to the increase in EBITDA of 3.1% and 4.4% for the three and six months ended May 31, 2006, respectively, from the corresponding periods of 2005. The overall EBITDA growth is a result of strong performance in our Trust and UK operations, offset by declining EBITDA for the Investment Management Operations segment. The three months ended May 31, 2006 marked a quarter of net positive mutual fund sales and continued growth in the Institutional and Private Investment Management AUM. To this end, we continue to invest in and support initiatives that will facilitate future growth in the Investment Management Operations segment. These results reflect the strength of our group of operating companies, which have contributed to our success for both the three and six months ended May 31, 2006.

Amortization expenses decreased by 2.9% and 3.2% in the three and six months ended May 31, 2006, respectively, compared with the corresponding periods in 2005. For the three and six months ended May 31, 2006, amortization of deferred selling commissions in the Investment Management Operations segment accounted for $27.2 million and $54.4 million(2005 - $28.5 million and $57.0 million), respectively, of the total amortization expense and was the primary driver of the period-over-period decreases.

Interest expense decreased by 42.9% and 53.6%, respectively, for the three and six months ended May 31, 2006 as compared with the corresponding periods in 2005. Interest expense is dependent upon the average outstanding loan balances and interest rates.

Income tax expense for the three months ended May 31, 2006 was $9.3 million as compared with $7.7 million in the second fiscal quarter of 2005. For the six months ended May 31, 2006, income tax expense was $19.6 million as compared with $16.2 million in the corresponding period in 2005. The effective tax rate for the first six months of 2006 was 30.0% as compared with 28.9% in the corresponding period of the prior year. Our tax rate and corresponding tax expense were higher in 2006 than in 2005 because we acquired and utilized tax benefits during 2005.

The impact of the above revenue and expense items resulted in net income from continuing operations of $21.7 million in the quarter ended May 31, 2006 as compared with $19.7 million in the comparable period of 2005. For the six months ended May 31, 2006, net income from continuing operations was $45.8 million compared with $39.9 million in the prior-year period. Basic and fully diluted earnings per share from continuing operations were $0.24 in the second quarter of 2006 as compared with $0.22 per share in the second quarter of 2005.

Net income was $33.0 million in the quarter ended May 31, 2006 as compared with $22.4 million in the comparable period of 2005. For the six months ended May 31, 2006, net income was $57.1 million compared with $43.5 million in the prior-year period. The three- and six-month periods ended May 31, 2006 included a $13.3 million gain on repayment of debt and a $2.0 million loss related to subsequent adjustments to the final purchase price on the sale of a Unisen. During the second quarter of 2006, we reached an agreement with Multi-Fund to terminate our obligations for a cash payment of $3.3 million. The gain resulted because the liability recorded on our balance sheet was higher than the cash buy out price. As a result of the Multi-Fund transaction, the Company will no longer be required to make ongoing payments, which totalled $345,000 for the three months ended May 31, 2006. The estimated loss relates to the sale of Unisen and is derived from a clause in the agreement of purchase and sale, which granted the purchaser certain revenue guarantees up to, and including, June 30, 2006.

A further discussion of the results of each business segment for the three and six months ended May 31, 2006 as compared with May 31, 2005 follows.

Business Segment Performance

We report on three business segments. Investment Management Operations and Trust Company Operations are discussed below. The Other segment includes the results of S&WHL, which is accounted for by the equity method, and the results of our wholly owned subsidiary Investmaster. These entities do not meet the criteria for separate segment disclosure. The Other segment also includes interest expense on our long-term debt. AGF's reportable segments are strategic business units that offer different products and services.

Investment Management Operations

Business and Industry Profile

Our Investment Management Operations segment provides products and services across the wealth continuum, including fund of funds products, mutual funds, wrap products and private investment management. Our products are delivered through multiple channels, including advisors, financial planners, banks, life insurance companies, brokers and consultants.

Investment management remains a highly competitive business with numerous domestic and foreign players serving the market. We believe that although the mutual fund business is reaching the early stages of maturity, there are opportunities for growth.

    <<
    Segment Strategy & Highlights

    The strategic priorities for our investment management operations, which
are detailed in the 2005 annual MD&A, include enhancing our client-centric
model by focusing on investment excellence and service excellence, as well as
promoting AGF's international investment management competency.
    Consistent with our stated strategy during the second quarter of fiscal
2006, we achieved the following:
    -   Sustained the trend of improving sales figures and reported positive
        net sales of long-term funds for the three months ended May 31, 2006.
    -   Continued the successful promotion of AGF Elements, a proprietary
        fund of funds product that brings state-of-the-art portfolio
        construction and monitoring, along with an unprecedented commitment
        to quality of money management. AGF Elements was launched on
        November 28, 2005 and as of May 31, 2006 had reached AUM of
        $554.7 million.
    -   Continued the sales momentum of the AGF Dividend Income Fund. This
        Fund was formerly the ING Canadian Dividend Income Fund and was
        acquired on August 5, 2005. At the time, the Fund had AUM of
        $154.0 million. At the beginning of the second quarter of 2006, the
        Fund had grown to $469.9 million and by the end of the quarter the
        Fund had $595.8 million.
    -   Harmony, AGF's wrap program, reached $1.7 billion in assets under
        management. Launched in 1997, Harmony has become one of the
        industry's fastest growing high-end wrap services.

    Assets Under Management

    The primary sources of revenue for AGF's Investment Management Operations
segment are management and advisory fees. The amount of management and
advisory fees is dependent on the level and composition of AUM. Under the
management and investment advisory contracts between AGF and each of the
mutual funds, we are entitled to monthly fees based on a specified percentage
of the average daily net asset value of the respective fund. In addition, we
earn fees on our institutional and private investment management AUM. As a
result, the level of AUM has a significant influence on financial results. The
following table illustrates the composition of the changes in total AUM during
the three and six months ended May 31, 2006 and May 31, 2005:

    -------------------------------------------------------------------------
                             Three Months Ended          Six Months Ended
                                    May 31,                    May 31,
                       ------------------------------------------------------
                                             %                          %
    ($ millions)           2006     2005   change     2006     2005   change
    -------------------------------------------------------------------------
    Mutual fund AUM,
     beginning of
     period             $23,505  $22,657     3.7%  $22,209  $22,747    (2.4%)
    Gross sales of
     mutual funds         1,196      676    76.9%    2,342    1,367    71.3%
    Redemptions of
     mutual funds        (1,142)  (1,279)  (10.7%)  (2,387)  (3,597)  (33.6%)
    -------------------------------------------------------------------------
      Net mutual fund
       sales
       (redemptions)         54     (603) (109.0%)     (45)  (2,230)  (98.0%)

    Market appreciation
     of fund portfolios     122     (404) (130.2%)   1,517    1,133    33.9%
    -------------------------------------------------------------------------

    Mutual fund AUM,
     end of period      $23,681  $21,650     9.4%  $23,681  $21,650     9.4%

    Institutional AUM     8,029    5,067    58.5%    8,029    5,067    58.5%
    PIM AUM               6,001    5,287    13.5%    6,001    5,287    13.5%
    -------------------------------------------------------------------------

    Total AUM,
     end of period      $37,711  $32,004    17.8%  $37,711  $32,004    17.8%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Average daily
     mutual fund AUM
     for the period     $24,358  $21,929    11.1%  $23,783  $22,311     6.6%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    >>


Investment performance, as well as net sales of $54 million, resulted in an increase in mutual fund AUM to $23.7 billion at May 31, 2006 from $23.5 billion at February 28, 2006. The average daily mutual fund AUM for the first three and six months increased by 11.1% and 6.6%, respectively, to $24.4 billion and $23.8 billion. Since May 31, 2005, institutional and private investment management AUM increased by 58.5% and 13.5%, respectively. These increases resulted in total AUM increasing by 17.8% to $37.7 billion.

Stock market performance influences the level of AUM. During the three and six months ended May 31, 2006, the Canadian-dollar-adjusted S&P 500 Index declined 3.4% and 3.1%, the Canadian-dollar-adjusted NASDAQ Index declined 7.4% and 7.8%, and the S&P/TSX Composite Index rose 1.1% and 9.7%. The aggregate market appreciation of our mutual fund portfolios for the three and six months ended May 31, 2006 divided by the average daily mutual fund AUM for the period was 0.1% and 6.4%, after management fees and expenses paid by the funds.

The impact of the U.S. dollar decrease relative to the Canadian dollar on the market value of AGF mutual funds since November 30, 2005 has been a decrease in AUM of $0.3 billion. Since February 28, 2006, the impact of the U.S. dollar decrease has been a decrease in AUM of $0.2 billion.

For the five-year period ended May 31, 2006, 58.9% of ranked mutual fund AUM performed above median. Over the 10-year period ended May 31, 2006, 65.2% of ranked AUM performed above median.

Financial and Operational Results

The Investment Management Operations segment results for the three and six months ended May 31, 2006 and May 31, 2005 are as follows:

    <<
    -------------------------------------------------------------------------
                             Three Months Ended          Six Months Ended
                                    May 31,                    May 31,
                       ------------------------------------------------------
                                             %                          %
    ($ millions)           2006     2005   change     2006     2005   change
    -------------------------------------------------------------------------
    Revenue
      Net management
       and advisory
       fees             $ 109.2  $ 101.7     7.4%  $ 211.3  $ 205.3     2.9%
      Administration
       fees and other
       revenue             19.6     15.6    25.6%     36.7     29.1    26.1%
      Deferred sales
       charges              7.1      9.8   (27.6%)    14.4     20.4   (29.4%)
      Investment income     0.8      0.1   700.0%      2.1      0.4   425.0%
    -------------------------------------------------------------------------
                          136.7    127.2     7.5%    264.5    255.2     3.6%
    Expenses
      Selling, general
       and administrative  41.4     31.3    32.3%     80.0     61.4    30.3%
      Trailing
       commissions         31.4     28.4    10.6%     60.3     54.7    10.2%
      Investment
       advisory fees        7.1      6.6     7.6%     14.0     13.7     2.2%
    -------------------------------------------------------------------------
                           79.9     66.3    20.5%    154.3    129.8    18.9%
    -------------------------------------------------------------------------

    EBITDA(1)              56.8     60.9    (6.7%)   110.2    125.4   (12.1%)
    Amortization           32.7     33.8    (3.3%)    65.5     67.7    (3.2%)
    -------------------------------------------------------------------------
    Income before taxes
     and non-segmented
     items              $  24.1  $  27.1   (11.1%) $  44.7  $  57.7   (22.5%)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) As previously defined, see the 'Key Performance Indicators and Non-
        GAAP Measures - EBITDA' section.
    >>


Revenue

For the three- and six-month periods ended May 31, 2006, revenue for the

Investment Management Operations segment increased by 7.5% and 3.6%, respectively, from the previous-year periods, with changes in the categories being:

Net Management and Advisory Fees

The 11.1% higher average daily mutual fund AUM in the second quarter of fiscal 2006 contributed to a 7.4% increase in net management and advisory fee revenue from the corresponding period in 2005. For the six months ended May 31, 2006, average daily mutual fund AUM was up by 6.6%, contributing to a 2.9% increase in net management and advisory fee revenue as compared with the corresponding period in 2005. Management and advisory fee revenue is reported net of distribution fees paid to limited partnerships and other third-party financing entities of $2.8 million (2005 - $3.4 million) for the three months ended May 31, 2006 and $5.7 million (2005 - $6.9 million) for the six months ended May 31, 2006. Average mutual fund AUM includes Harmony, our fast-growing tailored investment product. However, Harmony revenues are recorded in the administration fees and other revenue line, which is discussed below.

Harmony made up 6.3% of the average daily AUM in the three months ended May 31, 2006 and 6.8% of the average daily AUM in the six months ended May 31, 2006. Excluding the Harmony AUM, the period-over-period percentage change in net management and advisory fees is comparable to the remaining average daily mutual fund AUM.

Administration Fees and Other Revenue

Strong growth in AUM resulted in administration fees and other revenue, which includes fees earned on Harmony, institutional and private investment management AUM, increasing by 25.6% for the three months ended May 31, 2006 as compared with the corresponding period in 2005. Administration fees and other revenue increased by 26.1% for the six months ended May 31, 2006 as compared with the corresponding period in 2005.

Deferred Sales Charges

We receive Deferred Sales Charges upon redemption of securities sold on the contingent DSC or 'back-end' commission basis for which we financed the selling commissions paid to the dealer. The DSC revenue is generally 5.5% of the original subscription price of the funds purchased if the funds are redeemed within the first two years and declines to zero after seven years. DSC revenue fluctuates based on the level of redemptions, the age of the assets being redeemed and the proportion of redemptions composed of 'back-end' assets. DSC revenues for the three and six months ended May 31, 2006 decreased by 27.6% and 29.4%, respectively, from the corresponding periods in 2005, reflecting lower retail mutual fund redemptions of DSC AUM that are less than seven years in age.

Expenses

Total expenses increased by $5.5 million in the three-month period ended May 31, 2006 as compared to the three-month period ended February 28, 2006. The following items explain the increase:

    <<
    -   Higher average AUM resulted in higher trailer fees of $2.5 million
        and higher investment advisory fees of $0.2 million.
    -   Selling, general and administrative expenses increased by
        $2.8 million. The increase was made up of:
        -  $1.2 million in sales and marketing expenses incurred with the aim
           of retaining positive net sales momentum.
        -  $1.2 million of increased fund absorption related to the cap on
           management expense ratios on all of our funds to the lower of the
           amount incurred in 2004 and 2005. We have also soft capped
           certain funds at the management expense ratio levels below the
           2004 and 2005 levels.
        -  The remaining increase is a result of increases in expenses in our
           private investment management operation.
    >>


For the three- and six-month periods ended May 31, 2006, expenses increased by 20.5% and 18.9%, respectively, from the previous-year periods. Changes in specific categories are described in the discussion that follows.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ('SG&A') for the three- and six-month periods ending May 31, 2006 were $41.4 million and $80.0 million, respectively, representing a 32.3% and 30.3% increase over the comparable periods of 2005. The increase is made up of the following amounts:

    <<
    -------------------------------------------------------------------------
                                         Three months ended  Six months ended
                                                May 31,           May 31,
                                        -------------------------------------
    ($ millions)                                 2006              2006
    -------------------------------------------------------------------------
    Increase in fund absorption accrual       $     2.0         $     3.2
    Increase in stock option expense                0.3               0.9
    Increase in salaries, wages and bonuses         3.3               6.4
    IT costs related to transition of
     services from Citifinancial                    0.5               1.0
    Additional facilities and other staff
     related cost                                   1.4               2.4
    System enhancements for sales & marketing
     initiatives                                    1.5               3.3
    Increase in PIM salaries and bonuses            0.9               1.3
    -------------------------------------------------------------------------
    >>


The increase in fund absorption accrual is a result of the management expense ratio cap discussed above. For the remainder of 2006, the amount of absorption incurred will depend on the level of mutual fund AUM and expenses incurred by each of the funds at their September 30, 2006 year-end. Additional facilities and other staff-related costs related to increased staffing levels and the repatriation of our Information Technology Services Group from Unisen. Systems enhancements with respect to sales and marketing initiatives have been designed to make AGF easier to do business with and more responsive to our clients' needs.

Trailing Commissions

Trailing commissions paid to investment dealers are dependent on total AUM, the proportion of mutual fund AUM sold on a front-end versus back-end commission basis, and the proportion of equity fund AUM versus fixed-income fund AUM. Annualized trailing commissions as a percentage of average daily mutual fund AUM decreased to 0.516% for the three months ended May 31, 2006 from 0.518% in the comparable 2005 period. For the six months ended May 31, 2006, annualized trailing commissions as a percentage of average daily mutual fund AUM increased to 0.507% from 0.490% in the 2005 period. The changes are due to an increased proportion of mutual fund AUM sold on a front-end basis and a change in the mix of assets toward managed products, such as Harmony, which generally have higher trailers.

Investment Advisory Fees

External investment advisory fees increased by 7.6% and 2.2%, respectively, for the three- and six-month periods ended May 31, 2006 compared with the prior-year periods. This is primarily due to investment performance increasing the mutual fund AUM managed by sub advisors compared with the prior year.

EBITDA

EBITDA for the Investment Management Operations segment were $56.8 million for the three months ended May 31, 2006, a decrease of 6.7% from $60.9 million for the same period of fiscal 2005. For the six months ended May 31, 2006, EBITDA was $110.2 million compared with $125.4 million in the prior-year period, representing a decrease of 12.1%.

EBITDA Margin

For the three and six months ended May 31, 2006, the EBITDA margin for the Investment Management Operations segment was 41.6% and 41.7%, respectively, compared with 47.9% and 49.1% for the same periods in 2005. The EBITDA margin in the Investment Management segment declined because expenses increased at a greater rate than revenue. In addition, lower redemptions resulted in DSC revenue declining compared to prior periods.

Amortization

The largest item in this category is amortization of deferred selling commissions. Amortization also includes amortization of property, equipment and other intangible assets and amortization of customer contracts, relationships and investment advisory contracts.

We internally finance all selling commissions paid. These selling commissions are capitalized and are amortized on a straight-line basis over a period that corresponds with their applicable DSC schedule. Amortization expense related to deferred selling commissions were $27.2 million and $54.4 million, respectively, in the three and six months ended May 31, 2006, compared to $28.5 million and $57.0 million in the comparable periods in 2005.

During the second quarter of fiscal 2006, we paid $29.9 million in selling commissions, compared with $17.3 million in 2005. As at May 31, 2006, the unamortized balance of deferred selling commissions stood at $272.8 million, a decrease of $2.2 million from the November 30, 2005 balance of $275.0 million. The contingent deferred sales charges that would be received if all of the DSC securities were redeemed at May 31, 2006 were estimated to be approximately $359.6 million (2005 - $402.2 million).

Trust Company Operations

Business and Industry Profile

Through AGF Trust we offer financial solutions including mortgages and consumer loans. We offer mortgages to Canadians who have sound credit but in some cases have not met the requirements of Canada's large banks to qualify for their lowest rate mortgage products. This alternative mortgage space is underdeveloped and fragmented, which makes it a very attractive market. In addition to the strong secular demand created by an underserved market, demand has recently been underpinned by low interest rates and healthy housing prices. Mortgage products are distributed primarily through mortgage brokers. The mortgage broker channel also has experienced strong growth. Borrowers have chosen to deal with mortgage brokers to take advantage of independent advice and competitive rates, while lenders have provided mortgages in this channel to reduce distribution costs.

AGF Trust consumer loans consist of investment loans and RSP loans distributed through financial advisors. The market for these products is also healthy and growing due to the efforts of financial advisors who continue to broaden their suite of products as they service the needs of their customers.

Segment Strategy & Highlights

We strive to earn a high financial return as well as maximize synergies with the Investment Management Operations segment. Specific strategies include:

    <<
    -   expanding geographically within Canada (currently, the majority of
        our mortgage business is in Ontario)
    -   introducing new products that directly serve advisor needs
    -   effective, targeted marketing
    -   disciplined loan-underwriting standards and cost control
    >>


In the second quarter of 2006, we continued to expand our dedicated sales staff to promote investment lending and mortgage products. A Home Equity Line of Credit (HELOC) program is now being piloted, and lending specialists have been hired to support the growth of the HELOC program. HELOC loans are secured by a mortgage registered against the borrower's home. AGF Trust also continued to support AGF investment management wholesalers with the aim to make it easier for AGF wholesalers to serve their clients and promote trust products to advisors. A targeted investment loan offering was introduced during May 2006 and has been successful at driving business volumes for both AGF Trust and Investment Management Operations.

AGF Trust will continue to maximize operational synergies with our investment management business through trust products that assist financial advisors in broadening and deepening their relationship with their clients. In addition, we will focus on expanding returns by increasing our consumer and mortgage loan portfolios.

We anticipate that execution of AGF Trust's stated strategy will result in continued growth. Our growth plans require investing in product development initiatives and expanding our sales and administrative teams. As a result, non-interest expenses may rise more than the corresponding increase in total interest margin over the remaining quarters of the 2006 fiscal year.

Securitization Transaction

On February 28, 2006, AGF Trust Company securitized $218.4 million of RSP loans through the sale of these loans to a securitization trust. As at May 31, 2006, the balance outstanding of securitized loans was equal to $191.5 million.

When RSP loan receivables are securitized, the transaction is recognized as a sale. Based on assumptions such as prepayments and expected credit losses, a gain or loss on sale of the loan receivables is recognized immediately in income. The related loan assets are removed from the consolidated balance sheet. As part of the securitization, certain financial assets are retained and a servicing liability is incurred. Each quarter, an amount will be included in the financial results of AGF Trust Company, which relates to the amortization of retained interest and servicing liability as well as any change in assumptions.

Financial and Operational Results

Trust Company Operations segment results for the three and six months ended May 31, 2006 and May 31, 2005 are as follows:

    <<
    -------------------------------------------------------------------------
                             Three Months Ended          Six Months Ended
                                    May 31,                    May 31,
                       ------------------------------------------------------
                                             %                          %
    ($ millions)           2006     2005   change     2006     2005   change
    -------------------------------------------------------------------------
    Interest,
     administration fees
     and other revenue  $  31.2  $  16.0    95.0%  $  58.2  $  28.7   102.8%
    Securitization gains
     and related items      0.8      0.0      n/m     10.6      0.0      n/m
    -------------------------------------------------------------------------
                           32.0     16.0   100.0%     68.8     28.7   139.7%

    Expenses
      Selling, general
       and administrative   7.2      4.2    71.4%     13.6      8.0    70.0%
      Interest expense     17.8      7.1   150.7%     32.3     12.8   152.3%
      Provision for loan
       losses               1.8      1.3    38.5%      4.3      2.7    59.3%
    -------------------------------------------------------------------------
                           26.8     12.6   112.7%     50.2     23.5   113.6%

    EBITDA(1)               5.2      3.4    52.9%     18.6      5.2   257.7%
    Amortization            0.3      0.2    50.0%      0.6      0.5    20.0%
    -------------------------------------------------------------------------
    Income before
     taxes and
     non-segmented
     items              $   4.9  $   3.2    53.1%  $  18.0  $   4.7   283.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Interest,
     administration fees
     and other revenue     31.2     16.0    95.0%     58.2     28.7   102.8%
      Administration
       fees and other
       revenue             (1.1)    (0.9)   22.2%     (1.9)    (1.5)   26.7%
    -------------------------------------------------------------------------
    Total interest income  30.1     15.1    99.3%     56.3     27.2   107.0%

    Total interest
     expense               17.8      7.1   150.7%     32.3     12.8   152.3%
    -------------------------------------------------------------------------
    Total interest margin  12.3      8.0    53.8%     24.0     14.4    66.7%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) As previously defined, see the 'Key Performance Indicators and Non-
        GAAP Measures - EBITDA' section. The items required to reconcile
        EBITDA to net income, a defined term under Canadian GAAP, are
        detailed above.
    >>


Revenue

Total interest, administration fees and other revenue increased by 95.0% during the second quarter of 2006 relative to the second quarter of 2005. Increased revenue is a result of higher loan balances and a higher average prime rate of interest. The mortgage loan portfolio increased 84.1% year-over-year and the consumer loan portfolio was up 49.4%. The average prime rate increased during the quarter to 5.60% (4.25% in 2005). At May 31, 2006, the average interest rate on mortgages excluding HELOCs was 6.13% (5.88% in 2005), with consumer loans at an average rate of 7.58% (5.94% in 2005). The average interest rate for deposits was 3.85% (3.73% in 2005). Overall, margins have been relatively consistent with 2005. RSP loan margins are slightly lower because the portfolio is comprised of a higher percentage of short-term loans, which typically have lower margins. We have also had some promotional rate offerings in the investment loan segment. This has been offset by mortgage margins, which have improved slightly, primarily due to a shift in the mix of business towards higher margin conventional mortgage lending.

Selling, General and Administrative Expenses

The increases in SG&A expenses of 71.4% and 70.0%, respectively, in the three- and six-month periods ending May 31, 2006 over the respective periods in 2005, resulted from the significant increase in lending volumes, including hiring of additional employees. The Trust Company has also spent money to implement growth strategies aimed at increasing the future level of business.

Provision for Loan Losses

The total provision for loan losses increased by 38.5% in the second quarter of 2006, as compared with the second quarter of 2005 and increased by 59.3% for the six-month period ending May 31, 2006 compared to the same period in 2005. The increase is attributable to the increase in our loan portfolios. The rate of growth in the provision has been muted by the shift in the business mix towards a higher percentage of lower-risk investment loans in the consumer loan portfolio, partly offset by a higher percentage of conventional mortgages in the mortgage book.

EBITDA

Strong asset growth resulted in EBITDA growing 52.9% in Q2 2006 over the same period last year. The securitization of the RSP loan portfolio in Q1 2006 influenced the increase in EBITDA of 257.7% for the six-month period ending May 31, 2006.

Operational Performance

The table below highlights our key operational measures for the Trust Company Operations segment for the three and six months ended May 31, 2006 and May 31, 2005.

    <<
    -------------------------------------------------------------------------
                             Three Months Ended          Six Months Ended
                                  May 31(1),                   May 31,
                       ------------------------------------------------------
                                             %                          %
    ($ millions)           2006     2005   change     2006     2005   change
    -------------------------------------------------------------------------
    Mortgage loan
     assets             $ 705.4  $ 383.1    84.1%  $ 705.4  $ 383.1    84.1%
    Consumer loan assets  994.2    665.6    49.4%    994.2    665.6    49.4%
    Other assets
     (includes cash)      356.7     77.7   359.1%    356.7     77.7   359.1%
    -------------------------------------------------------------------------
    Total assets       $2,056.3 $1,126.4    82.6% $2,056.3 $1,126.4    82.6%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net interest income $  12.3  $   8.0    53.8%  $  24.0  $  14.4    66.7%
    Securitization gains
     and related items      0.8      0.0      n/m     10.6      0.0      n/m
    Other income            1.1      0.9    22.2%      1.9      1.5    26.7%
    Non-interest
     expenses               7.5      4.4    70.5%     14.2      8.5    67.1%
    Provision for loan
     losses                 1.8      1.3    38.5%      4.3      2.7    59.3%
    -------------------------------------------------------------------------
    Income before taxes
     and non-segmented
     items               $  4.9  $   3.2    53.1%  $  18.0  $   4.7   283.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Efficiency ratio(2)   52.8%    49.4%             38.9%    53.5%
    Assets-to-capital
     multiple              15.4     13.0              15.4     13.0
    -------------------------------------------------------------------------
    (1) Loan balances are as at May 31, 2006 and income and expense amounts
        are for the period ended May 31, 2006.
    (2) The efficiency ratio is calculated by dividing non-interest expenses
        by the total of net interest income and non-interest income.
    >>


Loan Asset Growth

Loan assets experienced substantial growth during the second quarter of 2006. Mortgages, RSP loans and investment loan advances were higher during the second quarter of 2006, compared with the prior-year period.

As at May 31, 2006, mortgage loans consisted of $345 million of insured loans (2005 - $228 million) and $360 million in conventional loans (2005 - $155 million). Consumer loans consist of $651 million of investment loans (2005 - $291 million) and $331 million of RSP loans (2005 - $368 million). RSP loan balances were reduced by $218.4 million during the six months ended May 31, 2006 as a result of the securitization transaction. Other loans make up the balance of consumer loans.

Efficiency Ratio

The efficiency ratio (non-interest expenses divided by the total of net interest income and non-interest income) is a key industry performance indicator utilized to ensure expenses are contained as the Trust business grows. The efficiency ratio increased to 52.8% in the second fiscal quarter of 2006 from 49.4% during the comparable quarter in 2005. The efficiency ratio for the six-month period ending May 31, 2006 declined to 38.9% from 53.5% during the comparable period in 2005 primarily due to the impact of the RSP loan securitization.

Balance Sheet

Our balance sheet has grown significantly during the past year, with our financial position remaining solid. Total assets increased 82.5% from May 31, 2005 to $2.1 billion at May 31, 2006. Cash balances were substantial at quarter-end and are anticipated to decline to lower levels during the balance of the year, and are down by approximately $100 million since February 28, 2006. Our assets-to-capital multiple stood at 15.4 times, up from 14.4 times at November 30, 2005, and below our authorized multiple of 17.5 times. Our risk-based capital ratio was 10.5% at May 31, 2006 (2005 - 10.9%). Liquid assets, included in Other assets above, were equal to $295.1 million in cash and cash equivalents at May 31, 2006 (2005 - $53.9 million).

Loan Portfolio Credit

Portfolio credit quality remains consistent as at May 31, 2006, compared to May 31, 2005. Due to higher loan balances, the general allowance for mortgage loan losses was increased to $3.2 million from $1.6 million at May 31, 2005. The general allowance for consumer loan losses was increased to $4.3 million from $4.1 million a year ago. The February 28, 2006 securitization reduced the general allowance by $1.8 million.

Approximately one-half of mortgage loan assets are insured. We have strong security for non-RSP investment loans and loan losses during the history of the program have been minimal. The losses to date on the RSP loan program have been consistent with management's expectations.

Liquidity and Capital Resources

Cash flow generated from continuing operating activities (before net change in non-cash balances related to operations) was $54.3 million and $104.4 million, respectively, for the three and six months ended May 31, 2006 compared with $57.7 million and $114.6 million in the comparable periods of 2005.

Our free cash flow (defined as cash flow from operations less selling commissions paid) was $24.4 million and $52.2 million, respectively, for the three and six months ended May 31, 2006, compared with $40.4 million and $82.4 million in the comparable periods of 2005. Cash flow and our bank facility were used primarily to fund the following:

    <<
    -------------------------------------------------------------------------
                                    Three months ended     Six months ended
                                          May 31,               May 31,
                                 --------------------------------------------
    ($ millions)                       2006       2005       2006       2005
    -------------------------------------------------------------------------
    Payment of dividends          $    16.1  $    13.6  $    29.4  $    23.6
    Repurchase of AGF Class B
     non-voting shares for
     cancellation                      11.5       18.0       15.9       19.4
    Acquisitions                        0.0        0.0        0.2        1.5
    Purchase of property,
     equipment and other
     intangible assets                  2.2        0.8        5.8        1.3
    Investments                         3.5        0.4        4.3        2.9
    Debt repayment                      0.1       17.0        1.3        1.7
    Investment in Trust Operations
     (eliminated on consolidation)     16.0       17.5       34.0       28.0
    -------------------------------------------------------------------------
                                  $    49.4  $    67.3  $    90.9  $    78.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    >>


Cash and cash equivalents increased by $141.6 million (2005 - decrease of $54.7 million) from November 30, 2005 primarily due to an increase in cash in the Trust Company Operations segment. The investment in Trust Company Operations is eliminated on consolidation; however, it represents a transfer of cash from our cash and cash equivalents balance shown as supplemental information on the Consolidated Statements of Cash Flow to the Trust Company Operations' cash and cash equivalents balance. In periods in which the Company has a free cash flow deficiency, these amounts will be financed by increasing our bank indebtedness.

During the quarter, we used $11.5 million (2005 - $18.0 million) of free cash flow to repurchase 500,000 Class B Non-Voting Shares of AGF at an average price of $23.09 per share.

Consolidated cash and cash equivalents amounted to $301.6 million as at May 31, 2006, compared with $64.1 million at May 31, 2005 and $412.4 million at February 28, 2005 primarily as a result of cash held by the Trust Company Operations.

We have a six-year primerate-based revolving term loan facility to a maximum of $200.0 million, of which $161.0 million was available to be drawn as of May 31, 2006. To date, we have utilized short-term borrowings under our credit facility. With the trend in gross sales improving and the Trust Company operations requiring substantial investments, we will look to finance any free cash flow deficiency with longer-term banker's acceptances and categorize any amount with repayment terms in excess of 12 months as long term. This facility will be available to meet future operational and investment needs. We anticipate that cash flow from operations, together with the available loan facility, will be sufficient in the foreseeable future to implement our business plan, finance selling commissions, satisfy regulatory requirements, service debt repayment obligations, meet capital spending needs and pay quarterly dividends.

Subsequent Event

The 2006 federal budget announced on May 2, 2006 proposed to reduce the federal corporate income tax rate to 19% from 21% by 2010 and to eliminate the federal corporate surtax rate of 1.12% by 2008. On June 6, 2006, these tax rate changes are considered to be substantively enacted. Consequently, the amount of reduction in future income tax liabilities and the increase in future income tax benefit of $16.2 million will be recognized in Q3 2006.

Dividends

For the three months ended May 31, 2006, we declared an 18-cent-per-share dividend on Class A Voting Common and Class B Non-Voting Shares. This dividend will be payable on July 20, 2006 to shareholders of record on July 10, 2006.

The holders of the Class B Non-Voting Shares are entitled to receive cash dividends. Dividends are paid in equal amounts per share on all the Class B Non-Voting Shares and all the Class A Voting Common Shares at the time outstanding without preference or priority of one share over another. No dividends may be declared in the event that there is a default of a condition of our loan facility or where such payment of dividends would create a default.

Our Board of Directors may determine that the Class B Non-Voting shareholders shall have the right to elect to receive part or all of such dividend in the form of a stock dividend. In determining whether a dividend in Class B Non-Voting Shares is substantially equal to a cash dividend, the Board of Directors may make a determination based on the weighted average price at which the Class B Non-Voting Shares traded on the Toronto Stock Exchange during the 10 trading days immediately preceding the record date applicable to such dividend.

The following table sets forth the dividends paid by AGF on the Class B Non-Voting Shares and the Class A Voting Common Shares for the periods indicated:

    <<
    -------------------------------------------------------------------------
    Years Ended November 30     2005      2004      2003      2002      2001
    -------------------------------------------------------------------------

    Per share               $  0.560  $  0.410  $  0.295  $  0.255  $  0.220
    -------------------------------------------------------------------------
    Percentage increase          37%       39%       16%       16%       22%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    >>


We review our dividend distribution policy on a quarterly basis, taking into consideration our financial position, profitability, cash flow and other factors considered relevant by our Board of Directors.

Outstanding Share Data

Set out below is our outstanding share data as at May 31, 2006 and May 31, 2005. For additional details, see Note 10 of the Consolidated Financial Statements.

    <<
    -------------------------------------------------------------------------
                                                            2006        2005
                                                     ------------------------
    Shares
    Class A Voting Common Shares                          57,600      57,600
    Class B Non-Voting Shares                         88,763,659  89,719,044

    Stock Options
    Outstanding options                                4,202,583   4,383,271
    Exercisable options                                1,808,584   1,689,785
    -------------------------------------------------------------------------


    Selected Quarterly Information

    -------------------------------------------------------------------------
    ($ millions, except per
     share amounts)
    For the three month           May 31,    Feb. 28,    Nov. 30,    Aug. 31,
     period ended                   2006        2006        2005        2005
    -------------------------------------------------------------------------
    Revenue (continuing
     operations)               $   174.2   $   169.2   $   148.6   $   153.0
    Cash flow from continuing
     operations(1)                  54.3        50.1        47.8        53.9
    EBITDA (continuing
     operations)(2)                 65.6        68.7        50.9        65.2
    Pretax income (continuing
     operations)                    31.0        34.4        16.1        29.6
    Net income                      33.0        24.1        28.0        20.3

    Earnings per share
      Basic                    $    0.37   $    0.27   $    0.31   $    0.23
      Diluted                  $    0.37   $    0.27   $    0.31   $    0.23

    Weighted average
     basic shares             89,006,146  89,190,007  89,203,949  89,615,145
    Weighted average fully
     diluted shares           89,973,999  90,031,001  89,868,786  89,915,618
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    ($ millions, except per
     share amounts)
    For the three month           May 31,    Feb. 28,    Nov. 30,    Aug. 31,
     period ended                   2005        2005        2004        2004
    -------------------------------------------------------------------------
    Revenue (continuing
     operations)               $   147.1   $   145.7   $   143.4   $   144.9
    Cash flow from
     operations(1)                  57.6        56.9        13.6        59.0
    EBITDA (continuing
     operations)(2)                 63.7        65.0        19.8        71.6
    Pretax income (continuing
     operations)                    27.4        28.7       (17.6)       31.7
    Net income (loss)               22.4        21.2        (8.1)       27.6

    Earnings (loss) per share
      Basic                    $    0.25   $    0.23   $   (0.08)  $    0.30
      Diluted                  $    0.25   $    0.23   $   (0.09)  $    0.30

    Weighted average
     basic shares             90,553,323  90,739,413  90,737,430  91,116,928
    Weighted average fully
     diluted shares           90,886,073  91,085,474  91,798,233  91,559,294
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Cash flow from operations before net change in non-cash balances
        related to operations.
    (2) As previously defined, see the 'Key Performance Indicators and
        Non-GAAP Measures - EBITDA' section.
    >>


Additional Information

Additional information relating to the Company can be found in our Consolidated Financial Statements and accompanying notes for the three and six months ended May 31, 2006, our 2005 annual MD&A and Consolidated Financial Statements, our 2005 AIF and other documents filed with applicable securities regulators in Canada, and may be accessed at www.sedar.com.

Caution Regarding Forward-Looking Statements

This Management's Discussion and Analysis includes forward-looking statements about AGF Management Limited, including its business operations, strategy and expected financial performance and condition. 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', 'intends', 'plans', 'believes' or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future financial performance (including revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future action on our part, is also a forward-looking statement. Forward-looking statements are based on certain factors and assumptions, including expected growth, results of operations, business performance and opportunities. While we consider these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about our operations, economic factors and the financial services industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by us due to, but not limited to, important factors such as level of assets under our management, volume of sales and redemption of our investment products, performance of our investment funds and of our investment managers and advisors, competitive fee levels for investment management products and administration and competitive dealer compensation levels, size and default experience on our loan portfolio and cost efficiency in our loan operations as well as interest and foreign exchange rates, taxation, changes in government regulations, unexpected judicial or regulatory proceedings, and our ability to complete strategic transactions and integrate acquisitions. We caution that the foregoing list is not exhaustive. The reader is cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements. Please see the 'Factors that May Affect Future Results' section for a further discussion of factors that may affect actual results. We expressly disclaim such obligation to update or alter the forward-looking statements whether as a result of new information, future events or otherwise except as may be required by law.

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MONTRÉAL, QUÉBEC--(Marketwired - 16 oct. 2017) - NE PAS DISTRIBUER À DES SERVICES DE FIL DE PRESSE AUX ÉTATS-UNIS NI DIFFUSER AUX ÉTATS-UNIS Redevances Aurifères Osisko Ltée (la « Société » ou « Osisko ») (TSX:OR)(NYSE:OR) a le...

à 18:58
Bithumb fera-t-elle de la cryptomonnaie « Zcash » son prochain grand succès? - Sa capitalisation boursière actuelle vaut environ 648,5 millions $, ce qui représente 470 fois sa valeur initiale lors de son inscription; Zcash accède ainsi au 15e rang...

à 18:49
Le verre est à moitié plein pour le syndicat international WASHINGTON, DC, le 16 oct. 2017 /CNW Telbec/ - Pour la quatrième ronde de renégociations de l'Accord de libre-échange nord-américain (ALENA), la Fraternité internationale des Teamsters...

à 18:45
VANCOUVER, le 16 oct. 2017 /CNW/ - TYPE DE BULLETIN : Avis aux émetteursDATE DU BULLETIN : 16 octobre 2017 Objet : Activités commerciales liées au cannabis aux États-Unis La Bourse de croissance TSX (la « Bourse ») émet par la présente des...

à 18:35
OTTAWA, le 16 oct. 2017 /CNW/ - Le ministre de l'Innovation, des Sciences et du Développement économique, l'honorable Navdeep Bains, a fait la déclaration suivante relativement à l'annonce d'un nouveau partenariat stratégique entre Airbus et...




Communiqué envoyé le 28 juin 2006 à 07:30 et diffusé par :