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PFD-PFO Press Release _12-12-2011_

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PFD AND PFO ANNOUNCE REGULAR MONTHLY DIVIDENDS AND SPECIAL

YEAR-END DIVIDENDS

PASADENA, CALIFORNIA – December 12, 2011



The Boards of Directors of Flaherty & Crumrine Preferred Income Fund Incorporated

(NYSE: PFD) and Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated

(NYSE: PFO) today declared the regular monthly dividend and a special year-end dividend to

be paid in December.



The regular monthly dividend rate for PFD will continue to be $0.093 per share, which equates

to an annual dividend of $1.116 per share. In addition, shareholders will receive a special year-

end dividend from net investment income of $0.047 per share.



The regular monthly dividend rate for PFO will continue to be $0.0755 per share, which equates

to an annual dividend of $0.906 per share. In addition, shareholders will receive a special year-

end dividend from net investment income of $0.045 per share.



The December monthly dividend and the special year-end dividend will be paid on December

30, 2011 to holders of record of each fund’s common stock on December 22, 2011. The

expected ex-dividend date is December 20, 2011. The tax breakdown of all 2011 distributions

will be available early next year, but at this point the funds anticipate that all dividends paid in

2011, including the special year-end dividend, will be taxable as income and not capital gains.



PFD was organized in 1991 and PFO was organized in 1992 as closed-end, diversified

investment companies which invest primarily in preferred securities. Each Fund’s investment

objective for holders of its common stock is high current income consistent with preservation of

capital. PFD and PFO are managed by Flaherty & Crumrine Incorporated, an independent

investment adviser which was founded in 1983 to specialize in the management of portfolios of

preferred and related securities. Flaherty & Crumrine also manages two other U.S. closed-end

funds: Flaherty & Crumrine/Claymore Preferred Securities Income Fund (NYSE: FFC); and

Flaherty & Crumrine/Claymore Total Return Fund (NYSE: FLC).



PRESS, ANALYST, SHAREHOLDER INQUIRIES:

Flaherty & Crumrine Incorporated

Donald F. Crumrine

626-795-7300

Pasadena, California

crumrine@pfdincome.com

Website: www.preferredincome.com



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