TORONTO, ONTARIO--(Marketwire - March 5, 2012) - E-L Financial Corporation Limited ("E-L Financial") (TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G) reported for the year ended December 31, 2011, consolidated net operating income of $30.3 million or $5.15 per share in 2011 compared with $90.3 million or $20.36 per share in 2010.
The $60.0 million decrease in net operating income in 2011 versus 2010 is principally attributable to a $56.8 million decrease in net operating income for the general insurance operation (The Dominion). The Dominion's decrease in net operating income is due mainly to changes in assumptions made in the fourth quarter actuarial analysis for automobile bodily injury claims provisions. Net operating income for the life insurance operation (Empire Life) continued to be negatively impacted by the low longer term interest rate environment.
Net income (loss)
On a year to date basis, E-L Financial incurred a consolidated net loss of $44.7 million or $13.93 per share compared with net income of $182.7 million or $43.80 per share in 2010.
In addition to the decrease in net operating income described above, 2011 net income was negatively impacted by decreases in the value of equity investments held at E-L Corporate of $88.0 million compared with gains of $57.7 million in 2010, reflecting market turmoil. Decreases in the value of the Company's interest in Economic Investment Trust Limited and United Corporations Limited, partially offset by positive income from Algoma Central Corporation, resulted in a loss from associates for 2011 of $23.9 million compared to income of $27.9 million in 2010.
Comprehensive income (loss)
E-L Financial incurred a consolidated comprehensive loss of $57.8 million or $17.24 per share in 2011 compared with income of $229.2 million or $55.60 per share in 2010. Consolidated Other Comprehensive Loss ("OCL") was $13.1 million or $3.31 per share compared with Consolidated Other Comprehensive Income ("OCI") of $46.5 million or $11.80 per share in 2010.
The $59.6 million decline in OCI compared to the prior year is a result of a decrease in unrealized gains on AFS investments for the year combined with an increase in realized gains being reclassified to net income.
"Our overall results for 2011 reflected challenging market conditions that included a low interest rate environment and increased equity market volatility as a result of global economic uncertainty", said Duncan Jackman, Chairman, President and CEO of E-L Financial. "This affected our insurance subsidiaries through the strengthening of their policy reserves and a decline in the value of our investment portfolio. In light of these challenges, we maintained a strong capital position and continue to focus on the long-term growth and profitability of the company."
| CONSOLIDATED SUMMARY OF COMPREHENSIVE (LOSS) INCOME | ||||||||||||
| 2011 | ||||||||||||
| (thousands of dollars) | E-L Corporate | The Dominion | Empire Life | Total | ||||||||
| Net operating income | $ | 11,200 | $ | 5,929 | $ | 13,178 | $ | 30,307 | ||||
| Realized gain on available for sale investments including impairment write downs | 5,029 | 19,313 | 12,552 | 36,894 | ||||||||
| Share of loss of associates | (23,886 | ) | - | - | (23,886 | ) | ||||||
| Fair value change in fair value through profit or loss investments | (88,038 | ) | (88,038 | ) | ||||||||
| Net (loss) income | (95,695 | ) | 25,242 | 25,730 | (44,723 | ) | ||||||
| Other comprehensive (loss) income | (467 | ) | 1,365 | (13,927 | ) | (13,029 | ) | |||||
| Comprehensive (loss) income | $ | (96,162 | ) | $ | 26,607 | $ | 11,803 | $ | (57,752 | ) | ||
| 2010 | ||||||||||||
| (thousands of dollars) | E-L Corporate | The Dominion | Empire Life | Total | ||||||||
| Net operating income | $ | 14,526 | $ | 62,695 | $ | 13,097 | $ | 90,318 | ||||
| Realized (loss) gain on available for sale investments including impairment write downs | (3,449 | ) | 7,532 | 2,701 | 6,784 | |||||||
| Share of income of associates | 27,857 | - | - | 27,857 | ||||||||
| Fair value change in fair value through profit or loss investments | 57,742 | 57,742 | ||||||||||
| Net income | 96,676 | 70,227 | 15,798 | 182,701 | ||||||||
| Other comprehensive income | 12,003 | 18,332 | 16,177 | 46,512 | ||||||||
| Comprehensive income | $ | 108,679 | $ | 88,559 | $ | 31,975 | $ | 229,213 | ||||
| 1Use of non-GAAP measures: |
| "net operating income (loss)" is net income excluding realized gain (loss) on AFS investments including impairment write downs, the Company's share of income (loss) from associates and the fair value change in FVTPL investments in the E-L Corporate portfolio, all net of tax. The term net operating income (loss) does not have any standardized meaning according to GAAP and therefore may not be comparable to similar measures presented by other companies. |
| 2 All earnings per share figures are net of dividends paid on First Preference shares. |
Contact Information:
Mark M. Taylor
Executive Vice-President and Chief Financial Officer
(416) 947-2578
(416) 362-2592 (FAX)