E-L Financial Corporation Limited
TSX : ELF
TSX : ELF.PR.F
TSX : ELF.PR.G
TSX : ELF.PR.H

E-L Financial Corporation Limited

March 04, 2014 14:34 ET

E-L Financial Corporation Limited Announces December 31, 2013 Year End Financial Results

TORONTO, ONTARIO--(Marketwired - March 4, 2014) - E-L Financial Corporation Limited ("E-L Financial") (TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G)(TSX:ELF.PR.H) today reported for the year ended December 31, 2013, consolidated net operating income from continuing operations1 of $140.6 million or $31.84 per share2 in 2013 compared with $71.4 million or $14.53 per share in 2012. The $69.2 million increase in net operating income in 2013 versus 2012 is mainly attributable to the $44.5 million increase in life insurance operation's ("Empire Life's") net operating income resulting primarily from the Individual Insurance product line. The increase is due mainly to the favourable impact of long-term interest rate movements and stock market movements in 2013. E-L Corporate's net operating income increased $24.6 million principally due to the recovery of refundable dividend taxes resulting from the $301.5 million payment of the special dividend to Common shareholders.

Net income

E-L Financial earned consolidated net income from continuing operations of $596.6 million compared with $432.3 million in 2012. The $164.3 million increase in net income is due primarily to a $396.0 million increase in E-L Corporate's fair value through profit or loss ("FVTPL") investments during the year compared to $125.8 million in 2012, an increase of $131.6 million from United Corporations Limited's ("United") investments and the favourable impact of stock market movements during 2013. In 2012, the Company recognized a $142.2 million gain on the consolidation of United.

On November 1, 2013, the Company completed the sale of its formerly wholly-owned subsidiary, The Dominion, to The Travelers Companies, Inc. for gross proceeds of $1.08 billion, resulting in an after-tax gain of $266.4 million. This gain combined with The Dominion's ten month earnings for 2013 of $44.7 million resulted in $311.1 million earned from discontinued operations.

Net income from continuing and discontinued operations resulted in E-L Financial earning total consolidated net income of $907.7 million or $227.18 per share compared with $479.6 million or $118.41 per share in 2012.

Comprehensive income

E-L Financial earned consolidated comprehensive income of $871.6 million or $217.99 per share in 2013 compared with $469.4 million or $115.82 per share in 2012. Consolidated other comprehensive loss ("OCL") was $36.1 million or $9.19 per share compared with $10.2 million or $2.59 per share in 2012.

The $25.9 million increase in OCL for 2013 is mainly due to the reclassification of significant gains relating to The Dominion's liquidation of its common share portfolio.

E-L Financial's net equity value per Common Share1 at December 31, 2013 was $872.45.

"We are pleased with 2013's exceptional results," said Duncan Jackman, Chairman, President and CEO of E-L Financial. "This year saw a continuation of strong performance by equity markets globally and an increase in long-term bond yields. As a result, our investment portfolio benefited from positive equity market performance and the life insurance business reported record net income on the heels of an improving yield environment. In addition, the year culminated with the sale of our general insurance business, generating a significant gain. Many things went right for us this year, leaving the company in a strong financial position to continue building shareholder value over the long-term."

CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME

2013
Continuing Operations Discontinued

(thousands of dollars)

E-L Corporate

Empire Life

Total

The Dominion
Total
Net operating income $ 47,913 $ 92,678 $ 140,591
Realized gain (loss) on available for sale investments including impairment write downs 11,061 (2,459) 8,602
Share of income of associates 51,337 - 51,337
E-L Corporate's fair value change in fair value through profit or loss investments 396,023 396,023
Net income 506,334 90,219 596,553 311,126 907,679
Other comprehensive income (loss) 32,834 (5,235) 27,599 (63,701) (36,102)
Comprehensive income $ 539,168 $ 84,984 $ 624,152 $ 247,425 $ 871,577
2012
Restated 3 Continuing Operations Discontinued

(thousands of dollars)

E-L Corporate

Empire Life

Total

The Dominion
Total
Net operating income $ 23,301 $ 48,154 $ 71,455
Realized gain on available for sale investments including impairment write downs 4,310 15,690 20,000
Share of income of associates 72,823 - 72,823
E-L Corporate's fair value change in fair value through profit or loss investments 125,810 125,810
Gain on the consolidation of United 142,241 - 142,241
Net income 368,485 63,844 432,329 47,275 479,604
Other comprehensive income (loss) 5,863 (16,800) (10,937) 753 (10,184)
Comprehensive income $ 374,348 $ 47,044 $ 421,392 $ 48,028 $ 469,420

1Use of non-GAAP measures:

"net operating income" is net income excluding realized gain on available for sale investments including impairment write downs, the Company's share of income from associates and the fair value change in fair value through profit or loss investments in the E-L Corporate portfolio, all net of tax. The term net operating income does not have any standardized meaning according to GAAP and therefore may not be comparable to similar measures presented by other companies.

"net equity value per Common share" provides an indication of the accumulated shareholder value, adjusting shareholders' equity to reflect investments in associates at fair value, net of tax, as opposed to their carrying value.

2 All earnings per share figures are net of dividends paid on First Preference shares.

3 Net operating income and other comprehensive income (loss) for December 31, 2012 have been restated to reflect the impact of the prior period adjustment related to the remeasurement of defined benefit plans resulting in a $6,863 increase in net operating income and a $12,354 decrease in other comprehensive income for the year ended December 31, 2012.

Contact Information

  • E-L Financial Corporation Limited
    Mark M. Taylor
    Executive Vice-President and Chief Financial Officer
    (416) 947-2578
    (416) 362-2592 (FAX)