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

E-L Financial Corporation Limited

August 04, 2011 12:45 ET

E-L Financial Corporation Limited Announces June 30, 2011 Interim Financial Results

TORONTO, ONTARIO--(Marketwire - Aug. 4, 2011) - E-L Financial Corporation Limited ("E-L Financial") (TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G) today reported that for the quarter ended June 30, 2011, it earned net consolidated operating income1 of $23.1 million or $5.23 per share compared with $7.7 million or $1.31 per share for the comparable period in 2010. On a year to date basis, E-L Financial earned consolidated net operating income of $48.2 million or $10.97 per share compared with $20.1 million or $3.83 per share for the comparable period in 2010.

  • E-L Corporate's $4.8 million increase in net operating income during the second quarter and $4.4 million on a year to date basis compared to the prior year was due primarily to increased dividends from the global portfolios.

  • The Dominion's $4.7 million increase in the quarter's operating income and $6.6 million on a year to date basis compared to the prior year reflects improved underwriting results and an increase in investment income. Improved underwriting results were driven by better automobile claims experience.

  • Empire Life's $5.8 million increase in net operating income for the quarter compared to the prior year was due primarily to improved segregated fund fee income in the Wealth Management business segment. On a year to date basis net operating income increased $17.1 million compared to the prior year due primarily to better mortality and surrender experience in the Individual Insurance product line in 2011. Net operating income also improved due to a non-recurring loss in the first quarter of 2010 related to a change in actuarial method. This change in actuarial method was related to the January 1, 2010 transition to IFRS.

Net income

For the three months ended June 30, 2011, E-L Financial incurred a consolidated net loss of $11.4 million or $3.53 per share compared with $38.1 million or $10.33 per share in 2010. On a year to date basis, E-L Financial earned a consolidated net income of $38.8 million or $8.58 per share compared with a loss of $19.4 million or $6.18 per share in 2010.

  • E-L Corporate's $7.5 million reduction in its net loss for the quarter compared with the prior year was mainly due to an increase in realized gains on available for sale ("AFS") investments. Income from investments in associates was impacted by a $25.6 million impairment write down. On a year to date basis, E-L Corporate's net income increased $20.0 million compared with the prior year reflecting improvements in global stock markets.

  • Both The Dominion's and Empire Life's net income increased for the quarter and year to date compared to the prior year as a result of improved operating income and an increase in realized gains on AFS investments.

Comprehensive income

For the three months ended June 30, 2011, E-L Financial had a consolidated comprehensive loss of $10.8 million or $3.38 per share compared with $47.3 million or $12.65 per share for the comparable period in 2010. Other comprehensive income ("OCI") was $0.6 million or $0.15 per share compared with other comprehensive loss ("OCL") of $9.2 million or $2.32 per share for the comparable period in 2010.

On a year to date basis, E-L Financial earned consolidated comprehensive income of $35.0 million or $7.62 per share compared with a loss of $25.8 million or $7.82 per share for the comparable period in 2010. Consolidated OCL was $3.8 million or $0.96 per share compared with $6.4 million or $1.63 per share for the comparable period in 2010.

  • E-L Corporate's OCI decreased $6.9 million in the quarter and $8.2 million on a year to date basis compared to the prior year reflecting an increase in realized gains being reclassified to net income during both periods.

  • The Dominion's OCI increased $21.0 million during the quarter and $9.6 million on a year to date basis compared to the prior year mainly due to net unrealized investment gains in bonds and debentures.

  • Empire Life's $4.3 million increase in OCL for the quarter compared to the prior year was due primarily to the reclassification to net income of a realized gain in 2011 versus reclassification of a realized loss in 2010. On a year to date basis OCL decreased $1.3 million compared to the prior year due primarily to stronger Canadian stock markets in 2011 than 2010.

CONSOLIDATED SUMMARY OF COMPREHENSIVE (LOSS) INCOME

Three months ended June 30, 2011
(thousands of dollars) E-L
Corporate
The
Dominion
Empire
Life
Total
Net operating income $ 4,036 $ 9,090 $ 9,970 $ 23,096
Realized gain on available for sale investments including impairment write downs 3,180 5,113 3,283 11,576
Share of loss of associates (24,170 ) - - (24,170 )
Fair value change in fair value through profit or loss investments (21,876 ) (21,876 )
Net (loss) income (38,830 ) 14,203 13,253 (11,374 )
Other comprehensive (loss) income (20 ) 6,738 (6,120 ) 598
Comprehensive (loss) income $ (38,850 ) $ 20,941 $ 7,133 $ (10,776 )
Three months ended June 30, 2010
(thousands of dollars) E-L
Corporate
The
Dominion
Empire
Life
Total
Net operating (loss) income $ (797 ) $ 4,350 $ 4,136 $ 7,689
Realized (loss) gain on available for sale investments including impairment write downs (3,615 ) 1,923 (2,177 ) (3,869 )
Share of loss of associates (22,716 ) - - (22,716 )
Fair value change in fair value through profit or loss investments (19,250 ) (19,250 )
Net (loss) income (46,378 ) 6,273 1,959 (38,146 )
Other comprehensive income (loss) 6,892 (14,254 ) (1,791 ) (9,153 )
Comprehensive (loss) income $ (39,486 ) $ (7,981 ) $ 168 $ (47,299 )
Six months ended June 30, 2011
(thousands of dollars) E-L
Corporate
The
Dominion
Empire
Life
Total
Net operating income $ 7,344 $ 22,479 $ 18,357 $ 48,180
Realized gain on available for sale investments including impairment write downs 4,305 13,140 6,061 23,506
Share of loss of associates (17,028 ) - - (17,028 )
Fair value change in fair value through profit or loss investments (15,858 ) (15,858 )
Net (loss) income (21,237 ) 35,619 24,418 38,800
Other comprehensive (loss) income (2,607 ) 1,827 (2,998 ) (3,778 )
Comprehensive (loss) income $ (23,844 ) $ 37,446 $ 21,420 $ 35,022
Six months ended June 30, 2010
(thousands of dollars) E-L
Corporate
The
Dominion
Empire
Life
Total
Net operating income $ 2,983 $ 15,882 $ 1,261 $ 20,126
Realized (loss) gain on available for sale investments including impairment write downs (3,638 ) 2,280 2,463 1,105
Share of loss of associates (24,636 ) - - (24,636 )
Fair value change in fair value through profit or loss investments (15,947 ) (15,947 )
Net (loss) income (41,238 ) 18,162 3,724 (19,352 )
Other comprehensive income (loss) 5,596 (7,734 ) (4,278 ) (6,416 )
Comprehensive (loss) income $ (35,642 ) $ 10,428 $ (554 ) $ (25,768 )
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.

Contact Information

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