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

E-L Financial Corporation Limited

May 08, 2009 11:37 ET

E-L Financial Corporation Limited Announces March 31, 2009 Interim Financial Results

TORONTO, ONTARIO--(Marketwire - May 8, 2009) - 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 March 31, 2009, it earned net operating income of $34.5 million or $9.64 per share compared with a net operating loss of $5.7 million or $2.46 per share for the comparable period last year.

Net loss for the quarter was $133.7 million or $41.00 per share compared with a net loss of $21.4 million or $7.20 per share for the comparable period last year.

The results were impacted by two significant events that occurred in the first quarter. The general insurance operation incurred a net loss of $148.2 million for the first quarter ($2.9 million net loss in the first quarter of 2008). An impairment provision was recorded for its common equity pooled fund units in the amount of $226.1 million, before income tax, most of which was recorded as an unrealized loss in other comprehensive income in 2008. These pooled fund units were written down since the fair value was less than cost and, early in the second quarter, they were redeemed in kind, as a result of the general insurance operation's decision to change its third party equity investment manager.

Secondly, on March 4, 2009, proposed amendments to the Income Tax Act passed third reading causing them to become substantively enacted for accounting purposes. Under these amendments, certain capital losses have been re-characterized as income losses for tax purposes. These amendments also resulted in most insurance investments and policy liabilities being taxed on a fair value basis, consistent with changes in accounting rules for financial instruments adopted in 2007. The impact of these amendments using fair values as of March 4, 2009 was a one-time increase to net income of $102.4 million during the first quarter of 2009. Most of this increase is due to a tax recovery relating to the recognition of unused tax losses on equity investments previously classified as capital losses which were considered not to be recoverable and therefore not recognized in 2008.

The following table summarizes the results of the Company's business segments:



Three months ended March 31, 2009
(thousands of dollars)
--------------------------------------------------
Corporate General Life
Investments Insurance Insurance Total
------------ ------------ ------------ -----------
Revenue $ (11,961) $ 62,906 $ 238,922 $ 289,867
------------ ------------ ------------ -----------
------------ ------------ ------------ -----------
Net income (loss):
Operating income $ 1,914 $ 1,960 $ 30,638 $ 34,512
Realized gain (loss) on
available for sale
investments 4,842 (150,203) (1,806) (147,167)
Loss from equity
method investment (21,064) -- -- (21,064)
------------ ------------ ------------ -----------
$ (14,308) $ (148,243) $ 28,832 $ (133,719)
------------ ------------ ------------ -----------
------------ ------------ ------------ -----------



Three months ended March 31, 2008
(thousands of dollars)
--------------------------------------------------
Corporate General Life
Investments Insurance Insurance Total
------------- ------------ ------------ ----------
Revenue $ (19,270) $ 281,546 $ 213,864 $ 476,140
------------- ------------ ------------ ----------
------------- ------------ ------------ ----------
Net income (loss):
Operating income (loss) $ 2,863 $ (6,617) $ (1,921) $ (5,675)
Realized gain (loss) on
available for sale
investments (1,464) 3,730 (162) 2,104
Loss from equity method
investment (17,868) -- -- (17,868)
------------- ------------ ------------ ----------
$ (16,469) $ (2,887) $ (2,083) $ (21,439)
------------- ------------ ------------ ----------
------------- ------------ ------------ ----------


The first quarter report ended March 31, 2009 is available on www.sedar.com.

(1) Use of non-GAAP measures

"net operating income (loss)" is net income excluding realized gain (loss) on available for sale investments and income (loss) from the equity method investment, both 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. We believe this measure provides information useful to shareholders in evaluating the Company's results.

Contact Information

  • E-L Financial Corporation Limited
    Mark M. Taylor
    Executive Vice-President and Chief Financial Officer
    (416) 947-2578
    (416) 362-0792 (FAX)