TORONTO, ONTARIO--(Marketwire - May 18, 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 March 31, 2011, it earned net consolidated operating income1 of $25.1 million or $5.74 per share compared with $12.4 million or $2.52 per share for the comparable period in 2010.
E-L Corporate's net operating income, which represents dividend, interest and other income, for the first three months of 2011 remained at a consistent level with the prior year.
The Dominion of Canada General Insurance Company's increase in the quarter's operating income mainly reflects higher investment income and a reduction in claims expense resulting from an increase in the claims discount rate in the first quarter of 2011 (insignificant in 2010).
The Empire Life Insurance Company's increase in net operating income was 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 March 31, 2011, E-L Financial earned a consolidated net income of $50.2 million or $12.11 per share compared with $18.8 million or $4.13 per share in 2010.
E-L Corporate showed significant improvement in net income as realized gain on AFS investments, the fair value change in FVTPL investments and investments in associates increased during the quarter compared to the prior year, reflecting improvements in global stock markets.
The Dominion's increase in the quarter's net income from last year mainly reflects higher net realized investment gains.
Empire Life's increase in net income was due to the improvement in operating income partially offset by a decrease in the realized gains on AFS investments including impairment write downs.
Comprehensive income
E-L Financial earned consolidated comprehensive income of $45.8 million or $11.01 per share in 2011 compared with $21.5 million or $4.83 per share for the comparable period in 2010. Consolidated other comprehensive loss ("OCL") was $4.4 million or $1.10 per share compared with other comprehensive income ("OCI") of $2.7 million or $0.70 per share for the comparable period in 2010.
E-L Corporate's increase in OCL reflects an increase in realized gains being reclassified to net income during the first quarter of 2011 relative to the prior year.
The Dominion's OCL in the first quarter of 2011 is due to a net unrealized investment loss and an increase in the reclassification of realized gains on sale of common share investments to net income from accumulated other comprehensive income. Prior year's other comprehensive income of $6.5 million was due mainly to unrealized gains in the fair value of common share investments.
Empire Life's OCI increased during the first quarter of 2011 relative to the first quarter of 2010 due to a stronger rise in Canadian stock markets in 2011 and the reclassification to net income of a lower realized gain in 2011 than in the first quarter of 2010.
"We are very pleased with the substantial improvement in the operating profitability of E-L's two major subsidiaries" said Duncan Jackman, Chairman, President and CEO of E-L Financial. "On behalf of the Board of Directors, I would like to thank all the employees of The Dominion and Empire Life for their hard work during these challenging times."
CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME (LOSS)
| Period ended March 31, 2011 | ||||||||||||
| (thousands of dollars) | E-L Corporate | The Dominion | Empire Life | Total | ||||||||
| Net operating income | $ | 3,308 | $ | 13,389 | $ | 8,387 | $ | 25,084 | ||||
| Realized gain on available for sale investments including impairment write downs | 1,125 | 8,027 | 2,778 | 11,930 | ||||||||
| Share of income of associates | 7,142 | - | - | 7,142 | ||||||||
| Fair value change in fair value through profit or loss investments | 6,018 | 6,018 | ||||||||||
| Net income | 17,593 | 21,416 | 11,165 | 50,174 | ||||||||
| Other comprehensive (loss) income | (2,587 | ) | (4,911 | ) | 3,122 | (4,376 | ) | |||||
| Comprehensive income (loss) | $ | 15,006 | $ | 16,505 | $ | 14,287 | $ | 45,798 | ||||
| Period ended March 31, 2010 | ||||||||||||
| (thousands of dollars) | E-L Corporate | The Dominion | Empire Life | Total | ||||||||
| Net operating income (loss) | $ | 3,780 | $ | 11,532 | $ | (2,875 | ) | $ | 12,437 | |||
| Realized gain (loss) on available for sale investments including impairment write downs | (23 | ) | 357 | 4,640 | 4,974 | |||||||
| Share of loss of associates | (1,920 | ) | - | - | (1,920 | ) | ||||||
| Fair value change in fair value through profit or loss investments | 3,303 | 3,303 | ||||||||||
| Net income | 5,140 | 11,889 | 1,765 | 18,794 | ||||||||
| Other comprehensive income (loss) | (1,296 | ) | 6,520 | (2,487 | ) | 2,737 | ||||||
| Comprehensive income (loss) | $ | 3,844 | $ | 18,409 | $ | (722 | ) | $ | 21,531 | |||
| 1 Use 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:
Mark M. Taylor
Executive Vice-President and Chief Financial Officer
(416) 947-2578
(416) 362-2592 (FAX)