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

E-L Financial Corporation Limited

November 03, 2011 15:27 ET

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

TORONTO, ONTARIO--(Marketwire - Nov. 3, 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 September 30, 2011, it earned net consolidated operating income1 of $2.5 million or $nil per share2 compared with $15.6 million or $3.33 per share for the comparable period in 2010. On a year to date basis, E-L Financial earned consolidated net operating income of $50.7 million or $10.98 per share compared with $35.8 million or $7.16 per share for the comparable period in 2010. "The results of E-L Financial continue to be affected by volatile stock markets and historically low interest rates" says Duncan Jackman, Chairman, President and CEO of E-L Financial.

  • E-L Corporate's $7.1 million decrease in net operating income during the third quarter and $2.8 million decrease on a year to date basis compared to the prior year was due primarily to the tax effect related to non-deductible unrealized capital losses.

  • The Dominion's $4.3 million increase in the quarter's operating income was due mainly to better underwriting results which were driven by improved automobile claims experience and lower catastrophe claims, partly offset by unfavourable prior year claims development. On a year to date basis net operating income increased $10.9 million reflecting better underwriting results and higher investment income.

  • Empire Life's $10.3 million decrease in net operating income for the quarter compared to the prior year was due primarily to unfavourable investment experience in the Individual Insurance product line. On a year to date basis net operating income increased $6.8 million compared to the prior year due primarily to improved segregated fund operating income. 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 International Financial Reporting Standards.

Net income (loss)

For the three months ended September 30, 2011, E-L Financial incurred a consolidated net loss of $94.7 million or $24.71 per share compared with net income of $84.5 million or $20.83 per share in 2010. On a year to date basis, E-L Financial incurred a consolidated net loss of $55.9 million or $16.12 per share compared with net income of $65.2 million or $14.63 per share in 2010.

  • E-L Corporate's $165.2 million reduction in net income for the quarter compared with the prior year was mainly due to unrealized losses on fair value through profit or loss investments relative to unrealized gains in the prior year. During the quarter a net loss of $16.7 million was reported from E-L Corporate's share of the loss from associates. On a year to date basis, E-L Corporate had a decrease in net income of $145.2 million compared to the prior year reflecting overall declines in stock markets.

  • The Dominion's net income for the quarter was consistent with prior year. Net income for the year to date increased $17.5 million compared to the prior year as a result of improved operating income and an increase in net realized gains on available for sale ("AFS") investments.

  • Empire Life's net income decreased by $14.1 million for the quarter due to lower operating income and higher impairment write downs on AFS investments. On a year to date basis net income increased $6.6 million compared to the prior year as a result of improved operating income.

Comprehensive income (loss)

For the three months ended September 30, 2011, E-L Financial had a consolidated comprehensive loss of $108.4 million or $28.19 per share compared with income of $129.7 million or $32.29 per share for the comparable period in 2010. Other comprehensive loss ("OCL") was $13.7 million or $3.48 per share compared with other comprehensive income ("OCI") of $45.1 million or $11.46 per share for the comparable period in 2010.

On a year to date basis, E-L Financial incurred a consolidated comprehensive loss of $73.4 million or $20.56 per share compared with income of $103.9 million or $24.45 per share for the comparable period in 2010. Consolidated OCL was $17.5 million or $4.44 per share compared with OCI of $38.7 million or $9.82 per share for the comparable period in 2010.

  • E-L Corporate's OCI decreased $4.8 million in the quarter and $13.0 million on a year to date basis compared to the prior year reflecting an increase in unrealized losses on common shares.

  • The Dominion's OCI decreased $35.0 million during the quarter and $25.4 million on a year to date basis compared to the prior year mainly due to an increase in unrealized investment losses in common shares partially offset by an increase in the fair value of bonds and debentures.

  • Empire Life's OCI decreased $19.0 million during the quarter and $17.7 million on a year to date compared to the prior year due primarily to the stock market decline in 2011 versus a stock market rise in 2010.

CONSOLIDATED SUMMARY OF COMPREHENSIVE (LOSS) INCOME
Three months ended September 30, 2011
(thousands of dollars) E-L Corporate The Dominion Empire Life Total
Net operating (loss) income $ (650 ) $ 4,134 $ (952 ) $ 2,532
Realized loss on available for sale investments including impairment write downs (309 ) (1,867 ) (4,269 ) (6,445 )
Share of loss of associates (16,693 ) - - (16,693 )
Fair value change in fair value through profit or loss investments (74,067 ) (74,067 )
Net (loss) income (91,719 ) 2,267 (5,221 ) (94,673 )
Other comprehensive loss (377 ) (6,872 ) (6,452 ) (13,701 )
Comprehensive loss $ (92,096 ) $ (4,605 ) $ (11,673 ) $ (108,374 )
Three months ended September 30, 2010
(thousands of dollars) E-L Corporate The Dominion Empire Life Total
Net operating income (loss) $ 6,485 $ (178 ) $ 9,326 $ 15,633
Realized gain (loss) on available for sale investments including impairment write downs 94 2,402 (458 ) 2,038
Share of income of associates 31,470 - - 31,470
Fair value change in fair value through profit or loss investments 35,404 35,404
Net income 73,453 2,224 8,868 84,545
Other comprehensive income 4,415 28,137 12,558 45,110
Comprehensive income $ 77,868 $ 30,361 $ 21,426 $ 129,655
Nine months ended September 30, 2011
(thousands of dollars) E-L Corporate The Dominion Empire Life Total
Net operating income $ 6,694 $ 26,613 $ 17,405 $ 50,712
Realized gain on available for sale investments including impairment write downs 3,996 11,273 1,792 17,061
Share of loss of associates (33,721 ) - - (33,721 )
Fair value change in fair value through profit or loss investments (89,925 ) (89,925 )
Net (loss) income (112,956 ) 37,886 19,197 (55,873 )
Other comprehensive loss (2,984 ) (5,045 ) (9,450 ) (17,479 )
Comprehensive (loss) income $ (115,940 ) $ 32,841 $ 9,747 $ (73,352 )
Nine months ended September 30, 2010
(thousands of dollars) E-L Corporate The Dominion Empire Life Total
Net operating income $ 9,468 $ 15,704 $ 10,587 $ 35,759
Realized (loss) gain on available for sale investments including impairment write downs (3,544 ) 4,682 2,005 3,143
Share of income of associates 6,834 - - 6,834
Fair value change in fair value through profit or loss investments 19,457 19,457
Net income 32,215 20,386 12,592 65,193
Other comprehensive income 10,011 20,403 8,280 38,694
Comprehensive income $ 42,226 $ 40,789 $ 20,872 $ 103,887

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.

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

Contact Information

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