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

E-L Financial Corporation Limited

November 08, 2016 16:02 ET

E-L Financial Corporation Limited Announces September 30, 2016 Interim Financial Results

TORONTO, ONTARIO--(Marketwired - Nov. 8, 2016) - 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 quarter ended September 30, 2016, consolidated shareholders' net income of $191.3 million or $47.72 per share compared with $28.2 million or $6.20 per share in 2015. For the nine months ended September 30, 2016, E-L Financial earned consolidated shareholders' net income of $233.1 million or $56.38 per share compared with $326.9 million or $80.28 per share in 2015.

E-L Financial's net equity value per Common Share was $1,132.28 at September 30, 2016, an increase from $1,089.23 as at December 31, 2015.

E-L Corporate

For the quarter ended September 30, 2016, E-L Corporate earned net income of $153.5 million compared to $10.4 million for the comparable period in 2015. E-L Corporate's net income for the third quarter is primarily attributable to net investment gains on the global investment portfolio. For the third quarter of 2016, E-L Corporate had a net gain on investments of $177.4 million versus a net loss on investments of $4.1 million for the same period in 2015. During the quarter E-L Corporate investments had a pre-tax total return of 4% compared to a nominal return in the third quarter of 2015.

For the nine months ended September 30, 2016, E-L Corporate earned net income of $133.7 million compared to $252.5 million for the comparable period in 2015. The decrease in year to date net income is mostly attributable to E-L Corporate's net gain on investments of $89.9 million compared to $298.8 million in 2015. During 2016 E-L Corporate's investments had a pre-tax total return of 3% mainly due to positive investment returns on global equities which was partly offset by the strengthening of the Canadian dollar against foreign currencies. At September 30, 2016, 84.5% of E-L Corporate's investments were denominated in foreign currencies with 47.8% exposed to U.S. equities. The net gain on investments in 2015 was attributed to the favourable impact of a lower Canadian dollar.

Empire Life

For the quarter ended September 30, 2016, The Empire Life Insurance Company's ("Empire Life") net income attributable to E-L Financial was $37.8 million compared to $17.8 million for the comparable period in 2015. The increase in net income was primarily due to higher profit from the Individual Insurance product line resulting from improved stock market conditions in 2016 and improved asset/liability matching in 2016.

For the nine months ended September 30, 2016 Empire Life's net income attributable to E-L Financial was $99.3 million compared to $74.4 million for the comparable period in 2015. The increase in net income was primarily due to the same reasons noted above for the third quarter.

Empire Life's assets under management (including segregated fund and mutual fund assets) increased 6% over December 31, 2015 levels to reach $15.9 billion.

Empire Life's Minimum Continuing Capital and Surplus Requirements ratio increased to 213% at September 30, 2016 compared to 201% at December 31, 2015 mainly due to Empire Life's issuance of $149.5 million of Non-Cumulative Rate Reset Preferred Shares during the first quarter of 2016.

CONSOLIDATED SUMMARY OF NET INCOME (UNAUDITED)

E-L Financial Consolidated Third quarter Year to date
(thousands of dollars) 2016 2015 2016 2015
Contribution to net income
E-L Corporate1 $ 153,498 $ 10,384 $ 133,748 $ 252,535
Empire Life2 37,771 17,835 99,326 74,377
Net income $ 191,269 $ 28,219 $ 233,074 $ 326,912
E-L Corporate Third quarter Year to date
(thousands of dollars) 2016 2015 2016 2015
Revenue
Net gain (loss) on investments3 $ 177,394 $ (4,076 ) $ 89,859 $ 298,791
Investment and other income 22,091 23,863 84,666 83,305
Share of associates income 16,885 7,423 19,165 17,513
216,370 27,210 193,690 399,609
Expenses
Operating 5,940 5,632 18,100 17,314
Income taxes 28,305 1,195 23,923 54,886
Non-controlling interests 28,627 9,999 17,919 74,874
62,872 16,826 59,942 147,074
Net income $ 153,498 $ 10,384 $ 133,748 $ 252,535
Empire Life Third quarter Year to date
(thousands of dollars) 2016 2015 2016 2015
Revenue
Net premiums $ 218,651 $ 208,414 $ 659,007 $ 628,963
Net gain (loss) on investments3 115,124 (114,925 ) 418,123 (86,010 )
Investment income 60,050 64,641 186,178 192,339
Fee income 59,050 54,221 170,143 160,781
452,875 212,351 1,433,451 896,073
Expenses
Benefits and expenses 392,202 184,114 1,280,806 774,414
Income and other taxes 18,415 8,622 47,315 34,157
Non-controlling and participating policyholders' interests 4,487 1,780 6,004 13,125
415,104 194,516 1,334,125 821,696
Net income $ 37,771 $ 17,835 $ 99,326 $ 74,377
1 Net of non-controlling interests
2 Net of non-controlling interests and participating policyholders' income (loss)
3 Includes fair value change on FVTPL investments and realized gains on AFS investments

Non-GAAP Measures

The Company uses non-GAAP measures including net equity value per Common share to provide investors with supplemental measures of its operating performance that may not otherwise be apparent when relying solely on International Financial Report Standards ("IFRS") financial measures. 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.

The Company also uses assets under management to provide investors with a supplemental measure of Empire Life's performance and to highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers.

About E-L Financial

E-L Financial operates as an investment and insurance holding company. In managing its operations, E-L Financial distinguishes between two operating segments, E-L Corporate and Empire Life.

E-L Corporate represents investments in stocks and fixed income securities held directly and indirectly through pooled funds, closed-end investment companies and other investment companies. The investment strategy is to accumulate shareholder value through long-term capital appreciation and dividend income from its investments.

Empire Life is a subsidiary of E-L Financial. Since 1923, Empire Life has provided competitive individual and group life and health insurance, investment and retirement products to Canadians. Empire Life's mission is to make it simple, fast and easy for Canadians to get the investment, insurance and group benefits coverage they need to build wealth, generate income, and achieve financial security.

Contact Information

  • E-L Financial Corporation Limited
    Scott F. Ewert
    Vice President and Chief Financial Officer
    (416) 947-2578
    (416) 362-0792 (FAX)