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

E-L Financial Corporation Limited

October 27, 2005 13:43 ET

E-L Financial Corporation Limited: Report To The Shareholders

TORONTO, ONTARIO--(CCNMatthews - Oct. 27, 2005) - For the nine months ended September 30, 2005, E-L Financial Corporation Limited (TSX:ELF)(TSX:ELF.PR.A)(TSX:ELF.PR.F) earned net operating income1 of $91.5 million or $21.77 per share compared with $58.1 million or $14.45 per share for the comparable period last year.

Total net income, including investment gains and income from the equity method investment, for the nine month period was $204.1 million or $49.79 per share compared with $130.9 million or $32.56 for the comparable period last year.

The figures for 2004 have been restated to reflect the change in accounting policy as set out below.

As a result of the new Canadian Institute of Chartered Accountants (CICA) Accounting Guideline 18, Investment Companies and changes in industry practice, the Company changed its accounting policy, effective January 1, 2005, for portfolio investments and investments over which the Company has significant influence. Portfolio investments are now measured and reported in the consolidated financial statements at their fair value with changes in fair value recognized in income in the period in which the change occurs. The Company has the ability to exercise significant influence over United Corporations Limited, a qualifying investment company, and accounts for this investment ("Equity method investment") under the equity method with changes in equity value being recognized in the period in which the change occurs. Previously, unrealized gains and losses for both of these types of investments were recorded directly to Shareholders' equity. Both Portfolio investments and the Equity method investment continue to be effectively carried at fair value on the Consolidated balance sheets. This change in accounting policy leaves the amount of Shareholders' equity unchanged.

DUNCAN N.R. JACKMAN

Chairman & Chief Executive Officer




2005
(thousands of dollars)
---------------------------------------------------------------------
Corporate General Life
investments insurance insurance Total
----------- --------- --------- -----

Revenue $ 115,102 $ 867,597 $ 601,411 $ 1,584,110
----------- --------- --------- -----------
----------- --------- --------- -----------

Net income:
Income excluding the
undernoted $ 9,938 $ 70,781 $ 10,767 $ 91,486
Amortization of
investment gains - - 17,842 17,842
Gain on sale of
investments 1,056 9,694 - 10,750
Income from equity
method investment 32,310 - - 32,310
Change in unrealized
appreciation
of portfolio
investments 51,732 - - 51,732
----------- --------- --------- -----------
$ 95,036 $ 80,475 $ 28,609 $ 204,120
----------- --------- --------- -----------
----------- --------- --------- -----------

2004(2)
(thousands of dollars)
---------------------------------------------------------------------
Corporate General Life
investments insurance insurance Total
----------- --------- --------- -----------

Revenue $ 75,140 $ 862,330 $ 514,675 $ 1,452,145
----------- --------- --------- -----------
----------- --------- --------- -----------

Net income:
Income excluding the
undernoted $ 6,635 $ 48,389 $ 3,083 $ 58,107
Amortization of
investment gains - - 14,998 14,998
Gain on sale of
investments 974 6,741 - 7,715
Income from equity
method investment 11,421 - - 11,421
Change in unrealized
appreciation
of portfolio
investments 38,644 - - 38,644
----------- --------- --------- -----------
$ 57,674 $ 55,130 $ 18,081 $ 130,885
----------- --------- --------- -----------
----------- --------- --------- -----------


(1) Net operating income is before investment gains and income from the equity method
investment.

(2) Restated for the accounting policy change.



CONSOLIDATED STATEMENT OF EARNINGS
For the nine months ended September 30
(thousands of dollars except per share amounts)


2005 2004
----------- -----------
REVENUES
Insurance premiums $ 1,112,256 $ 1,080,313
Annuity premiums 82,864 62,046
Investment and other income 238,325 204,112
Amortization of realized investment
gains 23,928 19,610
Amortization of unrealized investment
gains 13,916 12,179
Income from equity method investment 38,859 17,065
Change in unrealized appreciation of
portfolio investments 60,611 45,866
Gain on sale of investments 13,351 10,954
----------- -----------
$ 1,584,110 1,452,145
----------- -----------

EXPENSES
Claims and policy benefits 905,344 907,358
Commissions 237,952 202,153
Operating 128,113 120,611
----------- -----------
1,271,409 1,230,122
----------- -----------

Income before the undernoted items 312,701 222,023
----------- -----------

Taxes
- income 63,489 47,594
- premium 33,797 33,138
- investment and capital 2,361 2,068
----------- -----------
99,647 82,800
----------- -----------

Income before policyholders' and
minority shareholders' interest 213,054 139,223

Policyholders' and minority
shareholders'
portion of income 8,934 8,338
----------- -----------

Net Income $ 204,120 $ 130,885
----------- -----------
----------- -----------

Per share $ 49.79 $ 32.56

Total Assets (including segregated
funds) $ 9,197,001 $ 7,879,765

Capital Surplus $ 1,879,694 $ 1,604,070



Contact Information

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