E-L Financial Corporation Limited Announces March 31, 2011 Interim Financial Results
May 18 2011 - 11:25AM
Marketwired Canada
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 income(1)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
------------------------------------------------
E-L The Empire
(thousands of dollars) Corporate Dominion 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
------------------------------------------------
E-L The Empire
(thousands of dollars) Corporate Dominion 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.
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