E-L Financial Corporation Limited Announces September 30, 2011 Interim Financial Results
November 03 2011 - 3:27PM
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
September 30, 2011, it earned net consolidated operating income(1)of $2.5
million or $nil per share(2) 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
----------------------------------------------------------------------------
(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.
(2)All per share figures are net of dividends paid on First Preference shares.
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