E-L Financial Corporation Limited Announces December 31, 2011 Year End Financial Results
March 05 2012 - 3:07PM
Marketwired Canada
E-L Financial Corporation Limited ("E-L Financial")
(TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G) reported for the year ended December 31,
2011, consolidated net operating income of $30.3 million or $5.15 per share in
2011 compared with $90.3 million or $20.36 per share in 2010.
The $60.0 million decrease in net operating income in 2011 versus 2010 is
principally attributable to a $56.8 million decrease in net operating income for
the general insurance operation (The Dominion). The Dominion's decrease in net
operating income is due mainly to changes in assumptions made in the fourth
quarter actuarial analysis for automobile bodily injury claims provisions. Net
operating income for the life insurance operation (Empire Life) continued to be
negatively impacted by the low longer term interest rate environment.
Net income (loss)
On a year to date basis, E-L Financial incurred a consolidated net loss of $44.7
million or $13.93 per share compared with net income of $182.7 million or $43.80
per share in 2010.
In addition to the decrease in net operating income described above, 2011 net
income was negatively impacted by decreases in the value of equity investments
held at E-L Corporate of $88.0 million compared with gains of $57.7 million in
2010, reflecting market turmoil. Decreases in the value of the Company's
interest in Economic Investment Trust Limited and United Corporations Limited,
partially offset by positive income from Algoma Central Corporation, resulted in
a loss from associates for 2011 of $23.9 million compared to income of $27.9
million in 2010.
Comprehensive income (loss)
E-L Financial incurred a consolidated comprehensive loss of $57.8 million or
$17.24 per share in 2011 compared with income of $229.2 million or $55.60 per
share in 2010. Consolidated Other Comprehensive Loss ("OCL") was $13.1 million
or $3.31 per share compared with Consolidated Other Comprehensive Income ("OCI")
of $46.5 million or $11.80 per share in 2010.
The $59.6 million decline in OCI compared to the prior year is a result of a
decrease in unrealized gains on AFS investments for the year combined with an
increase in realized gains being reclassified to net income.
"Our overall results for 2011 reflected challenging market conditions that
included a low interest rate environment and increased equity market volatility
as a result of global economic uncertainty", said Duncan Jackman, Chairman,
President and CEO of E-L Financial. "This affected our insurance subsidiaries
through the strengthening of their policy reserves and a decline in the value of
our investment portfolio. In light of these challenges, we maintained a strong
capital position and continue to focus on the long-term growth and profitability
of the company."
CONSOLIDATED SUMMARY OF COMPREHENSIVE (LOSS) INCOME
----------------------------------------------------------------------------
2011
---------------------------------------------------------
(thousands of E-L Corporate The Dominion Empire Life Total
dollars)
----------------------------------------------------------------------------
Net operating
income $ 11,200 $ 5,929 $ 13,178 $ 30,307
Realized gain on
available for
sale investments
including
impairment write
downs 5,029 19,313 12,552 36,894
Share of loss of
associates (23,886) - - (23,886)
Fair value change
in fair value
through profit or
loss investments (88,038) (88,038)
----------------------------------------------------------------------------
Net (loss) income (95,695) 25,242 25,730 (44,723)
Other
comprehensive
(loss) income (467) 1,365 (13,927) (13,029)
----------------------------------------------------------------------------
Comprehensive
(loss) income $ (96,162) $ 26,607 $ 11,803 $ (57,752)
-------------------=========================================================
----------------------------------------------------------------------------
2010
---------------------------------------------------------
(thousands of E-L Corporate The Dominion Empire Life Total
dollars)
----------------------------------------------------------------------------
Net operating
income $ 14,526 $ 62,695 $ 13,097 $ 90,318
Realized (loss)
gain on available
for sale
investments
including
impairment write
downs (3,449) 7,532 2,701 6,784
Share of income of
associates 27,857 - - 27,857
Fair value change
in fair value
through profit or
loss investments 57,742 57,742
----------------------------------------------------------------------------
Net income 96,676 70,227 15,798 182,701
Other
comprehensive
income 12,003 18,332 16,177 46,512
----------------------------------------------------------------------------
Comprehensive
income $ 108,679 $ 88,559 $ 31,975 $ 229,213
-------------------=========================================================
(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 earnings per share figures are net of dividends paid on First
Preference shares.
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