E-L Financial Corporation Limited Announces December 31, 2012 Year End Financial Results
March 05 2013 - 11:56AM
Marketwired Canada
E-L Financial Corporation Limited ("E-L Financial")
(TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G)(TSX:ELF.PR.H) reported for the year ended
December 31, 2012, consolidated net operating income(1) of $87.6 million or
$18.62 per share(2) in 2012 compared with $30.3 million or $5.15 per share in
2011.
The $57.3 million increase in net operating income in 2012 versus 2011 is
principally attributable to a $35.2 million increase in net operating income at
the life insurance operation (Empire Life) as a result of a less severe
long-term interest rate drop, higher product prices, and favourable improvement
in policy liability assumption updates in the Individual Insurance product line.
The $10.0 million increase in the general insurance operation's (The Dominion)
net operating income is mainly due to lower claims expense for weather-related
property losses.
Net income (loss)
E-L Financial earned consolidated net income of $472.7 million or $116.66 per
share compared with a net loss of $44.7 million or $13.93 per share in 2011.
In addition to the increase in net operating income described previously,
improved global equity markets during 2012 resulted in a $125.8 million increase
in fair value through profit or loss ("FVTPL") investments and a $72.8 million
increase in the Company's share of income from associates compared to decreases
in 2011 of $88.0 million and $23.9 million, respectively. As a result of E-L
Financial obtaining over 50% of the voting shares of United Corporations Limited
("United") by the end of the year, the Company commenced recording its
investment in United using the consolidated method of accounting. The
consolidation of United resulted in an after tax gain of $142.2 million,
reflecting the excess of the fair value of United's assets and liabilities over
the Company's carrying value of United.
Comprehensive income (loss)
E-L Financial earned consolidated comprehensive income of $481.8 million or
$118.96 per share in 2012 compared with a loss of $57.8 million or $17.24 per
share in 2011. Consolidated other comprehensive income ("OCI") was $9.1 million
or $2.30 per share compared with other comprehensive loss ("OCL") of $13.1
million or $3.31 per share in 2011.
The $22.2 million increase in OCI for the year is mainly due to an increase in
unrealized gains on available for sale ("AFS") investments.
Duncan Jackman, Chairman, President and CEO of E-L Financial stated, "Our
results for 2012 reflected strong performance from our investment portfolio and
improved results at our insurance subsidiaries. Despite the economic
uncertainty, global equity markets rallied during the year and had a positive
impact on our investment portfolio at the corporate level. The life insurance
business was impacted to a lesser degree from interest rate declines compared to
the prior year and benefited from higher product prices and favourable actuarial
assumption updates. The general insurance business underwriting results were
primarily impacted by reserve strengthening in the fourth quarter in personal
auto in a year that otherwise showed significant improvement in personal
property and commercial underwriting results."
CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME (LOSS)
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2012
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E-L
(thousands of dollars) Corporate The Dominion Empire Life Total
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Net operating income $ 23,247 $ 15,965 $ 48,358 $ 87,570
Realized gain on available
for sale investments
including impairment write
downs 4,310 24,297 15,690 44,297
Share of income of
associates 72,823 - - 72,823
Fair value change in fair
value through profit or
loss investments 125,810 125,810
Gain on the consolidation
of United 142,241 - - 142,241
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Net income 368,431 40,262 64,048 472,741
Other comprehensive income
(loss) 6,550 12,645 (10,162) 9,033
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Comprehensive income $374,981 $ 52,907 $ 53,886 $481,774
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2011
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E-L The Empire
(thousands of dollars) Corporate Dominion Life Total
----------------------------------------------------------------------------
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)
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Net (loss) income (95,695) 25,242 25,730 (44,723)
Other comprehensive (loss)
income (467) 1,365 (13,927) (13,029)
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Comprehensive (loss) income $(96,162) $ 26,607 $ 11,803 $(57,752)
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(1) Use of non-GAAP measures:
"Net operating income" is net income excluding realized gain (loss) on available
for sale investments ("AFS") including impairment write downs, the Company's
share of income (loss) from associates, the fair value change in fair value
through profit or loss ("FVTPL") investments in the E-L Corporate portfolio and
the gain on the excess of the fair value of United's assets and liabilities over
the Company's carrying value of United, all net of tax. The term net operating
income 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
E-L Financial Corporation Limited
Mark M. Taylor
Executive Vice-President and Chief Financial Officer
(416) 947-2578
(416) 362-2592 (FAX)
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