E-L Financial Corporation Limited Announces June 30, 2013 Interim Financial Results
August 09 2013 - 3:01PM
Marketwired Canada
E-L Financial Corporation Limited ("E-L Financial")
(TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G)(TSX:ELF.PR.H) today reported for the
quarter ended June 30, 2013, consolidated net operating income(1) of $40.6
million or $9.34 per share(2) compared with $49.3 million or $11.52 per share in
2012. The $8.7 million decrease in net operating income in 2013 versus 2012 is
attributable to a decrease in the general insurance operation's ("The Dominion")
net operating income which reflects losses from the heavy flooding in Alberta in
June 2013, in contrast with prior year reserve reductions in the second quarter
of 2012. Partially offsetting the decrease, the life insurance operation's
("Empire Life") net operating income increased $19.0 million due to the
favourable impact of long-term interest rate movements in 2013.
Consolidated net operating income for the first six months of 2013 was $62.0
million or $13.80 per share compared with $94.4 million or $22.35 per share for
the same period in 2012. The $32.4 million decrease in net operating income was
mainly due to the reasons noted above.
Net income
E-L Financial earned consolidated net income of $190.9 million or $47.62 per
share for the second quarter of 2013 compared with $28.6 million or $6.24 per
share in 2012. The $162.3 million increase in net income is mainly due to The
Dominion's liquidation of its common share portfolio in June 2013 which resulted
in an $83.1 million realized gain on available for sale ("AFS") investments. In
addition, E-L Corporate's fair value through profit or loss ("FVTPL")
investments increased $50.5 million compared to a loss of $27.9 million in 2012
reflecting an increase of $28.9 million from United Corporations Limited's
("United") investments, as income from United is now reported on a consolidated
basis as opposed to income from associates in 2012.
Consolidated net income for the first six months of 2013 was $336.9 million or
$83.82 per share compared with $184.5 million or $45.27 per share in 2012. The
$152.4 million increase in net income for the period is mainly due to the second
quarter increase in net income as noted above, partially offset by a $9.9
million decrease in income from associates.
Comprehensive income
E-L Financial earned consolidated comprehensive income of $71.0 million or
$17.10 per share for the second quarter of 2013 compared with $7.9 million or
$0.98 per share in 2012. Consolidated other comprehensive loss ("OCL") was
$119.9 million for the second quarter of 2013 compared to $20.7 million in 2012.
The $99.2 million increase in other comprehensive loss for the quarter reflected
the reclassification of realized gains during the period.
Consolidated comprehensive income for the first six months of 2013 was $268.5
million or $66.40 per share compared with $173.6 million or $42.50 per share in
2012. Consolidated OCL was $68.4 million for the first six months of 2013
compared with $10.9 million in 2012.
E-L Financial's net equity value per Common Share(1) at June 30, 2013 was $806.33.
CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME (LOSS)
----------------------------------------------------------------------------
Three months ended June 30, 2013
---------------------------------------------------------
Continuing Operations Discontinued
---------------------------------------------------------
(thousands of E-L Empire
dollars) Corporate Life Total The Dominion Total
---------------------------------------------------------
Net operating
income $ 7,930 $ 31,723 $ 39,653 $ 897 $ 40,550
Realized gain on
available for sale
investments
including
impairment write
downs 1,901 628 2,529 83,100 85,629
Share of income of
associates 14,222 - 14,222 - 14,222
E-L Corporate's
fair value change
in fair value
through profit or
loss investments 50,486 50,486 50,486
----------------------------------------------------------------------------
Net income 74,539 32,351 106,890 83,997 190,887
Other comprehensive
income (loss) 693 (14,033) (13,340) (106,513) (119,853)
----------------------------------------------------------------------------
Comprehensive
income (loss) $ 75,232 $ 18,318 $ 93,550 $ (22,516) $ 71,034
-------------------=========================================================
----------------------------------------------------------------------------
Three months ended June 30, 2012
---------------------------------------------------------
Restated(3) Continuing Operations Discontinued
----------------------------------------------
(thousands of E-L Empire The
dollars) Corporate Life Total Dominion Total
----------------------------------------------------------------------------
Net operating
income $ 3,477 $ 12,687 $ 16,164 $ 33,182 $ 49,346
Realized gain on
available for sale
investments
including
impairment write
downs 1,947 1,208 3,155 8,521 11,676
Share of loss of
associates (4,484) - (4,484) - (4,484)
E-L Corporate's
fair value change
in fair value
through profit or
loss investments (27,924) (27,924) (27,924)
----------------------------------------------------------------------------
Net (loss) income (26,984) 13,895 (13,089) 41,703 28,614
Other comprehensive
loss (6,058) (4,374) (10,432) (10,241) (20,673)
----------------------------------------------------------------------------
Comprehensive
(loss) income $ (33,042) $ 9,521 $(23,521) $ 31,462 $ 7,941
-------------------=========================================================
----------------------------------------------------------------------------
Six months ended June 30, 2013
--------------------------------------------------------
Continuing Operations Discontinued
---------------------------------------------
(thousands of E-L Empire The
dollars) Corporate Life Total Dominion Total
----------------------------------------------------------------------------
Net operating income $ 13,356 $ 39,671 $ 53,027 $ 8,958 $ 61,985
Realized gain on
available for sale
investments
including
impairment write
downs 4,187 847 5,034 88,784 93,818
Share of income of
associates 17,025 - 17,025 - 17,025
E-L Corporate's fair
value change in
fair value through
profit or loss
investments 164,097 164,097 164,097
----------------------------------------------------------------------------
Net income 198,665 40,518 239,183 97,742 336,925
Other comprehensive
income (loss) 13,830 (9,360) 4,470 (72,885) (68,415)
----------------------------------------------------------------------------
Comprehensive income $ 212,495 $ 31,158 $243,653 $ 24,857 $ 268,510
--------------------========================================================
----------------------------------------------------------------------------
Six months ended June 30, 2012
---------------------------------------------------------
Restated(3) Continuing Operations Discontinued
---------------------------------------------------------
(thousands of E-L Empire The
dollars) Corporate Life Total Dominion Total
----------------------------------------------------------------------------
Net operating
income $ 10,718 $ 25,029 $ 35,747 $ 58,673 $ 94,420
Realized gain on
available for sale
investments
including
impairment write
downs 2,475 2,693 5,168 15,620 20,788
Share of income of
associates 26,886 - 26,886 - 26,886
E-L Corporate's
fair value change
in fair value
through profit or
loss investments 42,380 42,380 42,380
----------------------------------------------------------------------------
Net income 82,459 27,722 110,181 74,293 184,474
Other comprehensive
income (loss) 2,014 (6,752) (4,738) (6,131) (10,869)
----------------------------------------------------------------------------
Comprehensive
income $ 84,473 $ 20,970 $105,443 $ 68,162 $ 173,605
-------------------=========================================================
(1)Use of non-GAAP measures:
"net operating income" is net income excluding realized gain on available for
sale investments including impairment write downs, the Company's share of income
from associates and the fair value change in fair value through profit or loss
investments in the E-L Corporate portfolio, 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.
"net equity value per Common share" provides an indication of the accumulated
shareholder value, adjusting shareholders' equity to reflect investments in
associates at fair value, net of tax, as opposed to their carrying value.
(2) All earnings per share figures are net of dividends paid on First Preference
shares.
(3) Net operating income and other comprehensive income (loss) for June 30, 2012
have been restated to reflect the impact of the prior period adjustment related
to the remeasurement of defined benefit plans resulting in a $264 increase in
net operating income and a $8,320 decrease in other comprehensive income for the
six months ended June 30, 2012.
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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