E-L Financial Corporation Limited ("E-L Financial")
(TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G)(TSX:ELF.PR.H) today reported
that for the quarter ended June 30, 2012, consolidated net
operating income(1) of $49.2 million or $11.48 per share(2)
compared with $23.1 million or $5.23 per share in 2011.
The $26.1 million increase in net operating income for the
second quarter of 2012 versus 2011 is principally attributable to a
$23.9 million increase in net operating income for the general
insurance operation ("The Dominion"). Better underwriting results
driven by favourable prior year claims development recorded in the
second quarter of 2012 for automobile accident benefits claims and
lower claims expense for catastrophe losses contributed to The
Dominion's increase. Net operating income for the life insurance
operation ("Empire Life") improved $2.8 million primarily due to
the favourable impact of changes made to the asset mix to improve
the matching of long term liabilities in the Individual Insurance
product line.
Consolidated net operating income for the first six months of
2012 was $94.2 million or $22.28 per share compared with $48.2
million or $10.97 per share for the same period in 2011. The $46.0
million increase in net operating income was primarily due to a
$35.9 million increase in The Dominion's net operating income for
the reasons noted above, combined with lower weather-related
property losses. Empire Life's net operating income increased $6.8
million primarily due to the favourable impact of changes made to
the asset mix.
Net income (loss)
E-L Financial earned consolidated net income of $28.5 million or
$6.21 per share for the second quarter of 2012 compared with a loss
of $11.4 million or $3.53 per share in 2011. Net income was
favourably impacted by the increase in net operating income,
described above, and a $19.7 million decline in the Company's share
of losses from associates, partially offset by a $6.0 million
increase in E-L Corporate's fair value through profit or loss
("FVTPL") investment losses.
Consolidated net income for the first six months of 2012 was
$184.2 million or $45.20 per share compared with $38.8 million or
$8.58 per share in 2011. The $145.4 million increase in net income
for the period reflects a $58.2 million increase in net income from
E-L Corporate's FVTPL investments resulting from favourable market
returns, a $43.9 million increase in the Company's share of income
from associates and The Dominion's $35.9 million improvement in net
operating income.
Comprehensive income (loss)
E-L Financial earned consolidated comprehensive income of $11.7
million or $1.95 per share for the second quarter of 2012 compared
with a loss of $10.8 million or $3.38 per share in 2011.
Consolidated other comprehensive loss ("OCL") was $16.7 million for
the second quarter of 2012 compared with other comprehensive income
("OCI") of $0.6 million in 2011. The $17.3 million decline in OCI
for the quarter reflected a larger decline in the unrealized fair
value of available for sale investments compared to the prior
period.
Consolidated comprehensive income for the first six months of
2012 was $180.3 million or $44.21 per share compared with $35.0
million or $7.62 per share in 2011. Consolidated OCL was $3.9
million for the first six months of 2012 compared with $3.8 million
in 2011.
"Macroeconomic headwinds continue to effect the life insurance
business, while our general insurance operation benefits from
Ontario auto reforms and this showed through in our underwriting
results. Equity markets got off to a strong start early in the year
but pulled back during the last quarter and dampened results at the
corporate level", said Duncan Jackman, Chairman, President and CEO
of E-L Financial.
CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME (LOSS)
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Three months ended June 30, 2012
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(thousands of dollars) E-L Corporate The Dominion Empire Life Total
----------------------------------------------------------------------------
Net operating income $ 3,463 $ 33,013 $ 12,738 $ 49,214
Realized gain on
available for sale
investments including
impairment write downs 1,947 8,521 1,208 11,676
Share of loss of
associates (4,484) - - (4,484)
E-L Corporate's fair
value change in fair
value through profit
or loss investments (27,924) (27,924)
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Net (loss) income (26,998) 41,534 13,946 28,482
Other comprehensive
loss (5,950) (9,264) (1,530) (16,744)
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Comprehensive (loss)
income $ (32,948) $ 32,270 $ 12,416 $ 11,738
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Three months ended June 30, 2011
-----------------------------------------------------
(thousands of dollars) E-L Corporate The Dominion Empire Life Total
----------------------------------------------------------------------------
Net operating income $ 4,036 $ 9,090 $ 9,970 $ 23,096
Realized gain on
available for sale
investments including
impairment write downs 3,180 5,113 3,283 11,576
Share of loss of
associates (24,170) - - (24,170)
E-L Corporate's fair
value change in fair
value through profit
or loss investments (21,876) (21,876)
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Net (loss) income (38,830) 14,203 13,253 (11,374)
Other comprehensive
(loss) income (20) 6,738 (6,120) 598
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Comprehensive (loss)
income $ (38,850) $ 20,941 $ 7,133 $ (10,776)
-----------------------------------------------------
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Six months ended June 30, 2012
-----------------------------------------------------
(thousands of dollars) E-L Corporate The Dominion Empire Life Total
----------------------------------------------------------------------------
Net operating income $ 10,690 $ 58,335 $ 25,131 $ 94,156
Realized gain on
available for sale
investments including
impairment write downs 2,475 15,620 2,693 20,788
Share of income of
associates 26,886 - - 26,886
E-L Corporate's fair
value change in fair
value through profit
or loss investments 42,380 42,380
----------------------------------------------------------------------------
Net income 82,431 73,955 27,824 184,210
Other comprehensive
income (loss) 2,486 (3,863) (2,514) (3,891)
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Comprehensive income $ 84,917 $ 70,092 $ 25,310 $ 180,319
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Six months ended June 30, 2011
-----------------------------------------------------
(thousands of dollars) E-L Corporate The Dominion Empire Life Total
----------------------------------------------------------------------------
Net operating income $ 7,344 $ 22,479 $ 18,357 $ 48,180
Realized gain on
available for sale
investments including
impairment write downs 4,305 13,140 6,061 23,506
Share of loss of
associates (17,028) - - (17,028)
E-L Corporate's fair
value change in fair
value through profit
or loss investments (15,858) - - (15,858)
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Net (loss) income (21,237) 35,619 24,418 38,800
Other comprehensive
(loss) income (2,607) 1,827 (2,998) (3,778)
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Comprehensive (loss)
income $ (23,844) $ 37,446 $ 21,420 $ 35,022
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(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.
(2) All earnings per share figures are net of dividends paid on First
Preference shares.
Contacts: 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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