E-L Financial Corporation Limited Announces December 31, 2012 Year End Financial Results
March 05 2013 - 12:56PM
Marketwired
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
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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.
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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