TORONTO, ONTARIO--(Marketwired - Aug. 9, 2013) - 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 income1 of $40.6 million or $9.34 per share2 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 Share1 at June 30, 2013 was $806.33.
| CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME (LOSS) |
| Three months ended June 30, 2013 | |||||||||||||||
| Continuing Operations | Discontinued | ||||||||||||||
| (thousands of dollars) | E-L Corporate | Empire 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 | ||||||||||||||||
| Restated3 | Continuing Operations | Discontinued | ||||||||||||||
| (thousands of dollars) | E-L Corporate | Empire Life | Total | The 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 dollars) | E-L Corporate | Empire Life | Total | The 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 | |||||||||||||||
| Restated3 | Continuing Operations | Discontinued | |||||||||||||
| (thousands of dollars) | E-L Corporate | Empire Life | Total | The 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 | |||||
1Use 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.
Contact Information:
Mark M. Taylor
Executive Vice-President and Chief Financial Officer
(416) 947-2578
(416) 362-2592 (FAX)