E-L Financial Corporation Limited Announces December 31, 2013 Year End Financial Results
04 März 2014 - 7:34PM
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 year
ended December 31, 2013, consolidated net operating income from continuing
operations(1) of $140.6 million or $31.84 per share(2) in 2013 compared with
$71.4 million or $14.53 per share in 2012. The $69.2 million increase in net
operating income in 2013 versus 2012 is mainly attributable to the $44.5 million
increase in life insurance operation's ("Empire Life's") net operating income
resulting primarily from the Individual Insurance product line. The increase is
due mainly to the favourable impact of long-term interest rate movements and
stock market movements in 2013. E-L Corporate's net operating income increased
$24.6 million principally due to the recovery of refundable dividend taxes
resulting from the $301.5 million payment of the special dividend to Common
shareholders.
Net income
E-L Financial earned consolidated net income from continuing operations of
$596.6 million compared with $432.3 million in 2012. The $164.3 million increase
in net income is due primarily to a $396.0 million increase in E-L Corporate's
fair value through profit or loss ("FVTPL") investments during the year compared
to $125.8 million in 2012, an increase of $131.6 million from United
Corporations Limited's ("United") investments and the favourable impact of stock
market movements during 2013. In 2012, the Company recognized a $142.2 million
gain on the consolidation of United.
On November 1, 2013, the Company completed the sale of its formerly wholly-owned
subsidiary, The Dominion, to The Travelers Companies, Inc. for gross proceeds of
$1.08 billion, resulting in an after-tax gain of $266.4 million. This gain
combined with The Dominion's ten month earnings for 2013 of $44.7 million
resulted in $311.1 million earned from discontinued operations.
Net income from continuing and discontinued operations resulted in E-L Financial
earning total consolidated net income of $907.7 million or $227.18 per share
compared with $479.6 million or $118.41 per share in 2012.
Comprehensive income
E-L Financial earned consolidated comprehensive income of $871.6 million or
$217.99 per share in 2013 compared with $469.4 million or $115.82 per share in
2012. Consolidated other comprehensive loss ("OCL") was $36.1 million or $9.19
per share compared with $10.2 million or $2.59 per share in 2012.
The $25.9 million increase in OCL for 2013 is mainly due to the reclassification
of significant gains relating to The Dominion's liquidation of its common share
portfolio.
E-L Financial's net equity value per Common Share(1) at December 31, 2013 was
$872.45.
"We are pleased with 2013's exceptional results," said Duncan Jackman, Chairman,
President and CEO of E-L Financial. "This year saw a continuation of strong
performance by equity markets globally and an increase in long-term bond yields.
As a result, our investment portfolio benefited from positive equity market
performance and the life insurance business reported record net income on the
heels of an improving yield environment. In addition, the year culminated with
the sale of our general insurance business, generating a significant gain. Many
things went right for us this year, leaving the company in a strong financial
position to continue building shareholder value over the long-term."
CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME
----------------------------------------------------------------------------
2013
----------------------------------------------------------
Continuing Operations Discontinued
-----------------------------------------------
(thousands of E-L Total
dollars) Corporate Empire Life Total The Dominion
----------------------------------------------------------------------------
Net operating
income $ 47,913 $ 92,678 $ 140,591
Realized gain
(loss) on
available for
sale investments
including
impairment write
downs 11,061 (2,459) 8,602
Share of income of
associates 51,337 - 51,337
E-L Corporate's
fair value change
in fair value
through profit or
loss investments 396,023 396,023
----------------------------------------------------------------------------
Net income 506,334 90,219 596,553 311,126 907,679
Other
comprehensive
income (loss) 32,834 (5,235) 27,599 (63,701) (36,102)
----------------------------------------------------------------------------
Comprehensive
income $ 539,168 $ 84,984 $ 624,152 $ 247,425 $ 871,577
------------------==========================================================
----------------------------------------------------------------------------
2012
----------------------------------------------------------
Restated (3) Continuing Operations Discontinued
-----------------------------------------------
(thousands of E-L Total
dollars) Corporate Empire Life Total The Dominion
----------------------------------------------------------------------------
Net operating
income $ 23,301 $ 48,154 $ 71,455
Realized gain on
available for
sale investments
including
impairment write
downs 4,310 15,690 20,000
Share of income of
associates 72,823 - 72,823
E-L Corporate's
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
----------------------------------------------------------------------------
Net income 368,485 63,844 432,329 47,275 479,604
Other
comprehensive
income (loss) 5,863 (16,800) (10,937) 753 (10,184)
----------------------------------------------------------------------------
Comprehensive
income $ 374,348 $ 47,044 $ 421,392 $ 48,028 $ 469,420
------------------==========================================================
(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 December 31,
2012 have been restated to reflect the impact of the prior period adjustment
related to the remeasurement of defined benefit plans resulting in a $6,863
increase in net operating income and a $12,354 decrease in other comprehensive
income for the year ended December 31, 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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