TORONTO, ONTARIO -- (Marketwired) -- 05/10/13 -- 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 March 31, 2013, consolidated net operating income(1) of $21.4 million or $4.47 per share(2) compared with $45.1 million or $10.83 per share in 2012.
The $23.7 million decrease in net operating income in 2013 versus 2012 is principally attributable to the general insurance operation ("The Dominion") which reported a $17.4 million decrease in net operating income in the first quarter resulting mainly from higher claims expense for automobile and weather-related personal property losses, partly offset by lower claims expense for commercial property. The life insurance operation's ("Empire Life") net operating income decreased $4.4 million due to the unfavourable impact of long-term interest rate movements on the Individual Insurance product line in 2013 compared to a favourable impact in 2012.
Net income
E-L Financial earned consolidated net income of $146.0 million or $36.20 per share for the first three months of 2013 compared with $155.9 million or $39.02 per share in 2012.
In addition to the decrease in net operating income described above, income from associates decreased $28.6 million, as income from United Corporations Limited ("United") in 2013 is now reported on a consolidated basis versus as income from associates in 2012. Offsetting the declines for the period, fair value through profit or loss ("FVTPL") investments held at E-L Corporate increased $113.6 million compared to $70.3 million in 2012 reflecting an increase of $43.9 million in United's investments.
Comprehensive income
E-L Financial earned consolidated comprehensive income of $197.5 million or $49.30 per share for the first three months of 2013 compared to $165.7 million or $41.51 per share in 2012. Consolidated other comprehensive income ("OCI") was $51.4 million or $13.10 per share compared with $9.8 million or $2.49 per share in 2012. The improvement in OCI for the quarter reflected a larger unrealized fair value increase on available for sale investments compared to the prior period.
E-L Financial's net equity value per Common Share (1) at March 31, 2013 was $790.90.
"The first quarter reflected insurance operation results that were lower relative to the same period in the prior year, offset by an increase in the investment portfolio primarily driven by continued momentum in global equity markets," said Duncan Jackman, Chairman, President and CEO of E-L Financial.
CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME
---------------------------------------------------------------------------- Period ended March 31, 2013 ------------------------------------------------ E-L The Empire(thousands of dollars) Corporate Dominion Life Total----------------------------------------------------------------------------Net operating income $ 5,426 $ 8,061 $ 7,948 $ 21,435Realized gain on available for sale investments including impairment write downs 2,286 5,684 219 8,189Share of income of associates 2,803 - - 2,803E-L Corporate's fair value change in fair value through profit or loss investments 113,611 113,611----------------------------------------------------------------------------Net income 124,126 13,745 8,167 146,038Other comprehensive income 13,137 33,628 4,673 51,438----------------------------------------------------------------------------Comprehensive income $ 137,263 $ 47,373 $ 12,840 $ 197,476--------------------------------------------------------------------------------------------------------------------------------------------------------Restated (3) Period ended March 31, 2012 ------------------------------------------------ E-L The Empire(thousands of dollars) Corporate Dominion Life Total----------------------------------------------------------------------------Net operating income $ 7,241 $ 25,491 $ 12,342 $ 45,074Realized gain on available for sale investments including impairment write downs 528 7,099 1,485 9,112Share of income of associates 31,370 - - 31,370E-L Corporate's fair value change in fair value through profit or loss investments 70,304 70,304----------------------------------------------------------------------------Net income 109,443 32,590 13,827 155,860Other comprehensive income (loss) 8,072 4,110 (2,378) 9,804----------------------------------------------------------------------------Comprehensive income $ 117,515 $ 36,700 $ 11,449 $ 165,664----------------------------------------------------------------------------(1) Use of non-GAAP measures:"net operating income" is net income excluding realized gain on availablefor sale investments including impairment write downs, the Company's shareof income from associates and the fair value change in fair value throughprofit or loss investments in the E-L Corporate portfolio, all net of tax.The term net operating income does not have any standardized meaningaccording to GAAP and therefore may not be comparable to similar measurespresented by other companies."net equity value per Common Share" provides an indication of theaccumulated shareholder value, adjusting shareholders' equity to reflectinvestments in associates at fair value, net of tax, as opposed to theircarrying value.(2) All earnings per share figures are net of dividends paid on FirstPreference shares.(3) Net operating income and other comprehensive income for March 31, 2012have been restated to reflect the impact of the prior period adjustmentrelated to the remeasurement of defined benefit plans resulting in a $132increase in net operating income and a $3,049 decrease in othercomprehensive income for the first quarter of 2012.
Contacts:
E-L Financial Corporation Limited
Mark M. Taylor
Executive Vice-President and Chief Financial Officer
(416) 947-2578
(416) 362-2592 (FAX)
