TORONTO, ONTARIO–(Marketwired – May 11, 2016) – 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, 2016, consolidated shareholders’ net loss of $61.4 million or $16.62 net loss per share compared with net income of $262.1 million or $65.75 per share in 2015.
E-L Financial’s net equity value per Common Share was $1,065.78 at March 31, 2016, a decline from $1,089.23 as at December 31, 2015.
E-L Corporate
For the quarter ended March 31, 2016, E-L Corporate incurred a net loss of $98.3 million compared to $241.5 million in net income for the comparable period in 2015. E-L Corporate’s net loss for the first quarter is primarily attributable to the impact of the strengthening of the Canadian dollar on the global investment portfolio. With 84.7% of E-L Corporate’s investments in common shares and units denominated in foreign currencies, the strengthening of the Canadian dollar reduced the return for the global investment portfolio. For the first quarter of 2016, E-L Corporate had a net loss on investments of $153.9 million compared to a net gain on investments of $345.9 million for the same period in 2015. The net gain on investments in 2015 was attributed to stronger equity markets and the favourable impact of a strengthening U.S. dollar.
Empire Life
For the quarter ended March 31, 2016 Empire Life’s net income attributable to E-L Financial was $36.9 million compared to $20.6 million for the comparable period in 2015. The $16.3 million increase in net income was primarily due to higher profit from the Individual Insurance product line resulting from improved investment experience and the impact of management actions to improve asset/liability matching in 2016.
Assets under management (including segregated fund and mutual fund assets) increased 2% over December 31, 2015 levels to reach $14.9 billion.
Empire Life’s Minimum Continuing Capital and Surplus Requirements ratio increased to 219% at March 31, 2016 compared to 201% at December 31, 2015 mainly due to Empire Life’s issuance of $149.5 million of Non-Cumulative Rate Reset Preferred Shares.
CONSOLIDATED SUMMARY OF NET INCOME (UNAUDITED)
| E-L Financial Consolidated | First quarter | ||||||
| (thousands of dollars) | 2016 | 2015 | |||||
| Contribution to net (loss) income | |||||||
| E-L Corporate1 | $ | (98,306 | ) | $ | 241,510 | ||
| Empire Life2 | 36,933 | 20,591 | |||||
| Net (loss) income | $ | (61,373 | ) | $ | 262,101 | ||
| E-L Corporate | First quarter | ||||||
| (thousands of dollars) | 2016 | 2015 | |||||
| Revenue | |||||||
| Net (loss) gains on investments3 | $ | (153,859 | ) | $ | 345,851 | ||
| Investment and other income | 25,466 | 22,846 | |||||
| Share of associates (loss) income | (6,328 | ) | 1,715 | ||||
| (134,721 | ) | 370,412 | |||||
| Expenses | |||||||
| Operating | 6,108 | 6,034 | |||||
| Income taxes | (15,228 | ) | 49,993 | ||||
| Non-controlling interests | (27,295 | ) | 72,875 | ||||
| (36,415 | ) | 128,902 | |||||
| Net (loss) income | $ | (98,306 | ) | $ | 241,510 | ||
| Empire Life | First quarter | |||||
| (thousands of dollars) | 2016 | 2015 | ||||
| Revenue | ||||||
| Net premiums | $ | 229,775 | $ | 217,574 | ||
| Net gains on investments3 | 70,663 | 312,822 | ||||
| Investment and other income | 60,785 | 60,553 | ||||
| Fee income | 54,763 | 52,128 | ||||
| 415,986 | 643,077 | |||||
| Expenses | ||||||
| Benefits and expenses | 361,685 | 610,701 | ||||
| Income and other taxes | 16,568 | 9,574 | ||||
| Non-controlling and participating policyholders’ interests | 800 | 2,211 | ||||
| 379,053 | 622,486 | |||||
| Net income | $ | 36,933 | $ | 20,591 | ||
| 1 | Net of non-controlling interests |
| 2 | Net of non-controlling interests and participating policyholders’ income (loss) |
| 3 | Includes fair value change on FVTPL investments and realized gains on AFS investments |
Non-GAAP Measures
The Company uses non-GAAP measures including net equity value per Common share to provide investors with supplemental measures of its operating performance that may not otherwise be apparent when relying solely on International Financial Report Standards (“IFRS”) financial measures. 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.
The Company also uses assets under management to provide investors with a supplemental measure of Empire Life’s performance and to highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers.
About E-L Financial
E-L Financial operates as an investment and insurance holding company. In managing its operations, E-L Financial distinguishes between two operating segments, E-L Corporate and The Empire Life Insurance Company (“Empire Life”).
E-L Corporate represents investments in stocks and fixed income securities held directly and indirectly through pooled funds, closed-end investment companies and other investment companies. The investment strategy is to accumulate shareholder value through long-term capital appreciation and dividend income from its investments.
Empire Life is a subsidiary of E-L Financial Corporation Limited. Since 1923, Empire Life has provided competitive individual and group life and health insurance, investment and retirement products to Canadians. Empire Life’s mission is to make it simple, fast and easy for Canadians to build wealth, generate income and get the insurance and group benefits coverage they need.
Vice President and Chief Financial Officer
E-L Financial Corporation Limited
(416) 947-2578
(416) 362-0792 (FAX)
