TORONTO, ONTARIO--(Marketwired - Aug. 7, 2015) - 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, 2015, consolidated shareholder net income of $36.6 million or $8.33 per share compared with $77.2 million or $18.66 per share in 2014. The $40.6 million decrease in net income is mainly due to the fair value change on global equities during the second quarter of 2015 compared to the second quarter of 2014. E-L Corporate's net income decreased $45.8 million during the second quarter of 2015 mainly due to a net loss on investments of $43.0 million compared to net gains on investments of $28.6 million in the prior year. Empire Life's net income increased $5.2 million compared to the prior year primarily due to the growth in segregated fund management fees and segregated fund guarantee fees related to guaranteed minimum withdrawal benefit products within the Wealth Management business and increased earnings on surplus.
Consolidated net income for the first six months of 2015 was $298.7 million or $74.08 per share compared with $181.9 million or $44.35 per share in 2014. The $116.8 million increase in net income for the period is mainly due to a $105.2 million increase in E-L Corporate's net income resulting from the positive impact of global equities during the six month period compared to the same period in 2014. Empire Life's net income increased $11.6 million during the six month period of 2015 primarily due to the same reasons noted above for the second quarter.
E-L Financial's net equity value per Common Share increased to $1,047.42 at June 30, 2015 from $970.65 as of December 31, 2014.
Comprehensive income
E-L Financial earned consolidated comprehensive income of $8.2 million or $1.10 per share for the second quarter of 2015 compared with $76.2 million or $18.42 per share in 2014. The decrease in comprehensive income is primarily due to weaker equity markets in 2015 along with the impact of a marginally stronger Canadian dollar relative to the U.S. dollar in the second quarter of 2015.
Consolidated comprehensive income for the first six months of 2015 was $296.5 million or $73.53 per share compared with $199.5 million or $48.82 per share in 2014. The $97.0 million increase in comprehensive income is mainly due to the fair value gain on investments resulting from growth in the investment portfolio and the strengthening of the U.S. dollar during the first quarter of 2015.
CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME
| E-L Financial Consolidated |
|
|
Second quarter |
|
|
|
Year to date |
| (thousands of dollars) |
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Contribution to net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| E-L Corporate1 |
|
|
$ |
641 |
|
|
|
$ |
46,392 |
|
|
|
$ |
242,151 |
|
|
|
$ |
136,991 |
| Empire Life2 |
|
|
|
35,951 |
|
|
|
|
30,769 |
|
|
|
|
56,542 |
|
|
|
|
44,931 |
| Net income |
|
|
|
36,592 |
|
|
|
|
77,161 |
|
|
|
|
298,693 |
|
|
|
|
181,922 |
| Other comprehensive (loss) income2 |
|
|
|
(28,403 |
) |
|
|
|
(931 |
) |
|
|
|
(2,152 |
) |
|
|
|
17,555 |
| Comprehensive income |
|
|
$ |
8,189 |
|
|
|
$ |
76,230 |
|
|
|
$ |
296,541 |
|
|
|
$ |
199,477 |
CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME
| E-L Corporate |
|
Second quarter |
|
Year to date |
| (thousands of dollars) |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| |
|
|
|
|
|
|
|
|
| Revenue |
|
|
|
|
|
|
|
|
| Net (loss) gains on investments3 |
|
$ |
(42,984 |
) |
|
$ |
28,581 |
|
|
$ |
302,867 |
|
|
$ |
150,275 |
| Investment and other income |
|
|
36,596 |
|
|
|
31,877 |
|
|
|
59,442 |
|
|
|
51,774 |
| Share of associates income |
|
|
8,375 |
|
|
|
6,793 |
|
|
|
10,090 |
|
|
|
1,097 |
| |
|
|
1,987 |
|
|
|
67,251 |
|
|
|
372,399 |
|
|
|
203,146 |
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating |
|
|
5,648 |
|
|
|
4,650 |
|
|
|
11,682 |
|
|
|
10,059 |
| Income taxes |
|
|
3,698 |
|
|
|
11,329 |
|
|
|
53,691 |
|
|
|
28,342 |
| Non-controlling interests |
|
|
(8,000 |
) |
|
|
4,880 |
|
|
|
64,875 |
|
|
|
27,754 |
| |
|
|
1,346 |
|
|
|
20,859 |
|
|
|
130,248 |
|
|
|
66,155 |
| Net income |
|
|
641 |
|
|
|
46,392 |
|
|
|
242,151 |
|
|
|
136,991 |
| Other comprehensive (loss) income, net of taxes2 |
|
|
(16,035 |
) |
|
|
(3,982 |
) |
|
|
(230 |
) |
|
|
5,519 |
| Comprehensive (loss) income |
|
$ |
(15,394 |
) |
|
$ |
42,410 |
|
|
$ |
241,921 |
|
|
$ |
142,510 |
| |
|
|
|
|
| |
|
|
|
|
| Empire Life |
|
Second quarter |
|
Year to date |
| (thousands of dollars) |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| |
|
|
|
|
|
|
|
|
| Revenue |
|
|
|
|
|
|
|
|
| Net premiums |
|
$ |
202,975 |
|
|
$ |
213,851 |
|
$ |
420,549 |
|
|
$ |
443,206 |
| Net (loss) gains on investments3 |
|
|
(283,907 |
) |
|
|
157,996 |
|
|
28,915 |
|
|
|
349,059 |
| Investment and other income |
|
|
121,577 |
|
|
|
108,669 |
|
|
234,258 |
|
|
|
212,243 |
| |
|
|
40,645 |
|
|
|
480,516 |
|
|
683,722 |
|
|
|
1,004,508 |
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| Benefits and expenses |
|
|
(20,401 |
) |
|
|
425,070 |
|
|
590,300 |
|
|
|
925,270 |
| Income and other taxes |
|
|
15,961 |
|
|
|
15,996 |
|
|
25,535 |
|
|
|
23,108 |
| Non-controlling and participating policyholders' interests |
|
|
9,134 |
|
|
|
8,681 |
|
|
11,345 |
|
|
|
11,199 |
| |
|
|
4,694 |
|
|
|
449,747 |
|
|
627,180 |
|
|
|
959,577 |
| Net income |
|
|
35,951 |
|
|
|
30,769 |
|
|
56,542 |
|
|
|
44,931 |
| Other comprehensive (loss) income, net of taxes2 |
|
|
(12,368 |
) |
|
|
3,051 |
|
|
(1,922 |
) |
|
|
12,036 |
| Comprehensive income |
|
$ |
23,583 |
|
|
$ |
33,820 |
|
$ |
54,620 |
|
|
$ |
56,967 |
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 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.
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.
Empire Life, a subsidiary of E-L Financial Corporation Limited and in business since 1923, helps Canadians build wealth and protect their financial security with competitive individual and group life and health insurance, investment and retirement products. The company's vision is to become Canada's most convenient life insurance and investment company by being simple, fast and easy to do business with.