E-L Financial Corporation Limited Announces September 30, 2014 Interim Financial Results

TORONTO, ONTARIO--(Marketwired - Nov 10, 2014) - E-L Financial Corporation Limited ("E-L Financial") (ELF.TO) (TSX:ELF.PR.F) (TSX:ELF.PR.G) (TSX:ELF.PR.H) today reported for the quarter ended September 30, 2014, consolidated net operating income¹ of $26.5 million or $5.75 per share² compared with $32.7 million or $7.33 per share in 2013. The $6.2 million decrease in net operating income in 2014 versus 2013 is mainly due to a $9.3 million decline in The Empire Life Insurance Company's ("Empire Life") net operating income, resulting primarily from the unfavourable impact of long-term interest rate movements relating to the Individual Insurance product line in 2014 compared to favourable movements in 2013. The decline was partially offset with a $3.0 million increase in E-L Corporate's³ operating income, reflecting the impact of the purchase of $650 million in equities from the sale of The Dominion of Canada General Insurance Company ("The Dominion").

Consolidated net operating income for the first nine months of 2014 was $96.0 million or $21.46 per share compared with $85.7 million or $18.85 per share for the same period in 2013. The $10.3 million increase in net operating income was due mainly to an increase of $16.2 million in E-L Corporate's net operating income, resulting from increased investment income as previously noted. Empire Life net operating income decreased $6.0 million due to the unfavourable impact of long-term interest rate movements noted above.

Net income

E-L Financial earned consolidated net income of $70.6 million or $17.00 per share for the third quarter of 2014 compared with $63.3 million or $15.13 per share in 2013. The $7.3 million increase in net income is mainly due to discontinued operations that reported a $29.4 million loss during the third quarter of 2013. The overall increase was partially offset by a decline in E-L Corporate's fair value through profit or loss ("FVTPL") investments income from $46.6 million in 2013 to $29.3 million in 2014.

Consolidated net income for the first nine months of 2014 was $252.6 million or $61.34 per share compared with $400.2 million or $98.95 per share in 2013. The $147.6 million decrease in net income for the period is mainly due to the liquidation of The Dominion's 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 income from FVTPL investments decreased from $210.7 million in 2013 to $135.1 million in 2014, reflecting the more favourable impact of global stock market movements in the prior year.

Comprehensive income

E-L Financial earned consolidated comprehensive income of $66.2 million or $15.87 per share for the third quarter of 2014 compared with $68.5 million or $16.45 per share in 2013. Consolidated other comprehensive loss ("OCL") was $4.4 million for the third quarter of 2014 compared to other comprehensive income ("OCI") in $5.2 million in 2013. The $9.6 million decrease in OCI is due to the remeasurement of defined benefit plans combined with a decrease in the unrealized gains on AFS investments.

Consolidated comprehensive income for the first nine months of 2014 was $265.7 million or $64.68 per share compared with $337.0 million or $82.85 per share in 2013. Consolidated OCI was $13.1 million for the first nine months of 2014 compared to OCL of $63.2 million in 2013. The 2013 OCL resulted from the reclassification in 2013 of significant gains relating to The Dominion's liquidation of its common share portfolio.

E-L Financial's net equity value per Common Share¹ at September 30, 2014 was $933.42.

CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME
	Three months ended September 30, 2014
(thousands of dollars)	E-L Corporate				Empire Life				Total
Net operating income	$	8,275			$	18,213			$	26,488
Realized gain on available for sale investments including impairment write downs		5,013				1,001				6,014
Share of income of associates		8,837				-				8,837
E-L Corporate's fair value change in fair value through profit or loss investments		29,289								29,289
Net income		51,414				19,214				70,628
Other comprehensive loss ("OCL")		(2,731	)			(1,689	)			(4,420	)
Comprehensive income	$	48,683			$	17,525			$	66,208

	Three months ended September 30, 2013
(thousands of dollars)	E-L Corporate			Empire Life				Total
Net operating income	$	5,226		$	27,468			$	32,694
Realized gain (loss) on available for sale investments including impairment write downs		2,591			(1,592	)			999
Share of income of associates		12,439			-				12,439
E-L Corporate's fair value change in fair value through profit or loss investments		46,557							46,557
Net income from continuing operations		66,813			25,876				92,689
Net loss from discontinued operations		-			-				(29,373	)
Net income		66,813			25,876				63,316
Other comprehensive income ("OCI") from continuing operations		4,335			3,335				7,670
OCL from discontinued operations		-			-				(2,496	)
Total OCI		4,335			3,335				5,174
Comprehensive income	$	71,148		$	29,211			$	68,490

	Nine months ended September 30, 2014
(thousands of dollars)	E-L Corporate			Empire Life			Total
Net operating income	$	34,774		$	61,180		$	95,954
Realized gain on available for sale investments including impairment write downs		8,778			2,965			11,743
Share of income of associates		9,789			-			9,789
E-L Corporate's fair value change in fair value through profit or loss investments		135,064						135,064
Net income		188,405			64,145			252,550
OCI		2,788			10,347			13,135
Comprehensive income	$	191,193		$	74,492		$	265,685

	Nine months ended September 30, 2013
(thousands of dollars)	E-L Corporate			Empire Life				Total
Net operating income	$	18,582		$	67,139			$	85,721
Realized gain (loss) on available for sale investments including impairment write downs		6,778			(745	)			6,033
Share of income of associates		29,464			-				29,464
E-L Corporate's fair value change in fair value through profit or loss investments		210,654							210,654
Net income from continuing operations		265,478			66,394				331,872
Net income from discontinued operations		-			-				68,369
Net income		265,478			66,394				400,241
OCI (OCL) from continuing operations		18,165			(6,025	)			12,140
OCL from discontinued operations		-			-				(75,381	)
Total OCI (OCL)		18,165			(6,025	)			(63,241	)
Comprehensive income	$	283,643		$	60,369			$	337,000

1	Use of non-GAAP measures:
	"net operating income" is net income from continuing operations 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	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.