E L Financial : For year ended December 31, 2024

Published: 2025-03-07 17:23:10 ET ELF.TO

Financial Corporation Limited

ANNUAL REPORT 2024

56th ANNUAL REPORT

Financial Highlights

(Millions of dollars, except per share amounts)

Years ended December 31

2024

2023

Net Equity Value per Common Share (1)

2,336.43

1,968.17

Net Income per Common Share

459.74

265.60

Contribution to Shareholders' Net Income:

E-L Corporate

1,284

778

Empire Life

279

155

Shareholders' Net Income

1,563

933

Preferred Shareholder Dividends

Net Income attributable to Common Shareholders

1,548

918

E-L Corporate

Shareholders' Net Income

1,284

778

Investments - Corporate

7,821

6,593

Investments in Associates

466

394

Empire Life

Common Shareholders' Net Income

279

155

Net Insurance Service Result

176

181

Life Insurance Capital Adequacy Test Total Ratio ("LICAT") (%)

151

155

ANNUAL MEETING OF SHAREHOLDERS

The Annual and Special Meeting of Shareholders ("AGM") will be held Wednesday May 7, 2025 at 11:30 a.m. (Toronto time). The AGM will be held as a virtual-only meeting. All shareholders are invited to attend.

E-L Financial Corporation Limited 1

Board of Directors

Duncan N.R. Jackman

Chairman, President and Chief Executive Officer, E-L Financial Corporation Limited

M. Victoria D. Jackman

Executive Director, Hal Jackman Foundation

Peter J. Levitt

Corporate Director

Elizabeth M. Loach

Head, Private Markets, Pension Investment Management, Canada Imperial Bank of Commerce

Clive P. Rowe

Corporate Director

Stephen J.R. Smith

Co-Founder and Executive Chairman, First National Financial LP

Mark M. Taylor

Treasurer, Canadian Northern Prairie Lands Company Inc.

Honorary Directors

The Hon. Henry N.R. Jackman

William J. Corcoran

Officers

Duncan N.R. Jackman

Chairman, President and Chief Executive Officer

Richard B. Carty

Vice-President, General Counsel and Corporate Secretary

Susan C. Clifford

Treasurer

Scott F. Ewert

Vice-President and Chief Financial Officer

Fahad Khan

Vice-President and Chief Investment Officer

2 E-L Financial Corporation Limited

MANAGEMENT'S DISCUSSION & ANALYSIS

REPORT ON E-L FINANCIAL CORPORATION LIMITED

This document has been prepared for the purpose of providing Management's Discussion and Analysis ("MD&A") of the financial condition and results of operations for the years ended December 31, 2024 and 2023 for E-L Financial Corporation Limited ("E-L Financial" or the "Company"). This MD&A should be read in conjunction with the December 31, 2024 year end consolidated financial statements and the notes, which form part of the E-L Financial Corporation Limited 2024 Annual Report dated March 6, 2025. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"). Unless otherwise noted, both the consolidated financial statements and this MD&A are expressed in Canadian dollars. Figures in this MD&A may differ or not sum due to rounding. This MD&A is dated March 6, 2025.

This MD&A contains certain forward-looking statements that are subject to risks and uncertainties that may cause the results or events mentioned in this discussion to differ materially from actual results or events. No assurance can be given that results, performance or achievement expressed in, or implied by, any forward-looking statements within this discussion will occur, or if they do, that any benefits may be derived from them.

Unless otherwise stated, all per share amounts are based on the weighted average number of common shares and Series A Convertible Preference Shares outstanding for the period, adjusted for the Company's proportionate interest in its own common shares held indirectly through investments in associates.

Additional information relating to the Company, including its Annual Information Form, may be found at www.sedarplus.ca.

Forward-looking statements and information

Certain statements in this MD&A about the Company's current and future plans, expectations and intentions, results, market share growth and profitability, strategic objectives or any other future events or developments constitute forward-looking statements and information within the meaning of applicable securities laws. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements and information. Although management anticipates that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because there can be no assurance that they will prove to be correct. By their nature, such forward-looking statements and information are subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, market risk including equity risk, hedging risk, interest rate risk, foreign exchange rate risk; liquidity risk; credit risk including counterparty risk; product risk including mortality risk, policyholder behaviour risk, expense risk, morbidity risk, product design and pricing risk, underwriting and claims risk, reinsurance risk; operational risk, including legal and regulatory compliance risk, model risk, human resources risk, third party risk, technology, information security and business continuity risk; and business and strategic risk, including environmental and social risk, risk with respect to risk with respect to financial strength, capital adequacy risk, risk to competition, risk with respect to distribution channels, risk with respect to changes to applicable income tax legislation, risk with respect to brand, risk with respect to intellectual property and risk with respect to significant ownership of common shares. Please see the section titled "Description of the Business" in E-L Financial's Annual Information Form available at www.sedarplus.cafor more details on these risks.

E-L Financial Corporation Limited 3

MANAGEMENT'S DISCUSSION & ANALYSIS

Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking statements and information include that the general economy remains stable; assumptions on interest rates, mortality rates and insurance contract liabilities; and capital markets continue to provide access to capital. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully, and readers should not place undue reliance on forward-looking statements made herein or in the documents reproduced herein.

To the extent any forward-looking information in this MD&A constitutes future-oriented financial information or financial outlooks within the meaning of securities laws, such information is being provided to demonstrate potential benefits and readers are cautioned that this information may not be appropriate for any other purpose. Future-oriented financial information and financial outlooks are, without limitation, based on the assumptions and subject to the risks set out above.

The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. When relying on the Company's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors, assumptions and other uncertainties and potential events. Readers are cautioned not to place undue reliance on this forward- looking information, which is given as of the date hereof or the date indicated, and to not use such forward-looking information for anything other than its intended purpose. The Company undertakes no obligation to update publicly or revise any forward-looking statements and information, whether as a result of new information, future events or otherwise after the date of this document, except as required by law.

Non-GAAP measures

The MD&A contains information using non-GAAP measures. Current Canadian GAAP is the IFRS Accounting Standards for the Company's consolidated financial statements. The Company believes that these measures provide useful information to its shareholders in evaluating the Company's financial results. Where non-GAAP measures are used, descriptions have been provided as to the nature of the adjustments made.

The MD&A contains reference to net equity value, net equity value per common share and growth in net equity value per common share. Net equity value per common share is described and reconciled to shareholders' equity on page 7. These terms do not have any standardized meaning according to IFRS Accounting Standards and therefore may not be comparable to similar measures presented by other companies.

Other non-GAAP measures are also used in The Empire Life Insurance Company ("Empire" or "Empire Life") section of the MD&A. These include references to assets under management, annualized premium sales, gross and net sales for segregated funds and fixed annuities to provide investors with supplemental measures of its operating performance and to highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS Accounting Standards financial measures. Empire Life also believes that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers. Empire Life's management also uses non-GAAP measures to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and to determine components of management compensation. Empire Life believes that these measures provide information useful to its shareholders and policyholders in evaluating the Empire's underlying financial results.

Annualized premium sales is used as a method of measuring sales volume. It is equal to the premium expected to be received in the first 12 months for all new individual insurance and employee benefit policies sold during the period. For segregated funds and annuity contracts, sales include new and renewal deposits to policy contracts. Net sales in the Wealth Management line reflect the gross sales (deposits) less the effect of redemptions and surrenders.

4 E-L Financial Corporation Limited

MANAGEMENT'S DISCUSSION & ANALYSIS

Assets under management is a non-GAAP measure of the assets managed by Empire Life, which includes general fund assets assets and segregated fund assets. It represents the total assets of Empire Life and the assets its customers invest in.

The following table provides a reconciliation of assets under management to total assets in Empire Life's financial statements:

(in millions of dollars)

2024

2023

General fund assets

10,273

9,852

Segregated fund assets

9,394

8,813

Total Empire Life assets under management

19,667

18,665

The Company

E-L Financial operates as an investment and insurance holding company. In managing its operations, the Company distinguishes between two operating segments, E-L Corporate and Empire Life.

E-L Corporate's operations include the oversight of investments in global equities held through direct and indirect holdings of common shares, investment funds, closed-end investment companies and other private companies. E-L Financial holds a 56.6% (December 31, 2023 - 56.6%) interest in a closed-end investment corporation, United Corporations Limited ("United") which is listed on the Toronto Stock Exchange. United is an investment vehicle for long-term growth through investments in common equities. The invested assets and operations of United are consolidated and included in the E-L Corporate segment. In addition, E-L Corporate has two significant investments in associates which includes a 34.9% (December 31, 2023 - 36.6%) interest in Algoma Central Corporation ("Algoma") and a 24.9% (December 31, 2023 - 24.9%) interest in Economic Investment Trust Limited ("Economic"). Algoma and Economic are accounted for using the equity method.

The Company's investment in Empire Life (99.5% interest) is consolidated by E-L Financial. The Empire Life operating segment underwrites life and health insurance policies and provides segregated funds and annuity products.

The Company's strategy is to accumulate shareholder value through long-term capital appreciation and dividend and interest income from its investments. E-L Financial oversees its investments through representation on the Boards of Directors of the subsidiaries and the other companies in which the Company has significant shareholdings.

Overview of results attributable to shareholders of E-L Financial

E-L Financial consolidated

Fourth quarter

(millions of dollars)

2024

2023

Contribution to net income

E-L Corporate(1)

271

391

Empire Life(1)

110

Net income

287

501

Other comprehensive income (loss)(1)

Comprehensive income

292

508

Year

2024

2023

1,284

778

279

155

1,563

933

(1)

1,577

932

E-L Financial Corporation Limited 5

MANAGEMENT'S DISCUSSION & ANALYSIS

The following tables summarize the results of the Company's business segments:

E-L Corporate

Fourth quarter

(millions of dollars)

2024

2023

Net gain on investments

301

516

Investment and other income

Share of associates income (loss)

(31)

352

517

Expenses

Income taxes

Non-controlling interests

126

Net income

271

391

Other comprehensive income (loss), net of taxes(1)

(3)

Comprehensive income

277

388

Empire Life

Fourth quarter

(millions of dollars)

2024

2023

Net insurance service result

Net investment and insurance finance result

142

Fee and other income(2)

198

Expenses

Income and other taxes

Non-controlling interests and net income

attributable to the participating account

Net income

110

Other comprehensive (loss) income, net of taxes(1)

(1)

Comprehensive income

120

Year

2024

2023

1,470

948

157

143

(9)

1,712

1,082

214

134

168

127

428

304

1,284

778

(1)

1,293

777

Year

2024

2023

176

181

306

136

527

348

125

113

103

248

193

279

155

284

155

E-L Financial reported a consolidated 2024 shareholder's net income of $1,563 million or $459.74 per common share compared to $933 million or $265.60 per common share in 2023.

E-L Corporate reported net income of $1,284 million for the year ended December 31, 2024 compared to $778 million in 2023. The increase in earnings was due to a higher net gain on investments of $1,470 million in 2024 compared to $948 million in 2023. E-L Corporate's global investment portfolio had a pre- tax total return, including dividend income, of 26% in 2024 compared to a pre-tax total return of 19% in the prior year.

Empire Life reported a net income of $279 million for the year ended December 31, 2024 compared to $155 million in 2023. The increase in earnings was primarily due to more favourable interest rate movements in 2024 and the impacts of insurance contract liability assumption updates.

Consolidated comprehensive income for the year ended December 31, 2024 was $1,577 million compared to $932 million for 2023. Other comprehensive income ("OCI") was $14 million in 2024 compared to other comprehensive loss ("OCL") of $1 million in 2023. The income in 2024 was primarily due to the Company's share of OCI of associates and a gain on the remeasurement of the post- employment defined benefit plans.

6 E-L Financial Corporation Limited

MANAGEMENT'S DISCUSSION & ANALYSIS

Normal course issuer bid

On March 7, 2024, the Company obtained approval from the TSX to renew its normal course issuer bid ("NCIB") to purchase up to 173,086 common shares between March 12, 2024 and March 11, 2025. Daily purchases (other than pursuant to a block purchase exemption) on the TSX under the NCIB are limited to 1,000 common shares. The price that the Company pays for the common shares is the prevailing market price at the time of acquisition.

No shares were purchased under the NCIB for the year ended December 31, 2024. For the year ended December 31, 2023, 4,700 shares were purchased under the NCIB at an average price of $900.78 for a total consideration of $4 million.

Substantial issuer bids

On November 7, 2023 the Company announced its intention to commence a substantial issuer bid ("SIB") pursuant to which the Company offered to purchase up to $100 million of its outstanding common shares for cash. As of December 31, 2023 the Company had taken up and paid for 90,668 common shares at a price of $1,050.00 per common share. The Common Shares acquired under the SIB represent an aggregate purchase price of $95 million. As required by security legislation, the Company suspended any purchases of common shares under the NCIB during the SIB.

During the fourth quarter of 2023, United completed a SIB, which resulted in United taking up 338,983 of its outstanding common shares. Combined with the shares repurchased year to date under United's normal course issuer bid, E-L Financial's effective ownership increased to 56.6% at December 31, 2023 from 54.9% at December 31, 2022.

Net equity value per common share

E-L Corporate's investments in Algoma and Economic are accounted for using the equity method and are not carried at fair value. Therefore, to provide an indication of the accumulated shareholder value, the following table adjusts shareholders' equity to reflect investments in associates at fair value:

(millions of dollars, except per share amounts)

2024

2023

E-L Financial shareholders' equity

8,416

7,114

Less: First preference shares

(300)

8,116

6,814

Adjustments for E-L Corporate's investments in associates not carried at fair

value:

Carrying value

(466)

(394)

Fair value(1)

430

394

(36)

Non-controlling interest and deferred tax

(28)

Net equity value

8,088

6,814

Common shares(2) outstanding at year end

3,461,980

Net equity value per common share(2) (3)

2,336.43

1,968.17

E-L Financial Corporation Limited 7

MANAGEMENT'S DISCUSSION & ANALYSIS

Growth in net equity value per common share

The Company's objective is to build long-term shareholder value by compounding growth in net equity value per common share over the long term. Set out below is a table that shows the net equity value per common share and growth for the respective fiscal periods. The growth in net equity value per common share and compounded annual growth in net equity value per common share is calculated as the change in net equity value per share for the respective period and includes dividends paid to common shareholders.

Net equity value

Annual

per common

Growth*

share *

2015

1,089.23

12.3

2016

1,159.26

6.8

2017

1,316.64

14.0

2018

1,295.65

(1.2)

2019

1,486.19

15.1

2020

1,684.93

15.4

2021

1,884.08

17.1

2022

1,785.66

(3.4)

2023

1,968.17

11.1

2024

2,336.43

22.5

Compounded annual growth in net equity value per common

share*

2015

- 2024 - 10 years

10.4

1969

- 2024 - Since inception

12.3

Summary of quarterly results

The following table summarizes the quarterly results:

(millions of dollars, except per share

2024

2023

amounts)

Insurance service revenue

358

357

351

339

335

337

328

326

Net investment and insurance finance

219

142

(46)

(7)

result

Fair value change in fair value through

301

325

214

629

516

(103)

211

323

profit or loss investments

Non-insurance investment and other

income

Share of income (loss) of associates

(30)

Total revenue

729

1,000

669

1,070

1,003

229

591

752

Net income (loss)(1)

287

497

232

547

501

(57)

184

305

Earnings (loss) per common share

- basic

84.03

146.56

67.66

161.41

144.61

(17.73)

52.07

86.96

- diluted

77.93

135.13

62.96

148.72

132.30

(17.73)

48.31

80.00

(1) Attributable to shareholders

8 E-L Financial Corporation Limited

Disclaimer

E-L Financial Corporation Limited published this content on March 07, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 07, 2025 at 22:21:58.144.