Partners Value Investments Inc. Announces Q1 2022 Interim Results
TORONTO, May 20, 2022 (GLOBE NEWSWIRE) — Partners Value Investments Inc. (the “Company”, TSX: PVF.WT) announced today its financial results for the three months ended March 31, 2022. All amounts are stated in US dollars.
The Company recorded Adjusted Earnings of $9.1 million for the three months ended March 31, 2022, compared to an Adjusted Loss of $2.4 million in the prior year quarter. Adjusted Earnings increased in the current quarter due to investment valuation gains of $16.7 million compared to $5.3 million in the prior year quarter, combined with lower foreign currency losses, and was partially offset by an increase in income tax expense.
The Company generated net income of $31.4 million for the three months ended March 31, 2022 compared to $11.6 million in the prior year quarter. The increase in net income was primarily due to a warrant liability valuation gain of $43.5 million compared to $13.9 million in the prior year quarter, offset by remeasurement losses of $16.7 million relating to the Company’s retractable common shares. The remeasurement losses are the result of an increase in the weighted average price of a Partnership unit which is used to determine the fair value of the retractable common share liability.
The market price of a Brookfield Asset Management Inc. (“Brookfield”) share was $56.57 per share at March 31, 2022 (December 2021 – $60.38).
Consolidated Statements of Earnings
| (Unaudited) For the three months ended March 31 (Thousands, US dollars) |
2022 | 2021 | |||||
| Investment income | |||||||
| Dividends | $ | 21,933 | $ | 21,292 | |||
| Other investment income | 896 | 2,009 | |||||
| 22,829 | 23,301 | ||||||
| Expenses | |||||||
| Operating expenses | (615 | ) | (365 | ) | |||
| Financing costs | (6,978 | ) | (1,284 | ) | |||
| Retractable preferred share dividends | (7,612 | ) | (11,540 | ) | |||
| 7,624 | 10,112 | ||||||
| Other items | |||||||
| Investment valuation gain | 16,683 | 5,284 | |||||
| Remeasurement losses of exchangeable shares | (16,676 | ) | — | ||||
| Warrant liability valuation gain | 43,548 | 13,942 | |||||
| Amortization of deferred financing costs | (766 | ) | (1,204 | ) | |||
| Current tax (expense) recovery | (20,290 | ) | 1,980 | ||||
| Deferred tax recovery (expense) | 11,544 | (2,627 | ) | ||||
| Foreign currency loss | (10,218 | ) | (15,935 | ) | |||
| Net income | $ | 31,449 | $ | 11,552 | |||
Financial Profile
The Company’s principal investment is its interest in 130 million Class A Limited Voting Shares (“Brookfield shares”) of Brookfield. This represents an 8% interest as at March 31, 2022. In addition, the Company owns a diversified investment portfolio of marketable securities.
The information in the following table has been extracted from the Company’s Statement of Financial Position:
Statement of Financial Position
| As at (Thousands, US dollars, except per share amounts) |
(Unaudited) March 31, 2022 |
December 31, 2021 |
|||||
| Assets | |||||||
| Cash and cash equivalents | $ | 252,425 | $ | 80,697 | |||
| Accounts receivable and other assets | 48,210 | 77,501 | |||||
| Investment in Brookfield Asset Management Inc. 1 | 7,373,102 | 7,869,681 | |||||
| Other investments carried at fair value | 660,545 | 666,033 | |||||
| $ | 8,334,282 | $ | 8,693,912 | ||||
| Liabilities and Equity | |||||||
| Accounts payable and other liabilities | $ | 24,580 | $ | 7,693 | |||
| Corporate Borrowings | 238,925 | 236,513 | |||||
| Preferred shares2 | 805,850 | 682,613 | |||||
| Retractable common shares | 3,948,808 | 3,932,110 | |||||
| Warrant liability | 573,226 | 611,010 | |||||
| Deferred taxes3 | 8,756 | 23,430 | |||||
| 5,600,145 | 5,493,369 | ||||||
| Equity | |||||||
| Deficit | (4,517,890 | ) | (4,549,339 | ) | |||
| Accumulated Other Comprehensive Income | 7,252,027 | 7,749,882 | |||||
| $ | 8,334,282 | $ | 8,693,912 | ||||
| 1 | The investment in Brookfield Asset Management Inc. consists of approximately 130 million Brookfield shares with a quoted market value of $56.57 per share as at March 31, 2022 (December 31, 2021 – $60.38). |
| 2 | Represents $738 million of retractable preferred shares less $16 million of unamortized issue costs as at March 31, 2022 (December 31, 2021 – $611 million less $13 million) and $84 million of three series of preferred shares of a subsidiary of the Company (December 31, 2021 – $84 million). |
| 3 | The deferred tax liability represents the potential future income tax liability of the Company recorded for accounting purposes based on the difference between the carrying values of the Company’s assets and liabilities and their respective tax values, as well as giving effect to estimated capital and non-capital losses. |
For further information, contact Investor Relations at 416-956-5141.
Note: This news release contains “forward-looking information” within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of applicable Canadian securities regulations. The words “potential” and “estimated” and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters, identify forward-looking information. Forward-looking information in this news release includes statements with regard to the Company’s potential future income taxes.
Although the Company believes that its anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond its control, which may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.
Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements and information include, but are not limited to: the financial performance of Brookfield Asset Management Inc., the impact or unanticipated impact of general economic, political and market factors; the behavior of financial markets, including fluctuations in interest and foreign exchanges rates; global equity and capital markets and the availability of equity and debt financing and refinancing within these markets; strategic actions including dispositions; changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates); the effect of applying future accounting changes; business competition; operational and reputational risks; technological change; changes in government regulation and legislation; changes in tax laws, catastrophic events, such as earthquakes and hurricanes; the possible impact of international conflicts and other developments including terrorist acts; and other risks and factors detailed from time to time in the Company’s documents filed with the securities regulators in Canada.
The Company cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on the Company’s forward-looking statements and information, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements and information, whether written or oral, that may be as a result of new information, future events or otherwise.
