TORONTO, May 20, 2022 (GLOBE NEWSWIRE) — Partners Value Investments LP (the “Partnership” TSX: PVF.UN TSX: PVF.PR.U) today announced its financial results for the three months ended March 31, 2022. All amounts are in US dollars.
The partnership reported net income of $10.0 million for the quarter ended March 31, 2022 compared to a net loss of $1.2 million for the same quarter last year. Net income increased for the current quarter primarily due to investment valuation gains on the partnership’s other investment portfolio of $16.7 million compared to $5.3 million in the year-ago quarter and lower foreign exchange losses, partially offset by an increase in income tax expense became.
The market price of Brookfield Asset Management Inc. (“Brookfield”) shares on March 31, 2022 was $56.57 per share (December 2021 – $60.38).
Consolidated Income Statement
| (unaudited) For the three months ended March 31 (thousands, US dollars) |
2022 | 2021 | |||||
| capital gains | |||||||
| dividends | $ | 19,144 | $ | 18,503 | |||
| Other Investment Income | 896 | 2.009 | |||||
| 20,040 | 20,512 | ||||||
| Costs | |||||||
| operating expenses | (865 | ) | (705 | ) | |||
| financing costs | (2,467 | ) | (1,284 | ) | |||
| Retractable Preferred Stock Dividends | (8.413 | ) | (11,540 | ) | |||
| (11,745 | ) | (13,529 | ) | ||||
| Other things | |||||||
| Valuation gains from investments | 16,683 | 5,284 | |||||
| Amortization of deferred financing costs | (766 | ) | (1.204 | ) | |||
| Current taxes (expenses) reimbursement | (20,290 | ) | 1,980 | ||||
| Deferred tax refund (expense) | 11,544 | (2.627 | ) | ||||
| foreign currency losses | (5,487 | ) | (11,592 | ) | |||
| net income (loss) | $ | 9,979 | $ | (1.176 | ) | ||
Change in Net Book Value
The information in the following table shows the changes in the net book value:
| For the three months ended March 31 | 2022 | 2021 | |||||||||||||
| (in thousands, except per unit amounts) | In total | Per unit | In total | Per unit | |||||||||||
| Net book value, beginning of period1 | $ | 7,482,738 | $ | 85.35 | $ | 4,777,152 | $ | 54.20 | |||||||
| net income2 | 8.257 | 0.10 | (2,898 | ) | (0.03 | ) | |||||||||
| Other comprehensive income2 | (492,897 | ) | (6.09 | ) | 383,658 | 4.36 | |||||||||
| Adjustment for Arrest Warrant Effects3 | 3,901 | 0.05 | 5.155 | 0.06 | |||||||||||
| Share LP Buyback | (1,449 | ) | (0.02 | ) | (1,654 | ) | (0.02 | ) | |||||||
| Net book value, period end1,4 | $ | 7,000,550 | $ | 79.39 | $ | 5,161,413 | $ | 58.57 | |||||||
| 1 | Calculated on a fully diluted basis. Net book value is a non-IFRS measure used by management to measure the value of an equity LP unit on a fully diluted basis. It is equal to total equity less general partners’ equity and preferred limited partners’ equity plus the value of consideration to be received upon the exercise of warrants, which was $382 million as of March 31, 2022 (December 31, 2022). December 2021 – $378 million). |
| 2 | Attributable to Equity Limited Partners. |
| 3 | The fundamental weighted average number of units outstanding of Equity Limited Partnership (“Equity LP”) during the period ended March 31, 2022 was 66,198,629. The diluted weighted average number of units of Equity Limited Partnership (“Equity LP”) available and outstanding for the three months ended March 31, 2022 was 80,906,274; this includes the 14,707,645 Equity LP units issued by the exercise of all outstanding warrants. |
| 4 | At the end of the period, outstanding diluted equity LP units were 80,895,667 (December 31, 2021 – 82,171,127). |
financial profile
The Partnership’s principal investment is its interest in approximately 130 million Class A shares with limited voting rights (“Brookfield Shares”) of Brookfield. As of March 31, 2022, this corresponds to a share of around 8%. In addition, the Company owns a diversified investment portfolio of marketable securities.
The information in the table below was extracted from the partnership balance sheet:
| As in (thousands, US dollars) |
(unaudited) March 31, 2022 |
December 31, 2021 |
|||
| financial assets | |||||
| Cash and cash equivalents | $ | 262,295 | $ | 80,704 | |
| Receivables and Other Assets | 34,283 | 65,418 | |||
| Investment in Brookfield Asset Management Inc. 1 | 7.373.102 | 7,869,681 | |||
| Other investments measured at fair value | 343,541 | 344,983 | |||
| $ | 8.013.221 | $ | 8,360,786 | ||
| Liabilities and Equity | |||||
| Trade accounts payable and other liabilities | $ | 35,243 | $ | 7,693 | |
| corporate loans | 238,925 | 236,513 | |||
| preferred shares2 | 958,255 | 835.019 | |||
| Deferred taxes3 | 8,756 | 23,431 | |||
| 1,241,179 | 1,102,656 | ||||
| Equity capital | |||||
| Equity Limited Partners | 6,618,987 | 7.105.075 | |||
| Complementary | 1 | 1 | |||
| Preferred limited partners | 153,054 | 153,054 | |||
| $ | 8.013.221 | $ | 8,360,786 |
| 1 | Investment in Brookfield Asset Management Inc. consists of approximately 130 million Brookfield with a listed market value of $56.57 per share as of March 31, 2022 (December 31, 2021 – $60.38). |
| 2 | Represents $738 million in redeemable preferred stock less $16 million in unamortized issue cost as of March 31, 2022 (December 31, 2021 – $612 million less $13 million) and $152 million in three Series of Preferred Stock (December 31, 2021 – $152 million) and $84 million for three Series of Preferred Stock (December 31, 2021 – $84 million) of a subsidiary of the Partnership, issued in December 2021. |
| 3 | Deferred tax liability represents the partnership’s potential future income tax liability, which is recognized for accounting purposes based on the difference between the carrying amounts of the partnership’s assets and liabilities and their respective tax bases, and affects estimated capital and non-capital losses. |
For more information, contact Investor Relations at 416-956-5141.
Note: This press 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 that are or indicate predictions of future events, trends or prospects and which are not related to historical matters, identify forward-looking information. Forward-looking information in this press release includes statements regarding 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 on reasonable assumptions and expectations, the reader should not place undue reliance on any forward-looking statements and information, as these are known and unknown risks, uncertainties and other factors, many of which are beyond its control, which may cause the Company’s actual results, performance or achievements to differ materially from anticipated future results, performance or achievements contained in such forward-looking statements are expressed or implied and information.
Factors that could cause actual results to differ materially from those anticipated or implied by the forward-looking statements and information include, among others: the financial performance of Brookfield Asset Management Inc., the effect or unexpected effects of general economic, political and market factors; the behavior of financial markets, including fluctuations in interest rates and exchange rates; global equity and capital markets and the availability of equity and debt financing and refinancing within those markets; strategic measures including orders; changes in accounting policies and methods used in reporting financial condition (including uncertainties related to 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 potential impact of international conflicts and other developments, including terrorist attacks; and other risks and factors set out from time to time in the Company’s filings with 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, whether as a result of new information, future events or otherwise.
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