Partners Value Investments Inc. Announces Q3 2022 Interim

TORONTO, Nov. 22, 2022 (GLOBE NEWSWIRE) — Partners Value Investments Inc. (the “Company”, TSX: PVF.WT) today announced its financial results for the three months ended September 30, 2022. All amounts are shown in US Dollars.

The Company generated net income of $343.9 million for the quarter ended September 30, 2022, compared to a net loss of $269.0 million in the prior year quarter. The increase in net earnings was primarily due to revaluation gains of $214.3 million in the quarter related to the company’s redeemable common stock, compared to revaluation losses of $239.2 million in the quarter. the previous year. The retractable common shares of the Company are classified as liabilities due to their exchangeable feature equivalent to one unit of Partners Value Investments LP (the “Partnership”). Therefore, revaluation gains or losses in a given period are determined by the respective depreciation or appreciation of the Partnership. Unit price. During the quarter, the price of the Partnership Units decreased by $3.59 compared to an increase of $3.25 in the prior year quarter. The Partnership’s unit value is primarily determined by Brookfield’s share price, which declined over the period in line with the broader market.

Excluding revaluation gains on redeemable shares and warrants, the Company’s adjusted earnings were $78.8 million for the three months ended September 30, 2022, compared to $22.7 million for the third quarter. ‘Previous exercice. Adjusted earnings are higher for the current year period due to foreign exchange gains and tax recoveries from the depreciation of the Canadian dollar, partially offset by higher financing costs and valuation losses investments. Funding costs are higher in the current period due to senior unsecured notes issued since the prior year period and dividends declared and paid on the Company’s retractable shares, which are recognized as a financing cost in the consolidated statements of earnings.

The market price of a Brookfield share was $40.89 as of September 30, 2022 (December 31, 2021 – $60.38). The market price of a Brookfield share was $44.07 on November 21, 2022.

Consolidated Statements of Income

(In thousands of US dollars)
Three months completed Nine month period ended
For periods ended September 30 2022 2021 2022 2021
investment income
Dividends $ 22,588 $ 20,247 $ 66,413 $ 107,717
Other investment income 2,150 1,116 3,969 4,160
24,738 21,363 70,382 111,877
Operating Expenses (386 ) (429 ) (1,453 ) (1,529 )
Funding costs (8,469 ) (2,132 ) (24,830 ) (6,382 )
Dividends on redeemable preferred shares (9,075 ) (7,207 ) (25,616 ) (26,425 )
6,808 11,595 18,483 77,541
Other items
Investment capital gains (losses) (3,683 ) 2,692 9,559 8,685
Gains (losses) from revaluation of redeemable shares 214 305 (239,224 ) 583 910 (718,318 )
Gains (losses) on remeasurement of warrant liabilities 56,885 (52,548 ) 171,868 (163,768 )
Amortization of deferred financing costs (872 ) (764 ) (2,524 ) (3,301 )
Recovery of current taxes (expenses) (73 ) (618 ) (20,248 ) 1,627
Recovery of deferred taxes (expense) 7,557 (3,310 ) 22,880 (11,481 )
Exchange gains (losses) 62,983 13,122 80,687 (24,324 )
Net profit (loss) $ 343,910 $ (269,055 ) $ 864 615 $ (833,339 )

Financial Profile

The Company’s principal investment is its ownership interest in 130 million Class A Limited Voting Shares (“Brookfield Shares”) of Brookfield. This represents an 8% ownership as of September 30, 2022. In addition, the Company holds a diversified investment portfolio of marketable securities.

The information contained in the following table has been extracted from the company’s statements of financial position:

Statements of financial position

Like a
(In thousands of US dollars)
September 30,
December 31, 2021
Cash and cash equivalents $ 230,982 $ 80,697
Accounts receivable and other assets 44,703 77,501
Investment in Brookfield Asset Management Inc.1 5,329,435 7,869,681
Other investments recognized at fair value 614 308 666,033
Deferred tax asset2 6,950
$ 6,226,378 $ 8,693,912
Liabilities and equity
Accounts payable and other liabilities $ 40 196 $ 7,693
Corporate borrowings 216 162 236,513
Preferred shares3 738 267 682 613
Redeemable common shares 3,358,184 3,932,110
Mandate Liability 398,807 611 010
Deferred tax liability 23,430
4,751,616 5,493,369
Deficit (3,684,724 ) (4,549,339 )
Accumulated other comprehensive income 5,159,486 7,749,882
$ 6,226,378 $ 8,693,912
  1. The investment in Brookfield Asset Management Inc. consists of approximately 130 million shares of Brookfield with a market value of $40.89 per share as of September 30, 2022 (December 31, 2021 – $60.38).
  2. The deferred tax balance represents the potential tax recovery arising from the difference between the carrying value of the net assets and the respective tax values. Changes in the deferred tax balance are primarily related to changes in the market value of the Partnership’s investments and foreign currency fluctuations.
  3. Represents $667 million of retractable preferred shares less $13 million of unamortized issue costs as of September 30, 2022 (December 31, 2021 – $612 million less $13 million) and $84 million of three series of preferred shares of a subsidiary of the Company (December 31, 2021, 2021 – $84 million).

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 which are predictions or indicate future events, trends or prospects and which do not relate to historical matters, identify forward-looking information. The forward-looking information contained 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 the forward-looking statements and information because they involve unknown events and 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 any anticipated future results, performance or achievements 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 the forward-looking statements and information include, but are not limited to: the financial performance of Brookfield Asset Management Inc., the impact or unforeseen impact of economic events, political and market factors; the behavior of financial markets, including interest rate and currency exchange rate fluctuations; global equity and capital markets and the availability of equity and debt financing and refinancing in such markets; strategic actions, including provisions; 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 regulations and laws; changes in tax laws; catastrophic events, such as earthquakes and hurricanes; the possible impact of international conflicts and other developments, including acts of terrorism; and other risks and factors detailed from time to time in the Company’s documents filed with the securities authorities in Canada.

The Company cautions that the foregoing list of important factors that could 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 as well as 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 result from new information, future events or otherwise.