Partners Value Investments Inc. Announces 2018 Third Quarter Results
November 29 2018 - 4:30PM
Partners Value Investments Inc. (the “Company”) announced today its
financial results for the three months ended September 30, 2018.
All amounts are stated in US dollars.
The Company generated net loss of $29 million for the three
months ended September 30, 2018 compared to net income of $75
million in the prior year period. The net loss was primarily driven
by the recognition of valuation losses on the change in value of
the warrant liability, and foreign currency losses resulting from
the weakening United States dollar.
The market price of a Brookfield share increased from $43.54 to
$44.53 during the nine months ended September 30, 2018.
Consolidated Statements of
Operations
(Unaudited)For the periods ended September
30(Thousands, US dollars) |
Three months |
|
Nine months |
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
Investment income |
|
|
|
|
|
|
|
|
|
|
|
Dividends |
$ |
18,541 |
|
|
$ |
20,721 |
|
|
$ |
56,219 |
|
|
$ |
67,734 |
|
Other
investment income |
|
717 |
|
|
|
1,239 |
|
|
|
3,476 |
|
|
|
2,752 |
|
|
|
19,258 |
|
|
|
21,960 |
|
|
|
59,695 |
|
|
|
70,486 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
(631 |
) |
|
|
(10,047 |
) |
|
|
(3,690 |
) |
|
|
(12,807 |
) |
Financing
costs |
|
(748 |
) |
|
|
(1,889 |
) |
|
|
(2,436 |
) |
|
|
(3,677 |
) |
Retractable preferred share dividends |
|
(7,213 |
) |
|
|
(6,896 |
) |
|
|
(20,706 |
) |
|
|
(19,525 |
) |
|
|
10,666 |
|
|
|
3,128 |
|
|
|
32,863 |
|
|
|
34,477 |
|
Other items |
|
|
|
|
|
|
|
|
|
|
|
Investment valuation gains |
|
8,945 |
|
|
|
40,141 |
|
|
|
29,123 |
|
|
|
55,275 |
|
Warrant
liability valuation (loss) gain |
|
(27,910 |
) |
|
|
76,667 |
|
|
|
28,439 |
|
|
|
(19,494 |
) |
Amortization of deferred financing costs |
|
(871 |
) |
|
|
(726 |
) |
|
|
(1,938 |
) |
|
|
(1,694 |
) |
Income
taxes |
|
(6,358 |
) |
|
|
(12,264 |
) |
|
|
(13,138 |
) |
|
|
(18,979 |
) |
Equity
accounted income |
|
572 |
|
|
|
262 |
|
|
|
651 |
|
|
|
262 |
|
Foreign
currency (losses) gains |
|
(13,620 |
) |
|
|
(31,996 |
) |
|
|
34,783 |
|
|
|
(44,359 |
) |
Net (loss)
income |
$ |
(28,576 |
) |
|
$ |
75,212 |
|
|
$ |
110,783 |
|
|
$ |
5,488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Profile
The Company’s principal investment is its
interest in 86 million Class A Limited Voting Shares (“Brookfield
shares”) of Brookfield, representing a 9% fully-diluted interest as
at September 30, 2018. 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) |
|
September 30, 2018 |
|
|
December 31, 2017 |
Assets |
|
|
|
|
|
Cash and cash
equivalents |
$ |
152,187 |
|
$ |
29,794 |
Investment in
Brookfield Asset Management Inc. 1 |
|
3,822,412 |
|
|
3,737,431 |
Other investments
carried at fair value |
|
527,849 |
|
|
750,467 |
Accounts receivable and
other assets |
|
2,272 |
|
|
6,443 |
Equity accounted
investment |
|
16,074 |
|
|
13,643 |
Goodwill |
|
4,125 |
|
|
3,102 |
|
$ |
4,524,919 |
|
$ |
4,540,880 |
Liabilities and
Equity |
|
|
|
|
|
Accounts payable and
other liabilities |
$ |
33,030 |
|
$ |
103,096 |
Preferred shares2 |
|
523,573 |
|
|
575,620 |
Warrant liability |
|
199,359 |
|
|
233,958 |
Deferred taxes3 |
|
469,502 |
|
|
468,040 |
|
|
1,225,464 |
|
|
1,380,714 |
Equity |
|
|
|
|
|
Common equity |
|
3,299,455 |
|
|
3,160,166 |
|
$ |
4,524,919 |
|
$ |
4,540,880 |
|
|
|
|
|
|
1. The investment in Brookfield Asset Management Inc. consists
of 86 million Brookfield shares with a quoted market value of
$44.53 per share as at September 30, 2018 (December 31, 2017 –
$43.54).2. Represents $531 million of retractable preferred shares
less $7 million of unamortized issue costs as at September 30, 2018
(December 31, 2017 – $585 million less $9 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 ir@pvii.ca or 647-503-6513.
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.
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