Partners Value Investments Inc. Announces 2018 Annual Results
April 01 2019 - 7:28PM
Partners Value Investments Inc. (the “Company”, TSX: PVF.WT)
announced today its financial results for the year ended December
31, 2018. All amounts are stated in US dollars.
The Company generated net income of $120 million
for the year ended December 31, 2018 compared to net loss of $14
million in the prior year. The increase in net income was primarily
driven by foreign currency gains, partially offset 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 was
$38.35 as at December 31, 2018 (2017 – $43.54).
Consolidated Statements of
Operations
For the periods ended December 31(Thousands, US dollars) |
|
2018 |
|
|
|
2017 |
|
Investment income |
|
|
|
|
|
Dividends |
$ |
73,462 |
|
|
$ |
87,666 |
|
Other
investment income |
|
6,636 |
|
|
|
2,142 |
|
|
|
80,098 |
|
|
|
89,808 |
|
Expenses |
|
|
|
|
|
Operating
expenses |
|
(2,500 |
) |
|
|
(13,418 |
) |
Financing
costs |
|
(2,945 |
) |
|
|
(5,358 |
) |
Retractable
preferred share dividends |
|
(26,854 |
) |
|
|
(27,341 |
) |
|
|
(32,299 |
) |
|
|
(46,117 |
) |
Other items |
|
|
|
|
|
Investment
valuation gains |
|
4,985 |
|
|
|
87,784 |
|
Warrant
liability valuation losses |
|
(20,182 |
) |
|
|
(80,908 |
) |
Amortization
of deferred financing costs |
|
(2,360 |
) |
|
|
(2,473 |
) |
Current
taxes expense |
|
(12,816 |
) |
|
|
(14,745 |
) |
Deferred
taxes recovery (expenses) |
|
5,957 |
|
|
|
(5,314 |
) |
Equity
accounted income |
|
(18 |
) |
|
|
253 |
|
Foreign
currency gains (losses) |
|
96,748 |
|
|
|
(42,347 |
) |
Net income
(loss) |
$ |
120,113 |
|
|
$ |
(14,059 |
) |
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 December 31, 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 December
31(Thousands, US dollars, except per share amounts) |
|
2018 |
|
|
2017 |
Assets |
|
|
|
|
|
Cash and cash
equivalents |
$ |
272,316 |
|
$ |
29,794 |
Investment in Brookfield
Asset Management Inc. 1 |
|
3,291,927 |
|
|
3,737,431 |
Other investments carried
at fair value |
|
442,505 |
|
|
750,467 |
Accounts receivable and
other assets |
|
22,064 |
|
|
6,443 |
Equity accounted
investment2,3 |
|
— |
|
|
16,745 |
|
$ |
4,028,812 |
|
$ |
4,540,880 |
Liabilities and
Equity |
|
|
|
|
|
Accounts payable and other
liabilities |
$ |
30,766 |
|
$ |
103,096 |
Preferred shares4 |
|
602,724 |
|
|
575,620 |
Warrant liability |
|
237,226 |
|
|
233,958 |
Deferred taxes5 |
|
395,015 |
|
|
468,040 |
|
|
1,265,731 |
|
|
1,380,714 |
Equity |
|
|
|
|
|
Common equity |
|
2,763,081 |
|
|
3,160,166 |
|
$ |
4,028,812 |
|
$ |
4,540,880 |
1 |
The investment in
Brookfield Asset Management Inc. consists of 86 million Brookfield
shares with a quoted market value of $38.35 per share as at
December 31, 2018 (December 31, 2017 – $43.54). |
2 |
Certain
reclassifications have been made to the comparative figures
reported. These reclassifications had no effect on the reported
results of operations. A reclassification has been made to the
Statement of Financial Position for the year ended December 31,
2017 to reclassify the amount previously disclosed as Goodwill of
$3.1 million to Equity accounted investment (EAI). |
3 |
Effective April 1, 2018, the basis of accounting for Trisura was
changed from Equity Accounted Investments (“EAI”) to Fair Value
Through Other Comprehensive Income (“FVTOCI”). |
4 |
Represents $613 million of retractable preferred shares less $10
million of unamortized issue costs as at December 31, 2018
(December 31, 2017 – $585 million less $9 million). |
5 |
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 416-956-5142.
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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