PVF.WT Partners Value Investments LP

Partners Value Investments Inc. (the “Company”, TSX: PVF.WT) announced today its financial results for the three months ended June 30, 2020. All amounts are stated in US dollars.

The Company generated net income of $36 million for the three months ended June 30, 2020 compared to $12 million in the prior year quarter. The increase in net income was primarily driven by increase in valuation gains, partially offset by higher foreign currency losses.

The market price of a Brookfield share on a post-split basis was $32.90 as at June 30, 2020 (December 31, 2019 – $38.53). Brookfield completed a three-for-two stock split on April 1, 2020.

Consolidated Statements of Operations

(unaudited)For the periods ended June 30(Thousands, US dollars)	Three months ended								Six months ended
		2020				2019				2020				2019
Investment income
Dividends	$	20,245			$	18,194			$	43,812			$	36,667
Other investment income		136				1,865				1,123				5,783
		20,381				20,059				44,935				42,450
Expenses
Operating expenses		(361	)			(940	)			(567	)			(1,832	)
Financing costs		(134	)			(14	)			(151	)			(171	)
Retractable preferred share dividends		(6,509	)			(6,384	)			(11,917	)			(13,130	)
		(13,377	)			(12,721	)			(12,635	)			(27,317	)
Other items
Investment valuation gains (losses)		1,406				(26,876	)			(14,045	)			10,871
Warrant liability valuation gains (losses)		53,098				51,683				121,586				(33,498	)
Amortization of deferred financing costs		(594	)			(1,190	)			(1,123	)			(1,726	)
Current taxes expense		(441	)			(5,779	)			(126	)			(10,088	)
Deferred taxes (expense) recovery		(1,337	)			3,746				(2,203	)			5,160
Foreign currency (losses) gains		(29,659	)			(22,739	)			69,820				(47,144	)
Net income (loss)	$	35,850			$	11,566			$	206,209			$	(49,108	)

Financial Profile

The Company’s principal investment is its interest in approximately 129 million Class A Limited Voting Shares (“Brookfield shares”) of Brookfield. Brookfield completed a three-for-two stock split on April 1, 2020. This represents a 9% fully diluted interest as at June 30,2020. 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:

As at (Thousands, US dollars, except per share amounts)		June 30, 2020			December 31, 2019
Assets
Cash and cash equivalents	$	107,167		$	99,488
Investment in Brookfield Asset Management Inc. 1		4,236,156			4,961,496
Other investments carried at fair value		515,625			465,380
Accounts receivable and other assets		34,629			21,985
	$	4,893,577		$	5,548,349
Liabilities and Equity
Accounts payable and other liabilities	$	8,231		$	21,195
Preferred shares2		542,644			454,076
Warrant liability		230,231			368,039
Deferred taxes3		512,180			608,876
		1,293,286			1,452,186
Equity
Common equity		3,600,291			4,096,163
	$	4,893,577		$	5,548,349

   

1. The investment in Brookfield Asset Management Inc. consists of approximately 129 million Brookfield shares on a post-split basis with a quoted market value of $32.90 per share as at June 30, 2020 (December 31, 2019 – $38.53). Brookfield completed a three-for-two stock split on April 1, 2020.
2. Represents $552 million of retractable preferred shares less $9 million of unamortized issue costs as at June 30, 2020 (December 31, 2019 – $462 million less $8 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.

President and Officer Appointment

Partners Value Investments Inc. is pleased to announce the appointment of Bahir Manios as President of the Company, effective August 20, 2020. Mr. Manios will be replacing Brian D. Lawson who will continue as Chairman and Chief Executive Officer.

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.