TORONTO, Nov. 17, 2023 (GLOBE NEWSWIRE) -- Partners Value Investments Inc. (the "Company", TSX: PVF.WT) announced today its financial results for the nine months ended September 30, 2023. All amounts are stated in U.S. dollars.
The Company recorded net income of $72.1 million for the three months ended September 30, 2023, compared to net income of $343.9 million in the prior year period. Net income was lower in the current period primarily due to lower remeasurement gains on the Company's retractable shares and warrant liability as well as lower foreign currency gains. The Company's retractable common shares are classified as liabilities due to their cash retraction feature. The remeasurement gains or losses in a given period are driven by the respective depreciation or appreciation of the Partnership unit price as the exchangeable shares are recognized at fair value based on the quoted price of the Partnership's Equity LP units. During the quarter, the Partnership unit price increased by $0.52 compared to a decrease of $3.59 in the prior year quarter.
Excluding retractable share and warrant liability remeasurement gains and dividends paid on retractable shares, Adjusted Earnings for the Company was $29.4 million for the three months ended September 30, 2023, compared to Adjusted Earnings of $78.8 million in the prior year period. Adjusted Earnings were lower in the current period as a result of lower foreign currency gains.
As at September 30, 2023, the market prices of a Brookfield Corporation (the "Corporation", NYSE/TSX: BN) and Brookfield Asset Management Ltd. (the "Manager", NYSE/TSX: BAM) share were $31.27 and $33.34, respectively. As at November 16, 2023, the market prices of a BN and BAM share were $34.07 and $33.47, respectively.
Consolidated Statements of Operations
| (Unaudited) (Thousands, US dollars) For the periods ended September 30 | Three Months Ended | Nine Months Ended | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Investment income | |||||||||||||||
| Dividends | $ | 24,120 | $ | 22,588 | $ | 71,984 | $ | 66,413 | |||||||
| Other investment income | 2,862 | 2,150 | 8,297 | 3,969 | |||||||||||
| 26,982 | 24,738 | 80,281 | 70,382 | ||||||||||||
| Expenses | |||||||||||||||
| Operating expenses | (1,398 | ) | (386 | ) | (2,240 | ) | (1,453 | ) | |||||||
| Financing costs | (8,399 | ) | (8,469 | ) | (25,112 | ) | (24,830 | ) | |||||||
| Retractable preferred share dividends | (8,855 | ) | (9,075 | ) | (26,495 | ) | (25,616 | ) | |||||||
| 8,330 | 6,808 | 26,434 | 18,483 | ||||||||||||
| Other items | |||||||||||||||
| Investment valuation (losses) gains | (4,746 | ) | (3,683 | ) | (6,732 | ) | 9,559 | ||||||||
| Remeasurement gains of retractable shares | 35,036 | 214,305 | 142,280 | 583,910 | |||||||||||
| Warrant liability valuation gains | 13,705 | 56,885 | 38,284 | 171,868 | |||||||||||
| Amortization of deferred financing costs | (848 | ) | (872 | ) | (2,538 | ) | (2,524 | ) | |||||||
| Current taxes expense | (286 | ) | (73 | ) | (1,103 | ) | (20,248 | ) | |||||||
| Deferred taxes (expense) recovery | 1,532 | 7,557 | (3,061 | ) | 22,880 | ||||||||||
| Foreign currency gains | 19,423 | 62,983 | 269 | 80,687 | |||||||||||
| Net income | $ | 72,146 | $ | 343,910 | $ | 193,833 | $ | 864,615 | |||||||
Financial Profile
The Company's principal investments are its interest in 134 million Class A Limited Voting Shares of the Corporation and approximately 31 million Class A Limited Voting Shares of the Manager. This represents approximately a 9% interest as at September 30, 2023 in the Corporation and an 8% interest in the Manager. In addition, the Company owns a diversified investment portfolio of marketable securities and private fund interests.
The information in the following table has been extracted from the Company's Consolidated Statements of Financial Position:
Consolidated Statements of Financial Position
| (Unaudited) As at (Thousands, US dollars) | September 30, 2023 | December 31, 2022 | |||||
| Assets | |||||||
| Cash and cash equivalents | $ | 178,960 | $ | 185,711 | |||
| Accounts receivable and other assets | 53,953 | 47,260 | |||||
| Deferred tax assets | 5,902 | 1,604 | |||||
| Investment in Brookfield Corporation1 | 4,181,515 | 4,149,188 | |||||
| Investment in Brookfield Asset Management Ltd.2 | 1,017,799 | 934,183 | |||||
| Other investments carried at fair value | 600,194 | 606,223 | |||||
| $ | 6,038,323 | $ | 5,924,169 | ||||
| Liabilities and Equity | |||||||
| Accounts payable and other liabilities | $ | 22,700 | $ | 36,861 | |||
| Corporate borrowings | 220,309 | 220,711 | |||||
| Preferred shares3 | 753,597 | 752,727 | |||||
| Retractable common shares | 3,304,741 | 3,447,021 | |||||
| Warrant liability | 324,939 | 363,707 | |||||
| 4,626,286 | 4,821,027 | ||||||
| Equity | |||||||
| Accumulated deficit | (2,504,830 | ) | (2,698,663 | ) | |||
| Accumulated other comprehensive income | 3,916,867 | 3,801,805 | |||||
| $ | 6,038,323 | $ | 5,924,169 | ||||
| 1 The investment in Brookfield Corporation consists of 134 million Corporation shares with a quoted market value of $31.27 per share as at September 30, 2023 (December 31, 2022 - $31.46). | |||||||
| 2 The investment in Brookfield Asset Management Ltd. consists of 31 million Manager shares with a quoted market value of $33.34 per share as at September 30, 2023 (December 31, 2022 - $28.67). | |||||||
| 3 Represents $680 million of retractable preferred shares less $10 million of unamortized issue costs as at September 30, 2023 (December 31, 2022 - $681 million less $13 million) and $84 million of three series of preferred shares of a subsidiary of the Company (December 31, 2022 - $84 million). | |||||||
For further information, contact Investor Relations at ir@pvii.ca or 416-643-7621.
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.
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 Corporation, 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; limitations on the liquidity of our investments; 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; risks associated with the use of financial leverage; 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.
