TORONTO, Nov. 29, 2018 (GLOBE NEWSWIRE) — 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 [email protected] 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.
