TORONTO, Aug. 28, 2019 (GLOBE NEWSWIRE) -- Partners Value Investments L.P. (the “Partnership” TSX: PVF.UN TSX: PVF.PR.U) announced today its financial results for the three months ended June 30, 2019. All amounts are stated in US dollars.
The Partnership had a net loss of $35 million for the quarter ended June 30, 2019 compared to a net income of $55 million in the prior year period. The decrease in net income was primarily attributable to foreign currency losses resulting from the weakening United States dollar and unrealized valuation losses.
On July 9, 2019, the Partnership successfully completed its substantial issuer bid by repurchasing $250 million of its Class A Preferred Limited Partnership units through a wholly owned subsidiary.
The market price of a Brookfield share was $47.78 as at June 30, 2019 (December 31, 2018 – $38.35).
Consolidated Statements of Operations
| (unaudited) For the periods ended June 30 (Thousands, US dollars) | Three months ended | Six months ended | |||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Investment income | |||||||||||||||
| Dividends | $ | 18,194 | $ | 18,934 | $ | 36,667 | $ | 37,678 | |||||||
| Other investment income | 1,865 | 1,995 | 5,783 | 2,759 | |||||||||||
| 20,059 | 20,929 | 42,450 | 40,437 | ||||||||||||
| Expenses | |||||||||||||||
| Operating expenses | (1,019 | ) | (1,809 | ) | (2,124 | ) | (3,060 | ) | |||||||
| Financing costs | (14 | ) | (478 | ) | (171 | ) | (1,688 | ) | |||||||
| Retractable preferred share dividends | (6,384 | ) | (6,704 | ) | (13,130 | ) | (13,493 | ) | |||||||
| 12,642 | 11,938 | 27,025 | 22,196 | ||||||||||||
| Other items | |||||||||||||||
| Investment valuation (losses) gains | (26,876 | ) | 31,281 | 10,871 | 20,178 | ||||||||||
| Amortization of deferred financing costs | (1,190 | ) | (566 | ) | (1,726 | ) | (1,067 | ) | |||||||
| Current taxes | (5,779 | ) | (3,324 | ) | (10,088 | ) | (7,629 | ) | |||||||
| Deferred taxes | 3,746 | (2,968 | ) | 5,160 | 849 | ||||||||||
| Equity accounted investments | - | (127 | ) | - | 79 | ||||||||||
| Foreign currency (losses) gains | (17,543 | ) | 18,486 | (37,187 | ) | 39,337 | |||||||||
| Net (loss) income | $ | (35,000 | ) | $ | 55,260 | $ | (5,945 | ) | $ | 73,943 | |||||
| Net income attributable to: | |||||||||||||||
| Equity Limited Partners | $ | (40,623 | ) | $ | 49,636 | $ | (17,194 | ) | $ | 62,691 | |||||
| General Partner | - | - | - | - | |||||||||||
| Preferred Limited Partners | 5,623 | 5,624 | 11,249 | 11,252 | |||||||||||
| $ | (35,000 | ) | $ | 55,260 | $ | (5,945 | ) | $ | 73,943 | ||||||
Financial Profile and Net Book Value
The Partnership’s principal investment is its interest in 86 million Class A Limited Voting Shares (“Brookfield shares”) of Brookfield Asset Management Inc. (“Brookfield”), representing a 9% fully diluted interest as at June 30, 2019. The information in the following table shows the changes in net book value:
| For the three months ended June 30 (Thousands, except per unit amounts) | 2019 | 2018 | |||||||||||||
| Total | Per Unit | Total | Per Unit | ||||||||||||
| Net book value, beginning of period1 | $ | 3,535,926 | $ | 40.09 | $ | 2,911,071 | $ | 32.99 | |||||||
| Net income2 | (40,623 | ) | (0.46 | ) | 49,636 | 0.56 | |||||||||
| Other comprehensive income2 | 102,158 | 1.16 | 90,941 | 1.03 | |||||||||||
| Adjustment for impact of warrant3 | (668 | ) | (0.01 | ) | (6,634 | ) | (0.08 | ) | |||||||
| Equity LP repurchase | (511 | ) | - | (328 | ) | - | |||||||||
| Net book value, end of period1,4,5 | $ | 3,596,282 | $ | 40.78 | $ | 3,044,686 | $ | 34.50 | |||||||
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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 June 30, 2019. 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 unit amounts) | June 30, 2019 | December 31, 2018 | |||
| Assets | |||||
| Cash and cash equivalents | $ | 340,966 | $ | 272,322 | |
| Investment in Brookfield Asset Management Inc. 1 | 4,101,389 | 3,291,927 | |||
| Other investments carried at fair value | 269,073 | 442,505 | |||
| Accounts receivable and other assets | 15,310 | 20,685 | |||
| $ | 4,726,738 | $ | 4,027,439 | ||
| Liabilities and Equity | |||||
| Accounts payable and other liabilities | $ | 41,092 | $ | 30,767 | |
| Preferred shares2 | 449,298 | 602,724 | |||
| Deferred taxes3 | 492,256 | 395,015 | |||
| 982,646 | 1,028,506 | ||||
| Equity | |||||
| Common equity | 3,744,092 | 2,998,933 | |||
| $ | 4,726,738 | $ | 4,027,439 | ||
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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.