Partners Value Investments Inc. Announces Q1 2023 Interim Results

Partners Value Investments Inc.

TORONTO, May 24, 2023 (GLOBE NEWSWIRE) -- Partners Value Investments Inc. (the “Company”, TSX: PVF.WT) announced today its financial results for the three months ended March 31, 2023. All amounts are stated in US dollars.

The Company generated net income of $242 million for the three months ended March 31, 2023 compared to $31 million in the prior year period. Net income was higher in the current period primarily due to significant remeasurement gains associated with the retractable shares of $226 million, compared to remeasurement losses of $17 million in the prior year period. 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 decreased by $3.40 compared to a $0.66 increase 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 $11 million for the three months ended March 31, 2023, compared to $9 million in the prior year period. Adjusted Earnings was higher in the current period as a result of higher other investment income driven by increased interest earned on loan assets and cash on deposit and lower tax expenses offset by lower investment valuation gains.

As at March 31, 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 $32.59 and $32.72, respectively. As at May 23, 2023, the market prices of a BN and BAM share were $31.41 and $31.63, respectively.

Consolidated Statements of Operations

For the three months ended March 31, Unaudited (Thousands, US dollars)
		2023			2022
Investment income
Dividends	$	22,395		$	21,933
Other investment income		3,216			896
		25,611			22,829
Expenses
Operating expenses		(409)			(615)
Financing costs		(8,334)			(6,978)
Retractable preferred share dividends		(8,792)			(7,612)
		8,076			7,624
Other items
Investment valuation gains		2,242			16,683
Retractable share remeasurement gains (losses)		226,081			(16,676)
Warrant liability remeasurement gains		10,887			43,548
Amortization of deferred financing costs		(842)			(766)
Current tax expense		(407 )			(20,290)
Deferred tax (expense) recovery		(1,358)			11,544
Foreign currency losses		(2,579)			(10,218)
Net income	$	242,100		$	31,449

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 an 8% interest as at March 31, 2023 in both entities. 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

As at (Thousands, US dollars)				(Unaudited) March 31, 2023			December 31, 2022
Assets
Cash and cash equivalents			$	114,896		$	185,711
Accounts receivable and other assets				93,708			47,260
Deferred tax asset				5,387			1,604
Investment in Brookfield Corporation1				4,358,030			4,149,188
Investment in Brookfield Asset Management Ltd.2				998,872			934,183
Other investments carried at fair value				657,735			606,223
			$	6,228,628		$	5,924,169
Liabilities and Equity
Accounts payable and other liabilities			$	67,610		$	36,861
Corporate borrowings				221,225			220,711
Preferred shares3				754,982			752,727
Retractable common shares				3,220,958			3,447,021
Warrant liability				353,596			363,707
				4,618,371			4,821,027
Equity
Accumulated deficit				(2,456,563 )			(2,698,663)
Accumulated other comprehensive income				4,066,820			3,801,805
			$	6,228,628		$	5,924,169

1. The investment in Brookfield Corporation consists of 134 million Corporation shares with a quoted market value of $32.59 per share as at March 31, 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 $32.72 per share as at March 31, 2023 (December 31, 2022 – $28.67).

3. Represents $682 million of retractable preferred shares less $12 million of unamortized issue costs as at March 31, 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. 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 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; 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.