Partners Value Investments LP Announces 2016 Third Quarter Results

Partners Value Investments LP Announces 2016 Third Quarter Results

PARTNERS VALUE INVESTMENTS LP ANNOUNCES 2016 THIRD QUARTER RESULTS

TORONTO, NOVEMBER 28, 2016 – Partners Value Investments LP (the “Partnership”) announced today its financial results for the quarter ended September 30, 2016.

Net income for the quarter was $25 million, of which $15 million was attributable to the Equity Limited Partners ($0.20 per unit) compared to a net loss of $35 million ($0.47 per unit) in the prior year quarter. The increase in net income was primarily due to an increase in investment income and higher level of returns from our investment activity.

The Partnership’s net book value decreased by $4.74 per unit to $38.23 per unit primarily due to the capital reorganization as a portion of the previous equity of Partners Value Investments Inc. was exchanged for Preferred Limited Partnership units. Adjusting for the impact of the capital reorganization, the Partnership’s net book value increased 12% from $34.05 to $38.23 per unit due to higher comprehensive income, mainly driven by the increase in value of Brookfield common shares.

Consolidated Statements of Operations

For the periods ended September 30

 

Three months

 

 

 

Nine months

 

 

2016

 

 

2015

 

 

 

2016

 

 

 

2015

 

(Thousands)

 

 

 

 

 

 

 

 

 

 

Investment income

$

21,279

 

 

 

 

$

61,348

 

 

 

 

 

Dividends

 

$

18,083

 

 

$

50,523

 

Other investment income

 

802

 

 

298

 

 

 

5,840

 

 

 

605

 

Expenses

 

22,801

 

 

18,381

 

 

 

67,188

 

 

 

51,128

 

 

(4,787)

 

 

 

 

 

(12,852)

 

 

 

 

Operating expenses

 

 

(859)

 

 

 

 

(2,403)

Financing costs

 

(688)

 

(447)

 

 

(1,221)

 

 

(693)

Retractable preferred share dividends

 

(8,839)

 

(6,973)

 

 

(25,088)

 

 

(20,926)

Other items

 

7,767

 

 

10,102

 

 

 

28,027

 

 

 

27,106

 

 

30,882

 

 

 

 

 

 

65,907

 

 

 

 

 

Investment valuation gains (losses)

 

 

 

(41,291)

 

 

 

 

 

(44,838)

Amortization of deferred financing costs

 

(627)

 

(458)

 

 

(1,802)

 

 

(1,372)

Change in value of fund unit liability

 

(59)

 

2,838

 

 

(1,187)

 

 

2,979

 

Income taxes

 

(3,607)

 

6,606

 

 

(22,012)

 

 

5,619

Foreign currency (losses) gains

 

(9,420)

 

(12,736)

 

 

23,833

 

 

 

(10,331)

Net income (loss)

$

24,936

 

$

(34,939)

 

 

$

92,766

 

 

$

(20,837)

 

Net income (loss) attributable to:

$

 

 

 

$

67,830

 

 

 

 

 

Partners Value Investments Inc.

$

(34,939)

 

$

(20,837)

Equity Limited Partners

 

14,984

 

 

 

 

14,984

 

 

 

General Partner

 

 

 

 

 

 

Preferred Limited Partners

 

9,952

 

 

 

 

9,952

 

 

 

 

$

24,936

 

$

(34,939)

 

 

$

92,766

 

 

$

(20,837)

 

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 September 30, 2016. The information in the following table shows the changes in net book value:

For the periods ended September 30

 

Three months ended

 

 

 

Nine months ended

 

 

Total

 

Per Share

 

 

Total

 

 

Per Share

(Thousands, except per share amounts)

 

 

 

 

 

 

Net book value, beginning of period1

$

3,160,436

 

$

42.97

 

$

3,127,980

 

$

42.53

 

Net income2, 3

 

14,984

 

 

0.20

 

 

 

82,814

 

 

 

1.13

 

Other comprehensive income2,3

 

292,224

 

 

3.98

 

 

 

256,850

 

 

 

3.49

 

Re-Organization

 

(656,316)

 

(8.92)

 

 

(656,316)

 

 

(8.92)

Net book value, end of period1,4

$

2,811,328

 

$

38.23

 

 

$

2,811,328

 

 

$

38.23

 

1Net book value per common share is non-IFRS measure.

2Attributable to Equity Limited Partners and Partners Value Investments Inc.

3The weighted average number of Equity Limited Partnership (“Equity LP”) units outstanding during the nine months ended September, 2016 was 73,543,831 (2015 – 73,543,831).

4As at September 30, 2016, there were 73,543,831 (December 31, 2015 – 73,543,831) Equity LP units issued and outstanding on a fully diluted basis.

The information in the following table has been extracted from the Partnership’s Statement of Financial Position:

Statement of Financial Position

 

 

 

 

 

 

As at

 

September 30,

 

 

 

December 31,

(Thousands, except per share amounts)

 

2016

 

 

 

2015

Assets

$

37,368

 

 

 

 

Cash and cash equivalents

$

127,467

Investments

 

 

 

 

 

 

Brookfield Asset Management Inc.1

 

3,959,754

 

 

 

3,746,873

Other securities

 

795,844

 

 

 

619,363

Accounts receivable and other assets

 

13,017

 

 

 

8,169

 

 

$

4,805,983

 

 

$

4,501,872

Liabilities and Equity

$

166,504

 

 

 

 

Accounts payable and other liabilities

$

243,527

Preferred shares2

 

699,858

 

 

 

706,258

Deferred taxes3

 

471,977

 

 

 

424,107

Equity

 

1,338,339

 

 

 

1,373,892

 

 

 

 

 

Partners Value Investments Inc.

 

 

 

 

3,127,980

Partnership equity

 

2,811,328

 

 

 

 

Equity Limited Partners

 

 

 

 

General Partner

 

1

 

 

 

Preferred Limited Partners

 

656,315

 

 

 

 

 

 

3,467,644

 

 

 

3,127,980

Net book value per unit,5

 

$

4,805,983

 

 

$

4,501,872

$

38.23

 

 

$

42.53

1The investment in Brookfield Asset Management Inc. consists of 86 million Brookfield shares with a quoted market value of $46.13 per share as at September 30, 2016 (December 31, 2015 – $43.65).

2Represents $711 million of retractable preferred shares less $11 million of unamortized issue costs as at September 30, 2016 (December 31, 2015 – $717 million less $11 million).

3The deferred tax liability represents the potential future income tax liability of the Partnership recorded for accounting purposes based on the difference between the carrying values of the Partnership’s assets and liabilities and their respective tax values, as well as giving effect to estimated capital and non- capital losses.

4As at September 30, 2016, there were 73,543,831 (December 31, 2015 – 73,543,831) Equity LP units issued and outstanding on a fully diluted basis.

5Net book value per unit is a non-IFRS measure. Net book value is equal to total equity less General Partner equity and Preferred Limited

Partners equity.

For further information, contact Investor Relations at ir@pvii.ca or 647-503-6516.

*****

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 Partnership’s potential future income taxes.

Although the Partnership 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 Partnership 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 Partnership’s documents filed with the securities regulators in Canada.

The Partnership cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on the Partnership’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 Partnership 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.

©  2017 Partners Value Investments LP