Partners Value Investments LP Announces 2017 Annual Results
March 19 2018 - 5:30PM
Partners Value Investments LP (the
“Partnership”) (TSX-V:PVF.UN) announced today its financial
results for the year ended December 31, 2017. All amounts are
stated in US dollars.
Net income for the year was $80 million, of
which $58 million was attributable to the Equity Limited Partners
($0.65 per Equity LP unit) compared to $73 million ($0.82 per
Equity LP unit) in the prior year. The decrease in net income is
due to the impact of translating our Canadian dollar denominated
preferred share liabilities at a higher rate due to the
strengthening of the Canadian dollar versus our US dollar reporting
currency. Ignoring this impact, we recorded modestly higher net
income after-tax in 2017.
Consolidated Statements of
Operations
For the years ended
December 31 |
|
(Thousands) |
|
2017 |
|
|
|
2016 |
|
Investment income |
|
|
|
|
|
Dividends |
$ |
87,666 |
|
|
$ |
61,942 |
|
Other
investment income |
|
2,142 |
|
|
|
5,228 |
|
|
|
89,808 |
|
|
|
67,170 |
|
Expenses |
|
|
|
|
|
Operating
expenses |
|
(13,419 |
) |
|
|
(15,270 |
) |
Financing
costs |
|
(5,358 |
) |
|
|
(2,116 |
) |
Retractable preferred share dividends |
|
(27,341 |
) |
|
|
(25,289 |
) |
|
|
43,690 |
|
|
|
24,495 |
|
Other items |
|
|
|
|
|
Investment valuation gains (losses) |
|
87,784 |
|
|
|
72,967 |
|
Amortization of deferred financing costs |
|
(2,473 |
) |
|
|
(1,834 |
) |
Change in
value of fund unit liability |
|
— |
|
|
|
(896 |
) |
Income
taxes |
|
(20,059 |
) |
|
|
(22,394 |
) |
Income
from equity accounted income |
|
253 |
|
|
|
— |
|
Foreign
currency gains (losses) |
|
(29,112 |
) |
|
|
13,393 |
|
Net income (loss) |
$ |
80,083 |
|
|
$ |
85,731 |
|
|
|
|
|
|
|
Net income
(loss) attributable to: |
|
|
|
|
|
Partners
Value Investments Inc. |
$ |
— |
|
|
$ |
51,198 |
|
Equity
Limited Partners |
|
57,790 |
|
|
|
21,315 |
|
General
Partner |
|
— |
|
|
|
— |
|
Preferred
Limited Partners |
|
22,293 |
|
|
|
13,218 |
|
|
$ |
80,083 |
|
|
$ |
85,731 |
|
|
|
|
|
|
|
|
|
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 December 31, 2017.
The information in the following table shows the changes in net
book value:
For the years ended December 31(Thousands, except per
unit amounts) |
2017 |
|
2016 |
|
|
Total |
|
|
|
Per Unit |
|
|
Total |
|
|
|
Per Unit |
|
Net book value,
beginning of period1 |
$ |
2,337,457 |
|
|
$ |
26.49 |
|
$ |
2,260,264 |
|
|
$ |
25.61 |
|
Net income2 |
|
57,790 |
|
|
|
0.65 |
|
|
72,513 |
|
|
|
0.82 |
|
Other comprehensive
income2 |
|
848,407 |
|
|
|
9.61 |
|
|
149,520 |
|
|
|
1.69 |
|
Adjustment for impact
of warrant3 |
|
24,533 |
|
|
|
0.28 |
|
|
355,063 |
|
|
|
4.02 |
|
Equity LP
repurchase |
|
(11 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
Re-organization |
|
— |
|
|
|
— |
|
|
(499,903 |
) |
|
|
(5.65 |
) |
Net book value, end of
period1,4,5 |
$ |
3,268,176 |
|
|
$ |
37.03 |
|
$ |
2,337,457 |
|
|
$ |
26.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Calculated on a fully diluted basis, net book value is non-IFRS
measure.
- Attributable to Equity Limited Partners
- The basic weighted average number of Equity Limited Partnership
(“Equity LP”) units outstanding during the year ended December 31,
2017 was 73,541,190. The diluted weighted average number of Equity
Limited Partnership (“Equity LP”) units available and outstanding
during the year ended December 31, 2017 was 88,249,956; this
includes the 14,708,766 Equity LP units issued through the exercise
of all outstanding warrants.
- At the end of the year, the diluted Equity LP units outstanding
were 88,249,897 (December 31, 2016 – 88,250,327).
- Net book value is a non-IFRS measure and is equal to total
equity less General Partner equity and Preferred Limited Partners’
equity, plus the value of consideration to be received on
exercising of warrants, which as at December 31, 2017 was $380
million (December 31, 2016 – $355 million).
The information in the following table has been extracted from
the Partnership’s Statement of Financial Position:
Statement of Financial
Position
As
at(Thousands, except per unit amounts) |
|
December 31, 2017 |
|
|
December 31, 2016 |
Assets |
|
|
|
|
|
Cash and cash
equivalents |
$ |
29,801 |
|
$ |
5,971 |
Accounts receivable and
other assets |
|
6,443 |
|
|
20,881 |
Investment in
Brookfield Asset Management Inc.1 |
|
3,737,431 |
|
|
2,829,156 |
Other securities |
|
|
|
|
|
Available
for sale investments |
|
288,306 |
|
|
231,277 |
Marketable securities |
|
462,161 |
|
|
381,457 |
Equity accounted
investment |
|
13,643 |
|
|
— |
Goodwill |
|
3,102 |
|
|
— |
|
$ |
4,540,887 |
|
$ |
3,468,742 |
Liabilities and
shareholders’ equity |
|
|
|
|
|
Accounts payable and
other liabilities |
$ |
108,744 |
|
$ |
124,820 |
Preferred shares2 |
|
575,620 |
|
|
521,155 |
Deferred taxes3 |
|
468,040 |
|
|
340,470 |
|
|
1,152,404 |
|
|
986,445 |
Equity |
|
|
|
|
|
Partnership’s
Equity |
|
|
|
|
|
Equity
Limited Partners |
|
2,888,580 |
|
|
1,982,394 |
General
Partner |
|
1 |
|
|
1 |
Preferred
Limited Partners |
|
499,902 |
|
|
499,902 |
|
$ |
4,540,887 |
|
$ |
3,468,742 |
Net book value per
unit4,5 |
$ |
37.03 |
|
$ |
26.49 |
|
|
|
|
|
|
- The investment in Brookfield Asset Management Inc. consists of
86 million Brookfield shares with a quoted market value of $43.54
per share as at December 31, 2017 (December 31, 2016 –
$32.96).
- Represents $585 million of retractable preferred shares less $9
million of unamortized issue costs as at December 31, 2017
(December 31, 2016 – $529 million less $8 million).
- The 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.
- Calculated on a fully diluted basis. As at December 31, 2017,
there were 73,541,131 (December 31, 2016 – 73,541,531) Equity LP
units issued and outstanding, while the diluted Equity LP units
outstanding were 88,249,897 (December 31, 2016 – 88,250,327) which
includes the 14,708,766 Equity LP units that would be issued
through the exercise of all outstanding warrants.
- Net book value is a non-IFRS measure and is equal to total
equity less General Partner equity and Preferred Limited Partners’
equity, plus the value of consideration to be received on
exercising of warrants, which as at December 31, 2017 was $380
million (December 31, 2016 – $355 million).
Chief Executive Officer Appointment Partners
Value Investments LP is pleased to announce the appointment of
Brian D. Lawson as the Chief Executive Officer of the Partnership,
effective March 20, 2018. Mr. Lawson will be replacing George Myhal
who has held the position since 2016.
For further information, contact Investor
Relations at ir@pvii.ca or 647-503-6516.
FORWARD-LOOKING INFORMATION
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.
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