Partners Value Investments L.P. Announces 2018 Annual Results
April 01 2019 - 7:27PM
Partners Value Investments L.P. (the “Partnership”, TSX: PVF.UN
TSX:PVF.PR.U) announced today its financial results for the year
ended December 31, 2018. All amounts are stated in US dollars.
The Partnership generated net income of $125
million for the year ended December 31, 2018 compared to
$81 million in the prior year. The increase in net income was
primarily driven by foreign currency gains, partially offset by
lower recognized valuation gains.
The market price of a Brookfield share was
$38.35 as at December 31, 2018 (2017 – $43.54).
Consolidated Statements of
Operations
For the years ended December 31(Thousands, US
dollars) |
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
Investment income |
|
|
|
|
|
|
|
|
|
|
|
Dividends |
|
|
|
|
|
|
$ |
73,462 |
|
|
$ |
87,666 |
|
Other
investment income |
|
|
|
|
|
|
|
6,636 |
|
|
|
2,142 |
|
|
|
|
|
|
|
|
|
80,098 |
|
|
|
89,808 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
(2,134 |
) |
|
|
(13,418 |
) |
Financing
costs |
|
|
|
|
|
|
|
(2,945 |
) |
|
|
(5,358 |
) |
Retractable
preferred share dividends |
|
|
|
|
|
|
|
(26,854 |
) |
|
|
(27,341 |
) |
|
|
|
|
|
|
|
|
(31,933 |
) |
|
|
(46,118 |
) |
|
|
|
|
|
|
|
|
48,165 |
|
|
|
43,690 |
|
Other items |
|
|
|
|
|
|
|
|
|
|
|
Investment
valuation gains |
|
|
|
|
|
|
|
4,985 |
|
|
|
87,784 |
|
Amortization
of deferred financing costs |
|
|
|
|
|
|
|
(2,360 |
) |
|
|
(2,473 |
) |
Current
taxes |
|
|
|
|
|
|
|
(12,816 |
) |
|
|
(14,745 |
) |
Deferred
taxes |
|
|
|
|
|
|
|
5,957 |
|
|
|
(5,314 |
) |
Equity
accounted income |
|
|
|
|
|
|
|
(18 |
) |
|
|
253 |
|
Foreign
currency gains (losses) |
|
|
|
|
|
|
|
81,384 |
|
|
|
(29,112 |
) |
Net
income |
|
|
|
|
|
|
$ |
125,297 |
|
|
$ |
80,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2018.
The information in the following table shows the changes in net
book value:
|
|
|
|
|
For the years ended December 31(Thousands, except per
unit amounts) |
2018 |
|
|
2017 |
|
Total |
|
|
|
Per Unit |
|
|
|
Total |
|
|
|
Per Unit |
Net book value, beginning of period1 |
$ |
3,268,176 |
|
|
$ |
37.05 |
|
|
$ |
2,337,457 |
|
|
$ |
26.49 |
Net income2 |
|
102,804 |
|
|
|
1.17 |
|
|
|
57,790 |
|
|
|
0.65 |
Other comprehensive income2 |
|
(494,704 |
) |
|
|
(5.61 |
) |
|
|
848,407 |
|
|
|
9.61 |
Adjustment for impact of warrant3 |
|
(29,688 |
) |
|
|
(0.34 |
) |
|
|
24,533 |
|
|
|
0.28 |
Equity LP repurchase |
|
(2,350 |
) |
|
|
(0.03 |
) |
|
|
(11 |
) |
|
|
— |
Net book value, end of period1,4,5 |
$ |
2,844,238 |
|
|
$ |
32.24 |
|
|
$ |
3,268,176 |
|
|
$ |
37.03 |
- 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,
2018 was 73,524,856. The diluted weighted average number of Equity
Limited Partnership (“Equity LP”) units available and outstanding
during the year ended December 31, 2018 was 88,233,622; 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 88,200,297 (December 31, 2017 – 88,249,897).
- 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 $237
million (December 31, 2017 – $380 million).
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 December 31, 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) |
|
December 31,2018 |
|
|
December31, 2017 |
Assets |
|
|
|
|
|
Cash and cash
equivalents |
$ |
272,322 |
|
$ |
29,801 |
Investment in Brookfield
Asset Management Inc. 1 |
|
3,291,927 |
|
|
3,737,431 |
Other investments carried
at fair value |
|
442,505 |
|
|
750,467 |
Accounts receivable and
other assets |
|
20,685 |
|
|
6,443 |
Equity accounted
investment2,5 |
|
— |
|
|
16,745 |
|
$ |
4,027,439 |
|
$ |
4,540,887 |
Liabilities and
Equity |
|
|
|
|
|
Accounts payable and other
liabilities |
$ |
30,767 |
|
$ |
108,744 |
Preferred shares4 |
|
602,724 |
|
|
575,620 |
Deferred taxes5 |
|
395,015 |
|
|
468,040 |
|
|
1,028,506 |
|
|
1,152,404 |
Equity |
|
|
|
|
|
Common equity |
|
2,998,933 |
|
|
3,388,483 |
|
$ |
4,027,439 |
|
$ |
4,540,887 |
|
|
|
|
|
|
- The investment in Brookfield Asset Management Inc. consists of
86 million Brookfield shares with a quoted market value of $38.35
per share as at December 31, 2018 (December 31, 2017 –
$43.54).
- Certain reclassifications have been made to the comparative
figures reported. These reclassifications had no effect on the
reported results of operations. A reclassification has been made to
the Statement of Financial Position for the year ended December 31,
2017 to reclassify the amount previously disclosed as goodwill of
$3,102 to equity accounted investment (EAI).
- Represents $613 million of retractable preferred shares less
$10 million of unamortized issue costs as at December 31, 2018
(December 31, 2017 – $585 million less $9 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.
- Effective April 1, 2018, the basis of accounting for Trisura
was changed from EAI to FVTOCI.
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.
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