PVF.UN Partners Value Investments LP

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, 2021. All amounts are stated in US dollars.

The Partnership generated net income of $28.5 million for the quarter ended June 30, 2021 compared to a net loss of $11 million in the prior year quarter. Net income was higher in the current quarter as dividend income increased due to the receipt of Brookfield Asset Management Reinsurance Partners Ltd. valued at $46 million as a dividend-in-kind from Brookfield Asset Management.

The market price of a Brookfield share was $50.98 per share at June 30, 2021 compared to $41.27 at December 31, 2020.

Consolidated Statements of Operations

(Unaudited)For the period ended June 30(Thousands, US dollars)	Three Months Ended								Six Months Ended
		2021				2020				2021				2020
Investment income
Dividends	$	63,389			$	17,454			$	81,892			$	38,234
Other investment income		1,035				136				3,044				1,123
		64,424				17,590				84,936				39,357
Expenses
Operating expenses		(830	)			(401	)			(1,535	)			(842	)
Financing costs		(2,966	)			(134	)			(4,250	)			(151	)
Retractable preferred share dividends		(7,678	)			(6,509	)			(19,218	)			(11,917	)
		52,950				10,546				59,933				26,447
Other items
Investment valuation gains (loss)		709				1,407				5,993				(14,044	)
Amortization of deferred financing costs		(1,333	)			(594	)			(2,537	)			(1,123	)
Current taxes recovery (expense)		265				(441	)			2,245				(126	)
Deferred taxes (expense)		(5,544	)			(1,337	)			(8,171	)			(2,203	)
Foreign currency (losses) gain		(18,555	)			(21,022	)			(30,146	)			53,714
Net income (loss)	$	28,492			$	(11,441	)		$	27,317			$	62,665

Change in Net Book Value

The information in the following table shows the changes in net book value:

UnauditedFor the period ended June 30(Thousands, except per unit amounts)	Three Months Ended								Six Months Ended
		Total				Per Unit				Total				Per Unit
Net book value, beginning of period1	$	5,161,413			$	58.57			$	4,777,152			$	54.20
Net income2		26,770				0.30				23,873				0.27
Other comprehensive income2		894,653				10.17				1,278,310				14.53
Adjustment for impact of warrant3		5,011				0.06				10,166				0.12
Re-organization4		663,678				7.54				663,678				7.54
Equity LP repurchase		(1,138	)			(0.01	)			(2,792	)			(0.03	)
Net book value, end of period1,5,6	$	6,750,387			$	76.63			$	6,750,387			$	76.63

1. Calculated on a fully diluted basis, net book value is non-IFRS measure.
2. Attributable to Equity Limited Partners.
3. The basic weighted average number of Equity Limited Partnership (“Equity LP”) units outstanding during the period ended June 30, 2021 was 73,285,331. The diluted weighted average number of Equity LP units available and outstanding for the period ended June 30, 2021 was 88,024,713; this includes the 14,708,666 Equity LP units issuable on the exercise of all outstanding warrants. The adjustment for warrants is impacted by foreign currency fluctuation.
4. A re-organization in a subsidiary of the Partnership recognized a reduction in deferred tax liability through accumulated other comprehensive income. The subsidiary has the ability to allocate the taxable income to unitholders of the Partnership.
5. At the end of the period, the diluted Equity LP units outstanding were 87,993,997 (December 31, 2020 – 88,056,097).
6. 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 June 30, 2021 was $385 million (December 31, 2020 – $375 million).

Financial Profile

The Partnership’s principal investment is its interest in approximately 130 million Class A Limited Voting Shares (“Brookfield shares”) of Brookfield Asset Management Inc. This represents a 9% fully diluted interest as at June 30, 2021. In addition, the Company owns a diversified investment portfolio of marketable securities.

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

As at(Thousands, US dollars)		(Unaudited)June 30,2021			December 31,2020
Assets
Cash and cash equivalents	$	265,364		$	316,718
Accounts receivable and other assets		47,431			40,109
Investment in Brookfield Asset Management Inc. 1		6,604,278			5,313,865
Other investments carried at fair value		362,783			365,949
	$	7,279,856		$	6,036,641
Liabilities and Equity
Accounts payable and other liabilities	$	11,201		$	15,604
Corporate Borrowings		120,511			117,286
Preferred shares2		608,336			694,148
Deferred taxes3		21,353			654,217
		761,401			1,481,255
Equity
Common equity		6,365,400			4,402,331
General Partner		1			1
Preferred Limited Partners		153,054			153,054
	$	7,279,856		$	6,036,641

1. The investment in Brookfield Asset Management Inc. consists of approximately 130 million Brookfield shares with a quoted market value of $50.98 per share as at June 30, 2021 (December 31, 2020 – $41.27).
2. Represents $623 million of retractable preferred shares less $15 million of unamortized issue costs as at June 30, 2021 (December 31, 2020 – $706 million less $12 million).
3. 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.

Appointment of Chief Financial Officer

Partners Value Investments L.P. is pleased to announce the appointment of Rachel Powell as Chief Financial Officer of the Partnership, effective August 19, 2021.

For further information, contact Investor Relations at 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.