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, 2022. All amounts are stated in US dollars.

The Partnership recorded net income of $21.0 million for the quarter ended June 30, 2022, compared to net income of $28.5 million in the prior year quarter. The decrease in income was primarily due to lower income from dividends, as a result of the one-time special dividend in the prior year quarter from the spin-off of Brookfield Asset Management Reinsurance Partners Ltd, and was partially offset by foreign currency gains and tax recoveries. Income of $19.3 million was attributable to the Equity Limited Partners ($0.24 per Equity LP unit) and income of $1.7 million was attributable to preferred limited partners.

The market price of a Brookfield Asset Management Inc. (“Brookfield”) share was $44.47 per share at June 30, 2022 (December 2021 – $60.38). The market price of a Brookfield share was $51.02 on August 22, 2022.

Consolidated Statements of Operations

(Unaudited)For the period ended June 30	Three Months Ended								Six Months Ended
(Thousands, US dollars)		2022				2021				2022				2021
Investment income
Dividends	$	19,103			$	63,389			$	38,247			$	81,892
Other investment income		924				1,035				1,820				3,044
		20,027				64,424				40,067				84,936
Expenses
Operating expenses		(761	)			(830	)			(1,626	)			(1,535	)
Financing costs		(2,547	)			(2,966	)			(5,014	)			(4,250	)
Retractable preferred share dividends		(10,454	)			(7,678	)			(18,867	)			(19,218	)
		6,265				52,950				14,560				59,933
Other items
Investment valuation gains (loss)		(3,441	)			709				13,242				5,993
Amortization of deferred financing costs		(886	)			(1,333	)			(1,652	)			(2,537	)
Current taxes recovery (expense)		115				265				(20,175	)			2,245
Deferred taxes recovery (expense)		3,779				(5,544	)			15,323				(8,171	)
Foreign currency (losses) gain		15,176				(18,555	)			9,689				(30,146	)
Net income	$	21,008			$	28,492			$	30,987			$	27,317

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	$	7,000,550				79.39			$	7,482,738			$	85.35
Net income2		19,286				0.24				27,543				0.34
Other comprehensive income2		(1,596,902	)			(19.75	)			(2,089,799	)			(25.84	)
Adjustment for impact of warrant3		(10,833	)			(0.14	)			(6,933	)			(0.09	)
Equity LP repurchase		(1,473	)			(0.02	)			(2,921	)			(0.04	)
Net book value, end of period1, 4,5	$	5,410,628			$	59.72			$	5,410,628			$	59.72

1. Calculated on a fully diluted basis. Net book value is a non-IFRS measure used by management to measure the value of an Equity LP unit on a fully diluted basis. It 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, 2022 was $371 million (December 31, 2021 – $378 million).
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 was 66,187,069. The diluted weighted average number of Equity Limited Partnership (“Equity LP”) units available and outstanding for the three months ended June 30, 2022 was 80,894,554; this includes the 14,707,485 Equity LP units issued through the exercise of all outstanding warrants.
4. At the end of the period, the diluted Equity LP units outstanding were 80,870,467 (December 31, 2021 – 82,171,127).
5. Net book value excludes amounts attributable to non-controlling interests.

Financial Profile

The Partnership’s principal investment is its interest in approximately 130 million Class A Limited Voting Shares (“Brookfield shares”) of Brookfield. This represents approximately a 8% interest as at June 30, 2022. 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, 2022				December 31, 2021
Assets
Cash and cash equivalents	$	237,888			$	80,704
Accounts receivable and other assets		29,410				65,418
Investment in Brookfield Asset Management Inc. 1		5,796,037				7,869,681
Other investments carried at fair value		336,214				344,983
	$	6,399,549			$	8,360,786
Liabilities and Equity
Accounts payable and other liabilities	$	25,048			$	7,693
Corporate Borrowings		232,178				236,513
Preferred shares2		938,447				835,019
Deferred taxes3		961				23,431
		1,196,634				1,102,656
Equity
Equity Limited Partners		5,039,898				7,105,075
General Partner		1				1
Preferred Limited Partners		153,054				153,054
Non-controlling interests		9,962				-
	$	6,399,549			$	8,360,786

1. The investment in Brookfield Asset Management Inc. consists of approximately 130 million Brookfield with a quoted market value of $44.47 per share as at June 30, 2022 (December 31, 2021 – $60.38).
2. Represents $717 million of retractable preferred shares less $15 million of unamortized issue costs as at June 30, 2022 (December 31, 2021 – $612 million less $13 million), $152 million of three series of preferred shares (December 31, 2021 - $152 million) and $84 million of three series of preferred shares (December 31, 2021 - $84 million) of a subsidiary of the Partnership, issued in December 2021
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.

For further information, contact Investor Relations at 416-956-5141.

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.