PVF.WT Partners Value Investments LP

Partners Value Investments Inc. (the “Company”, TSX: PVF.WT) announced today its financial results for the three months ended September 30, 2021. All amounts are stated in US dollars.

The Company recorded Adjusted Earnings of $22.7 million for the quarter ended September 30, 2021 compared to $0.1 million in the prior year quarter. Adjusted Earnings is defined as net income attributable to the Company, excluding the impact of remeasurement gains and losses on our retractable shares and warrant liability, and is used to assess the ongoing performance of our underlying operations. Adjusted Earnings is higher in the current quarter due to foreign currency gain of $13 million compared to a loss of $15 million in the prior year quarter, partially offset by increase in financing costs and taxes in the period.

The Company recorded a net loss of $269 million for the quarter ended September 30, 2021, compared to $50 million in the prior year quarter. Net income was lower in the current quarter compared to the prior year quarter primarily due to remeasurement losses of $239 million relating to the Company’s retractable common shares. These shares are classified as liabilities due to their exchangeable feature equivalent to a Partnership unit. Thus, the remeasurement losses are the result of the appreciation of the Partnership unit price.

The market price of a Brookfield share was $53.51 per share on September 30, 2021 (December 31, 2020 - $41.27).

Consolidated Statements of Operations

(Unaudited)For the periods ended September 30(Thousands, US dollars)	Three months ended									Nine months ended
		2021				2020						2021				2020
Investment income
Dividends	$	20,247			$	20,694					$	107,717			$	64,506
Other investment income		1,116				1,061						4,160				2,184
		21,363				21,755						111,877				66,690
Expenses
Operating expenses		(429	)			(125		)				(1,529	)			(692		)
Financing costs		(2,132	)			(571		)				(6,382	)			(722		)
Retractable preferred share dividends		(7,207	)			(6,774		)				(26,425	)			(18,691		)
		11,595				14,285						77,541				46,585
Other items
Investment valuation gains (losses)		2,692				3,747						8,685				(10,298		)
Remeasurement loss on retractable shares		(239,224	)			—						(718,318	)			—
Warrant liability valuation (losses) gains		(52,548	)			(49,688		)				(163,768	)			71,898
Amortization of deferred financing costs		(764	)			(625		)				(3,301	)			(1,748		)
Current taxes (expense) recovery		(618	)			(1,820		)				1,627				(1,946		)
Deferred taxes (expense) recovery		(3,310	)			(459		)				(11,481	)			(2,662		)
Foreign currency gains (losses)		13,122				(15,004		)				(24,324	)			54,816
Net (loss) income	$	(269,055	)		$	(49,564		)			$	(833,339	)		$	156,645

Financial Profile

The Company’s principal investment is its interest in approximately 130 million Class A Limited Voting Shares (“Brookfield shares”) of Brookfield. This represents a 8% fully diluted interest as at September 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 Company’s Statement of Financial Position:

As at (Thousands, US dollars, except per share amounts)		(Unaudited)September 30, 2021			December 31, 2020
Assets
Cash and cash equivalents	$	344,115		$	316,709
Investment in Brookfield Asset Management Inc. 1		6,974,274			5,313,865
Other investments carried at fair value		576,726			586,574
Accounts receivable and other assets		61,898			47,700
	$	7,957,013		$	6,264,848
Liabilities and Equity
Accounts payable and other liabilities	$	13,879		$	15,604
Corporate Borrowings		235,669			117,286
Preferred shares2		595,470			694,148
Retractable common shares3		4,060,347			—
Warrant liability		492,968			332,083
Deferred taxes4		19,461			654,217
		5,417,794			1,813,338
Equity
Common equity3		2,539,218			4,451,509
Preferred equity		1			1
	$	7,957,013		$	6,264,848

1. The investment in Brookfield Asset Management Inc. consists of approximately 130 million Brookfield shares with a quoted market value of $53.51 per share as at September 30, 2021 (December 31, 2020 – $41.27).
2. Represents $609 million of retractable preferred shares less $14 million of unamortized issue costs as at September 30, 2021 (December 31, 2020 – $706 million less $12 million).
3. In April 2021, the Company redeemed common shares and issued retractable common shares, which are classified as a liability due to their redemption features. Remeasurement gains or losses are recorded in the statement of operating results.
4. The deferred tax liability represents the potential future income tax liability of the Company recorded for accounting purposes based on the difference between the carrying values of the Company’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 416-956-5142.

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.