Partners Value Investments Inc. (the “Company”, TSX: PVF.WT) announced today its financial results for the year ended December 31, 2021. All amounts are stated in US dollars.

The Company recorded Adjusted Earnings of $52 million for the year ended December 31, 2021, compared to $53 million in the prior year. Adjusted Earnings is lower in the current year due to a foreign currency loss of $20 million, compared to a $7 million gain in the prior year, and higher preferred share dividends paid, which were partially offset by an increase in dividend income. The increased dividend income is due to a one-time special dividend-in-kind from Brookfield, which was valued at $46 million.

The Company generated a net loss of $1.0 billion for the year ended December 31, 2021 compared to net income of $91 million in the prior year. The decrease in net income was primarily due to remeasurement losses of $402 million relating to the Company’s retractable common shares and $396 million of dividends paid on the retractable shares, which are treated as interest expense as these shares are classified as liabilities due to their exchangeable feature equivalent to a Partnership unit. The remeasurement losses are the result of the value appreciation of the Partnership unit.

The market price of a Brookfield Asset Management Inc. (“Brookfield”) share was $60.38 per share at December 31, 2021 (2020 – $41.27).

Consolidated Statements of Operations

For the years ended December 31(Thousands, US dollars)               2021       2020  
Investment income                      
Dividends             $ 128,784     $ 84,935  
Other investment income               5,361       3,305  
                134,145       88,240  
Expenses                      
Operating expenses               (2,748 )     (942 )
Financing costs               (404,711 )     (1,979 )
Retractable preferred share dividends               (33,628 )     (25,618 )
                (306,942 )     59,701  
Other items                      
Investment valuation loss               (5,739 )     (2,394 )
Remeasurement (losses) of exchangeable shares               (402,266 )      
Warrant liability valuation (loss) gain               (280,474 )     38,018  
Amortization of deferred financing costs               (4,070 )     (2,575 )
Current tax expense               7,816       (1,649 )
Deferred tax expense               (15,024 )     (6,877 )
Foreign currency (loss) gain               (20,075 )     6,574  
Net (loss) income             $ (1,026,774 )   $ 90,798  

Financial Profile

The Company’s principal investment is its interest in 130 million Class A Limited Voting Shares (“Brookfield shares”) of Brookfield. This represents an 8% interest as at December 31, 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:

Statement of Financial Position

As at December 31(Thousands, US dollars, except per share amounts)   2021       2020
Assets          
Cash and cash equivalents $ 80,697     $ 316,709
Accounts receivable and other assets   77,501       47,700
Investment in Brookfield Asset Management Inc. 1   7,869,681       5,313,865
Other investments carried at fair value   666,033       586,574
  $ 8,693,912     $ 6,264,848
Liabilities and Equity          
Accounts payable and other liabilities $ 7,693     $ 15,604
Corporate Borrowings   236,513       117,286
Preferred shares2   682,613       694,148
Retractable common shares   3,932,110      
Warrant liability   611,010       332,083
Deferred taxes3   23,430       654,217
    5,493,369       1,813,338
Equity          
Common equity         4,451,509
Preferred equity        
Retained earnings   (4,549,339 )    
Accumulated Other Comprehensive Income   7,749,882       1
  $ 8,693,912     $ 6,264,848
  1. The investment in Brookfield Asset Management Inc. consists of approximately 130 million Brookfield shares with a quoted market value of $60.38 per share as at December 31, 2021 (December 31, 2020 – $41.27).
  2. Represents $611 million of retractable preferred shares less $13 million of unamortized issue costs as at December 31, 2021 (December 31, 2019 – $706 million less $13 million) and $84 million of three new series of preferred shares of a subsidiary of the Company.
  3. 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 ir@pvii.ca or 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.

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