Partners Value Investments Inc. Announces 2022 Annual Results
March 30 2023 - 9:45PM
Partners Value Investments Inc. (the “Company”, TSX: PVF.WT)
announced today its financial results for the year ended December
31, 2022. All amounts are stated in US dollars.
The Company generated net income of $1.9 billion
for the year ended December 31, 2022 compared to a net loss of $1.0
billion in the prior year. Net income was higher in the current
period primarily due to a special non‐cash distribution received
from Brookfield Corporation (the “Corporation”, formerly Brookfield
Asset Management Inc.). On December 9, 2022, the Corporation
completed the distribution of a 25% interest in its asset
management business through Brookfield Asset Management Ltd. (the
“Manager”), which was incorporated and publicly listed for the
purpose of holding an interest in this business. As part of this
distribution, the Company received one share of the Manager for
every four shares held of the Corporation. As a result, the Company
recognized non‐cash dividend income of $1.0 billion from the
Corporation in its Consolidated Statements of Operations.
The increase in net income further included
remeasurement gains of $495 million during the year relating to the
Company’s retractable common shares, compared to remeasurement
losses of $402 million in the prior year. The Company’s retractable
common shares are classified as liabilities due to their
exchangeable feature equivalent to a Partners Value Investments L.P
(the “Partnership”) unit, therefore the remeasurement gains or
losses in a given period are driven by the respective depreciation
or appreciation of the Partnership unit price. During the year, the
Partnership unit price decreased by $8.09 compared to an increase
of $13.70 in the prior year. The Partnership unit value is
primarily driven by the share prices of the Corporation and the
Manager, which experienced decreases during the year along with the
broader market.
Excluding retractable share and warrant
liability remeasurement gains and non-recurring transactions,
Adjusted Earnings for the Company was $121 million for the year
ended December 31, 2022, compared to $6 million in the prior year.
Adjusted Earnings is higher in the current year period due to
foreign currency gains and tax recoveries as a result of the
depreciation of the Canadian dollar, which most of the Company’s
liabilities are denominated in.
As at December 31, 2022, the market prices of a
Corporation (NYSE/TSX: BN) and Manager (NYSE/TSX: BAM) share were
$31.46 and $28.67, respectively. As at March 29, 2023, the market
prices of a BN and BAM share were $31.19 and $31.39,
respectively.
Effective March 31, 2023, Rachel Powell was
replaced by Jason Weckwerth as Chief Financial Officer of the
Company.
Consolidated Statements of
Operations
For the
years ended December 31(Thousands, US dollars) |
|
|
|
|
2022 |
|
|
|
2021 |
|
Investment income |
|
|
|
|
|
|
Dividends |
|
$ |
1,131,797 |
|
|
$ |
128,784 |
|
Other investment income |
|
|
6,694 |
|
|
|
5,361 |
|
|
|
|
1,138,491 |
|
|
|
134,145 |
|
Expenses |
|
|
|
|
|
|
Operating expenses |
|
|
(1,677 |
) |
|
|
(2,748 |
) |
Financing costs |
|
|
(33,205 |
) |
|
|
(404,711 |
) |
Retractable preferred share dividends |
|
|
(34,379 |
) |
|
|
(33,628 |
) |
|
|
|
(69,261 |
) |
|
|
(441,087 |
) |
Other items |
|
|
|
|
|
|
Investment valuation gains (losses) |
|
|
10,653 |
|
|
|
(5,739 |
) |
Retractable share remeasurement gains (losses) |
|
|
495,073 |
|
|
|
(402,266 |
) |
Warrant liability remeasurement gains (losses) |
|
|
215,219 |
|
|
|
(280,474 |
) |
Amortization of deferred financing costs |
|
|
(3,363 |
) |
|
|
(4,070 |
) |
Current tax (expense) recovery |
|
|
(19,990 |
) |
|
|
7,816 |
|
Deferred tax recovery (expense) |
|
|
21,439 |
|
|
|
(15,024 |
) |
Foreign currency gains (losses) |
|
|
62,415 |
|
|
|
(20,075 |
) |
Net income (loss) |
|
$ |
1,850,676 |
|
|
$ |
(1,026,774 |
) |
Financial Profile
The Company’s principal investments are its
interest in 132 million Class A Limited Voting Shares of the
Corporation and approximately 33 million Class A Limited Voting
Shares of the Manager. This represents an 8% interest as at
December 31, 2022 in both entities. 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 Consolidated Statements of Financial
Position:
Consolidated Statements of Financial
Position
As
at(Thousands, US dollars) |
|
|
December 31,2022 |
|
|
December 31,2021 |
|
Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
185,711 |
|
|
$ |
80,697 |
|
Accounts receivable and other
assets |
|
|
|
47,260 |
|
|
|
77,501 |
|
Deferred tax asset |
|
|
|
1,604 |
|
|
|
— |
|
Investment in Brookfield
Corporation1 |
|
|
|
4,149,188 |
|
|
|
7,869,681 |
|
Investment in Brookfield Asset
Management Ltd.2 |
|
|
|
934,183 |
|
|
|
— |
|
Other investments carried at
fair value |
|
|
|
606,223 |
|
|
|
666,033 |
|
|
|
|
$ |
5,924,169 |
|
|
$ |
8,693,912 |
|
Liabilities and
Equity |
|
|
|
|
|
|
|
Accounts payable and other
liabilities |
|
|
$ |
36,861 |
|
|
$ |
7,693 |
|
Corporate borrowings |
|
|
|
220,711 |
|
|
|
236,513 |
|
Preferred shares3 |
|
|
|
752,727 |
|
|
|
682,613 |
|
Retractable common shares |
|
|
|
3,447,021 |
|
|
|
3,932,110 |
|
Warrant liability |
|
|
|
363,707 |
|
|
|
611,010 |
|
Deferred tax liability |
|
|
|
— |
|
|
|
23,430 |
|
|
|
|
|
4,821,027 |
|
|
|
5,493,369 |
|
Equity |
|
|
|
|
|
|
|
Accumulated deficit |
|
|
|
(2,698,663 |
) |
|
|
(4,549,339 |
) |
Accumulated other
comprehensive income |
|
|
|
3,801,805 |
|
|
|
7,749,882 |
|
|
|
|
$ |
5,924,169 |
|
|
$ |
8,693,912 |
|
- The investment in Brookfield
Corporation (formerly known as Brookfield Asset Management Inc.)
consists of 132 million Corporation shares with a quoted market
value of $31.46 per share as at December 31, 2022.
- The investment in Brookfield Asset
Management Ltd. consists of 33 million Manager shares with a quoted
market value of $28.67 per share as at December 31, 2022.
- Represents $681 million of
retractable preferred shares less $13 million of unamortized issue
costs as at December 31, 2022 (December 31, 2021 –
$611 million less $13 million). $84 million of three series of
preferred shares of a subsidiary of the Company (December 31, 2021
‐ $84 million).
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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