Partners Value Fund
TSX VENTURE : PVF

August 29, 2013 16:35 ET

Partners Value Fund Inc. Announces 2013 Second Quarter Results

TORONTO, ONTARIO--(Marketwired - Aug. 29, 2013) - Partners Value Fund Inc. (TSX VENTURE:PVF), formerly BAM Investments Corp., today announced its financial results for the second quarter June 30, 2013.

Partners Value Fund Inc. ("Partners Value Fund" the "Company") recorded net income of $5.2 million ($0.07 per common share) for the three months ended June 30, 2013 compared to $3.7 million ($0.05 per common share) for the same period of 2012. The higher net income in the current period was primarily the result of increased dividend income and valuation gains on the Company's other securities investment portfolio.

The Company also announced today that it received approval from the TSX Venture Exchange (the "Exchange") for its proposed normal course issuer bid (the "Bid") to purchase up to 3,472,415 of its common shares, representing approximately 10% of the public float of its currently outstanding common shares. The period of the Bid will remain effective from August 30, 2013 to August 29, 2014, or such earlier date that the Company completes its purchases. Purchases pursuant to the Bid will be made through the facilities of the Exchange and all applicable exchanges in Canada, and the price which the Company will pay for any common shares purchased will be the market price of the common shares at the time of acquisition. Any common shares acquired through the Bid will be cancelled. Under its former normal course issuer bid that commenced on August 30, 2012 and expired on August 29, 2013, the Company acquired none of its common shares. As of August 29, 2013, there were 74,206,510 common shares outstanding. From time to time, when Partners Value Fund does not possess material non-public information about itself or its securities, it may enter into a pre-defined plan with its broker to allow for the repurchase of shares at times when it ordinarily would not be active in the market due to its own internal trading blackout periods, insider trading rules or otherwise. Any such plans entered into with the Company's broker will be adopted in accordance with applicable Canadian securities laws.

Consolidated Statements of Operations
Three months ended Six months ended
June 30 June 30
Thousands, except per share amounts 2013 2012 2013 2012
Investment income
Dividends and interest $ 10,999 $ 8,724 $ 20,220 $ 16,974
Cash portion of equity accounted income(1) 1,220 1,220 2,440 2,440
Other investment income (1,336 ) - 1,109 -
10,883 9,944 23,769 19,414
Less:
Operating expenses 385 122 638 449
Retractable preferred share dividends 6,627 6,494 13,121 12,988
Income from operations(2) 3,871 3,328 10,010 5,977
Adjust for other items:
Non-cash portion of equity accounted income(1) 2,345 1,075 6,483 5,007
Amortization of deferred financing costs (423 ) (356 ) (795 ) (711 )
Income tax (expense) recovery (637 ) (389 ) (1,775 ) (1,070 )
Net income $ 5,156 $ 3,658 $ 13,923 $ 9,203
Net income per common share $ 0.07 $ 0.05 $ 0.19 $ 0.12

Notes:

(1) Equity accounted income is bifurcated into the Company's proportionate share of cash distributions and non-cash changes in value to better reflect the amount of investment income generated by the investment portfolio.

(2) Income from operations is a non-IFRS measure used by the Company to better reflect the operating performance during the period. The measure is defined as investment income less expenses, as shown on the Consolidated Statements of Operations, and then adjusted for cash distributions received from the Company's equity accounted investment.

Financial Profile and Net Book Value

The Company's principal investment is a direct and indirect interest in 56.2 million Class A Limited Voting Shares ("Class A Shares") of Brookfield Asset Management Inc. ("Brookfield"), representing 7.6 Brookfield Class A Shares for every 10 common shares of Partners Value Fund Inc.

The net book value of the Company's common shares as at June 30, 2013, based on the market price of Brookfield's Class A Shares of $37.80, was $22.85 per share. The information in the following table shows the changes in net book value for the three and six months ended June 30, 2013.

For the period ended June 30, 2013 Three months ended Six months ended
Thousands, except per share amounts Total Per Share Total Per Share
Net book value, beginning of period(1) $ 1,596,232 $ 21.51 $ 1,534,746 $20.68
Net income(2) 5,156 0.07 13,923 0.19
Other comprehensive income(2) 94,068 1.27 146,787 1.98
Net book value, end of period(1,3) $1,695,456 $ 22.85 $ 1,695,456 $22.85

Notes:

(1) Net book value per common share is a non-IFRS measure.

(2) The weighted average number of common shares outstanding during the six months ended June 30, 2013 was 74,206,510 (June 30, 2012 - 74,206,510) on a fully diluted basis.

(3) As of June 30, 2013 there were 74,206,510 voting and non-voting common shares of the Company issued and outstanding on a fully diluted basis.

The information in the following table has been extracted from the Company's balance sheet as at June 30, 2013:
Statement of Financial Position

(unaudited)
Thousands, except per share amounts Net Book Value
Assets
Investment in Brookfield Asset Management Inc.(1) $ 2,125,351
Other securities 333,412
Investment in cash and cash equivalents 5,910
Accounts receivable and other 1,465
$ 2,466,138
Liabilities and Shareholders' Equity
Accounts payable and other $ 12,931
Retractable preferred shares (2) 537,177
Deferred taxes (3) 220,574
770,682
Shareholders' equity
Common equity 1,695,456
$ 2,466,138
Net book value per common share, pre tax (4, 5) $ 25.82
Net book value per common share, after tax (4, 5) $ 22.85

Notes:

(1) The investment in Brookfield Asset Management Inc. consists of 56.2 million Class A Shares at a bid price of $37.80 as at June 30, 2013.

(2) Represents $542.3 million retractable preferred shares gross of $5.1 million unamortized issue costs.

(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 as at the date of this statement.

(4) As at June 30, 2013, there were 74,206,510 (December 31, 2012 - 74,206,510) voting and non-voting common shares of the Company issued and outstanding on a fully diluted basis.

(5) Net book value per common share is a non-IFRS measure.

Note: This news release contains "forward-looking information" within the meaning of Canadian provincial securities laws and 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 the anticipated future results or achievements expressed or implied by the forward-looking information and statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on the forward-looking information and statements because they involve known and unknown risks, uncertainties and other factors 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 information and statements.

Factors that could cause actual results to differ materially from those contemplated or implied by the forward-looking information and statements include: the behavior of financial markets, including fluctuations in interest and exchange rates, availability of equity and debt financing and other risks and factors detailed from time to time in the Company's other documents filed with the Canadian securities regulators.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking information to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as may be required by law, the Company undertakes no obligation to publicly update or revise any forward-looking information or statements, whether written or oral, that may be as a result of new information, future events or otherwise. Reference should be made to the company's most recent Annual Information Form for a description of the major risk factors.

Contact Information

  • Partners Value Fund Inc.
    Edward C. Kress
    President
    (416) 956-5140