Partners Value Fund

TSX VENTURE : PVF


August 22, 2014 16:30 ET

Partners Value Fund Inc. Announces 2014 Second Quarter Results

TORONTO, ONTARIO--(Marketwired - Aug. 22, 2014) - Partners Value Fund Inc. ("Partners Value Fund" or the "Company") (TSX VENTURE:PVF) today announced its financial results for the second quarter ending June 30, 2014.

Partners Value Fund recorded net income of $18 million ($0.25 per common share) for the three months ended June 30, 2014 compared to $5.2 million ($0.07 per common share) in the prior year period. The increase in net income was primarily due to increases in dividend income from its Brookfield Class A Shares and its other securities portfolio, in addition to valuation gains included within the Global Champions portfolio and equity accounted income associated with the Company's New Horizons investment.

Consolidated Statements of Operations
For the period ended June 30
(Thousands)

Three months ended

Six months ended
2014 2013 2014 2013
Investment income
Dividends and interest $ 13,291 $ 10,999 $ 28,707 $ 20,220
Other investment income (loss) 7,343 (1,336 ) 7,833 1,109
20,634 9,663 36,540 21,329
Less
Operating expenses 185 385 676 638
Retractable preferred share dividends 7,001 6,627 13,990 13,121
13,448 2,651 21,874 7,570
Other items
Equity accounted income 6,754 3,565 14,767 8,923
Amortization of deferred financing costs (440 ) (423 ) (887 ) (795 )
Income tax expense (1,543 ) (637 ) (2,824 ) (1,775 )
Net income $ 18,219 $ 5,156 $ 32,930 $ 13,923

Financial Profile and Net Book Value

The Company's principal investment is its interest in 56 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.

The net book value of the Company's common shares as at June 30, 2014 was equal to $29.81 per share, an increase of $1.72 per share from March 31, 2014. The increase was mainly the result of an increase in the market price of the Brookfield Class A shares held. The information in the following table shows the changes in net book value for the three and six months ended June 30, 2014.


For the period ended June 30, 2014
Three Months Ended Six Months Ended
(Thousands, except per share amounts) Total Per Share Total Per Share
Net book value, beginning of period 1 $ 2,084,479 $ 28.09 $ 1,881,555 $ 25.36
Net income 2 18,219 0.25 32,930 0.44
Other comprehensive income 2 109,252 1.47 297,465 4.01
Net book value, end of period 1,3 $ 2,211,950 $ 29.81 $ 2,211,950 $ 29.81
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, 2014, was 74,206,510 (June 30, 2013 - 74,206,510).
3 As at June 30, 2014, there were 74,206,510 (December 31, 2013 - 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 Statement of Financial Position:

Statement of Financial Position
(Thousands, except per share amounts) June 30, 2014 December 31, 2013
Assets
Cash and cash equivalents $ 19,008 $ 5,102
Investments
Brookfield Asset Management Inc. 1 2,643,195 2,310,897
Other securities 383,202 354,180
Accounts receivable and other 2,480 2,083
$ 3,047,985 $ 2,672,262
Liabilities and Shareholders' Equity
Accounts payable and other $ 2,357 $ 5,196
Retractable preferred shares 2 538,129 537,531
Deferred taxes 3 295,549 247,980
836,035 790,707
Shareholders' equity
Common equity 2,211,950 1,881,555
$ 3,047,985 $ 2,672,262
Net book value per common share 4, 5 $ 29.81 $ 25.36
1 The investment in Brookfield Asset Management Inc. consists of 56 million Class A Shares with a quoted market value of $47.01 per share as at June 30, 2014 (December 31, 2013 - $41.10).
2 Represents $542 million of retractable preferred shares less $4 million of unamortized issue costs (December 31, 2013 - $542 million less $5 million).
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.
4 As at June 30, 2014, there were 74,206,510 (December 31, 2013 - 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 "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.

Contact Information

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