TORONTO, ONTARIO--(Marketwired - Nov. 25, 2014) - Partners Value Fund Inc. ("Partners Value Fund" or the "Company") (TSX VENTURE:PVF) today announced its financial results for the third quarter ending September 30, 2014.
Partners Value Fund's net book value increased by $2.21 per share during the third quarter to $32.02 per share due to increases in the market value of its long-term investment portfolio, namely its Brookfield Class A Shares.
Partners Value Fund recorded net income of $1 million ($0.01 per common share) for the three months ended September 30, 2014 compared to $3 million ($0.04 per common share) in the prior year period. The decrease in net income was primarily due to mark-to-market valuation losses within the Global Champions and New Horizons portfolios which more than offset the increases in dividend income.
Consolidated Statements of Operations
| Three months ended | Nine months ended | ||||||||||||
| For the period ended September 30 (Thousands) |
2014 | 2013 | 2014 | 2013 | |||||||||
| Investment income | |||||||||||||
| Dividends and interest | $ | 13,085 | $ | 11,604 | $ | 41,792 | $ | 31,824 | |||||
| Other investment (loss) income | (2,200 | ) | (1,639 | ) | 5,633 | (530 | ) | ||||||
| 10,885 | 9,965 | 47,425 | 31,294 | ||||||||||
| Less | |||||||||||||
| Operating expenses | 227 | 133 | 903 | 771 | |||||||||
| Retractable preferred share dividends | 7,102 | 7,493 | 21,092 | 20,614 | |||||||||
| 3,556 | 2,339 | 25,430 | 9,909 | ||||||||||
| Other items | |||||||||||||
| Equity accounted (loss) income | (2,707 | ) | 2,152 | 12,060 | 11,075 | ||||||||
| Amortization of deferred financing costs | (446 | ) | (437 | ) | (1,333 | ) | (1,232 | ) | |||||
| Income tax recovery (expense) | 819 | (903 | ) | (2,005 | ) | (2,678 | ) | ||||||
| Net income | $ | 1,222 | $ | 3,151 | $ | 34,152 | $ | 17,074 | |||||
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 information in the following table shows the changes in net book value for the three and nine months ended September 30, 2014.
| For the period ended September 30, 2014 | Three Months Ended | Nine Months Ended | ||||||
| (Thousands, except per share amounts) | Total | Per Share | Total | Per Share | ||||
| Net book value, beginning of period(1) | $ | 2,211,950 | $ | 29.81 | $ | 1,881,555 | $ | 25.36 |
| Net income(2) | 1,222 | 0.01 | 34,152 | 0.46 | ||||
| Other comprehensive income(2) | 162,618 | 2.20 | 460,083 | 6.20 | ||||
| Net book value, end of period(1), (3) | $ | 2,375,790 | $ | 32.02 | $ | 2,375,790 | $ | 32.02 |
| 1 | Net book value per common share is a non-IFRS measure. |
| 2 | The weighted average number of common shares outstanding during the nine months ended September 30, 2014, was 74,206,510 (September 30, 2013 - 74,206,510). |
| 3 | As at September 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) |
September 30, 2014 |
December 31, 2013 |
|||
| Assets | |||||
| Cash and cash equivalents | $ | 97,426 | $ | 5,102 | |
| Investments | |||||
| Brookfield Asset Management Inc.(1) | 2,827,055 | 2,310,897 | |||
| Other securities | 380,652 | 354,180 | |||
| Accounts receivable and other | 1,951 | 2,083 | |||
| $ | 3,307,084 | $ | 2,672,262 | ||
| Liabilities and Shareholders' Equity | |||||
| Accounts payable and other | $ | 4,690 | $ | 5,196 | |
| Retractable preferred shares(2) | 607,323 | 537,531 | |||
| Deferred taxes(3) | 319,281 | 247,980 | |||
| 931,294 | 790,707 | ||||
| Shareholders' equity | |||||
| Common equity | 2,375,790 | 1,881,555 | |||
| $ | 3,307,084 | $ | 2,672,262 | ||
| Net book value per common share(4), (5) | $ | 32.02 | $ | 25.36 | |
| 1 | The investment in Brookfield Asset Management Inc. consists of 56 million Class A Shares with a quoted market value of $50.28 per share as at September 30, 2014 (December 31, 2013 - $41.10). |
| 2 | Represents $617 million of retractable preferred shares less $10 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 September 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:
Edward C. Kress
President
(416) 956-5140