TORONTO, ONTARIO--(Marketwired - April 3, 2017) - Partners Value Investments Inc. (the "Company") announced today its financial results for the year ended December 31, 2016. All results have been presented in U.S. dollars as the Company changed the presentation currency from Canadian to U.S.
The net loss for the year was $56 million ($0.76 per common share) compared to $17 million ($0.24 per common share) in the prior year due to a warrant valuation loss on the initial recognition of our warrant liability. Adjusting for the warrant valuation loss recorded, net income for the year was $86 million, driven by our improved performance in our investment portfolio.
The Company's net book value increased by $1.20 per share to $31.93 per share primarily due to the increase in the market value of our investment portfolio.
Consolidated Statements of Operations
| For the years ended December 31 | ||||||||
| (Thousands) | 2016 | 2015 | ||||||
| Investment income | ||||||||
| Dividends | $ | 61,942 | $ | 53,622 | ||||
| Other investment income | 5,228 | 1,522 | ||||||
| 67,170 | 55,144 | |||||||
| Expense | ||||||||
| Operating expenses | (15,269 | ) | (3,160 | ) | ||||
| Financing costs | (2,116 | ) | (871 | ) | ||||
| Retractable preferred share dividends | (25,289 | ) | (22,202 | ) | ||||
| 24,496 | 28,911 | |||||||
| Other items | ||||||||
| Investment valuation gains (losses) | 72,967 | (37,929 | ) | |||||
| Warrant liability valuation loss1 | (141,553 | ) | - | |||||
| Amortization of deferred financing costs | (1,834 | ) | (1,493 | ) | ||||
| Change in value of fund unit liability | (896 | ) | 3,182 | |||||
| Income taxes | (22,394 | ) | 6,737 | |||||
| Foreign currency gains (losses) | 13,509 | (16,772 | ) | |||||
| Net loss | $ | (55,705 | ) | $ | (17,364 | ) | ||
| 1 | Warrant liability valuation loss relates to the mark to market upon issuance of warrants during 2016. |
Financial Profile and Net Book Value
The Company's principal investment is its interest in 86 million Class A Limited Voting Shares ("Brookfield shares") of Brookfield Asset Management Inc. ("Brookfield"), representing a 9% fully-diluted interest as at December 31, 2016.
The information in the following table shows the changes in net book value:
| For the years ended December 31 | 2016 | 2015 | |||||||||
| (Thousands, except per share amounts) | Total | Per Share | Total | Per Share | |||||||
| Net book value, beginning of period1 | $ | 2,260,264 | $ | 30.73 | $ | 2,374,208 | $ | 32.28 | |||
| Net income2 | (55,705) | (0.76) | (17,364) | (0.24) | |||||||
| Other comprehensive income2 | 151,471 | 2.06 | (96,580) | (1.31) | |||||||
| Distributions | (8,062) | (0.19) | - | - | |||||||
| Capital reorganization and other | - | 0.09 | - | - | |||||||
| Net book value, end of period1,3 | $ | 2,347,968 | $ | 31.93 | $ | 2,260,264 | $ | 30.73 | |||
| 1. | Net book value per common share is non-IFRS measure. |
| 2. | The weighted average number of common shares outstanding during the year ended December, 2016 was 73,545,364 (2015 - 73,546,899). |
| 3. | As at December 31, 2016, there were 73,543,831 (December 31, 2015 - 73,546,898) 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
| As at (Thousands, except per share amounts) |
December 31, 2016 | December 31, 2015 | January 1, 2015 | ||||||
| Assets | |||||||||
| Cash and cash equivalents | $ | 5,544 | $ | 92,107 | $ | 16,651 | |||
| Investments | |||||||||
| Brookfield Asset Management Inc.1 | 2,829,156 | 2,707,474 | 2,816,875 | ||||||
| Other securities | 612,734 | 447,548 | 377,354 | ||||||
| Accounts receivable and other assets | 20,881 | 5,903 | 33,717 | ||||||
| $ | 3,468,315 | $ | 3,253,032 | $ | 3,244,597 | ||||
| Liabilities and shareholders' equity | |||||||||
| Accounts payable and other liabilities | $ | 119,196 | $ | 175,971 | $ | 21,378 | |||
| Preferred shares2 | 521,155 | 510,339 | 522,999 | ||||||
| Warrant liability | 139,526 | - | - | ||||||
| Deferred taxes3 | 340,470 | 306,458 | 326,012 | ||||||
| 1,120,347 | 992,768 | 870,389 | |||||||
| Shareholders' equity | |||||||||
| Common equity | 2,347,968 | 2,260,264 | 2,374,208 | ||||||
| $ | 3,468,315 | $ | 3,253,032 | $ | 3,244,597 | ||||
| Net book value per common share4,5 | $ | 31.93 | $ | 30.73 | $ | 32.28 | |||
| 1. | The investment in Brookfield Asset Management Inc. consists of 86 million Brookfield shares with a quoted market value of $32.96 per share as at December 31, 2016 (December 31, 2015 - $31.54). |
| 2. | Represents $529 million of retractable preferred shares less $8 million of unamortized issue costs as at December 31, 2016 (December 31, 2015 - $518 million less $8 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 December 31, 2016, there were 73,543,831 (December 31, 2015 - 73,546,898) 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:
Investor Relations
ir@pvii.ca
647-503-6516