PVF.UN Partners Value Investments LP

Partners Value Investments L.P. (the “Partnership” TSX: PVF.UN TSX:PVF.PR.U) announced today its financial results for the three months ended September 30, 2021. All amounts are stated in US dollars.

The Partnership recorded an increase in net book value during the period of $3.78 to $80.41 per unit ($7.1 billion). The increase is primarily due to an increase in the quoted market price of Brookfield Asset Management common shares. The Partnership recorded net income for the quarter of $9.7 million, an increase of $8 million from $1.7 million in the prior year quarter. The increase in income from the prior year quarter was a result of foreign exchange gains recorded in the period.

The market price of a Brookfield share was $53.51 per share at September 30, 2021 compared to $41.27 at December 31, 2020.

Consolidated Statements of Operations

(Unaudited)For the period ended September 30(Thousands, US dollars)	Three Months Ended								Nine Months Ended
		2021				2020				2021				2020
Investment income
Dividends	$	17,458			$	17,906			$	99,350			$	56,140
Other investment income		1,116				1,061				4,160				2,184
		18,574				18,967				103,510				58,324
Expenses
Operating expenses		(448	)			(142	)			(1,983	)			(984	)
Financing costs		(2,132	)			(571	)			(6,382	)			(722	)
Retractable preferred share dividends		(7,207	)			(6,774	)			(26,425	)			(18,691	)
		8,787				11,480				68,720				37,927
Other items
Investment valuation gains (losses)		2,692				3,746				8,685				(10,298	)
Amortization of deferred financing costs		(764	)			(625	)			(3,301	)			(1,748	)
Current taxes (expenses) recovery		(618	)			(1,820	)			1,627				(1,946	)
Deferred taxes expense		(3,310	)			(459	)			(11,481	)			(2,662	)
Foreign currency gains (losses)		2,960				(10,605	)			(27,186	)			43,109
Net income	$	9,747			$	1,717			$	37,064			$	64,382

Change in Net Book Value

The information in the following table shows the changes in net book value:

For the period ended September 30(Thousands, except per unit amounts)	Three Months Ended						Nine Months Ended
		Total			Per Unit			Total			Per Unit
Net book value, beginning of period1	$	6,750,387		$	76.63		$	4,777,152		$	54.20
Net income2		8,025			0.09			31,898			0.36
Other comprehensive income 2		334,621			3.80			1,612,931			18.34
Adjustment for impact of warrants3		(8,591 )			(0.10 )			1,575			0.02
Re-organization4		—			—			663,678			7.54
Equity LP repurchases		(1,182)			(0.01)			(3,974)			(0.05)
Net book value, end of period1,5,6	$	7,083,260		$	80.41		$	7,083,260		$	80.41

1. Calculated on a fully diluted basis, net book value is a non-IFRS measure.
2. Attributable to Equity Limited Partners.
3. The basic weighted average number of Equity Limited Partnership (“Equity LP”) units outstanding during the period ended September 30, 2021 was 73,303,589. The diluted weighted average number of Equity Limited Partnership (“Equity LP”) units available and outstanding for the period ended September 30, 2021 was 88,012,255; this includes the 14,708,666 Equity LP units issuable on the exercise of all outstanding warrants. The adjustment for warrants is impacted by foreign currency fluctuation.
4. As a result of the re-organization in a subsidiary, the Partnership recognized a reduction in its deferred tax liability mainly through accumulated other comprehensive income. The subsidiary has the ability to allocate capital gains to unitholders of the partnership.
5. At the end of the period, the diluted Equity LP units outstanding were 87,972,497 (December 31, 2020 – 88,056,097).
6. Net book value is a non-IFRS measure and is equal to total equity less General Partner equity and Preferred Limited Partners’ equity, plus the value of consideration to be received on exercising of warrants, which as at September 30, 2021 was $376 million (December 31, 2020 – $375 million).

Financial Profile

The Partnership’s principal investment is its interest in approximately 130 million Class A Limited Voting Shares (“Brookfield shares”) of Brookfield Asset Management Inc. This represents a 8% fully diluted interest as at September 30, 2021. In addition, the Company owns a diversified investment portfolio of marketable securities.

The information in the following table has been extracted from the Partnership’s Statement of Financial Position:

As at(Thousands, US dollars, except per share amounts)		September 30, 2021			December 31, 2020
Assets
Cash and cash equivalents	$	344,122		$	316,718
Accounts receivable and other assets		49,900			40,109
Investment in Brookfield Asset Management Inc. 1		6,974,274			5,313,865
Other investments carried at fair value		356,101			365,949
	$	7,724,397		$	6,036,641
Liabilities and Equity
Accounts payable and other liabilities	$	13,878		$	15,604
Corporate borrowings		235,669			117,286
Preferred shares2		595,470			694,148
Deferred taxes3		19,461			654,217
		864,478			1,481,255
Equity
Common equity		6,706,864			4,402,331
General Partner		1			1
Preferred Limited Partners		153,054			153,054
	$	7,724,397		$	6,036,641

1. The investment in Brookfield Asset Management Inc. consists of 130 million Brookfield shares with a quoted market value of $53.51 per share as at September 30, 2021 (December 31, 2020 – $41.27).
2. Represents $609 million of retractable preferred shares less $14 million of unamortized issue costs as at September 30, 2021 (December 31, 2020 – $706 million less $12 million).
3. The deferred tax liability represents the potential future income tax liability of the Partnership recorded for accounting purposes based on the difference between the carrying values of the Partnership’s assets and liabilities and their respective tax values, as well as giving effect to estimated capital and non-capital losses.

For further information, contact Investor Relations at 416-956-5142.

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.