TORONTO, ONTARIO--(Marketwired - April 14, 2014) - Partners Value Fund Inc. ("Partners Value Fund" or the "Company") (TSX VENTURE: PVF), formerly BAM Investments Corp., today announced its financial results for the year ended December 31, 2013.
Partners Value Fund recorded net income of $33 million ($0.44 per common share) for the year ended December 31, 2013 compared to $19 million ($0.26 per common share) in the prior year. The increase in net income was primarily the result of increased dividend income and valuation gains associated with the Company's other securities investment portfolio.
Consolidated Statements of Operations
For the years ended December 31
(Thousands, except per share amount) |
|
2013 |
|
2012 |
| Investment Income |
|
|
|
|
| Dividends and interest |
$ |
43,451 |
$ |
34,871 |
| Other investment income (loss) |
|
6,277 |
|
- |
| |
|
49,728 |
|
34,871 |
| Less: |
|
|
|
|
| |
Operating expenses |
|
1,198 |
|
705 |
| |
Retractable preferred share dividends |
|
27,595 |
|
25,977 |
| Income from operations(1) |
|
20,935 |
|
8,189 |
| Adjust for other items: |
|
|
|
|
| |
Equity accounted income |
|
16,895 |
|
14,522 |
| |
Amortization of deferred financing costs |
|
(1,687) |
|
(1,421) |
| |
Income tax expense |
|
(3,589) |
|
(2,170) |
| Net income |
$ |
32,554 |
$ |
19,120 |
| Net income per common share |
$ |
0.44 |
$ |
0.26 |
| Notes: |
|
|
|
|
| 1 Income from operations is a non-IFRS measure used by the Company to better reflect the operating performance during the year. 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.
The net book value of the Company's common shares as at December 31, 2013 was equal to $25.36 per share compared to $20.68 per share in the prior year. The increase in net book value was mainly due to the increase in the market price of Brookfield's Class A Shares held, which were equal to $41.10 per share as of December 31, 2013 compared to $36.17 per share in the prior year. The information in the following table shows the changes in net book value for the year ended December 31, 2013:
For the years ended December 31
(Thousands, except per share amount) |
2013 |
2012 |
| Total |
Per Share |
Total |
Per Share |
| Net book value, beginning of year(1) |
$ 1,534,746 |
$ 20.68 |
$ 1,102,815 |
$ 14.86 |
| Net Income(2) |
32,554 |
0.44 |
19,120 |
0.26 |
| Other comprehensive income(2) |
314,255 |
4.24 |
412,811 |
5.56 |
| Net book value, end of year(1)(3) |
$ 1,881,555 |
$ 25.36 |
$ 1,534,746 |
$ 20.68 |
| Notes: |
|
|
|
|
| 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 31, 2013 was 74,206,510 (December 31, 2012 - 74,206,510). |
| 3 As at December 31, 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. |
The information in the following table has been extracted from the Company's statement of financial position as at December 31, 2013:
Statement of Financial Position
As at December 31
(Thousands, except per share amounts) |
2013 |
2012 |
| Assets |
|
|
|
|
| Cash and cash equivalents |
$ |
5,102 |
$ |
25,882 |
| Accounts receivable and other |
|
2,083 |
|
1,269 |
| Brookfield Asset Management Inc.(1) |
|
2,310,897 |
|
2,033,703 |
| Other securities |
|
354,180 |
|
159,706 |
| |
$ |
2,672,262 |
$ |
2,220,560 |
| Liabilities and Shareholders' Equity |
|
|
|
|
| Accounts payable and other |
$ |
5,196 |
$ |
277 |
| Retractable preferred shares(2) |
|
537,531 |
|
488,139 |
| Deferred taxes(3) |
|
247,980 |
|
197,398 |
| |
|
790,707 |
|
685,814 |
| Shareholders' Equity |
|
|
|
|
| Common equity |
|
1,881,555 |
|
1,534,746 |
| |
$ |
2,672,262 |
$ |
2,220,560 |
| Net book value per common share(4)(5) |
$ |
25.36 |
$ |
20.68 |
| Notes: |
|
|
|
|
| 1 The investment in Brookfield Asset Management Inc. consists of 56.2 million Brookfield Class A Shares at a bid price of $41.10 per Class A Share as at December 31, 2013 (December 31, 2012 - $36.17). |
| 2 Represents $542 million of retractable preferred shares less $5 million of unamortized issue costs. (December 31, 2012 - $492 million less $4 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, 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 "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.