BAM Brookfield Asset Management Ltd

Partners Value Investments Inc. (the “Company”, TSX: PVF.WT, PVF.PR.V) announced today its financial results for the six months ended June 30, 2024. All amounts are stated in U.S. dollars.

The Company recorded net income of $94.5 million for the three months ended June 30, 2024, compared to a net loss of $120.4 million in the prior year quarter. The increase in net Income was primarily due to current period remeasurement gains of $94.6 million associated with the retractable shares, compared to remeasurement losses of $118.8 million in the prior year quarter. The Company’s retractable common shares are classified as liabilities due to their cash retraction feature. The remeasurement gains or losses in a given period are driven by the respective appreciation or depreciation of the Partners Value Investments L.P. (the “Partnership”) unit price as the exchangeable shares are recognized at fair value based on the quoted price of the Partnership’s Equity LP units. During the quarter, the Partnership unit price decreased by $1.34 compared to an increase of $1.80 in the prior year quarter.

Excluding retractable share and warrant liability remeasurement gains and dividends paid on retractable shares, Adjusted Earnings for the Company was $28.9 million for the three months ended June 30, 2024, compared to Adjusted Losses of $9.2 million in the prior year quarter. Adjusted Earnings were higher in the current quarter as a result of foreign currency and investment valuation gains.

As at June 30, 2024, the market prices of a Brookfield Corporation (the “Corporation”, NYSE/TSX: BN) and Brookfield Asset Management Ltd. (the “Manager”, NYSE/TSX: BAM) share were $41.54 and $38.05, respectively. As at August 16, 2024, the market prices of a BN and BAM share were $46.57 and $40.90, respectively.

Consolidated Statements of Operations

(Unaudited)(Thousands, US dollars)For the periods ended June 30	Three months ended								Six months ended
		2024				2023				2024				2023
Investment income
Dividends	$	26,995			$	25,469			$	53,680			$	47,864
Other investment income		4,160				2,219				8,195				5,435
		31,155				27,688				61,875				53,299
Expenses
Operating expenses		(735	)			(433	)			(2,885	)			(842	)
Financing costs		(10,191	)			(8,379	)			(18,370	)			(16,713	)
Retractable preferred share dividends		(8,562	)			(8,848	)			(16,802	)			(17,640	)
		11,667				10,028				23,818				18,104
Other items
Investment valuation gains (losses)		443				(4,228	)			1,367				(1,986	)
Remeasurement gains (losses) of retractable shares		94,590				(118,837	)			(119,040	)			107,244
Warrant liability remeasurement (losses) gains		(21,378	)			13,692				(11,452	)			24,579
Amortization of deferred financing costs		(871	)			(848	)			(1,755	)			(1,690	)
Current taxes (expense) recovery		(1,742	)			(410	)			6,327				(817	)
Deferred taxes recovery (expense)		4,865				(3,235	)			707				(4,593	)
Foreign currency gains (losses)		6,880				(16,575	)			19,333				(19,154	)
Net income (loss)	$	94,454			$	(120,413	)		$	(80,695	)		$	121,687

Financial ProfileThe Company’s principal investments are its interest in 121 million Class A Limited Voting Shares of the Corporation and approximately 31 million Class A Limited Voting Shares of the Manager. This represents approximately an 8% interest in the Corporation and a 7% interest in the Manager as at June 30, 2024. In addition, the Company owns a diversified investment portfolio of marketable securities and private fund interests.

The information in the following table has been extracted from the Company’s Consolidated Statements of Financial Position:

Consolidated Statements of Financial Position

(Unaudited)As at(Thousands, US dollars)		June 30,2024				December 31,2023
Assets
Cash and cash equivalents	$	112,218			$	199,856
Accounts receivable and other assets		38,739				31,456
Deferred tax assets		1,185				4,309
Investment in Brookfield Corporation1		5,025,128				4,853,261
Investment in Brookfield Asset Management Ltd.2		1,172,250				1,237,554
Other investments carried at fair value		950,302				889,398
	$	7,299,822			$	7,215,834
Liabilities and equity
Accounts payable and other liabilities	$	23,675			$	34,916
Corporate borrowings		218,798				225,789
Preferred shares3		701,280				757,254
Retractable common shares		3,838,591				3,718,510
Warrant liability		221,965				218,051
		5,004,309				4,954,520
Equity
Accumulated deficit		(3,114,708	)			(3,034,013	)
Accumulated other comprehensive income		5,398,241				5,283,347
Non-controlling interest		11,980				11,980
	$	7,299,822			$	7,215,834

1. The investment in Brookfield Corporation consists of 121 million Corporation shares with a quoted market value of $41.54 per share as at June 30, 2024 (December 31, 2023 – $40.12).
2. The investment in Brookfield Asset Management Ltd. consists of 31 million Manager shares with a quoted market value of $38.05 per share as at June 30, 2024 (December 31, 2023 – $40.17).
3. Represents $709 million of retractable preferred shares less $8 million of unamortized issue costs as at June 30, 2024 (December 31, 2023 – $767 million less $10 million).

For further information, contact Investor Relations at ir@pvii.ca.

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.

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 Corporation, 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; limitations on the liquidity of our investments; 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; risks associated with the use of financial leverage; 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.