Franco-Nevada(FNV) - 2024 Q1 - Quarterly Report

Financial Performance - Total revenue for Q1 2024 was $256.8 million, a decrease of 7.0$276.3 million in Q1 2023[4] - Net income for Q1 2024 was $144.5 million, down 7.7$156.5 million in Q1 2023[4] - Gross profit for Q1 2024 was $165.0 million, representing a decrease of 6.8$177.1 million in Q1 2023[4] - Basic earnings per share for Q1 2024 were $0.75, a decrease from$0.82 in Q1 2023[4] - Revenue for Q1 2024 was $256.8 million, a decrease of 7.1$276.3 million in Q1 2023[81] - Revenue from mining segment was $213.0 million, down 6.3$227.3 million in the same period last year[81] - Segment gross profit for Q1 2024 was $165.2 million, a decline of 6.0$177.3 million in Q1 2023[81] - Net income before income taxes for Q1 2024 was $172.0 million, down 6.6$184.1 million in Q1 2023[81] - Gold revenue decreased to $160.9 million in Q1 2024 from$172.2 million in Q1 2023, a decline of 6.9%[60] Cash and Assets - Cash and cash equivalents at the end of Q1 2024 were $1,352.0 million, down from$1,421.9 million at the end of 2023[2] - Total assets increased to $6,059.3 million as of March 31, 2024, compared to$5,994.1 million at the end of 2023[2] - Shareholders' equity rose to $5,819.5 million at the end of Q1 2024, up from$5,769.1 million at the end of 2023[2] - Equity investments increased to $249.3 million as of March 31, 2024, compared to$246.4 million as of December 31, 2023[36] - Loans receivable increased to $65.4 million as of March 31, 2024, up from$24.8 million as of December 31, 2023[39] - The Company disposed of equity investments with a cost of $11.6 million for gross proceeds of$7.4 million during the three months ended March 31, 2024[37] Dividends and Income - The company declared dividends of $69.4 million in Q1 2024, compared to$65.4 million in Q1 2023[7] - The company declared dividends of $0.36 per common share in Q1 2024, compared to$0.34 in Q1 2023[77] - The total cash dividends paid in Q1 2024 were $58.9 million, an increase from$57.8 million in Q1 2023[77] - The Company recognized a total of $2.1 million in dividend income from its equity investment in LIORC for Q1 2024, compared to$2.3 million in Q1 2023[58] Costs and Expenses - Total costs of sales for Q1 2024 were $33.6 million, down from$38.2 million in Q1 2023, representing a decrease of 12.1%[61] - General and administrative expenses were $5.7 million in Q1 2024, slightly down from$6.2 million in Q1 2023[62] - Current income tax expense for Q1 2024 was $22.1 million, up from$19.5 million in Q1 2023, an increase of 13.3%[68] Investments and Acquisitions - The company acquired royalty, stream, and working interests totaling $146.9 million in Q1 2024, up from$109.3 million in Q1 2023[6] - The Company acquired a 2.0% gross production royalty on minerals produced on Scottie Resources Corp.'s claims for a purchase price of $5.9 million (C$8.1 million) on April 15, 2024[20] - The Company received $6.5 million (A$10 million) from Fortuna Silver Mines for the buy-back of 0.6% of the Company's initial 1.2% NSR on the Séguéla mine on April 1, 2024[22] - The Company amended its precious metal stream agreement for the Condestable mine in Peru, increasing the Variable Phase 2 Deliveries from 25% to 37.5% and advancing an additional up-front deposit of $10.0 million, totaling$175.0 million[23] - The Company funded a term loan of $42.0 million for the Tocantinzinho gold project on January 29, 2024, and subsequently advanced an additional$33.0 million on April 19, 2024[27][28] Tax and Legal Matters - The Canada Revenue Agency has proposed additional taxes of $16.8 million for 2018 and$30.6 million for 2019, with potential penalties under review[121] - For the 2013-2016 taxation years, the company faces additional taxes of $22.1 million and penalties of$9.0 million related to transfer pricing reassessments[115] - The company has filed formal Notices of Objection against the CRA's reassessments and has posted security for 50% of the reassessed amounts[117] - If reassessed for 2020-2023, the company estimates additional taxes of approximately $237.0 million and penalties of approximately$89.6 million[122] - The ongoing CRA audit poses a risk of additional income taxes, penalties, and interest if the CRA successfully challenges the Company's tax filings, which could materially affect the Company[124] Other Financial Metrics - Finance income increased to $16.0 million in Q1 2024, compared to$10.5 million in Q1 2023, marking a growth of 52.4%[67] - The Company recorded a gain of $2.0 million on changes in the fair value of equity investments at FVTOCI for the three months ended March 31, 2024[38] - The Company has remaining commitments of up to$56.0 million in the Royalty Acquisition Venture as of March 31, 2024[32] - The Company has a $1.0 billion unsecured revolving term credit facility, with no amounts drawn as of March 31, 2024[56] - The Company has long-term commodity purchase commitments extending up to 40 years for various precious metals agreements[95] - Franco-Nevada recognized a full impairment of$1,169.2 million for its Cobre Panama streams due to a Supreme Court ruling in Panama[110] - The company estimates damages of at least $5 billion related to its Cobre Panama arbitration proceedings[111]