BAM Investments Corp.
TSX : BNB

BAM Investments Corp.

August 14, 2009 16:53 ET

(BNB-TSX) BAM Investments Reports Second Quarter Results

TORONTO, ONTARIO--(Marketwire - Aug. 14, 2009) - BAM Investments Corp. (TSX:BNB) today announced its financial results for the second quarter ended June 30, 2009.

The company recorded net income of $4.0 million for the quarter ended June 30, 2009, compared with $3.0 million in the same period last year. The increase in net income primarily relates to a decrease in interest expense and preferred share dividends, partially offset by a decrease in investment income. Net income per common share was $0.05 for the three month period, compared with $0.04 for the comparable period in 2008.

During the first quarter of 2009, the company redeemed all of the exchangeable debentures that it had previously issued, by delivering 5.3 million Class A Limited Voting Shares ("Class A Shares") of Brookfield Asset Management Inc. ("Brookfield") and 0.2 million Limited Partnership Units of Brookfield Infrastructure Partners LP ("Brookfield Infrastructure"). As a result, the company no longer bears interest expense on the exchangeable debentures, whereas the comparable period in 2008 included $1.1 million of interest expense on the exchangeable debentures.

The company's principal investment is a direct interest in 55.5 million Class A Shares of Brookfield.



Consolidated Statements of Operations

Three months ended Six months ended
June 30 June 30
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(unaudited) $thousands,
except per share amounts 2009 2008 2009 2008
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Investment income
Dividends, interest and other $ 8,885 $ 9,405 $ 18,739 $ 17,197
Gain on the repurchase of preferred
share obligations 149 - 1,329 -
Gain on sale of investments - - 434 -
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9,034 9,405 20,502 17,197
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Expenses
Operating 194 179 515 401
Interest expense on exchangeable
debentures - 1,056 137 2,083
Amortization of deferred financing
costs 269 426 687 844
Subsidiary preferred share dividends 4,594 5,118 9,226 10,236
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5,057 6,779 10,565 13,564
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Net income before income taxes 3,977 2,626 9,937 3,633
Future income tax recovery 32 334 3,127 6,472
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Net income $ 4,009 $ 2,960 $ 13,064 $ 10,105
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Net income per common share $ 0.05 $ 0.04 $ 0.16 $ 0.13
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Net Book Value

The net book value of the company's common shares as at June 30, 2009 based on the stock market price of Brookfield's Class A Shares of $19.87 was $9.10 per share. BAM Investments holds approximately 7 Brookfield Class A Shares for every 10 common shares of BAM Investments. The information in the following table has been extracted from the company's consolidated balance sheet as at June 30, 2009.



Statement of Financial Position

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(unaudited)
As at June 30, 2009
($thousands, except per share amounts) Net Asset Value
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Assets
Investment in Brookfield Asset Management Inc.(1) $ 1,102,114
Investment in Brookfield Infrastructure Partners(2) 31,718
Cash and equivalents 50,874
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$ 1,184,706
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Liabilities
Accounts payable and provisions $ 2,023
Retractable preferred shares(3) 360,148
Future tax liability(4) 100,740
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462,911
Shareholders' Equity
Common shares 721,795
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$ 1,184,706
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Net Asset Value Per Common Share, pre tax(5) $ 10.36
Net Asset Value Per Common Share, after tax(5) $ 9.10
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Notes:
(1) The investment in Brookfield Asset Management Inc. consists of 55.5
million Class A Shares at a bid price of $19.87 per Brookfield Class A
Share at June 30, 2009.
(2) The investment in Brookfield Infrastructure Partners consists of 2.2
million Limited Partnership Units at a bid price of $14.30 per unit at
June 30, 2009.
(3) Represents $363 million retractable preferred shares issued by BAM Split
Corp, which is a subsidiary of the company, net of $2.7 million of
unamortized issuance costs.
(4) The future tax liability represents the potential future income tax
liability of the company 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 as at the date of this statement.
(5) As at June 30, 2009, there were 79,360,410 common shares of the company
issued and outstanding.


Note: This news release contains "forward-looking information" within the meaning of Canadian provincial securities laws and 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 potential future income taxes.

Although the company believes that the anticipated future results or achievements expressed or implied by the forward-looking information and statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on the forward-looking information and statements because they involve known and unknown risks, uncertainties and other factors 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 information and statements.

Factors that could cause actual results to differ materially from those contemplated or implied by the forward-looking information and statements include: the behavior of financial markets, including fluctuations in interest and exchange rates, availability of equity and debt financing and other risks and factors detailed from time to time in the company's other documents filed with the Canadian securities regulators.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking information to make decisions with respect to the company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as may be required by law, the company undertakes no obligation to publicly update or revise any forward-looking information or statements, whether written or oral, that may be as a result of new information, future events or otherwise. Reference should be made to the company's most recent Annual Information Form for a description of the major risk factors.

Contact Information

  • BAM Investments Corp.
    Edward C. Kress
    President
    (416) 956-5140