BNN Investments Ltd.
TSX : BNB

BNN Investments Ltd.

May 11, 2006 16:50 ET

BNN Investments Announces First Quarter Results

TORONTO, ONTARIO--(CCNMatthews - May 11, 2006) - BNN Investments Ltd. (TSX:BNB) today announced its financial results for the first quarter ended March 31, 2006.

The company recorded a net loss of $0.5 million for the three months ended March 31, 2006, consistent with 2005. After providing for preferred share dividend obligations, the net loss per common share was $0.41, compared with a net loss per common share of $0.40 for the same period in 2005.

BNN Investments is a publicly listed investment company whose principal mandate is to provide its common shareholders with a leveraged investment in the securities of Brookfield Asset Management Inc. ("Brookfield"), which currently consists of 26,127,000 Class A Limited Voting shares of Brookfield.

On April 4, 2006, Brookfield announced a three-for-two stock split of its outstanding Class A Limited Voting shares. The split was implemented by way of a stock dividend whereby shareholders, including BNN Investments, received one-half of a Brookfield share for each share held. As a result, the company now holds 26,127,000 Class A Limited Voting shares of Brookfield. In addition, Brookfield increased its quarterly dividend on a post-split basis from US$0.11 per share to US$0.16 per share, commencing with the May 31, 2006 dividend. The increase represents approximately $6 million of additional investment income for BNN Investments on an annualized basis, based on its current financial profile.



Consolidated Statements of Operations
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Three months ended March 31
(unaudited) ----------------------------
$thousands, except per share amounts 2006 2005
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Investment income $ 3,008 $ 3,032
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Expenses
Operating 201 188
Amortization of deferred financing costs 377 378
Subsidiary preferred share dividends 2,943 2,943
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3,521 3,509
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Net loss (513) (477)
Preferred share dividends (1,238) (1,238)
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Net loss for common shareholders $ (1,751) $ (1,715)
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Net loss per common share $ (0.41) $ (0.40)
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Net Asset Value

The calculated net asset value of the company's common shares as at March 31, 2006 based on the stock market price of Brookfield's Class A shares of $42.85 was $155.48 per share. A $1.00 change in the value of Brookfield's Class A shares results in a $4.81 change in the calculated net asset value of a BNN Investments common share. The net asset value per common share does not take into account tax and transaction costs on disposition.



Statement of Financial Position
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(unaudited) As at March 31, 2006
$thousands, except per ------------------------------------
share amounts Net Asset Value(5) Book Value
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Assets
Cash and equivalents $ 3,057 $ 3,057
Brookfield Asset Management
Inc.(1) 1,119,542 333,967
Deferred financing costs - 2,306
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$ 1,122,599 $ 339,330
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Liabilities(2)
Accounts payable and provisions 1,980 1,980
Retractable preferred shares(3) 205,000 205,000
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206,980 206,980
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Shareholders' Equity
Preferred shares 70,750 70,750
Common shares 844,869 61,600
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915,619 132,350
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$ 1,122,599 $ 339,330
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Per Common Share(4) $ 155.48 $ 11.34
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1) The investment in Brookfield Asset Management Inc. ("Brookfield")
represents 26,127,000 Class A Limited Voting shares of Brookfield
with a market value of $42.85 per share as at March 31, 2006.
2) The net asset value of liabilities approximates their respective
book values.
3) Represents $205.0 million retractable preferred shares issued by
BNN Split Corp., which is a subsidiary of the company.
4) As at March 31, 2006, there were 5,433,918 common shares of the
company issued and outstanding.
5) The company has available non-capital losses of $29.1 million and
the tax bases of the company's common share investments exceed
their accounting carrying value by $62.3 million.


Note: This news release contains "forward-looking statements". The words "believe", "expect", "anticipate", "intend", "estimate" and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward-looking statements. Reliance should not be placed on forward-looking 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 achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include general economic conditions, interest rates, availability of equity and debt financing and other risks detailed from time to time in the company's continuous disclosure documents. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact Information

  • BNN Investments Ltd.
    Brian D. Lawson
    President and Chief Executive Officer
    (416) 359-8620