BAM Investments Corp.
TSX : BNB

BAM Investments Corp.

November 12, 2010 17:45 ET

(BNB-TSX) BAM Investments Reports 2010 Third Quarter Results

TORONTO, ONTARIO--(Marketwire - Nov. 12, 2010) - BAM Investments Corp. (TSX:BNB) today announced its financial results for the third quarter ended September 30, 2010.

BAM Investments Corp. recorded net income of $3.6 million ($0.05 per common share) for the three months ended September 30, 2010 compared to $2.3 million ($0.03 per common share) in the same period of 2009. The prior year included a $1.2 million redemption premium which was paid in connection with the early redemption of the Class A Preferred Shares. Prior to the redemption premium, net income in the prior year was $3.5 million or $0.04 common share.

The company's principal investment is a direct and indirect interest in 55.5 million Class A Limited Voting Shares ("Class A Shares") of Brookfield, representing 7 Brookfield Class A Shares for every 10 common shares of BAM Investments.

Consolidated Statements of Operations            
   
  Three months ended Sept 30   Nine months ended Sept 30  
(unaudited)                        
Thousands, except per share amounts   2010     2009     2010     2009  
Investment income                        
  Dividends and interest $ 9,123   $ 8,403   $ 27,553   $ 27,147  
  Gain on the repurchase of preferred shares       65         1,394  
  Other   336         507     434  
    9,459     8,468     28,060     28,970  
Expenses                        
  Operating   100     147     467     661  
  Interest expense on exchangeable debentures               137  
  Amortization of deferred financing costs   463     606     1,390     1,293  
  Retractable preferred share dividends   4,978     4,544     14,935     13,770  
    5,541     5,297     16,792     15,861  
Net income before income taxes and redemption premium   3,918     3,171     11,268     13,109  
Class A preferred share redemption premium       (1,200 )       (1,200 )
Income tax (expense) recovery   (364 )   340     (1,143 )   3,466  
Net income $ 3,554   $ 2,311   $ 10,125   $ 15,375  
Net income per common share $ 0.05   $ 0.03   $ 0.13   $ 0.19  

Net Book Value

The net book value of each of the company's common shares as at September 30, 2010, based on the stock market price of Brookfield's Class A Shares of $29.06, was $14.81 per common share. The company holds approximately 7 Brookfield Class A Shares for every 10 common shares of BAM Investments.

Statement of Financial Position
     
(unaudited)    
Thousands, except per share amounts Sept 30, 2010
Assets    
  Investment in Brookfield Asset Management Inc.(1) $ 1,611,849
  Other securities(2)   90,426
  Cash and cash equivalents   13,479
  Other assets   4,670
  $ 1,720,424
Liabilities and Shareholders' Equity    
  Accounts payable and provisions $ 2,057
  Retractable preferred shares (3)   362,967
  Future tax liability (4)   182,448
    547,472
 
Shareholders' equity   1,172,952
  $ 1,720,424
Net Asset Value Per Common Share, pre tax (5)(6) $ 17.11
Net Asset Value Per Common Share, after tax (5) $ 14.81
Notes:    
     
  (1)  The investment in Brookfield Asset Management Inc. consists of 55.5 million Class A Shares at a bid price of $29.06 per Class A Share as at September 30, 2010.
  (2)  Other securities consist of 2.2 million Partnership Units of Brookfield Infrastructure Partners and U.S. denominated high yield corporate bonds.
  (3)  Represents $367.4 million retractable preferred shares gross of $4.4 million unamortized issue costs.
  (4)  The future 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 as at the date of this statement.
  (5)  As at September 30, 2010, there were 79,206,910 common shares of the company issued and outstanding. Net Book Value per common share is non-GAAP measure.
  (6)  Does not reflect future tax liabilities.

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, performance 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 most recent Annual Information Form and 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.

Contact Information

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