TORONTO, ONTARIO -- (Marketwire) -- 11/28/12 -- BAM Investments Corp. (TSX VENTURE: BNB) today announced its financial results for the third quarter ended September 30, 2012.
BAM Investments Corp. recorded comprehensive income, which consists of net income and other comprehensive income, of $18.7 million for the three months ended September 30, 2012 which, in turn, increased the company's net book value by $0.25 per share to $19.13 per share. Other comprehensive income includes $13.8 million of after-tax unrealized gains on the company's investment portfolio, primarily as a result of a $0.25 per share increase in the market price of the company's Brookfield Asset Management shares to $33.90 per share.
The company recorded net income of $4.8 million ($0.07 per common share) for the three months ended September 30, 2012 compared to a $2.8 million loss ($0.04 per common share) for the prior year comparable period. The increase in net income in the current period was primarily the result of an increase in equity accounted income as a publicly listed fund held by the company recorded increased valuation gains.
Consolidated Statements of Operations
Three months ended Nine months ended
(unaudited) September 30 September 30
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Thousands, except per
share amounts 2012 2011 2012 2011
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Investment income
Dividends and interest $ 8,829 $ 7,952 $ 25,803 $ 25,354
Cash portion of equity
accounted income(1) 1,220 1,220 3,660 2,440
Gain on sale of
investments - - - 859
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10,049 9,172 29,463 28,653
Less:
Operating expenses 101 151 550 583
Retractable preferred
share dividends 6,494 6,494 19,482 19,295
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Income from operations(2) 3,454 2,527 9,431 8,775
Adjust for other items:
Non-cash portion of
equity accounted
income(1) 2,219 (4,697) 7,226 (7,015)
Foreign currency
revaluation - - - (1,202)
Amortization of deferred
financing costs (355) (613) (1,066) (1,835)
Income tax (expense)
recovery (490) (3) (1,560) 87
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Net income $ 4,828 $ (2,786) $ 14,031 $ (1,190)
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Notes:
1. Equity accounted income is bifurcated into the company's proportionate
share of cash distributions and non-cash changes in value to better
reflect the amount of investment income generated by the investment
portfolio.
2. Income from operations is a non-IFRS measure used by the company to
better reflect the operating performance during the period. The
measure is defined as investment income less expenses, as shown on the
Consolidated Statements of Operations, and then adjusted for cash
distributions received from the company's equity accounted investment.
Financial Profile and Net Book Value
The company's principal investment is a direct and indirect interest in 56.2 million Class A Limited Voting Shares ("Class A Shares") of Brookfield Asset Management Inc. ("Brookfield"), representing 7.6 Brookfield Class A Shares for every 10 common shares of BAM Investments Corp.
The net book value of the company's common shares as at September 30, 2012, based on the stock market price of Brookfield's Class A Shares of $33.90, was $19.13 per share. The information in the following table shows the changes in net book value for the three and nine months ended September 30, 2012:
Three months ended Nine months ended
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Total Per Share Total Per Share
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Net book value, beginning
of period(1) $ 1,400,933 $ 18.88 $ 1,102,815 $ 14.86
Net income(2) 4,828 0.07 14,031 0.19
Other comprehensive income 13,841 0.18 302,756 4.08
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Net book value, end of
period(1,3) $ 1,419,602 $ 19.13 $ 1,419,602 $ 19.13
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Notes:
1. Net book value per common share is non-IFRS measure.
2. The weighted average number of common shares outstanding during the nine
months ended September 30, 2012, was 74,206,510.
3. As at September 30, 2012, there were 74,206,510 voting and non-voting
common shares of the company issued and outstanding on a fully diluted
basis.
Statement of Financial Position
The information in the following table has been extracted from the company's consolidated balance sheet as at September 30, 2012.
(unaudited)
Thousands, except per share amounts
Net Book Value
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Assets
Investment in Brookfield Asset
Management Inc.(1) $ 1,906,070
Other securities 140,487
Cash and cash equivalents 39,823
Accounts receivable and other 1,363
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$ 2,087,743
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Liabilities and Shareholders' Equity
Accounts payable and other $ 168
Retractable preferred shares (2) 487,784
Deferred taxes (3) 180,189
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668,141
Shareholders' equity 1,419,602
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$ 2,087,743
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Net book value per common share, pre tax
(4, 5) $ 21.56
Net book value per common share, after
tax (4, 5) $ 19.13
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Notes:
1 The investment in Brookfield Asset Management Inc. consists of 56.2
million Class A Shares at a bid price of $33.90 per Class A Share as at
September 30, 2012.
2 Represents $492.4 million of retractable preferred shares less $4.6
million of unamortized issue costs.
3 The deferred 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.
4 As at September 30, 2012, there were 74,206,510 (Dec. 31, 2011 -
74,206,510) voting and non-voting common shares of the company issued and
outstanding on a fully diluted basis.
5 Net book value per common share is a non-IFRS measure.
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 the company's 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.
Contacts:
BAM Investments Corp.
Edward C. Kress
President
(416) 956-5140
