TORONTO, ONTARIO, May 14, 2010 (Marketwire) -- BAM Investments Corp. (TSX:BNB) today announced its financial results for the first quarter ended March 31, 2010.
BAM Investments Corp. recorded net income of $3.3 million ($0.04 per common share) for the first three months of 2010 compared to $9.1 million ($0.11 per common share) for the first three months of 2009. The higher income in 2009 reflects $1.6 million of one-time gains on the repurchase of preferred share obligations and the disposition of certain non-core securities and a gain on the reduction in our future tax provisions of $3.1 million due to the redemption of the exchangeable debentures in January 2009.
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 Asset Management Inc. ("Brookfield"), representing 7 Brookfield Class A Shares for every 10 common shares of BAM Investments.
Consolidated Statements of Operations
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Three months ended March 31
(unaudited)
Thousands, except per share amounts 2010 2009
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Investment income
Dividends and interest $9,338 $ 9,780
Gain on the repurchase of preferred
shares - 1,180
Other (102) 508
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9,236 11,468
Expenses
Operating 222 321
Interest - 137
Amortization of deferred financing costs 460 418
Retractable preferred share dividends 4,978 4,632
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5,660 5,508
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Net income before income taxes 3,576 5,960
Future income tax (expense) recovery (250) 3,095
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Net income $3,326 $ 9,055
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Net income per common share $ 0.04 $ 0.11
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Net Book Value
The net book value of the company's common shares as at March 31, 2010 based on the stock market price of Brookfield's Class A Shares of $25.79 was $12.73 per share. The information in the following table has been extracted from the company's consolidated balance sheet as at March 31, 2010.
Statement of Financial Position as at March 31, 2010
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(unaudited)
Thousands, except per share amounts Net Asset Value
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Assets
Investment in Brookfield Asset Management Inc.(1) $ 1,430,474
Investment in Brookfield Infrastructure Partners (2) 39,541
Other securities 36,208
Cash and cash equivalents 19,778
Other assets 2,614
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$ 1,528,615
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Liabilities and Shareholders' Equity
Accounts payable and provisions $ 2,103
Retractable preferred shares (3) 362,037
Future tax liabilities (4) 155,074
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519,214Shareholders' equity 1,009,401
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$ 1,528,615
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Net Asset Value Per Common Share, pre tax (5)(6) $ 14.69
Net Asset Value Per Common Share, after tax (5) $ 12.73
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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 $25.79 per Class A Share as at March 31, 2010.
(2) The investment in Brookfield Infrastructure Partners consists of 2.2 million Partnership Units at a bid price of $17.82 per Partnership Unit as at March 31, 2010.
(3) Represents $367.4 million retractable preferred shares gross of $5.3 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 March 31, 2010, there were 79,271,510 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 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.
