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(BNB-TSX Venture) BAM Investments Announces Third Quarter 2012 Results

Wednesday, November 28, 2012 5:41 PM


http://at.marketwire.com/accesstracking/AccessTrackingLogServlet?docid=0837861001&sourceType=1

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 
                          --------------------------------------------------
Thousands, except per                                                       
 share amounts                   2012         2011        2012         2011 
----------------------------------------------------------------------------
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 
----------------------------------------------------------------------------
                               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 
----------------------------------------------------------------------------
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 
----------------------------------------------------------------------------
Net income                  $   4,828   $   (2,786)  $  14,031   $   (1,190)
----------------------------------------------------------------------------
                                                                            
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
                           -------------------------------------------------
                                   Total   Per Share        Total  Per Share
----------------------------------------------------------------------------
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
----------------------------------------------------------------------------
Net book value, end of                                                      
 period(1,3)                 $ 1,419,602  $    19.13  $ 1,419,602  $   19.13
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
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
---------------------------------------------------------------------------
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
---------------------------------------------------------------------------
                                                         $        2,087,743
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Liabilities and Shareholders' Equity                                       
  Accounts payable and other                             $              168
  Retractable preferred shares (2)                                  487,784
  Deferred taxes (3)                                                180,189
---------------------------------------------------------------------------
                                                                    668,141
                                                                           
  Shareholders' equity                                            1,419,602
---------------------------------------------------------------------------
                                                         $        2,087,743
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Net book value per common share, pre tax                                   
 (4, 5)                                                  $            21.56
Net book value per common share, after                                     
 tax (4, 5)                                              $            19.13
---------------------------------------------------------------------------
---------------------------------------------------------------------------
                                                                           
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

(Source: Market Wire )
(Source: Quotemedia)

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