BAM Investments Announces Second Quarter Results: Financial News

BAM Investments Announces Second Quarter Results
Thursday August 14, 2008 6:19 pm ET

TORONTO, ONTARIO--(MARKET WIRE)--Aug 14, 2008 -- BAM Investments Corp. (Toronto:BNB.TO - News) today announced its financial results for the second quarter ended June 30, 2008.

The company recorded net income of $0.6 million ($0.01 per share) for the quarter ended June 30, 2008, compared with $1.8 million ($0.02 per share) in the same period last year. In the first quarter of 2008, the company received a special dividend on the Brookfield Class A shares valued at $50.1 million.

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").

 

Consolidated Statements of Operations

----------------------------------------------------------------------------
                       Three months ended June 30  Six months ended June 30
                       -----------------------------------------------------
(unaudited)
$thousands, except per
 share amounts             2008              2007      2008            2007
----------------------------------------------------------------------------
Investment income
 Dividends, interest
  and other             $ 9,405 $           9,474  $ 17,197 $        17,297
 Special dividend             -                 -    50,056               -
----------------------------------------------------------------------------
                          9,405             9,474    67,253          17,297
Expenses
 Operating                  179               219       401             685
 Interest expense         1,056             1,083     2,083           2,158
 Amortization of
  deferred
  financing costs           426               406       844             784
 Subsidiary preferred
  share dividends         5,118             6,125    10,236          10,236
----------------------------------------------------------------------------
                          6,779             7,833    13,564          13,863
----------------------------------------------------------------------------
Net income before
 income taxes             2,626             1,641    53,689           3,434
Future tax expense
 (recovery)               2,042              (144)    1,580          (1,441)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income              $   584 $           1,785  $ 52,109 $         4,875
Preferred share
 dividends                    -                 -         -            (213)
----------------------------------------------------------------------------
Net income for common
 shareholders           $   584 $           1,785  $ 52,109 $         4,662
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income per common
 share                  $  0.01 $            0.02  $   0.66 $          0.06
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net Book Value

The net book value of the company's common shares as at June 30, 2008 based on the stock market price of Brookfield's Class A shares of $33.10 was $16.76 per share. BAM Investments holds 6.98 Brookfield Class A shares for every 10 common shares of BAM Investments. The information in the following table has been extracted from the company's consolidated balance sheet as at June 30, 2008.

 

Statement of Financial Position

----------------------------------------------------------------------------
As at June 30, 2008 ($thousands, except per share amounts)  Net Asset Value
----------------------------------------------------------------------------
Assets
 Investment in Brookfield Asset Management Inc.(1)          $     1,835,932
 Investment in Brookfield Infrastructure Partners(2)                 48,661
 Cash and equivalents                                                54,783
 Other assets                                                         9,435
----------------------------------------------------------------------------
                                                            $     1,948,811
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
 Accounts payable and provisions                            $         2,964
 Retractable preferred shares(3)                                    397,732
 Future tax liability(4)                                            217,365
----------------------------------------------------------------------------
                                                                    618,061
Shareholders' Equity
 Common shares                                                    1,330,750
----------------------------------------------------------------------------
                                                            $     1,948,811
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net Asset Value Per Common Share(5)                         $         16.76
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Notes:
(1) The investment in Brookfield Asset Management Inc. consists of
    55.5 million Class A shares at a bid price of $33.10 per Brookfield
    share at June 30, 2008.  This represents the total shares owned of
    60.8 million Class A shares less 5.3 million Class A that have been set
    aside for settlement of the long-term exchangeable debentures issued
    by the company.
(2) The investment in Brookfield Infrastructure Partners consists of
    2.4 million Limited Partnership Units at a bid price of $20.02 per unit.
(3) Represents $405  million retractable preferred shares issued by
    BAM Split Corp, which is a subsidiary of the company, net of unamortized
    issuance costs.
(4) The future tax liability represents the potential future income tax
    liability of the company 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 June 30, 2008, there were 79,418,910 common shares of the company
    issued and outstanding.

Note: This news release contains "forward-looking statements". The words "potential" and "estimated" 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.