TORONTO, ONTARIO--(Marketwired - Apr 4, 2013) - BAM Investments Corp. (TSX VENTURE:BNB) today announced its financial results for the year ended December 31, 2012.
BAM Investments recorded income from operations of $13.1 million for the year ended December 31, 2012, compared to $11.7 million in the prior year. The increase in income from operations compared to the prior year was driven by increases in dividend income from its Brookfield Class A Shares and increased distributions received from its equity accounted investment.
The Company recorded net income of $19.1 million ($0.26 per common share) for the year ended December 31, 2012 compared to $2.1 million ($0.03 per common share) in the prior year. The increase in net income compared to the prior year was primarily the result of an increase in equity accounted income, as a publicly listed fund held by the Company recorded increased valuation gains.
The Company's net book value increased by $5.82 per share to $20.68 per share at December 31, 2012, primarily as a result of changes in the market value of the Company's investment portfolio.
Consolidated Statement of Operations
|Dividends and interest||$||34,871||$||33,672||$||1,199|
|Cash portion of equity accounted income(1)||4,880||3,660||1,220|
|Gain on sale of investments||-||846||(846||)|
|Retractable preferred share dividends||25,977||25,789||188|
|Income from operations(2)||13,069||11,694||1,375|
|Adjust for other items:|
|Non-cash portion of equity accounted income(1)||9,642||(5,316||)||14,958|
|Foreign currency revaluation||-||(1,202||)||1,202|
|Amortization of deferred financing costs||(1,421||)||(2,446||)||1,025|
|Income tax expense||(2,170||)||(645||)||(1,525||)|
(1) Equity accounted income is adjusted to separate 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 year. 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 ("Brookfield Class A Shares") of Brookfield Asset Management Inc. ("Brookfield"), representing approximately 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 December 31, 2012, based on the stock market price of Brookfield's Class A Shares of $36.17, was $20.68 per share. The information in the following table shows the changes in net book value for the years ended December 31, 2012.
|Change in Net Book Value|
|For the years ended December 31||2012||2011|
|($C Thousands, except per share amounts)||Total||per |
|Net book value, beginning of year(1)||$||1,102,815||$||14.86||$||1,408,311||$||17.78|
|Other comprehensive (loss) income(2)||412,811||5.57||(223,525||)||(2.97||)|
|Common shares repurchased||(84,056||)||0.02|
|Net book value, end of year(1),(3)||$||1,534,746||$||20.68||$||1,102,815||$||14.86|
(1) Net book value per common share is non-IFRS measure.
(2) The weighted average number of common shares outstanding during the year ended December 31, 2012 was 74,206,510 (December 31, 2011 - 76,289,852).
(3) As at December 31, 2012, there were 74,206,510 (December 31, 2011 - 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 December 31, 2012.
|As at ($C Thousands, except per share amounts)||Dec 31, 2012||Dec 31, 2011|
|Cash and equivalents||$||25,882||$||30,904|
|Brookfield Asset Management Inc.(1)||2,033,703||1,572,085|
|Accounts receivable and other||1,269||1,245|
|Liabilities and Shareholders' Equity|
|Accounts payable and other||$||277||$||522|
|Retractable preferred shares(2)||488,139||486,718|
|Net Book Value Per Common Share(4),(5)||$||20.68||$||14.86|
(1) The investment in Brookfield Asset Management Inc. consists of 56.2 million Brookfield Class A Shares at a bid price of $36.17 per Class A Share as at December 31,2012 (December 31, 2011 - $27.96).
(2) Represents $492.4 million of retractable preferred shares less $4.2 million of unamortized issue costs. (December 31, 2011 - $492.4 million less $5.6 million).
(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 December 31, 2012, there were 74,206,510 (December 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.