| Three Months Ended December 31 | Year Ended December 31 | |||||||||
| US$ millions (except per unit amounts), unaudited | 2017 | 2016 | 2017 | 2016 | ||||||
| Net income1 | $ | 71 | $ | 162 | $ | 125 | $ | 474 | ||
| – per unit2,3 | $ | 0.09 | $ | 0.40 | $ | (0.04 | ) | $ | 1.13 | |
| FFO4 | $ | 313 | $ | 245 | $ | 1,170 | $ | 944 | ||
| – per unit5 | $ | 0.80 | $ | 0.69 | $ | 3.11 | $ | 2.72 | ||
Brookfield Infrastructure reported net income for the year of
FFO of
“2017 was a strong year for Brookfield Infrastructure, completing a successful decade for the business. We posted solid financial results, acquired a large marquee utility, invested almost
Segment Performance
Our utilities segment contributed FFO of
Our transport segment reported FFO of
Our energy segment generated FFO of
Our communications infrastructure segment contributed FFO of
The following table presents FFO by segment:
| | Three Months Ended December 31 | Year Ended December 31 | |||||||||||
| US$ millions, unaudited | 2017 | 2016 | 2017 | 2016 | |||||||||
| FFO by segment | |||||||||||||
| Utilities | $ | 172 | $ | 97 | $ | 610 | $ | 399 | |||||
| Transport | 139 | 115 | 532 | 423 | |||||||||
| Energy | 56 | 52 | 209 | 175 | |||||||||
| Communications Infrastructure | 19 | 20 | 76 | 77 | |||||||||
| Corporate | (73 | ) | (39 | ) | (257 | ) | (130 | ) | |||||
| FFO | $ | 313 | $ | 245 | $ | 1,170 | $ | 944 | |||||
Update on Strategic Initiatives
Capital Recycling
- Chilean electricity transmission– In December, we signed definitive agreements to sell Brookfield Infrastructure’s approximately 28% interest in Transelec, our Chilean electricity transmission business for
$1.3 billion ($1.1 billion net of applicable taxes). While Transelec generated strong and predictable cash flows throughout the time we held it, it has now matured and the net proceeds from the sale can be reinvested for unitholders at significantly higher returns. Upon closing, we will have generated a compound internal rate of return on this investment of approximately 16% since acquisition (18% pre-tax). Closing is subject to customary closing conditions, certain third-party consents and applicable regulatory approvals and is targeted to occur in the first half of 2018.
Pending Transaction
- Colombian regulated gas distribution – In November, we signed a binding agreement to acquire a minimum 53% controlling interest in Gas Natural S.A. ESP (“GN Colombia”), the second largest natural gas distribution system in
Colombia . GN Colombia operates a high-quality distribution system with regulated revenues and predictable cash flows. At the end of December, we acquired an initial stake of 11% of GN Colombia for$105 million (BIP’s share –$30 million ) and we will be making subsequent investments in a staged approach, which may result in Brookfield Infrastructure and our institutional partners owning all or virtually all of the company.
Balance Sheet Update
We continue to maintain a strong balance sheet to prepare to execute on investment opportunities. Subsequent to quarter end, a preferred unit issuance was completed for
Distribution Increase
The Board of Directors has declared a quarterly distribution in the amount of
Additional Information
The Board has reviewed and approved this news release, including the summarized unaudited financial information contained herein.
Brookfield Infrastructure’s Letter to Unitholders and Supplemental Information are available at www.brookfield.com/infrastructure.
Brookfield Infrastructure Partners is a leading global infrastructure company that owns and operates high-quality, long-life assets in the utilities, transport, energy and communications infrastructure sectors across
Brookfield Infrastructure is the flagship listed infrastructure company of Brookfield Asset Management, a leading global alternative asset manager with approximately
Please note that Brookfield Infrastructure Partner’s previous audited annual and unaudited quarterly reports have been filed on SEDAR and EDGAR and can also be found in the shareholders section of its website at www.brookfield.com/infrastructure. Hard copies of the annual and quarterly reports can be obtained free of charge upon request.
For more information, please contact:
| Media: Claire Holland Vice President, Communications Tel: (416) 369-8236 Email: [email protected] | Investors: Rene Lubianski Senior Vice President, Corporate Development Tel: (416) 956-5196 Email: [email protected] |
Conference Call and Quarterly Earnings Details
Investors, analysts and other interested parties can access Brookfield Infrastructure’s Fourth Quarter 2017 Results as well as the Letter to Unitholders and Supplemental Information on Brookfield Infrastructure’s website under the Investor Relations section at www.brookfield.com/infrastructure.
The conference call can be accessed via webcast on February 9, 2018 at 9:00 a.m. Eastern Time at https://event.on24.com/wcc/r/1585375/3BE30EB5ECEF2E4A4DA20E114AAB79E8 or via teleconference at 1-866-521-4909 toll free in
Note: This news release may contain forward-looking information within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of Section 27A of the
References to Brookfield Infrastructure are to the Partnership together with its subsidiaries and operating entities. Brookfield Infrastructure’s results include limited partnership units held by public unitholders, redeemable partnership units and general partnership units.
References to the Partnership are to Brookfield Infrastructure Partners L.P.
1. Includes net income attributable to non-controlling interests ‒ Redeemable Partnership Units held by
2. Average number of limited partnership units outstanding on a time weighted average basis for the three and 12 month periods ended December 31, 2017 were 276.5 million and 264.6million, respectively (2016 – 248.7 million and 244.7 million, respectively).
3. Results in a loss on a per unit basis for the year ended December 31, 2017 as allocation of net income is reduced by preferred unit and incentive distributions.
4. FFO is defined as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. A reconciliation of net income to FFO is available on page 8 of this release.
5. Average number of partnership units outstanding on a fully diluted time weighted average basis, assuming the exchange of redeemable partnership units held by
6. Payout ratio is defined as distributions paid (inclusive of GP incentive and preferred unit distributions) divided by FFO.
| Brookfield Infrastructure Partners L.P. | |||||
| Consolidated Statements of Financial Position | |||||
| As of December 31, | |||||
US$ millions, unaudited | 2017 | 2016 | |||
| Assets | |||||
| Cash and cash equivalents | $ | 374 | $ | 786 | |
| Financial assets | 196 | 92 | |||
| Property, plant and equipment | 9,937 | 8,656 | |||
| Intangible assets | 9,894 | 4,465 | |||
| Investments in associates | 5,572 | 4,727 | |||
| Investment properties | 192 | 154 | |||
| Deferred income taxes and other | 3,312 | 2,395 | |||
| Total assets | $ | 29,477 | $ | 21,275 | |
| Liabilities and partnership capital | |||||
| Corporate borrowings | $ | 2,101 | $ | 1,002 | |
| Non-recourse borrowings | 8,063 | 7,324 | |||
| Financial liabilities | 1,313 | 381 | |||
| Deferred income taxes and other | 4,526 | 2,924 | |||
| Totalliabilities | 16,003 | 11,631 | |||
| Partnership capital | |||||
| Limited partners | 4,967 | 4,611 | |||
| General partner | 25 | 27 | |||
| Non-controlling interest attributable to: | |||||
| Redeemable partnership units held by | 2,012 | 1,860 | |||
| Interest of others in operating subsidiaries | 5,875 | 2,771 | |||
| Preferred unitholders | 595 | 375 | |||
| Total partnership capital | 13,474 | 9,644 | |||
| Total liabilities and partnership capital | $ | 29,477 | $ | 21,275 | |
| Brookfield Infrastructure Partners L.P. | |||||||||||||||
| Consolidated Statements of Operating Results | |||||||||||||||
| US$ millions (except per unit information), unaudited | For the three months ended Dec 31, | For the year ended Dec 31, | |||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Revenues | $ | 984 | $ | 677 | $ | 3,535 | $ | 2,115 | |||||||
| Direct operating costs | (399 | ) | (396 | ) | (1,509 | ) | (1,063 | ) | |||||||
| General and administrative expenses | (66 | ) | (44 | ) | (239 | ) | (166 | ) | |||||||
| Depreciation and amortization expense | (130 | ) | (113 | ) | (671 | ) | (447 | ) | |||||||
| 389 | 124 | 1,116 | 439 | ||||||||||||
| Interest expense | (113 | ) | (98 | ) | (428 | ) | (392 | ) | |||||||
| Share of earnings from associates | 35 | 106 | 118 | 248 | |||||||||||
| Revaluation gains (losses) on hedging items | 18 | 73 | (66 | ) | 74 | ||||||||||
| Other (expenses) income | (12 | ) | 3 | 7 | 174 | ||||||||||
| Income before income tax | 317 | 208 | 747 | 543 | |||||||||||
| Income tax (expense) recovery | |||||||||||||||
| Current | (39 | ) | (13 | ) | (106 | ) | (33 | ) | |||||||
| Deferred | (36 | ) | (17 | ) | (67 | ) | 18 | ||||||||
| Net income | 242 | 178 | 574 | 528 | |||||||||||
| Non-controlling interest of others in operating subsidiaries | (171 | ) | (16 | ) | (449 | ) | (54 | ) | |||||||
| Net income attributable to partnership | $ | 71 | $ | 162 | $ | 125 | $ | 474 | |||||||
| Attributable to: | |||||||||||||||
| Limited partners | 30 | 99 | 11 | 276 | |||||||||||
| General partner | 29 | 22 | 113 | 84 | |||||||||||
| Non-controlling interest – redeemable partnership units held by | 12 | 41 | 1 | 114 | |||||||||||
| Basic and diluted earnings (loss) per unit attributable to: | |||||||||||||||
| Limited partners1 | $ | 0.09 | $ | 0.40 | $ | (0.04 | ) | $ | 1.13 | ||||||
1. Average number of limited partnership units outstanding on a time weighted average basis for the three and 12 months ended December 31, 2017 were
276.5 million and 264.6million, respectively (2016– 248.7 million and 244.7 million, respectively).
| Brookfield Infrastructure Partners L.P. | ||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||
| US$ millions, unaudited | For the three months ended Dec 31, | For the year ended Dec 31, | ||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Operating Activities | ||||||||||||
| Net income | $ | 242 | 178 | $ | 574 | $ | 528 | |||||
| Adjusted for the following items: | ||||||||||||
| Share of earnings from associates, net of distributions | (11 | ) | (92 | ) | (52 | ) | (202 | ) | ||||
| Depreciation and amortization expense | 130 | 113 | 671 | 447 | ||||||||
| Mark-to-market on hedging items, provisions and other | (12 | ) | (81 | ) | 90 | (47 | ) | |||||
| Deferred tax expense (recovery) | 36 | 17 | 67 | (18 | ) | |||||||
| Change in non-cash working capital, net | 124 | (46 | ) | 131 | 45 | |||||||
| Cash from operating activities | 509 | 89 | 1,481 | 753 | ||||||||
| Investing Activities | ||||||||||||
| Investments, net of disposals: | ||||||||||||
| Operating assets | (20 | ) | 245 | (4,223 | ) | (167 | ) | |||||
| Associates | (269 | ) | (171 | ) | (620 | ) | (887 | ) | ||||
| Long-lived assets | (193 | ) | (218 | ) | (667 | ) | (683 | ) | ||||
| Financial assets | 28 | 107 | (60 | ) | 536 | |||||||
| Net settlements of foreign exchange contracts | (108 | ) | 34 | (151 | ) | 143 | ||||||
| Cash used by investing activities | (562 | ) | (3 | ) | (5,721 | ) | (1,058 | ) | ||||
| Financing Activities | ||||||||||||
| Distributions to limited and general partners | (208 | ) | (162 | ) | (794 | ) | (628 | ) | ||||
| Net borrowings: | ||||||||||||
| Corporate | 412 | (492 | ) | 1,020 | (407 | ) | ||||||
| Subsidiary | 86 | 258 | 360 | 422 | ||||||||
| Other | — | — | — | (38 | ) | |||||||
| Issuance of preferred units | — | — | 220 | 186 | ||||||||
| Issuance of partnership units, net of repurchases | 4 | 736 | 992 | 749 | ||||||||
| Distributions to non-controlling interest, net of capital provided | (356 | ) | (69 | ) | 2,016 | 615 | ||||||
| Cash (used by) from financing activities | (62 | ) | 271 | 3,814 | 899 | |||||||
| Cash and cash equivalents | ||||||||||||
| Change during the period | $ | (115 | ) | $ | 357 | $ | (426 | ) | $ | 594 | ||
| Impact of foreign exchange on cash | (3 | ) | (12 | ) | 14 | (7 | ) | |||||
| Balance, beginning of period | 492 | 441 | 786 | 199 | ||||||||
| Balance, end of period | $ | 374 | $ | 786 | $ | 374 | $ | 786 | ||||
| Brookfield Infrastructure Partners L.P. | ||||||||||||||
| Statements of Funds from Operations | ||||||||||||||
| For the three months ended Dec 31, | For the year ended Dec 31, | |||||||||||||
| US$ millions, unaudited | 2017 | 2016 | 2017 | 2016 | ||||||||||
| Adjusted EBITDA | ||||||||||||||
| Utilities | $ | 205 | $ | 125 | $ | 738 | $ | 524 | ||||||
| Transport | 179 | 156 | 694 | 597 | ||||||||||
| Energy | 70 | 74 | 281 | 276 | ||||||||||
| Communications Infrastructure | 22 | 24 | 90 | 91 | ||||||||||
| Corporate | (66 | ) | (44 | ) | (239 | ) | (166 | ) | ||||||
| Total | 410 | 335 | 1,564 | 1,322 | ||||||||||
| Financing costs | (106 | ) | (112 | ) | (434 | ) | (456 | ) | ||||||
| Other income | 9 | 22 | 40 | 78 | ||||||||||
| Funds from operations (FFO) | 313 | 245 | 1,170 | 944 | ||||||||||
| Depreciation and amortization | (187 | ) | (161 | ) | (726 | ) | (609 | ) | ||||||
| Deferred taxes and other items | (55 | ) | 78 | (319 | ) | 139 | ||||||||
| Net income attributable to the partnership | $ | 71 | $ | 162 | $ | 125 | $ | 474 | ||||||
Notes:
Funds from operations in this statement is on a segmented basis and represents the operations of Brookfield Infrastructure net of charges associated with related liabilities and non-controlling interests. Adjusted EBITDA is defined as FFO excluding the impact of interest expense and other income or expenses. Net income attributable to the partnership includes net income attributable to non-controlling interests – redeemable partnership units held by
The Statements of Funds from Operations above are prepared on a basis that is consistent with the Partnership’s Supplemental Information and differs from net income as presented in Brookfield Infrastructure’s Consolidated Statements of Operating Results on page 6 of this release, which is prepared in accordance with IFRS. Management uses funds from operations (FFO) as a key measure to evaluate operating performance. Readers are encouraged to consider both measures in assessing Brookfield Infrastructure’s results.
| Brookfield Infrastructure Partners L.P. | |||||||||||||
| Statements of Funds from Operations per Unit | |||||||||||||
| For the three months ended Dec 31, | For the year ended Dec 31, | ||||||||||||
| US$, unaudited | 2017 | 2016 | 2017 | 2016 | |||||||||
| Earnings (loss) per limited partnership unit1 | $ | 0.09 | $ | 0.40 | $ | (0.04 | ) | $ | 1.13 | ||||
| Add back or deduct the following: | |||||||||||||
| Depreciation and amortization | 0.47 | 0.46 | 1.92 | 1.75 | |||||||||
| Deferred taxes and other items | 0.24 | (0.17 | ) | 1.23 | (0.16 | ) | |||||||
| FFO per unit2 | $ | 0.80 | $ | 0.69 | $ | 3.11 | $ | 2.72 | |||||
1. Average number of limited partnership units outstanding on a time weighted average basis for the three and 12 month periods ended December 31, 2017 were 276.5 million and 264.6million, respectively (2016 – 248.7 million and 244.7 million, respectively).
2. Average number of partnership units outstanding on a fully diluted time weighted average basis, assuming the exchange of redeemable partnership units held by
Notes:
The Statements of Funds from Operations per unit above are prepared on a basis that is consistent with the Partnership’s Supplemental Information and differs from net income per limited partnership unit as presented in Brookfield Infrastructure’s Consolidated Statements of Operating Results on page 6 of this release, which is prepared in accordance with IFRS. Management uses funds from operations per unit (FFO per unit) as a key measure to evaluate operating performance. Readers are encouraged to consider both measures in assessing Brookfield Infrastructure’s results.
| Brookfield Infrastructure Partners L.P. | ||||
| Statements of Partnership Capital | ||||
| As of December 31 | ||||
US$ millions, unaudited | 2017 | 2016 | ||
| Assets | ||||
| Operating groups | ||||
| Utilities | $ | 3,290 | $ | 1,807 |
| Transport | 4,116 | 3,549 | ||
| Energy | 1,806 | 1,564 | ||
| Communications Infrastructure | 614 | 541 | ||
| Corporate cash and financial assets | 205 | 549 | ||
| $ | 10,031 | $ | 8,010 | |
| Liabilities | ||||
| Corporate borrowings | $ | 2,101 | $ | 1,002 |
| Other liabilities | 926 | 510 | ||
| 3,027 | 1,512 | |||
| Capitalization | ||||
| Partnership capital | 7,004 | 6,498 | ||
| $ | 10,031 | $ | 8,010 | |
Notes:
Partnership capital in these statements represents Brookfield Infrastructure’s investments in its operations on a segmented basis, net of underlying liabilities and non-controlling interests, and includes partnership capital attributable to non-controlling interests – redeemable partnership units held by
The Statements of Partnership Capital above are prepared on a basis that is consistent with the Partnership’s Supplemental Information and differs from Brookfield Infrastructure’s Consolidated Statements of Financial Position on page 5 of this release, which is prepared in accordance with IFRS. Readers are encouraged to consider both measures in assessing Brookfield Infrastructure's financial position.
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