| For the three months ended Dec 31, | For the year ended Dec 31, | |||||||||||
| US$ millions (except per unit amounts), unaudited | 2018 | 2017 | 2018 | 2017 | ||||||||
| Net income1 | $ | 71 | $ | 71 | $ | 410 | $ | 125 | ||||
| – per unit2,3 | $ | 0.06 | $ | 0.09 | $ | 0.59 | $ | (0.04 | ) | |||
| FFO4 | $ | 326 | $ | 313 | $ | 1,231 | $ | 1,170 | ||||
| – per unit5 | $ | 0.82 | $ | 0.80 | $ | 3.11 | $ | 3.11 | ||||
Brookfield Infrastructure reported net income for the year of
Our business generated FFO of
“2018 was an extremely active and successful year. We executed on our asset rotation strategy, an integral component of our full cycle investment plan, and as a result, are able to fund our secured transactions, without need for equity issuance. The business also generated solid results and we deployed over
Segment Performance
The utilities segment contributed FFO of
Our transport segment generated FFO of
Our energy segment generated FFO of
Our data infrastructure segment contributed FFO of
The following table presents FFO by segment:
| For the three months ended Dec 31, | For the year ended Dec 31, | ||||||||||||||
| US$ millions, unaudited | 2018 | 2017 | 2018 | 2017 | |||||||||||
| FFO by segment | |||||||||||||||
| Utilities | $ | 138 | $ | 172 | $ | 576 | $ | 610 | |||||||
| Transport | 129 | 139 | 518 | 532 | |||||||||||
| Energy | 90 | 56 | 269 | 209 | |||||||||||
| Data Infrastructure | 20 | 19 | 77 | 76 | |||||||||||
| Corporate | (51 | ) | (73 | ) | (209 | ) | (257 | ) | |||||||
| FFO | $ | 326 | $ | 313 | $ | 1,231 | $ | 1,170 | |||||||
Update on Strategic Initiatives
We have closed or committed to close a number of initiatives which will contribute to our results and liquidity.
U.S. Data Centers – On December 31, we closed on the previously announcedU.S. data center acquisition from AT&T, investing$160 million in a high-quality portfolio of retail co-location data centers in several key markets.
- Asia Pacific Data Centers – In January, we successfully acquired a 100% interest in an
Asia Pacific data center business for$180 million (BIP’s share –$50 million ). This business consists of two Australian data centers providing services to investment-grade hyperscale customers under attractive long-term contracts. We intend to utilize this operation to grow into the greater Asian market which lags behind the North American market in cloud computing developments.
- South American Data Centers – Working alongside a strategic partner, we have achieved all milestones to acquire Ascenty, the leading hyperscale data center operator in
South America , and anticipate closing this transaction in February. We are also actively assessing prospective “tuck-in” acquisition opportunities in the region that are complementary to this business.
- Indian Natural Gas Pipeline – This transaction is progressing well, and we anticipate closing by the end of February. We have started to turn our attention to executing our 100-day plan and integrating these assets into our portfolio.
- Western Canadian Midstream – We are continuing to complete the regulatory process to close on the Federally regulated assets from the Westcoast long-haul gas transmission line. This process remains on-track and is scheduled to close in mid-2019.
- Chilean Toll Road Business – In January, we signed an agreement to sell up to 33% of our stake in our Chilean toll road business. We considered this to be an opportune time to monetize a portion of the investment, as the asset had reached the mature phase of its lifecycle. Concurrently, we are executing a dividend recapitalization, which will be completed upon closing of the sale, which is expected imminently. After-tax proceeds to Brookfield Infrastructure are estimated to be approximately $365 million. The result of our efforts generated an annualized return of approximately 17% on this portion of our investment.
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 data infrastructure sectors across
Brookfield Infrastructure is the flagship listed infrastructure company of Brookfield Asset Management, a leading global alternative asset manager with over
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: Melissa Low Vice President, Investor Relations Tel: (416) 956-5239 Email: [email protected] |
Conference Call and Quarterly Earnings Details
Investors, analysts and other interested parties can access Brookfield Infrastructure’s Fourth Quarter 2018 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 6, 2019 at 9:00 a.m. Eastern Time at https://edge.media-server.com/m6/p/m8m2o78f or via teleconference at 1-866-688-9459 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, general partnership units and exchange LP 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, 2018 were 277.5 million and 276.9million, respectively (2017 – 276.5 million and 264.6 million, respectively).
3. Results in a loss on a per unit basis for the 12 months 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 9 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
Brookfield Infrastructure Partners L.P.
Consolidated Statements of Financial Position
| As of December 31, | |||||
| US$ millions, unaudited | 2018 | 2017 | |||
| Assets | |||||
| Cash and cash equivalents | $ | 540 | $ | 374 | |
| Financial assets | 224 | 196 | |||
| Property, plant and equipment | 12,814 | 9,937 | |||
| Intangible assets | 11,635 | 9,894 | |||
| Investments in associates | 4,591 | 5,572 | |||
| Investment properties | 190 | 192 | |||
| Deferred income taxes and other | 6,586 | 3,312 | |||
| Total assets | $ | 36,580 | $ | 29,477 | |
| Liabilities and partnership capital | |||||
| Corporate borrowings | $ | 1,993 | $ | 2,101 | |
| Non-recourse borrowings | 13,113 | 8,063 | |||
| Financial liabilities | 1,280 | 1,313 | |||
| Deferred income taxes and other | 5,526 | 4,526 | |||
| Partnership capital | |||||
| General partner | 22 | 25 | |||
| Limited partners | 4,513 | 4,967 | |||
| Non-controlling interest attributable to: | |||||
| Redeemable partnership units held by | 1,823 | 2,012 | |||
| Exchange LP units | 71 | — | |||
| Interest of others in operating subsidiaries | 7,303 | 5,875 | |||
| Preferred unitholders | 936 | 595 | |||
| Total partnership capital | 14,668 | 13,474 | |||
| Total liabilities and partnership capital | $ | 36,580 | $ | 29,477 | |
Brookfield Infrastructure Partners L.P.
Consolidated Statements of Operating Results
| For the three months ended Dec 31, | For the year ended Dec 31, | ||||||||||||||
| US$ millions (except per unit information), unaudited | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Revenues | $ | 1,428 | $ | 984 | $ | 4,652 | $ | 3,535 | |||||||
| Direct operating costs | (729 | ) | (399 | ) | (2,208 | ) | (1,509 | ) | |||||||
| General and administrative expenses | (54 | ) | (66 | ) | (223 | ) | (239 | ) | |||||||
| Depreciation and amortization expense | (232 | ) | (130 | ) | (801 | ) | (671 | ) | |||||||
| 413 | 389 | 1,420 | 1,116 | ||||||||||||
| Interest expense | (176 | ) | (113 | ) | (555 | ) | (428 | ) | |||||||
| Share of earnings (losses) from associates | 23 | 35 | (13 | ) | 118 | ||||||||||
| Mark-to-market on hedging items | 79 | 18 | 137 | (66 | ) | ||||||||||
| Gain on sale of associates | — | — | 338 | — | |||||||||||
| Other (expenses) income | (124 | ) | (12 | ) | (157 | ) | 7 | ||||||||
| Income before income tax | 215 | 317 | 1,170 | 747 | |||||||||||
| Income tax (expense) recovery | |||||||||||||||
| Current | (49 | ) | (39 | ) | (318 | ) | (106 | ) | |||||||
| Deferred | 7 | (36 | ) | (46 | ) | (67 | ) | ||||||||
| Net income | 173 | 242 | 806 | 574 | |||||||||||
| Non-controlling interest of others in operating subsidiaries | (102 | ) | (171 | ) | (396 | ) | (449 | ) | |||||||
| Net income attributable to partnership | $ | 71 | $ | 71 | $ | 410 | $ | 125 | |||||||
| Attributable to: | |||||||||||||||
| Limited partners | 26 | 30 | 192 | 11 | |||||||||||
| General partner | 34 | 29 | 137 | 113 | |||||||||||
| Non-controlling interest – redeemable partnership units held by | 11 | 12 | 81 | 1 | |||||||||||
| Basic and diluted earnings (loss) per unit attributable to: | |||||||||||||||
| Limited partners1 | $ | 0.06 | $ | 0.09 | $ | 0.59 | $ | (0.04 | ) | ||||||
- Average number of limited partnership units outstanding on a time weighted average basis for the three and 12 months ended December 31, 2018 were 277.5 million and 276.9million, respectively (2017– 276.5 million and 264.6 million, respectively).
Brookfield Infrastructure Partners L.P.
Consolidated Statements of Cash Flows
| For the three months ended Dec 31, | For the year ended Dec 31, | ||||||||||||||
| US$ millions, unaudited | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Operating Activities | |||||||||||||||
| Net income | $ | 173 | 242 | $ | 806 | $ | 574 | ||||||||
| Adjusted for the following items: | |||||||||||||||
| Share of losses (earnings) from associates, net of distributions | 8 | (11 | ) | 72 | (52 | ) | |||||||||
| Depreciation and amortization expense | 232 | 130 | 801 | 671 | |||||||||||
| Mark-to-market on hedging items, provisions and other | 42 | (12 | ) | 99 | 90 | ||||||||||
| Gain on sale of associate | — | — | (338 | ) | — | ||||||||||
| Deferred tax (recovery) expense | (7 | ) | 36 | 46 | 67 | ||||||||||
| Change in non-cash working capital, net | (72 | ) | 124 | (124 | ) | 131 | |||||||||
| Cash from operating activities | 376 | 509 | 1,362 | 1,481 | |||||||||||
| Investing Activities | |||||||||||||||
| Investments, net of disposals: | |||||||||||||||
| Operating assets | (5,246 | ) | (20 | ) | (5,825 | ) | (4,223 | ) | |||||||
| Associates | 2 | (269 | ) | 1,228 | (620 | ) | |||||||||
| Long-lived assets | (267 | ) | (193 | ) | (816 | ) | (667 | ) | |||||||
| Financial assets | (35 | ) | 28 | (98 | ) | (60 | ) | ||||||||
| Net settlements of foreign exchange contracts | 24 | (108 | ) | (53 | ) | (151 | ) | ||||||||
| Cash used by investing activities | (5,522 | ) | (562 | ) | (5,564 | ) | (5,721 | ) | |||||||
| Financing Activities | |||||||||||||||
| Distributions to limited and general partners | (233 | ) | (208 | ) | (919 | ) | (794 | ) | |||||||
| Net borrowings: | |||||||||||||||
| Corporate | 416 | 412 | 4 | 1,020 | |||||||||||
| Subsidiary | 2,322 | 86 | 3,951 | 360 | |||||||||||
| Preferred unit (repurchases) issuances | (1 | ) | — | 341 | 220 | ||||||||||
| Repurchases of partnership units, net of issuances | (28 | ) | 4 | (16 | ) | 992 | |||||||||
| Cash provided by non-controlling interest, net of distributions | 2,071 | (356 | ) | 1,057 | 2,016 | ||||||||||
| Cash from (used by) financing activities | 4,547 | (62 | ) | 4,418 | 3,814 | ||||||||||
| Cash and cash equivalents | |||||||||||||||
| Change during the period | $ | (599 | ) | $ | (115 | ) | $ | 216 | $ | (426 | ) | ||||
| Impact of foreign exchange on cash | (5 | ) | (3 | ) | (50 | ) | 14 | ||||||||
| Balance, beginning of period | 1,144 | 492 | 374 | 786 | |||||||||||
| Balance, end of period | $ | 540 | $ | 374 | $ | 540 | $ | 374 | |||||||
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 | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Adjusted EBITDA | |||||||||||||||
| Utilities | $ | 181 | $ | 205 | $ | 733 | $ | 738 | |||||||
| Transport | 173 | 179 | 682 | 694 | |||||||||||
| Energy | 107 | 70 | 328 | 281 | |||||||||||
| Data Infrastructure | 24 | 22 | 93 | 90 | |||||||||||
| Corporate | (54 | ) | (66 | ) | (223 | ) | (239 | ) | |||||||
| Total | 431 | 410 | 1,613 | 1,564 | |||||||||||
| Financing costs | (121 | ) | (106 | ) | (444 | ) | (434 | ) | |||||||
| Other income | 16 | 9 | 62 | 40 | |||||||||||
| Funds from operations (FFO) | 326 | 313 | 1,231 | 1,170 | |||||||||||
| Depreciation and amortization | (185 | ) | (187 | ) | (758 | ) | (726 | ) | |||||||
| Deferred taxes and other items | (70 | ) | (55 | ) | (63 | ) | (319 | ) | |||||||
| Net income attributable to the partnership | $ | 71 | $ | 71 | $ | 410 | $ | 125 | |||||||
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 7 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 | 2018 | 2017 | 2018 | 2017 | ||||||||
| Earnings (loss) per limited partnership unit1 | $ | 0.06 | $ | 0.09 | $ | 0.59 | $ | (0.04 | ) | |||
| Add back or deduct the following: | ||||||||||||
| Depreciation and amortization | 0.47 | 0.47 | 1.92 | 1.92 | ||||||||
| Deferred taxes and other items | 0.29 | 0.24 | 0.60 | 1.23 | ||||||||
| FFO per unit2 | $ | 0.82 | $ | 0.80 | $ | 3.11 | $ | 3.11 | ||||
- Average number of limited partnership units outstanding on a time weighted average basis for the three and 12-month periods ended December 31, 2018 were 277.5 million and 276.9million, respectively (2017 – 276.5 million and 264.6 million, respectively).
- Average number of partnership units outstanding on a fully diluted time weighted average basis, assuming the exchange of redeemable partnership units held by
Brookfield for limited partnership units, for the three and 12-month periods ended December 31, 2018 were 399.1million and 395.4 million, respectively (2017 – 393.9 million and 376.8 million, respectively).
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 7 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 | 2018 | 2017 | ||
| Assets | ||||
| Operating groups | ||||
| Utilities | $ | 1,787 | $ | 3,290 |
| Transport | 3,627 | 4,116 | ||
| Energy | 2,817 | 1,806 | ||
| Data Infrastructure | 882 | 614 | ||
| Corporate cash and financial assets | 238 | 205 | ||
| $ | 9,351 | $ | 10,031 | |
| Liabilities | ||||
| Corporate borrowings | $ | 1,993 | $ | 2,101 |
| Other liabilities | 929 | 926 | ||
| 2,922 | 3,027 | |||
| Capitalization | ||||
| Partnership capital | 6,429 | 7,004 | ||
| $ | 9,351 | $ | 10,031 | |
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 6 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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