7% growth in distributions ─ 11th consecutive annual increase
| For the three months | For the year | |||||||||
| ended Dec 31, | ended Dec 31, | |||||||||
| US$ millions (except per unit amounts), unaudited | 2019 | 2018 | 2019 | 2018 | ||||||
| Net income1 | $ | 23 | $ | 71 | $ | 233 | $ | 410 | ||
| – per unit2,3 | $ | (0.07 | ) | $ | 0.06 | $ | 0.07 | $ | 0.59 | |
| FFO4 | $ | 358 | $ | 326 | $ | 1,384 | $ | 1,231 | ||
| – per unit5 | $ | 0.86 | $ | 0.82 | $ | 3.40 | $ | 3.11 | ||
Brookfield Infrastructure reported net income for the year of
FFO of
“2019 was one of the most active and positive years in our company’s history. Our financial results and operating performance were strong and we added high-quality assets to each of our operating segments,” said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure Partners. “Our business is well-positioned for continued growth and our outlook remains positive. We are on track to raise
Segment Performance
Our utilities segment contributed FFO of
Our transport segment generated FFO of
FFO from our energy segment was
FFO from our data infrastructure segment totaled
The following table presents FFO by segment:
| For the three months | For the year | |||||||||||
| ended Dec 31, | ended Dec 31, | |||||||||||
| US$ millions, unaudited | 2019 | 2018 | 2019 | 2018 | ||||||||
| FFO by segment | ||||||||||||
| Utilities | $ | 152 | $ | 138 | $ | 577 | $ | 576 | ||||
| Transport | 128 | 129 | 530 | 518 | ||||||||
| Energy | 109 | 90 | 412 | 269 | ||||||||
| Data Infrastructure | 42 | 20 | 136 | 77 | ||||||||
| Corporate | (73 | ) | (51 | ) | (271 | ) | (209 | ) | ||||
| FFO | $ | 358 | $ | 326 | $ | 1,384 | $ | 1,231 | ||||
Update on Strategic Initiatives
The fourth quarter was very active from an investment perspective. We completed two previously announced acquisitions, investing
- Indian Telecom Towers – We finalized an agreement with Reliance Jio to acquire a portfolio of telecom towers in
India . We will be investing up to$400 million (BIP’s share) and expect to complete this acquisition in the first quarter of 2020. U.S. Data Transmission and Distribution Business – In late December, we entered into an agreement to acquire 100% of Cincinnati Bell Inc. (“CBB”) in a take-private transaction investing$480 million (BIP’s share). CBB is a leading fiber-to-the-home business in theU.S. , serving approximately 1.3 million residential and business customers in greaterCincinnati andHawaii . This is an attractive business with substantial growth prospects. The transaction is subject to shareholder and regulatory approvals, which, if obtained, would likely result in a closing of this transaction in late 2020.U.K. Telecom Towers – In December, we completed the acquisition of aU.K. -based independent wireless infrastructure company, investing$140 million (BIP’s share). It is comprised of over 2,000 fully contracted operating towers and distributed antenna systems. The business is well-positioned to capture expected network growth in theU.K. and has significant potential to leverage Brookfield’s real estate holdings to expand into other jurisdictions outside of theU.K.
We are also making good progress on the next phase of our capital recycling program. We completed three asset sales which were announced last quarter, including the divestment of our Australian district energy and distribution business, our regulated distribution operation in
Furthermore, during the fourth quarter, we signed a binding agreement to sell our North American electricity transmission operation for proceeds of approximately
Distribution Increase
The Board of Directors has declared a quarterly distribution in the amount of
Board of Directors Update
After 12 years as Chairman of the Board of Brookfield Infrastructure, Derek Pannell has stepped aside from his role as Chairman, but will continue as an independent director. In conjunction, Anne Schaumburg has agreed to assume the role of Chair of the company. Anne has served on the Board of Brookfield Infrastructure for 11 years and has been Chair of the Audit Committee for the last 10 years. Anne will continue her role as Chair of the Audit Committee, in addition to her new role as BIP’s Chair.
Furthermore, Brookfield Infrastructure is pleased to announce the appointment of Roslyn Kelly to the Board of Brookfield Infrastructure Partners Limited, effective February 7, 2020. Roslyn brings over 25 years of experience in financial markets. She is currently a Senior Managing Director in Mediobanca’s Alternative Asset Management Group, based in
Anne Schaumburg stated, “I am very pleased to welcome Roslyn Kelly to the Board and look forward to her advice and guidance. Roslyn is an experienced business executive whose background will be of great benefit to our global operations.”
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
Brookfield Infrastructure Partners is listed on the
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 https://bip.brookfield.com. 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 2019 Year-End 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 10, 2020 at 9:00 a.m. Eastern Time at https://edge.media-server.com/mmc/p/oce79qif 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 twelve-month periods ended December 31, 2019 were 293.5 million and 285.6 million, respectively (2018 – 277.5 million and 276.9 million).
3. Results in a loss on a per unit basis for the three-month period ended December 31, 2019 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 | 2019 | 2018 | |||
| Assets | |||||
| Cash and cash equivalents | $ | 827 | $ | 540 | |
| Financial assets | 149 | 224 | |||
| Property, plant and equipment | 23,013 | 12,814 | |||
| Intangible assets | 14,386 | 11,635 | |||
| Investments in associates | 4,967 | 4,591 | |||
| Investment properties | 416 | 190 | |||
| Goodwill | 6,553 | 3,859 | |||
| Deferred income taxes and other | 5,997 | 2,727 | |||
| Total assets | $ | 56,308 | $ | 36,580 | |
| Liabilities and partnership capital | |||||
| Corporate borrowings | $ | 2,475 | $ | 1,993 | |
| Non-recourse borrowings | 18,544 | 13,113 | |||
| Financial liabilities | 2,173 | 1,280 | |||
| Deferred income taxes and other | 10,939 | 5,526 | |||
| Partnership capital | |||||
| General partner | 24 | 22 | |||
| Limited partners | 5,048 | 4,513 | |||
| Non-controlling interest attributable to: | |||||
| Redeemable partnership units held by | 2,039 | 1,823 | |||
| Exchange LP units | 18 | 71 | |||
| Interest of others in operating subsidiaries | 14,113 | 7,303 | |||
| Preferred unitholders | 935 | 936 | |||
| Total partnership capital | 22,177 | 14,668 | |||
| Total liabilities and partnership capital | $ | 56,308 | $ | 36,580 | |
Brookfield Infrastructure Partners L.P.
Consolidated Statements of Operating Results
| For the three months | For the year | ||||||||||||||
| US$ millions (except per unit information), unaudited | ended Dec 31, | ended Dec 31, | |||||||||||||
| 2019 | 2018 | | 2019 | 2018 | |||||||||||
| Revenues | $ | 1,655 | $ | 1,428 | $ | 6,597 | $ | 4,652 | |||||||
| Direct operating costs | (907 | ) | (729 | ) | (3,395 | ) | (2,208 | ) | |||||||
| General and administrative expenses | (79 | ) | (54 | ) | (279 | ) | (223 | ) | |||||||
| Depreciation and amortization expense | (282 | ) | (232 | ) | (1,214 | ) | (801 | ) | |||||||
| 387 | 413 | 1,709 | 1,420 | ||||||||||||
| Interest expense | (222 | ) | (176 | ) | (904 | ) | (555 | ) | |||||||
| Share of earnings (losses) from associates | 136 | 23 | 224 | (13 | ) | ||||||||||
| Mark-to-market on hedging items | (47 | ) | 79 | 57 | 137 | ||||||||||
| Gain on sale of associates | — | — | — | 338 | |||||||||||
| Other expenses | (144 | ) | (124 | ) | (158 | ) | (157 | ) | |||||||
| Income before income tax | 110 | 215 | 928 | 1,170 | |||||||||||
| Income tax (expense) recovery | |||||||||||||||
| Current | (70 | ) | (49 | ) | (250 | ) | (318 | ) | |||||||
| Deferred | (14 | ) | 7 | (28 | ) | (46 | ) | ||||||||
| Net income | 26 | 173 | 650 | 806 | |||||||||||
| Non-controlling interest of others in operating subsidiaries | (3 | ) | (102 | ) | (417 | ) | (396 | ) | |||||||
| Net income attributable to partnership | $ | 23 | $ | 71 | $ | 233 | $ | 410 | |||||||
| Attributable to: | |||||||||||||||
| Limited partners | (13 | ) | 26 | 52 | 192 | ||||||||||
| General partner | 41 | 34 | 159 | 137 | |||||||||||
| Non-controlling interest – redeemable partnership units held by | (5 | ) | 11 | 22 | 81 | ||||||||||
| Basic and diluted earnings (loss) per unit attributable to: | |||||||||||||||
| Limited partners1 | $ | (0.07 | ) | $ | 0.06 | $ | 0.07 | $ | 0.59 | ||||||
1. Average number of limited partnership units outstanding on a time weighted average basis for the three and 12 months ended December 31, 2019 were 293.5million and 285.6 million, respectively (2018– 277.5 million and 276.9million, respectively).
Brookfield Infrastructure Partners L.P.
Consolidated Statements of Cash Flows
| For the three months | For the year | |||||||||||
| US$ millions, unaudited | ended Dec 31, | ended Dec 31, | ||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Operating Activities | ||||||||||||
| Net income | $ | 26 | $ | 173 | $ | 650 | $ | 806 | ||||
| Adjusted for the following items: | ||||||||||||
| Share of (earnings) losses from associates, net of distributions | (48 | ) | 8 | 30 | 72 | |||||||
| Depreciation and amortization expense | 282 | 232 | 1,214 | 801 | ||||||||
| Mark-to-market on hedging items, provisions and other | 147 | 42 | 153 | 99 | ||||||||
| Gain on sale of associate | — | — | — | (338 | ) | |||||||
| Deferred tax expense (recovery) | 14 | (7 | ) | 28 | 46 | |||||||
| Change in non-cash working capital, net | (8 | ) | (72 | ) | 68 | (124 | ) | |||||
| Cash from operating activities | 413 | 376 | 2,143 | 1,362 | ||||||||
| Investing Activities | ||||||||||||
| Investments, net of disposals: | ||||||||||||
| Operating assets | (7,787 | ) | (5,246 | ) | (9,999 | ) | (5,825 | ) | ||||
| Associates | (115 | ) | 2 | (404 | ) | 1,228 | ||||||
| Long-lived assets | (329 | ) | (267 | ) | (1,144 | ) | (816 | ) | ||||
| Financial assets | 231 | (35 | ) | 102 | (98 | ) | ||||||
| Net settlements of foreign exchange contracts | 14 | 24 | 73 | (53 | ) | |||||||
| Cash used by investing activities | (7,986 | ) | (5,522 | ) | (11,372 | ) | (5,564 | ) | ||||
| Financing Activities | ||||||||||||
| Distributions to limited and general partners | (263 | ) | (233 | ) | (1,027 | ) | (919 | ) | ||||
| Net borrowings: | ||||||||||||
| Corporate | 330 | 416 | 398 | 4 | ||||||||
| Subsidiary | 2,615 | 2,322 | 3,573 | 3,951 | ||||||||
| Preferred unit and preferred shares issued, net of repurchases | — | (1 | ) | 72 | 341 | |||||||
| Repurchases of partnership units, net of issuances | 2 | (28 | ) | 781 | (16 | ) | ||||||
| Cash provided by non-controlling interest, net of distributions, and other | 5,019 | 2,071 | 5,745 | 1,057 | ||||||||
| Cash from financing activities | 7,703 | 4,547 | 9,542 | 4,418 | ||||||||
| Cash and cash equivalents | ||||||||||||
| Change during the period | $ | 130 | $ | (599 | ) | $ | 313 | $ | 216 | |||
| Cash reclassified as held for sale | 3 | — | (13 | ) | — | |||||||
| Impact of foreign exchange on cash | 17 | (5 | ) | (13 | ) | (50 | ) | |||||
| Balance, beginning of period | 677 | 1,144 | 540 | 374 | ||||||||
| Balance, end of period | $ | 827 | $ | 540 | $ | 827 | $ | 540 | ||||
Brookfield Infrastructure Partners L.P.
Statements of Funds from Operations
| For the three months | For the year | |||||||||||||
| ended Dec 31, | ended Dec 31, | |||||||||||||
| US$ millions, unaudited | 2019 | 2018 | 2019 | 2018 | ||||||||||
| Adjusted EBITDA | ||||||||||||||
| Utilities | $ | 198 | $ | 181 | $ | 759 | $ | 733 | ||||||
| Transport | 175 | 173 | 722 | 682 | ||||||||||
| Energy | 136 | 107 | 514 | 328 | ||||||||||
| Data Infrastructure | 54 | 24 | 175 | 93 | ||||||||||
| Corporate | (79 | ) | (54 | ) | (279 | ) | (223 | ) | ||||||
| Total | 484 | 431 | 1,891 | 1,613 | ||||||||||
| Financing costs | (146 | ) | (121 | ) | (585 | ) | (444 | ) | ||||||
| Other income | 20 | 16 | 78 | 62 | ||||||||||
| Funds from operations (FFO) | 358 | 326 | 1,384 | 1,231 | ||||||||||
| Depreciation and amortization | (222 | ) | (185 | ) | (895 | ) | (758 | ) | ||||||
| Deferred taxes and other items | (113 | ) | (70 | ) | (256 | ) | (63 | ) | ||||||
| Net income attributable to the partnership | $ | 23 | $ | 71 | $ | 233 | $ | 410 | ||||||
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 | 2019 | 2018 | 2019 | 2018 | |||||||
| Earnings (loss) per limited partnership unit1 | $ | (0.07 | ) | $ | 0.06 | $ | 0.07 | $ | 0.59 | ||
| Add back or deduct the following: | |||||||||||
| Depreciation and amortization | 0.53 | 0.47 | 2.20 | 1.92 | |||||||
| Deferred taxes and other items | 0.40 | 0.29 | 1.13 | 0.60 | |||||||
| FFO per unit2 | $ | 0.86 | $ | 0.82 | $ | 3.40 | $ | 3.11 | |||
1. Average number of limited partnership units outstanding on a time weighted average basis for the three and 12-month periods ended December 31, 2019 were 293.5 million and 285.6million, respectively (2018 – 277.5 million and 276.9million, 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 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 | 2019 | 2018 | ||
| Assets | ||||
| Operating groups | ||||
| Utilities | $ | 2,178 | $ | 1,787 |
| Transport | 3,991 | 3,627 | ||
| Energy | 3,128 | 2,817 | ||
| Data Infrastructure | 1,318 | 882 | ||
| Corporate cash and financial assets | 273 | 238 | ||
| $ | 10,888 | $ | 9,351 | |
| Liabilities | ||||
| Corporate borrowings | $ | 2,475 | $ | 1,993 |
| Other liabilities | 1,284 | 929 | ||
| 3,759 | 2,922 | |||
| Capitalization | ||||
| Partnership capital | 7,129 | 6,429 | ||
| $ | 10,888 | $ | 9,351 | |
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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