Three Months Ended
March 31
----------------------------
US$ millions (except per unit amounts),
unaudited 2017 2016
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Net (loss) income(1) $ 16 $ 78
- per unit(2,3) $ (0.03) $ 0.17
FFO(4) $ 261 $ 234
- per unit(5) $ 0.71 $ 0.68
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Brookfield Infrastructure reported net income for the quarter of
FFO increased by 12% to
"We started 2017 with another quarter of strong FFO growth, reflecting the contribution of new assets acquired over the last 12 months," said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure. "Following the recent acquisition of our Brazilian natural gas transmission business, we expect to see meaningful growth in our financial results for the balance of the year."
Segment Performance
All of our operating groups generated strong FFO as follows:
Three Months Ended
March 31
--------------------------
US$ millions, unaudited 2017 2016
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FFO by segment
Utilities $ 100 $ 100
Transport 123 94
Energy 62 40
Communications Infrastructure 19 19
Corporate and other (43) (19)
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FFO $ 261 $ 234
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The utilities segment generated FFO of
The transport segment posted strong results for the quarter, generating
The energy segment generated FFO of
Our communications infrastructure segment generated FFO of
Update on Strategic Initiatives
We have executed on a number of initiatives that will contribute to substantial growth in our business in the periods to come:
(I) Brazilian natural gas transmission acquisition - In April, Brookfield Infrastructure completed the acquisition of an interest in NTS, investing
(II)
(III) Ongoing organic growth initiatives - We ended the period with over
-- OurUK regulated distribution business was awarded the right to acquire up to 850,000 smart meters from two leading energy retailers. With these two new awards, the business has now secured a total of up to 1.5 million smart meters, deploying approximately$400 million of capital (our share). These meters should be commissioned by 2019 and will earn solid risk-adjusted returns. -- Our Brazilian toll roads business was recently awarded a 30-year concession by the government, to operate and expand a 720 km road in the highly populatedstate of Sao Paulo . This concession is particularly attractive to our business as the road connects with our existing network and expands our footprint in one of the most attractive economic regions in the country. Brookfield Infrastructure will invest up to$215 million (our share) by way of an upfront payment and we expect to further deploy up to$90 million (our share) of capital over the next several years to expand and upgrade the road. -- We agreed to purchase a total of five, high-quality district energy systems throughoutNorth America . In total, we expect to invest approximately$40 million (our share) for the various systems that are scheduled to close in the second half of 2017.
Our business development teams are also working to convert many further opportunities into investments which should provide further profitable growth for the various operating groups.
Appointment of a New Director
Brookfield Infrastructure is pleased to announce the appointment of John Mullen to the Board of Brookfield Infrastructure Partners Limited, effective May 3, 2017. John Mullen is an experienced businessman who has held senior positions with multinational transportation and logistics companies for more than two decades. Most recently, he was Managing Director and Chief Executive Officer of Asciano Limited. John currently serves as Chairman of the Board of Telstra Corporation Limited,
In conjunction with this addition to the Board, David Hamill will be stepping down from our Board but will remain on the Board of another
Distribution
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 BIP's previous audited annual and unaudited quarterly reports have been filed on SEDAR and can also be found in the investors 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.
Conference Call and Quarterly Earnings Details
Investors, analysts and other interested parties can access Brookfield Infrastructure's First 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 May 4, 2017 at 9:00 a.m. Eastern Time at http://services.choruscall.ca/links/bip20170504.html or via teleconference at 1-800-319-4610 toll free in
Note: This news release contains forward-looking information within the meaning of Canadian provincial securities laws and "forward-looking statements" within the meaning of Section 27A of the
Although Brookfield Infrastructure believes that these forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on them, or any other forward looking statements or information in this news release. The future performance and prospects of Brookfield Infrastructure are subject to a number of known and unknown risks and uncertainties. Factors that could cause actual results of Brookfield Infrastructure to differ materially from those contemplated or implied by the statements in this news release include general economic conditions in the jurisdictions in which we operate and elsewhere which may impact the markets for our products and services, the ability to achieve growth within Brookfield Infrastructure's businesses and in particular completion on time and on budget of various large capital projects, which themselves depend on access to capital and continuing favourable commodity prices, and our ability to achieve the milestones necessary to deliver the targeted returns to our unitholders, the impact of market conditions on our businesses, the fact that success of Brookfield Infrastructure is dependent on market demand for an infrastructure company, which is unknown, the availability of equity and debt financing for Brookfield Infrastructure, the ability to effectively complete new acquisitions in the competitive infrastructure space (including the ability to complete announced and potential acquisitions that may be subject to conditions precedent, and the inability to reach final agreement with counterparties to transactions referred to in this press release as being currently pursued, given that there can be no assurance that any such transaction will be agreed to or completed) and to integrate acquisitions into existing operations, the future performance of these acquisitions, the market conditions of key commodities, the price, supply or demand for which can have a significant impact upon the financial and operating performance of our business and other risks and factors described in the documents filed by Brookfield Infrastructure with the securities regulators in
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 months ended March 31, 2017 was 259.5 million (2016 - 243.2 million).
3 Loss per LP unit as allocation of net income is reduced by preferred unit and incentive distributions paid during the period.
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
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
----------------------------------
US$ millions, unaudited Mar 31, 2017 Dec 31, 2016
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Assets
Cash and cash equivalents $ 1,323 $ 786
Financial assets 144 92
Property, plant and equipment 8,905 8,656
Intangible assets 4,638 4,465
Investments in associates 4,844 4,727
Investment properties 156 154
Deferred income taxes and other 2,274 2,376
Assets classified as held for sale 19 19
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Total assets $ 22,303 $ 21,275
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Liabilities and partnership capital
Corporate borrowings $ 1,693 $ 1,002
Non-recourse borrowings 7,423 7,324
Financial liabilities 412 381
Deferred income taxes and other 3,001 2,924
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Total liabilities 12,529 11,631
Partnership capital
Limited partners 4,488 4,611
General partner 27 27
Non-controlling interest attributable to:
Redeemable partnership units held by
Brookfield 1,805 1,860
Interest of others in operating
subsidiaries 2,859 2,771
Preferred unitholders 595 375
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Total partnership capital 9,774 9,644
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Total liabilities and partnership capital $ 22,303 $ 21,275
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Brookfield Infrastructure Partners L.P.
Consolidated Statements of Operating Results
US$ millions, except per unit information, For the three months
unaudited ended March 31,
------------------------------
2017 2016
----------------------------------------------------------------------------
Revenues $ 656 $ 454
Direct operating costs (343) (202)
General and administrative expenses (51) (37)
Depreciation and amortization expense (120) (100)
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142 115
Interest expense (94) (95)
Share of earnings from associates 23 4
Mark-to-market on hedging items (37) 8
Other income 24 55
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Income before income tax 58 87
Income tax (expense) recovery
Current (12) (4)
Deferred - 5
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Net income 46 88
Non-controlling interest of others in
operating subsidiaries (30) (10)
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Net income attributable to partnership $ 16 $ 78
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Attributable to:
Limited partners (8) 41
General partner 28 20
Non-controlling interest - redeemable
partnership units held by Brookfield (4) 17
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Basic and diluted (loss) earnings per unit
attributable to:
Limited partners(1) $ (0.03) $ 0.17
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1. Average number of limited partnership units outstanding on a time weighted average basis for the three months ended March 31, 2017 was 259.5 million (2016 - 243.2 million).
Brookfield Infrastructure Partners L.P.
Consolidated Statements of Cash Flows
For the three months
US$ millions, unaudited ended March 31,
------------------------------
2017 2016
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Operating Activities
Net income $ 46 $ 88
Adjusted for the following items:
Share of earnings from associates, net of
distributions (5) 13
Depreciation and amortization expense 120 100
Mark-to-market on hedging items, provisions
and other 21 (16)
Deferred tax recovery - (5)
Change in non-cash working capital, net (4) (18)
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Cash from operating activities 178 162
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Investing Activities
Net investments in:
Operating assets - (35)
Associates (49) (2)
Long-lived assets (134) (163)
Financial assets (96) (18)
Net settlement of foreign exchange contracts (30) 50
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Cash used by investing activities (309) (168)
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Financing Activities
Distributions to limited and general partners (194) (153)
Net borrowings:
Corporate 683 152
Subsidiary (41) 35
Other - (38)
Issuance of preferred units 220 -
Issuance of partnership units 6 3
Capital provided (to) by non-controlling
interest, net of distributions (14) 48
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Cash from financing activities 660 47
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Cash and cash equivalents
Change during the period $ 529 $ 41
Impact of foreign exchange on cash 8 8
Balance, beginning of period 786 199
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Balance, end of period $ 1,323 $ 248
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Brookfield Infrastructure Partners L.P.
Statements of Funds from Operations
For the three months
ended March 31,
------------------------------
US$ millions, unaudited 2017 2016
----------------------------------------------------------------------------
Adjusted EBITDA
Utilities $ 128 $ 134
Transport 165 132
Energy 86 72
Communications Infrastructure 22 21
Corporate and other (51) (37)
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Total 350 322
Financing costs (110) (115)
Other income 21 27
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Funds from operations (FFO) 261 234
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Depreciation and amortization (158) (140)
Deferred taxes and other items (87) (16)
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Net income attributable to the partnership $ 16 $ 78
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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 March 31,
-----------------------------
US$ millions, unaudited 2017 2016
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(Loss) earnings per limited partnership unit(1) $ (0.03) $ 0.17
Add back or deduct the following:
Depreciation and amortization 0.43 0.41
Deferred taxes and other items 0.31 0.10
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FFO per unit(2) $ 0.71 $ 0.68
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1. Average number of limited partnership units outstanding on a time weighted average basis for the three months ended March 31, 2017 was 259.5 million (2016 - 243.2 million).
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
----------------------------
Mar 31, Dec 31,
US$ millions, unaudited 2017 2016
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Assets
Operating groups
Utilities $ 1,827 $ 1,807
Transport 3,661 3,549
Energy 1,592 1,564
Communications Infrastructure 544 541
Cash and cash equivalents 1,198 549
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$ 8,822 $ 8,010
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Liabilities
Corporate borrowings $ 1,693 $ 1,002
Other liabilities 809 510
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2,502 1,512
Capitalization
Partnership capital 6,320 6,498
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$ 8,822 $ 8,010
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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 the 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 bases of presentation in assessing Brookfield Infrastructure's financial position.
Contacts: Media: Claire Holland Vice President, Communications (416) 369-8236 [email protected] Investors: Melissa Low Vice President, Investor Relations & Communications (416) 956-5239 [email protected]
Source: Brookfield Infrastructure Partners L.P.
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