| Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
| US$ millions (except per unit amounts), unaudited | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Net income1 | $ | 125 | $ | 5 | $ | 334 | $ | 21 | |||||||
| – per unit2,3 | $ | 0.21 | $ | (0.06 | ) | $ | 0.63 | $ | (0.09 | ) | |||||
| FFO4 | $ | 294 | $ | 295 | $ | 627 | $ | 556 | |||||||
| – per unit5 | $ | 0.75 | $ | 0.80 | $ | 1.60 | $ | 1.51 | |||||||
Brookfield Infrastructure reported net income for the quarter of
Our business generated Funds from Operations (“FFO”) of
“We are pleased to be deploying
Segment Performance
Our utilities segment generated FFO of
Our transport segment contributed FFO of
Our energy segment reported FFO of
Our data infrastructure segment (formerly telecommunications infrastructure), currently comprised of operations in
The following table presents FFO by segment:
| Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
| US$ millions, unaudited | 2018 | 2017 | 2018 | 2017 | |||||||||||
| FFO by segment | |||||||||||||||
| Utilities | $ | 139 | $ | 168 | $ | 308 | $ | 268 | |||||||
| Transport | 133 | 134 | 270 | 257 | |||||||||||
| Energy | 54 | 43 | 120 | 105 | |||||||||||
| Data Infrastructure | 19 | 19 | 38 | 38 | |||||||||||
| Corporate | (51 | ) | (69 | ) | (109 | ) | (112 | ) | |||||||
| FFO | $ | 294 | $ | 295 | $ | 627 | $ | 556 | |||||||
Update on Strategic Initiatives
We have executed on several initiatives that will meaningfully contribute to our future results:
U.S. Data Center Business – We further established our position in the data infrastructure space through an agreement to acquire AT&T’s large-scale data center business for$1 .1 billion or$560 million of equity (BIP’s share – $160 million). This business is a high-quality, multi-tenant service provider, supplying colocation services to top-tier customers in many prominent markets. The asset portfolio includes 31 well-located data centers in five continents, 11 countries and 26 metro markets, with approximately 85% of revenues coming from theU.S.
- Western Canadian Midstream Business – We entered into a definitive agreement to acquire 100% of Enbridge Inc.’s Western Canadian natural gas gathering and processing business for
$3.3 billion , with a total equity investment of$1.8 billion (BIP’s share – approximately $540 million). This is the largest independent operation of its kind inCanada , strategically positioned for continued development of the prolificMontney region ofBritish Columbia andAlberta . The business is comprised of 19 natural gas processing facilities with total operating processing capacity of 3.3 bcf/d and 3,550 kilometers of gathering pipelines. It is well-connected to major demand markets including theU.S. Pacific Northwest,U.S. Midwest andAlberta , giving producers multiple egress options.
- North American Residential Energy Infrastructure Business – Subsequent to quarter end, we announced the acquisition of 100% of the outstanding shares of Enercare Inc. (“Enercare”, TSX: ECI) for
$3 .3 billion or$2.3 billion of equity (BIP’s share –$630 million ). Enercare is a leading provider of essential residential energy infrastructure, such as water heaters, heating, ventilation, air conditioning systems and other home services acrossCanada and theU.S. , with approximately 1.1 million rental units. The company is a high-quality, annuity-like business with a well-established market position, and we see strong growth prospects for the future.
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 data 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: | Investors: |
| Claire Holland | Rene Lubianski |
| Vice President, Communications | Senior Vice President, Corporate Development |
| Tel: (416) 369-8236 | Tel: (416) 956-5196 |
| Email: [email protected] | Email: [email protected] |
Conference Call and Quarterly Earnings Details
Investors, analysts and other interested parties can access Brookfield Infrastructure’s Second 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 August 2, 2018 at 9:00 a.m. Eastern Time at https://event.on24.com/wcc/r/1783319/8DC4BC5CBF232EA9C5E3D040D1221E3E 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 six-month periods ended June 30, 2018 was 276.7 million and 276.6 million, respectively (2017 – 259.6 million and 259.5 million).
3. Results in a loss on a per unit basis for the three and six-month periods ended June 30, 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 | ||||
US$ millions, unaudited | June 30, 2018 | Dec 31, 2017 | ||
| Assets | ||||
| Cash and cash equivalents | $ | 782 | $ | 374 |
| Financial assets | 251 | 196 | ||
| Property, plant and equipment | 10,221 | 9,937 | ||
| Intangible assets | 8,868 | 9,894 | ||
| Investments in associates and joint ventures | 4,407 | 5,572 | ||
| Investment properties | 188 | 192 | ||
| Deferred income taxes and other | 4,113 | 3,312 | ||
| Total assets | $ | 28,830 | $ | 29,477 |
| Liabilities and partnership capital | ||||
| Corporate borrowings | $ | 1,256 | $ | 2,101 |
| Non-recourse borrowings | 9,689 | 8,063 | ||
| Financial liabilities | 1,208 | 1,313 | ||
| Deferred income taxes and other | 4,401 | 4,526 | ||
| Totalliabilities | 16,554 | 16,003 | ||
| Partnership capital | ||||
| Limited partners | 4,545 | 4,967 | ||
| General partner | 22 | 25 | ||
| Non-controlling interest attributable to: | ||||
| Redeemable partnership units held by | 1,832 | 2,012 | ||
| Interest of others in operating subsidiaries | 5,125 | 5,875 | ||
| Preferred unitholders | 752 | 595 | ||
| Total partnership capital | 12,276 | 13,474 | ||
| Total liabilities and partnership capital | $ | 28,830 | $ | 29,477 |
| Brookfield Infrastructure Partners L.P. | |||||||||||||||||
| Consolidated Statements of Operating Results | |||||||||||||||||
| For the three-month period ended June 30, | For the six-month period ended June 30, | ||||||||||||||||
| US$ millions, except per unit information, unaudited | 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenues | $ | 1,044 | $ | 934 | $ | 2,057 | $ | 1,590 | |||||||||
| Direct operating costs | (467 | ) | (373 | ) | (876 | ) | (716 | ) | |||||||||
| General and administrative expenses | (54 | ) | (59 | ) | (112 | ) | (110 | ) | |||||||||
| Depreciation and amortization expense | (188 | ) | (206 | ) | (381 | ) | (326 | ) | |||||||||
| 335 | 296 | 688 | 438 | ||||||||||||||
| Interest expense | (125 | ) | (107 | ) | (239 | ) | (201 | ) | |||||||||
| Share of earnings (losses) from associates and joint ventures | 1 | 36 | (4 | ) | 59 | ||||||||||||
| Mark-to-market on hedging items | 63 | (29 | ) | 27 | (66 | ) | |||||||||||
| Gain on sale of associate | — | — | 338 | — | |||||||||||||
| Other income (expenses) | 17 | (5 | ) | (7 | ) | 19 | |||||||||||
| Income before income tax | 291 | 191 | 803 | 249 | |||||||||||||
| Income tax expense | |||||||||||||||||
| Current | (46 | ) | (38 | ) | (216 | ) | (50 | ) | |||||||||
| Deferred | (26 | ) | (18 | ) | (41 | ) | (18 | ) | |||||||||
| Net income | 219 | 135 | 546 | 181 | |||||||||||||
| Non-controlling interest of others in operating subsidiaries | (94 | ) | (130 | ) | (212 | ) | (160 | ) | |||||||||
| Net income attributable to partnership | $ | 125 | $ | 5 | $ | 334 | $ | 21 | |||||||||
| Attributable to: | |||||||||||||||||
| Limited partners | 64 | (16 | ) | 186 | (24 | ) | |||||||||||
| General partner | 34 | 28 | 69 | 56 | |||||||||||||
| Non-controlling interest – redeemable partnership units held by | 27 | (7 | ) | 79 | (11 | ) | |||||||||||
| Basic and diluted earnings (loss) per unit attributable to: | |||||||||||||||||
| Limited partners1 | $ | 0.21 | $ | (0.06 | ) | $ | 0.63 | $ | (0.09 | ) | |||||||
1. Average number of limited partnership units outstanding on a time weighted average basis for the three and six-month periods ended June 30, 2018 were 276.7 million and 276.6 million, respectively (2017 – 259.6 million and 259.5 million).
| Brookfield Infrastructure Partners L.P. | ||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||
| For the three-month period ended June 30, | For the six-month period ended June 30, | |||||||||||
| US$ millions, unaudited | 2018 | 2017 | 2018 | 2017 | ||||||||
| Operating Activities | ||||||||||||
| Net income | $ | 219 | $ | 135 | $ | 546 | $ | 181 | ||||
| Adjusted for the following items: | ||||||||||||
| Losses (earnings) from investments in associates and joint ventures, net of distributions received | 15 | (16 | ) | 24 | (21 | ) | ||||||
| Depreciation and amortization expense | 188 | 206 | 381 | 326 | ||||||||
| Revaluation (gains) losses on hedging items, provisions and other | (40 | ) | 54 | 29 | 75 | |||||||
| Gain on sale of associate | — | — | (338 | ) | — | |||||||
| Deferred income tax expense | 26 | 18 | 41 | 18 | ||||||||
| Change in non-cash working capital, net | (225 | ) | 22 | (34 | ) | 18 | ||||||
| Cash from operating activities | 183 | 419 | 649 | 597 | ||||||||
| Investing Activities | ||||||||||||
| Net (investments in) proceeds from: | ||||||||||||
| Operating assets | (398 | ) | (4,203 | ) | (398 | ) | (4,203 | ) | ||||
| Associates | (40 | ) | (269 | ) | 1,234 | (318 | ) | |||||
| Long-lived assets | (178 | ) | (176 | ) | (353 | ) | (310 | ) | ||||
| Financial assets | (63 | ) | 72 | (88 | ) | (24 | ) | |||||
| Net settlements of foreign exchange contracts | (18 | ) | (10 | ) | (72 | ) | (40 | ) | ||||
| Cash (used by) from investing activities | (697 | ) | (4,586 | ) | 323 | (4,895 | ) | |||||
| Financing Activities | ||||||||||||
| Distributions to limited and general partners | (229 | ) | (196 | ) | (457 | ) | (390 | ) | ||||
| Net borrowings: | ||||||||||||
| Corporate | — | 628 | (789 | ) | 1,311 | |||||||
| Subsidiary | 1,554 | 250 | 1,614 | 209 | ||||||||
| Issuance of preferred units | — | — | 157 | 220 | ||||||||
| Issuance of partnership units, net of repurchases | 4 | 5 | 8 | 11 | ||||||||
| Capital provided by non-controlling interest, net of distributions | (889 | ) | 2,629 | (1,064 | ) | 2,615 | ||||||
| Cash from (used by) financing activities | 440 | 3,316 | (531 | ) | 3,976 | |||||||
| Cash and cash equivalents | ||||||||||||
| Change during the period | $ | (74 | ) | $ | (851 | ) | $ | 441 | $ | (322 | ) | |
| Impact of foreign exchange on cash | (34 | ) | (4 | ) | (33 | ) | 4 | |||||
| Balance, beginning of period | 890 | 1,323 | 374 | 786 | ||||||||
| Balance, end of period | $ | 782 | $ | 468 | $ | 782 | $ | 468 | ||||
| Brookfield Infrastructure Partners L.P. | |||||||||||||
| Statements of Funds from Operations | |||||||||||||
| For the three-month period ended June 30, | For the six-month period ended June 30, | ||||||||||||
| US$ millions, unaudited | 2018 | 2017 | 2018 | 2017 | |||||||||
| Adjusted EBITDA | |||||||||||||
| Utilities | $ | 177 | $ | 205 | $ | 380 | $ | 333 | |||||
| Transport | 173 | 171 | 351 | 336 | |||||||||
| Energy | 69 | 63 | 148 | 149 | |||||||||
| Data Infrastructure | 23 | 23 | 46 | 45 | |||||||||
| Corporate | (54 | ) | (59 | ) | (112 | ) | (110 | ) | |||||
| Total | 388 | 403 | 813 | 753 | |||||||||
| Financing costs | (104 | ) | (110 | ) | (216 | ) | (220 | ) | |||||
| Other income | 10 | 2 | 30 | 23 | |||||||||
| Funds from Operations ("FFO") | 294 | 295 | 627 | 556 | |||||||||
| Depreciation and amortization | (183 | ) | (186 | ) | (393 | ) | (344 | ) | |||||
| Deferred taxes and other items | 14 | (104 | ) | 100 | (191 | ) | |||||||
| Net income attributable to the partnership | $ | 125 | $ | 5 | $ | 334 | $ | 21 | |||||
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-month period ended June 30, | For the six-month period ended June 30, | |||||||||
| US$, unaudited | 2018 | 2017 | 2018 | 2017 | ||||||
| Earnings (loss) per limited partnership unit1 | $ | 0.21 | $ | (0.06 | ) | $ | 0.63 | $ | (0.09 | ) |
| Add back or deduct the following: | ||||||||||
| Depreciation and amortization | 0.46 | 0.50 | 0.99 | 0.93 | ||||||
| Deferred taxes and other items | 0.08 | 0.36 | (0.02 | ) | 0.67 | |||||
| FFO per unit2 | $ | 0.75 | $ | 0.80 | $ | 1.60 | $ | 1.51 | ||
1. Average number of limited partnership units outstanding on a time weighted average basis for the three and six-month periods ended June 30, 2018 were 276.7 million and 276.6 million, respectively (2017 – 259.6 million and 259.5 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 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 | ||||
US$ millions, unaudited | June 30, 2018 | Dec 31, 2017 | ||
| Assets | ||||
| Operating groups | ||||
| Utilities | $ | 1,770 | $ | 3,290 |
| Transport | 3,743 | 4,116 | ||
| Energy | 1,799 | 1,806 | ||
| Data Infrastructure | 649 | 614 | ||
| Cash and cash equivalents | 475 | 205 | ||
| $ | 8,436 | $ | 10,031 | |
| Liabilities | ||||
| Corporate borrowings | $ | 1,256 | $ | 2,101 |
| Other liabilities | 781 | 926 | ||
| 2,037 | 3,027 | |||
| Capitalization | ||||
| Partnership capital | 6,399 | 7,004 | ||
| $ | 8,436 | $ | 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 the 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 bases of presentation in assessing Brookfield Infrastructure's financial position.
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