Three Months Ended Nine Months Ended
September 30 September 30
----------------------------------------
US$ millions (except per unit
amounts), unaudited 2016 2015 2016 2015
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Net income(1) $ 78 $ 123 $ 312 $ 273
- per unit(2) $ 0.16 $ 0.31 $ 0.73 $ 0.67
FFO(3) $ 235 $ 210 $ 699 $ 604
- per unit(4) $ 0.68 $ 0.61 $ 2.02 $ 1.80
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Brookfield Infrastructure reported net income for the quarter of
Our FFO during the quarter of
"We continue to build momentum heading into 2017. We delivered 12% FFO per unit growth and completed three transactions in the third quarter," said Sam Pollock, CEO of Brookfield Infrastructure. "In the upcoming years, we expect to benefit from a number of current growth initiatives. We will be investing over
Segment Performance
Our utilities segment generated FFO of
Our transport segment generated FFO of
Our energy segment generated FFO of
Our French communications infrastructure operations generated FFO of
The following table presents FFO by segment:
Three Months Ended Nine Months Ended
September 30 September 30
----------------------------------------
US$ millions, unaudited 2016 2015 2016 2015
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FFO by segment
Utilities $ 102 $ 99 $ 302 $ 287
Transport 112 103 308 303
Energy 40 19 123 70
Communications Infrastructure 19 20 57 40
Corporate and other (38) (31) (91) (96)
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FFO $ 235 $ 210 $ 699 $ 604
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Update on Strategic Initiatives
We have executed on a number of initiatives in the third quarter that will contribute meaningfully to our businesses.
-- Recently completed acquisitions - In recent months, we closed on three
investments totaling $660 million of capital, consisting of a group of
Australian ports, Peruvian toll roads and a North American gas storage
business. These transactions were completed in the third quarter and
will contribute a full quarter of results beginning in the fourth
quarter. We expect the transactions to generate attractive going-in
yields of approximately 8-10% on a combined basis.
-- Build-out of our gas and electricity transmission businesses - We plan
to deploy over $1.1 billion in the gas and electricity utility sectors.
Given the attractive nature of the assets, we expect they will be very
accretive to our overall results.
-- In September, alongside several of our institutional partners, we
announced an agreement to acquire a 90% controlling stake in Nova
Transportadora do Sudeste S.A. ("NTS"), from Petroleo Brasileiro
S.A. ("Petrobras"), for total consideration of $5.2 billion .
Brookfield Infrastructure's investment will be a minimum of 20% of
the total transaction, representing approximately $825 million of
the consideration payable on closing. NTS owns the backbone natural
gas transmission system that serves the core economic regions in the
highly populated states of Sao Paulo , Rio de Janeiro and Minas
Gerais in South Central Brazil. These uniquely-positioned long-life
assets will earn revenues that are indexed to inflation, and have no
volume risk.
-- Additionally, we expect to invest approximately $300 million in a
business that is developing approximately 4,200 km of greenfield
electricity transmission lines, including projects that were awarded
to us under government auctions last week. These are attractive 30-
year concession assets that earn cash flows under a stable,
availability-based regulatory framework. Construction of these
projects is underway and they will be commissioned over the next
five years.
We are also pursuing the acquisition of various networks of operating electricity transmission lines, in addition to securing greenfield projects planned for construction in the next few years. We are encouraged by the number of prospective investments that are ahead of us as we strive to build a transmission business of meaningful scale.
Appointment of a New Director
Brookfield Infrastructure is also pleased to announce the appointment of William Cox to the Board of Brookfield Infrastructure Partners Limited, effective November 3, 2016. William Cox is the President of The Waterfront, the owner and manager of real estate and retail property in
Distributions
The Board of Directors has declared a quarterly distribution in the amount of
The quarterly distributions payable on the limited partnership units ("LP units") are declared in
Additional Information
Brookfield Infrastructure's Letter to Unitholders and Supplemental Information are available at www.brookfieldinfrastructure.com.
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
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.brookfieldinfrastructure.com. Hard copies of the annual and quarterly reports can be obtained free of charge upon request.
For more information, please visit our website at www.brookfieldinfrastructure.com.
Conference Call and Quarterly Earnings Details
Investors, analysts and other interested parties can access Brookfield Infrastructure's Third Quarter 2016 Results as well as the Letter to Unitholders and Supplemental Information on Brookfield Infrastructure's website under the Investor Relations section at www.brookfieldinfrastructure.com.
The conference call can be accessed via webcast on November 4, 2016 at 9:00 a.m. Eastern Time at www.brookfieldinfrastructure.com 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
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, including traffic volumes on our toll roads, 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 Brookfield , general partner and
limited partners.
(2) Average number of limited partnership units outstanding on a time
weighted average basis for the three and nine months ended September
30, 2016 were 243.4 million and 243.3 million, respectively (2015 -
244.5 million and 237.5 million, respectively).
(3) FFO is defined as net income excluding the impact of depreciation and
amortization, deferred income taxes, breakage and transaction costs,
non-cash valuation gains and losses, and other items. A reconciliation
of net income to FFO is available on page 9 of this release.
(4) 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 nine months ended September 30, 2016 were 345.3 million and 345.2
million, respectively (2015 - 346.4 million and 334.8 million,
respectively).
(5) Payout ratio is defined as distributions paid (inclusive of general
partner incentive and preferred unit distributions) divided by FFO.
Brookfield Infrastructure Partners L.P.
Consolidated Statements of Financial Position
As of
----------------------
Sept 30, Dec 31,
US$ millions, unaudited 2016 2015
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Assets
Cash and cash equivalents $ 441 $ 199
Financial assets 316 279
Property, plant and equipment 8,677 7,632
Intangible assets 4,583 3,296
Investments in associates 4,245 2,973
Investment properties 137 153
Deferred income taxes and other 2,278 2,623
Assets classified as held for sale 432 580
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Total assets $ 21,109 $ 17,735
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Liabilities and partnership capital
Corporate borrowings $ 1,511 $ 1,380
Non-recourse borrowings 7,289 5,852
Financial liabilities 604 582
Deferred income taxes and other 2,908 2,470
Liabilities directly associated with assets classified
as held for sale 179 275
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Total liabilities 12,491 10,559
Partnership capital
Limited partners 3,870 3,838
General partner 25 23
Non-controlling interest attributable to:
Redeemable partnership units held by Brookfield 1,527 1,518
Interest of others in operating subsidiaries 2,821 1,608
Preferred unit holders 375 189
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Total partnership capital 8,618 7,176
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Total liabilities and partnership capital $ 21,109 $ 17,735
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Brookfield Infrastructure Partners L.P.
Consolidated Statements of Operating Results
For the three month For the nine month
US$ millions, except per unit period period
information, unaudited ended September 30, ended September 30,
----------------------------------------
2016 2015 2016 2015
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Revenues $ 522 $ 468 $ 1,438 $ 1,400
Direct operating costs (267) (199) (667) (599)
General and administrative expenses (45) (30) (122) (99)
Depreciation and amortization
expense (126) (97) (334) (293)
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84 142 315 409
Interest expense (98) (90) (294) (273)
Share of earnings from associates 32 18 142 55
Revaluation gains (losses) on
hedging items (39) 51 1 109
Other income 109 73 171 82
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Income before income tax 88 194 335 382
Income tax (expense) recovery
Current (8) (8) (20) (21)
Deferred 23 (3) 35 (4)
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Net income 103 183 350 357
Non-controlling interest of others
in operating subsidiaries (25) (60) (38) (84)
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Net income attributable to
partnership $ 78 $ 123 $ 312 $ 273
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Attributable to:
Limited partners 40 75 177 160
General partner 22 17 62 49
Non-controlling interest -
redeemable partnership units held
by Brookfield 16 31 73 64
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Basic and diluted earnings per unit
attributable to:
Limited partners(1) $ 0.16 $ 0.31 $ 0.73 $ 0.67
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(1) Average number of limited partnership units outstanding on a time
weighted average basis for the three and nine months ended September
30, 2016 were 243.4 million and 243.3 million, respectively (2015 -
244.5 million and 237.5 million, respectively).
Brookfield Infrastructure Partners L.P.
Consolidated Statements of Cash Flows
For the three month For the nine month
period period
US$ millions, unaudited ended September 30, ended September 30,
------------------- --------------------
2016 2015 2016 2015
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Operating Activities
Net income $ 103 $ 183 $ 350 $ 357
Adjusted for the following items:
Share of earnings from associates,
net of distributions (20) 4 (110) 13
Depreciation and amortization
expense 126 97 334 293
Revaluation (gains) losses on
hedging items 39 (51) (1) (109)
Provisions and other items 27 (57) 35 8
Deferred tax (recovery) expense (23) 3 (35) 4
Change in non-cash working capital,
net 91 2 91 (26)
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Cash from operating activities $ 343 $ 181 $ 664 $ 540
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Investing Activities
Net investments in:
Operating assets $ (219) $ 14 $ (412) $ 10
Associates (212) - (716) (550)
Long-lived assets (173) (153) (465) (373)
Financial assets 436 - 429 (42)
Net settlement of foreign exchange
contracts 79 (4) 109 193
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Cash used by investing activities $ (89) $ (143) $ (1,055) $ (762)
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Financing Activities
Distributions to limited and general
partners $ (160) $ (140) $ (466) $ (406)
Net borrowings:
Corporate (713) - 85 115
Subsidiary 109 114 164 (20)
Other - - (38) (38)
Issuance of preferred units 186 - 186 96
Issuance of partnership units, net
of repurchases 8 (58) 13 868
Capital provided by non-controlling
interest, net of distributions 383 (12) 684 22
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Cash (used by) from financing
activities $ (187) $ (96) $ 628 $ 637
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Cash and cash equivalents
Change during the period $ 67 $ (58) $ 237 $ 415
Impact of foreign exchange on cash (4) (17) 5 (27)
Balance, beginning of period 378 652 199 189
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Balance, end of period $ 441 $ 577 $ 441 $ 577
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Brookfield Infrastructure Partners L.P.
Statements of Funds from Operations
For the three month For the nine month
period period
ended September 30, ended September 30,
------------------- --------------------
US$ millions, unaudited 2016 2015 2016 2015
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Adjusted EBITDA
Utilities $ 131 $ 133 $ 399 $ 391
Transport 162 142 441 424
Energy 64 38 202 124
Communications Infrastructure 23 22 67 44
Corporate and other (45) (30) (122) (99)
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Total 335 305 987 884
Financing costs (116) (99) (344) (295)
Other income 16 4 56 15
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Funds from operations (FFO) 235 210 699 604
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Depreciation and amortization (158) (119) (448) (344)
Deferred taxes and other items 1 32 61 13
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Net income attributable to the
partnership $ 78 $ 123 $ 312 $ 273
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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 month For the nine month
period period
ended September 30, ended September 30,
------------------- -------------------
US$ millions, unaudited 2016 2015 2016 2015
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Earnings per limited partnership
unit(1) $ 0.16 $ 0.31 $ 0.73 $ 0.67
Add back or deduct the following:
Depreciation and amortization 0.46 0.34 1.30 1.03
Deferred taxes and other items 0.06 (0.04) (0.01) 0.10
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FFO per unit(2) $ 0.68 $ 0.61 $ 2.02 $ 1.80
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(1) Average number of limited partnership units outstanding on a time
weighted average basis for the three and nine months ended September
30, 2016 were 243.4 million and 243.3 million, respectively (2015 -
244.5 million and 237.5 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 Brookfield for limited partnership units, for the three
and nine months ended September 30, 2016 were 345.3 million and 345.2
million, respectively (2015 - 346.4 million and 334.8 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
----------------------
Sept 30, Dec 31,
US$ millions, unaudited 2016 2015
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Assets
Operating groups
Utilities $ 1,929 $ 2,002
Transport 3,484 3,220
Energy 1,448 1,009
Communications Infrastructure 452 438
Cash and cash equivalents 326 286
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$ 7,639 $ 6,955
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Liabilities
Corporate borrowings $ 1,511 $ 1,380
Other liabilities 706 196
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2,217 1,576
Capitalization
Partnership capital 5,422 5,379
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$ 7,639 $ 6,955
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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: Suzanne Fleming Senior Vice President, Branding & Communications (212) 417-2421 [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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