| Three Months Ended | Nine Months Ended | ||||||||||
| Sep 30 | Sep 30 | ||||||||||
| US$ millions (except per unit amounts), unaudited | 2018 | 2017 | 2018 | 2017 | |||||||
| Net income1 | $ | 5 | $ | 11 | $ | 339 | $ | 32 | |||
| – per unit2,3 | $ | (0.10) | $ | (0.04) | $ | 0.53 | $ | (0.13) | |||
| FFO4 | $ | 278 | $ | 301 | $ | 905 | $ | 857 | |||
| – per unit5 | $ | 0.71 | $ | 0.81 | $ | 2.31 | $ | 2.32 | |||
Brookfield Infrastructure reported net income for the quarter of
Our business generated Funds from Operations (“FFO”) of
“For the balance of 2018, our focus is on completing our previously announced transactions, integrating our newly acquired businesses, and delivering on our organic growth backlog,” said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure. “Looking ahead, we are optimistic about the opportunities to expand our globally diversified business with high-quality investments, and we have tremendous flexibility and financial resources to pursue these initiatives.”
Segment Performance
The utilities segment generated FFO of
The transport segment contributed FFO of
Our energy segment reported FFO of
The data infrastructure segment contributed FFO of
The following table presents FFO by segment:
| Three Months Ended | Nine Months Ended | ||||||||||
| Sep 30 | Sep 30 | ||||||||||
| US$ millions, unaudited | 2018 | 2017 | 2018 | 2017 | |||||||
| FFO by segment | |||||||||||
| Utilities | $ | 130 | $ | 170 | $ | 438 | $ | 438 | |||
| Transport | 119 | 136 | 389 | 393 | |||||||
| Energy | 59 | 48 | 179 | 153 | |||||||
| Data Infrastructure | 19 | 19 | 57 | 57 | |||||||
| Corporate | (49) | (72) | (158) | (184) | |||||||
| FFO | $ | 278 | $ | 301 | $ | 905 | $ | 857 | |||
Update on Strategic Initiatives
We continue to advance several initiatives that will meaningfully contribute to our future results:
- South American Data Center Business – In the third quarter, we reached an agreement with a strategic partner to acquire a co-controlling interest in Ascenty, the leading hyperscale data center operator in
South America , for$2 billion . Brookfield Infrastructure and its institutional partners will be investing$750 million (BIP’s share – approximately$200 million ) and expect to close this transaction by the end of 2018.
- Indian Natural Gas Pipeline – We are in advanced bilateral discussions to acquire a 1,500 km gas pipeline in
India . This well-located pipeline draws from a prolific basin and spans the country from east to west. It will also provide secure cash flows generated under a 20-year take-or-pay contract. If successfully concluded, total equity invested by Brookfield Infrastructure and its institutional partners will be approximately$1 billion , of which BIP will invest approximately$200 million .
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 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.
Contact Information:
| 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 Third 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 November 2, 2018 at 9:00 a.m. Eastern Time here 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 nine-month periods ended September 30, 2018 was 276.8 million and 276.7 million, respectively (2017 – 262.6 million and 260.6 million).
3. Results in a loss on a per unit basis for the three-month period ended September 30, 2018 and three and nine-month periods ended September 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 | Sep 30, 2018 | Dec 31, 2017 | |||
| Assets | |||||
| Cash and cash equivalents | $ | 1,144 | $ | 374 | |
| Financial assets | 218 | 196 | |||
| Property, plant and equipment | 10,155 | 9,937 | |||
| Intangible assets | 9,084 | 9,894 | |||
| Investments in associates and joint ventures | 4,305 | 5,572 | |||
| Investment properties | 185 | 192 | |||
| Deferred income taxes and other | 4,241 | 3,312 | |||
| Total assets | $ | 29,332 | $ | 29,477 | |
| Liabilities and partnership capital | |||||
| Corporate borrowings | $ | 1,664 | $ | 2,101 | |
| Non-recourse borrowings | 9,860 | 8,063 | |||
| Financial liabilities | 1,188 | 1,313 | |||
| Deferred income taxes and other | 4,498 | 4,526 | |||
| Totalliabilities | 17,210 | 16,003 | |||
| Partnership capital | |||||
| Limited partners | 4,294 | 4,967 | |||
| General partner | 21 | 25 | |||
| Non-controlling interest attributable to: | |||||
| Redeemable partnership units held by | 1,726 | 2,012 | |||
| Interest of others in operating subsidiaries | 5,144 | 5,875 | |||
| Preferred unitholders | 937 | 595 | |||
| Total partnership capital | 12,122 | 13,474 | |||
| Total liabilities and partnership capital | $ | 29,332 | $ | 29,477 | |
Brookfield Infrastructure Partners L.P.
Consolidated Statements of Operating Results
| US$ millions, except per unit information, unaudited | For the three-month period ended September 30, | For the nine-month period ended September 30, | ||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||
| Revenues | $ | 1,167 | $ | 961 | $ | 3,224 | $ | 2,551 | ||||||
| Direct operating costs | (603 | ) | (394 | ) | (1,479 | ) | (1,110 | ) | ||||||
| General and administrative expenses | (57 | ) | (63 | ) | (169 | ) | (173 | ) | ||||||
| Depreciation and amortization expense | (188 | ) | (215 | ) | (569 | ) | (541 | ) | ||||||
| 319 | 289 | 1,007 | 727 | |||||||||||
| Interest expense | (140 | ) | (114 | ) | (379 | ) | (315 | ) | ||||||
| Share of (losses) earnings from associates and joint ventures | (32 | ) | 24 | (36 | ) | 83 | ||||||||
| Mark-to-market on hedging items | 31 | (18 | ) | 58 | (84 | ) | ||||||||
| Gain on sale of associate | — | — | 338 | — | ||||||||||
| Other (expenses) income | (26 | ) | — | (33 | ) | 19 | ||||||||
| Income before income tax | 152 | 181 | 955 | 430 | ||||||||||
| Income tax expense | ||||||||||||||
| Current | (53 | ) | (17 | ) | (269 | ) | (67 | ) | ||||||
| Deferred | (12 | ) | (13 | ) | (53 | ) | (31 | ) | ||||||
| Net income | 87 | 151 | 633 | 332 | ||||||||||
| Non-controlling interest of others in operating subsidiaries | (82 | ) | (140 | ) | (294 | ) | (300 | ) | ||||||
| Net income attributable to partnership | $ | 5 | $ | 11 | $ | 339 | $ | 32 | ||||||
| Attributable to: | ||||||||||||||
| Limited partners | (20 | ) | (11 | ) | 166 | (35 | ) | |||||||
| General partner | 34 | 28 | 103 | 84 | ||||||||||
| Non-controlling interest – redeemable partnership units held by | (9 | ) | (6 | ) | 70 | (17 | ) | |||||||
| Basic and diluted (loss) earnings per unit attributable to: | ||||||||||||||
| Limited partners1 | $ | (0.10 | ) | $ | (0.04 | ) | $ | 0.53 | $ | (0.13 | ) | |||
1. Average number of limited partnership units outstanding on a time weighted average basis for the three and nine-month periods ended September 30, 2018 were 276.8 million and 276.7million, respectively (2017 – 262.6 million and 260.6 million).
Brookfield Infrastructure Partners L.P.
Consolidated Statements of Cash Flows
| US$ millions, unaudited | For the three-month period ended September 30, | For the nine-month period ended September 30, | ||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||
| Operating Activities | ||||||||||||||
| Net income | $ | 87 | $ | 151 | $ | 633 | $ | 332 | ||||||
| Adjusted for the following items: | ||||||||||||||
| Losses (earnings) from investments in associates and joint ventures, net of distributions received | 40 | (20 | ) | 64 | (41 | ) | ||||||||
| Depreciation and amortization expense | 188 | 215 | 569 | 541 | ||||||||||
| Revaluation losses on hedging items, provisions and other | 28 | 27 | 57 | 102 | ||||||||||
| Gain on sale of associate | — | — | (338 | ) | — | |||||||||
| Deferred income tax expense | 12 | 13 | 53 | 31 | ||||||||||
| Change in non-cash working capital, net | (18 | ) | (11 | ) | (52 | ) | 7 | |||||||
| Cash from operating activities | 337 | 375 | 986 | 972 | ||||||||||
| Investing Activities | ||||||||||||||
| Net (investments in) proceeds from: | ||||||||||||||
| Operating assets | (181 | ) | — | (579 | ) | (4,203 | ) | |||||||
| Associates | (8 | ) | (33 | ) | 1,226 | (351 | ) | |||||||
| Long-lived assets | (196 | ) | (164 | ) | (549 | ) | (474 | ) | ||||||
| Financial assets | 25 | (64 | ) | (63 | ) | (88 | ) | |||||||
| Net settlements of foreign exchange contracts | (5 | ) | (3 | ) | (77 | ) | (43 | ) | ||||||
| Cash used by investing activities | (365 | ) | (264 | ) | (42 | ) | (5,159 | ) | ||||||
| Financing Activities | ||||||||||||||
| Distributions to limited and general partners | (229 | ) | (196 | ) | (686 | ) | (586 | ) | ||||||
| Net borrowings: | ||||||||||||||
| Corporate | 377 | (703 | ) | (412 | ) | 608 | ||||||||
| Subsidiary | 15 | 65 | 1,629 | 274 | ||||||||||
| Issuance of preferred units | 185 | — | 342 | 220 | ||||||||||
| Issuance of partnership units, net of repurchases | 4 | 977 | 12 | 988 | ||||||||||
| Capital provided by non-controlling interest, net of distributions | 50 | (243 | ) | (1,014 | ) | 2,372 | ||||||||
| Cash from (used by) financing activities | 402 | (100 | ) | (129 | ) | 3,876 | ||||||||
| Cash and cash equivalents | ||||||||||||||
| Change during the period | $ | 374 | $ | 11 | $ | 815 | $ | (311 | ) | |||||
| Impact of foreign exchange on cash | (12 | ) | 13 | (45 | ) | 17 | ||||||||
| Balance, beginning of period | 782 | 468 | 374 | 786 | ||||||||||
| Balance, end of period | $ | 1,144 | $ | 492 | $ | 1,144 | $ | 492 | ||||||
Brookfield Infrastructure Partners L.P.
Statements of Funds from Operations
| For the three-month period ended September 30, | For the nine-month period ended September 30, | ||||||||||||||||
| US$ millions, unaudited | 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Adjusted EBITDA | |||||||||||||||||
| Utilities | $ | 172 | $ | 200 | $ | 552 | $ | 533 | |||||||||
| Transport | 158 | 179 | 509 | 515 | |||||||||||||
| Energy | 73 | 62 | 221 | 211 | |||||||||||||
| Data Infrastructure | 23 | 23 | 69 | 68 | |||||||||||||
| Corporate | (57 | ) | (63 | ) | (169 | ) | (173 | ) | |||||||||
| Total | 369 | 401 | 1,182 | 1,154 | |||||||||||||
| Financing costs | (107 | ) | (108 | ) | (323 | ) | (328 | ) | |||||||||
| Other income | 16 | 8 | 46 | 31 | |||||||||||||
| Funds from Operations (“FFO”) | 278 | 301 | 905 | 857 | |||||||||||||
| Depreciation and amortization | (180 | ) | (195 | ) | (573 | ) | (539 | ) | |||||||||
| Deferred taxes and other items | (93 | ) | (95 | ) | 7 | (286 | ) | ||||||||||
| Net income attributable to the partnership | $ | 5 | $ | 11 | $ | 339 | $ | 32 | |||||||||
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 September 30, | For the nine-month period ended September 30, | ||||||||||||||
| US$, unaudited | 2018 | 2017 | 2018 | 2017 | |||||||||||
| (Loss) earnings per limited partnership unit1 | $ | (0.10 | ) | $ | (0.04 | ) | $ | 0.53 | $ | (0.13 | ) | ||||
| Add back or deduct the following: | |||||||||||||||
| Depreciation and amortization | 0.46 | 0.52 | 1.45 | 1.45 | |||||||||||
| Deferred taxes and other items | 0.35 | 0.33 | 0.33 | 1.00 | |||||||||||
| FFO per unit2 | $ | 0.71 | $ | 0.81 | $ | 2.31 | $ | 2.32 | |||||||
1. Average number of limited partnership units outstanding on a time weighted average basis for the three and nine-month periods ended September 30, 2018 were 276.8 million and 276.7 million, respectively (2017 – 262.6 million and 260.6 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 | Sep 30, 2018 | Dec 31, 2017 | ||||||
| Assets | ||||||||
| Operating groups | ||||||||
| Utilities | $ | 1,703 | $ | 3,290 | ||||
| Transport | 3,583 | 4,116 | ||||||
| Energy | 1,801 | 1,806 | ||||||
| Data Infrastructure | 651 | 614 | ||||||
| Cash and cash equivalents | 734 | 205 | ||||||
| $ | 8,472 | $ | 10,031 | |||||
| Liabilities | ||||||||
| Corporate borrowings | $ | 1,664 | $ | 2,101 | ||||
| Other liabilities | 767 | 926 | ||||||
| 2,431 | 3,027 | |||||||
| Capitalization | ||||||||
| Partnership capital | 6,041 | 7,004 | ||||||
| $ | 8,472 | $ | 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 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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