Brookfield Infrastructure (NYSE: BIP; TSX: BIP.UN) today announced
its results for the fourth quarter ended December 31, 2020.
“2020 provided a unique backdrop to showcase the
resilience and strength of our business,” said Sam Pollock, Chief
Executive Officer of Brookfield Infrastructure. “We were also able
to invest in high quality assets that were immediately accretive to
our results. We are beginning 2021 with a robust liquidity position
which will allow us to pursue attractive opportunities and convert
them into meaningful investments.”
|
For the three months endedDecember 31, |
|
For the year endedDecember 31, |
US$
millions (except per unit amounts), unaudited1 |
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
Net income2 |
$ |
331 |
|
$ |
23 |
|
|
$ |
394 |
|
$ |
233 |
|
– per unit3,4 |
$ |
0.58 |
|
$ |
(0.06 |
) |
|
$ |
0.35 |
|
$ |
0.06 |
|
FFO5 |
$ |
398 |
|
$ |
358 |
|
|
$ |
1,454 |
|
$ |
1,384 |
|
– per unit (split-adjusted)6 |
$ |
0.86 |
|
$ |
0.77 |
|
|
$ |
3.13 |
|
$ |
3.06 |
|
Brookfield reported net income for the year of
$394 million ($0.35 per unit) compared to $233 million ($0.06 per
unit) in the prior year. Net income for the year benefited from
organic growth across our regulated and contracted operations,
contributions from recently completed acquisitions and a gain
associated with the partial disposition of our Australian export
terminal. These increases were partially offset by the impact of
foreign exchange and higher depreciation associated with our annual
revaluation process and new investments.
Funds from Operations (or FFO) for 2020 totaled
$1.45 billion, compared to $1.38 billion in the prior year. This 5%
increase reflects the highly regulated and contracted nature of our
cash flows and embedded organic growth within the company. Results
benefited from capital deployed across our segments and organic
growth within our utilities, midstream and data segments. The
single largest adverse impact on results was the depreciation of
the Brazilian real, which reduced FFO by approximately $100 million
relative to 2019.
Segment Performance
Our utilities segment generated FFO of $659
million in 2020, an annual increase of 6% after adjusting for the
impact of a weaker Brazilian real. Our utility businesses performed
well overall, reflecting the regulated and contractual frameworks
under which we operate. Results benefited from inflation-indexation
and $340 million of capital commissioned into rate base during
the last 12 months. These contributions were partially offset by
delays in the recognition of certain connections revenue at our
U.K. regulated distribution business.
FFO from our transport segment was $590 million,
which was relatively consistent with the prior year despite a
challenging environment and disruptions in global trade. The
segment benefited from the initial contribution of our North
American rail operation and LNG export terminal, solid volumes
across our rail networks and favorable rent settlements at our U.K.
port operation. These contributions were offset by lower volumes at
our toll roads and container ports.
FFO from our midstream segment totaled $289
million, an increase of 18% compared to the prior year. Performance
this year was excellent, with organic growth contributing 13%
despite challenges in global energy markets. Our highly contracted
cash flows were uninterrupted by the economic shutdowns and we
benefited from robust transportation volumes and the commissioning
of several new capital expenditure projects.
Our data segment delivered FFO of $196 million,
an increase of almost 50% compared to the prior year. This
step-change increase is the result of organic growth and
approximately $1 billion of capital deployed into various
strategic growth initiatives over the last 24 months. With respect
to our ongoing growth capital projects, we have commissioned 22 MW
of capacity at our South American data center operation and
constructed approximately 150,000 fiber plugs at our French telecom
operation in the last year. Combined, these two projects will
contribute additional annual EBITDA of $50 million (BIP’s
share - approximately $10 million).
The following table presents FFO by segment:
|
For the three months endedDecember 31, |
|
For the year endedDecember 31, |
US$
millions, unaudited |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
FFO by segment |
|
|
|
|
|
|
|
Utilities |
$ |
168 |
|
|
$ |
178 |
|
|
$ |
659 |
|
|
$ |
672 |
|
Transport |
170 |
|
|
147 |
|
|
590 |
|
|
603 |
|
Midstream |
86 |
|
|
64 |
|
|
289 |
|
|
244 |
|
Data |
61 |
|
|
42 |
|
|
196 |
|
|
136 |
|
Corporate |
(87 |
) |
|
(73 |
) |
|
(280 |
) |
|
(271 |
) |
FFO |
$ |
398 |
|
|
$ |
358 |
|
|
$ |
1,454 |
|
|
$ |
1,384 |
|
Update on Strategic
Initiatives
We completed several important initiatives in
2020:
- Deployed $2.5 billion in
new investments and organic capital projects - Expanded
our presence in India’s rapidly expanding data infrastructure
sector with the acquisition of a large-scale portfolio of telecom
towers and made an investment in a world class LNG export terminal
that is contributing to global decarbonization efforts.
- Generated over $700 million
through capital recycling – Completed four sale processes
and several asset-level financings that produced over $700 million
of proceeds, resulting in an average after-tax IRR of approximately
20% and approximately three times multiple of capital.
In addition, we recently reached an agreement to
sell our North American district energy business in two separate
transactions for total consideration of $4.1 billion on an
enterprise value basis. Net proceeds to BIP are expected to be
approximately $950 million. We will earn an IRR of over 30% on our
investment and a multiple of invested capital of over six
times.
Distribution and Dividend
Increase
The Board of Directors has declared a quarterly
distribution in the amount of $0.51 per unit, payable on March 31,
2021 to unitholders of record as at the close of business on
February 26, 2021. This distribution represents a 5% increase
compared to the prior year. The regular quarterly dividends on the
Cumulative Class A Preferred Limited Partnership Units, Series 1,
Series 3, Series 5, Series 7, Series 9, Series 11, Series 13 and
Series 14 have also been declared, as well as the dividend for BIP
Investment Corporation Senior Preferred Shares, Series 1. In
conjunction with the Partnership’s distribution declaration, the
Board of Directors of BIPC has declared an equivalent quarterly
dividend of $0.51 per share, also payable on March 31, 2021 to
shareholders of record as at the close of business on February 26,
2021.
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 is a
leading global infrastructure company that owns and operates
high-quality, long-life assets in the utilities, transport,
midstream and data sectors across North and South America, Asia
Pacific and Europe. We are focused on assets that generate stable
cash flows and require minimal maintenance capital expenditures.
Investors can access its portfolio either through Brookfield
Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN), a
Bermuda-based limited partnership, or Brookfield Infrastructure
Corporation (NYSE, TSX: BIPC), a Canadian corporation. Further
information is available at www.brookfield.com/infrastructure.
Brookfield Infrastructure is the flagship listed
infrastructure company of Brookfield Asset Management, a global
alternative asset manager with approximately $600 billion of
assets under management. For more information, go to
www.brookfield.com.
Please note that Brookfield Infrastructure
Partners’ 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 |
Kate White |
Senior Vice President,
Communications |
Manager, Investor
Relations |
Tel: (416) 369-8236 |
Tel: (416) 956-5183 |
Email:
claire.holland@brookfield.com |
Email:
kate.white@brookfield.com |
|
|
Conference Call and Quarterly Earnings
Details
Investors, analysts and other interested parties
can access Brookfield Infrastructure’s 2020 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 3, 2021 at 9:00 a.m. Eastern Time at
https://edge.media-server.com/mmc/p.63nh6f4w or via teleconference
at 1-866-688-9459 toll free in North America. For overseas calls
please dial +1-409-216-0834, at approximately 8:50 a.m. Eastern
Time. A recording of the teleconference can be accessed at
1-855-859-2056 or +1-404-357-3406 (Conference ID: 4178742).
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 U.S. Securities Act of 1933, as
amended, Section 21E of the U.S. Securities Exchange Act of 1934,
as amended, “safe harbor” provisions of the United States Private
Securities Litigation Reform Act of 1995 and in any applicable
Canadian securities regulations. The words “will”, “target”,
“future”, “growth”, “expect”, “believe”, “may”, derivatives thereof
and other expressions which are predictions of or indicate future
events, trends or prospects and which do not relate to historical
matters, identify the above mentioned and other forward-looking
statements. Forward-looking statements in this news release may
include statements regarding expansion of Brookfield
Infrastructure’s business, the likelihood and timing of
successfully completing the transactions referred to in this news
release, statements with respect to our assets tending to
appreciate in value over time, the future performance of acquired
businesses and growth initiatives, the commissioning of our capital
backlog, the pursuit of projects in our pipeline, the level of
distribution growth over the next several years and our
expectations regarding returns to our unitholders as a result of
such growth. 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 impact of health pandemics such as the COVID-19
on our business and operations, the ability to effectively complete
transactions in the competitive infrastructure space (including the
ability to complete announced and potential transactions 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, changes in technology
which have the potential to disrupt the business and industries in
which we invest, 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 Canada
and the United States including under “Risk Factors” in Brookfield
Infrastructure’s most recent Annual Report on Form 20-F and other
risks and factors that are described therein. Except as required by
law, Brookfield Infrastructure undertakes no obligation to publicly
update or revise any forward-looking statements or information,
whether as a result of new information, future events or
otherwise.
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, Exchange LP units,
and class A shares of BIPC.
References to the Partnership are to Brookfield
Infrastructure Partners L.P.
- Please refer to page 12 for results
of Brookfield Infrastructure Corporation.
- Includes net income attributable to
limited partners, the general partner, and non-controlling
interests ‒ Redeemable Partnership Units held by Brookfield,
Exchange LP Units, and class A shares of BIPC.
- Average number of limited
partnership units outstanding on a time weighted average basis for
the three and twelve-month period ended December 31, 2020 were
295.4 million and 294.7 million, respectively (2019 – 293.5 million
and 285.6 million). Earnings per limited partnership unit have been
adjusted to reflect the dilutive impact of the special
distribution.
- 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.
- 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 press release.
- Average number of partnership units
outstanding on a fully diluted time weighted average basis,
assuming the exchange of redeemable partnership units held by
Brookfield, Exchange LP units, and class A shares of BIPC for
limited partnership units, as if the special distribution had been
completed prior to the periods presented, for the three and
twelve-month periods ended December 31, 2020 were
465.0 million and 464.9 million, respectively (2019 –
464.8 million and 452.9 million). Average number of units
outstanding on a fully diluted time weighted average basis,
excluding the impact of the special distribution, for the three and
twelve-month periods ended December 31, 2020 were
418.5 million and 418.4 million, respectively (2019 –
418.3 million and 407.6 million).
Brookfield Infrastructure Partners
L.P. Consolidated Statements of Financial
Position
|
As of |
US$
millions, unaudited |
Dec 31, 2020 |
|
|
Dec 31, 2019 |
|
|
|
|
|
Assets |
|
|
|
Cash and cash equivalents |
$ |
867 |
|
|
$ |
827 |
|
Corporate financial
assets |
425 |
|
|
149 |
|
Property, plant and equipment
and investment properties |
32,102 |
|
|
23,429 |
|
Intangible assets and
goodwill |
18,401 |
|
|
20,939 |
|
Investments in associates and
joint ventures |
5,528 |
|
|
4,967 |
|
Deferred income taxes and other |
4,008 |
|
|
5,997 |
|
Total assets |
$ |
61,331 |
|
|
$ |
56,308 |
|
|
|
|
|
Liabilities and
partnership capital |
|
|
|
Corporate borrowings |
$ |
3,158 |
|
|
$ |
2,475 |
|
Non-recourse borrowings |
20,020 |
|
|
18,544 |
|
Financial liabilities |
3,374 |
|
|
2,173 |
|
Deferred income taxes and
other |
13,106 |
|
|
10,939 |
|
|
|
|
|
Partnership
capital |
|
|
|
Limited partners |
4,233 |
|
|
5,048 |
|
General partner |
19 |
|
|
24 |
|
Non-controlling interest
attributable to: |
|
|
|
Redeemable partnership units held by Brookfield |
1,687 |
|
|
2,039 |
|
Class A shares of BIPC and Exchange LP units |
650 |
|
|
18 |
|
Interest of others in operating subsidiaries |
13,954 |
|
|
14,113 |
|
Preferred unitholders |
1,130 |
|
|
935 |
|
Total partnership capital |
21,673 |
|
|
22,177 |
|
Total liabilities and partnership capital |
$ |
61,331 |
|
|
$ |
56,308 |
|
Brookfield Infrastructure Partners
L.P.Consolidated Statements of Operating
Results
|
For the three months |
|
For the twelve months |
|
ended December 31 |
|
ended December 31 |
US$
millions, except per unit information, unaudited |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
2,534 |
|
|
$ |
1,655 |
|
|
$ |
8,885 |
|
|
$ |
6,597 |
|
Direct operating costs |
(1,356 |
) |
|
(907 |
) |
|
(4,843 |
) |
|
(3,395 |
) |
General and administrative
expense |
(93 |
) |
|
(79 |
) |
|
(312 |
) |
|
(279 |
) |
Depreciation and amortization expense |
(519 |
) |
|
(282 |
) |
|
(1,705 |
) |
|
(1,214 |
) |
|
566 |
|
|
387 |
|
|
2,025 |
|
|
1,709 |
|
Interest expense |
(372 |
) |
|
(222 |
) |
|
(1,179 |
) |
|
(904 |
) |
Share of earnings from
associates and joint ventures |
55 |
|
|
136 |
|
|
131 |
|
|
224 |
|
Mark-to-market on hedging
items |
(73 |
) |
|
(47 |
) |
|
(16 |
) |
|
57 |
|
Other
income (expense) |
452 |
|
|
(144 |
) |
|
234 |
|
|
(158 |
) |
Income before income tax |
628 |
|
|
110 |
|
|
1,195 |
|
|
928 |
|
Income tax expense |
|
|
|
|
|
|
|
Current |
(54 |
) |
|
(70 |
) |
|
(237 |
) |
|
(250 |
) |
Deferred |
— |
|
|
(14 |
) |
|
(54 |
) |
|
(28 |
) |
Net income |
574 |
|
|
26 |
|
|
904 |
|
|
650 |
|
Non-controlling interest of others in operating subsidiaries |
(243 |
) |
|
(3 |
) |
|
(510 |
) |
|
(417 |
) |
Net income attributable to partnership |
$ |
331 |
|
|
$ |
23 |
|
|
$ |
394 |
|
|
$ |
233 |
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
Limited partners |
$ |
182 |
|
|
$ |
(13 |
) |
|
$ |
141 |
|
|
$ |
52 |
|
General partner |
46 |
|
|
41 |
|
|
183 |
|
|
159 |
|
Non-controlling interest – redeemable partnership units held by
Brookfield |
74 |
|
|
(5 |
) |
|
55 |
|
|
22 |
|
Non-controlling interest – class A shares of Brookfield
Infrastructure Corporation |
28 |
|
|
— |
|
|
14 |
|
|
— |
|
Non-controlling interest – exchange LP units |
1 |
|
|
— |
|
|
1 |
|
|
— |
|
Basic and diluted earnings per unit attributable to: |
|
|
|
|
|
|
|
Limited partners1 |
$ |
0.58 |
|
|
$ |
(0.06 |
) |
|
$ |
0.35 |
|
|
$ |
0.06 |
|
- Average number of limited
partnership units outstanding on a time weighted average basis for
the three and twelve-month period ended December 31, 2020 were
295.4 million and 294.7 million, respectively (2019 –
293.5 million and 285.6 million). Earnings per limited
partnership unit have been adjusted to reflect the dilutive impact
of the special distribution.
Brookfield Infrastructure Partners
L.P.Consolidated Statements of Cash
Flows
|
For the three months |
|
For the twelve months |
|
ended December 31 |
|
ended December 31 |
US$
millions, unaudited |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
Operating
Activities |
|
|
|
|
|
|
|
Net income |
$ |
574 |
|
|
$ |
26 |
|
|
$ |
904 |
|
|
$ |
650 |
|
Adjusted for the following
items: |
|
|
|
|
|
|
|
Earnings from investments in associates and joint ventures, net of
distributions received |
(39 |
) |
|
(48 |
) |
|
36 |
|
|
30 |
|
Depreciation and amortization expense |
519 |
|
|
282 |
|
|
1,705 |
|
|
1,214 |
|
Mark-to-market on hedging items, provisions and other |
(344 |
) |
|
147 |
|
|
51 |
|
|
153 |
|
Deferred income tax expense |
— |
|
|
14 |
|
|
54 |
|
|
28 |
|
Change
in non-cash working capital, net |
(293 |
) |
|
(8 |
) |
|
(220 |
) |
|
68 |
|
Cash from operating activities |
417 |
|
|
413 |
|
|
2,530 |
|
|
2,143 |
|
|
|
|
|
|
|
|
|
Investing
Activities |
|
|
|
|
|
|
|
Net investments in: |
|
|
|
|
|
|
|
Operating and held for sale assets |
(37 |
) |
|
(7,787 |
) |
|
(2,660 |
) |
|
(9,999 |
) |
Associates |
— |
|
|
(115 |
) |
|
(369 |
) |
|
(404 |
) |
Long-lived assets |
(456 |
) |
|
(329 |
) |
|
(1,426 |
) |
|
(1,144 |
) |
Financial assets |
71 |
|
|
231 |
|
|
(237 |
) |
|
102 |
|
Net
settlements of foreign exchange contracts |
— |
|
|
14 |
|
|
83 |
|
|
73 |
|
Cash used by investing activities |
(422 |
) |
|
(7,986 |
) |
|
(4,609 |
) |
|
(11,372 |
) |
|
|
|
|
|
|
|
|
Financing
Activities |
|
|
|
|
|
|
|
Distributions to limited and
general partners |
(286 |
) |
|
(263 |
) |
|
(1,134 |
) |
|
(1,027 |
) |
Net borrowings: |
|
|
|
|
|
|
|
Corporate |
185 |
|
|
330 |
|
|
629 |
|
|
398 |
|
Subsidiary |
736 |
|
|
2,615 |
|
|
1,119 |
|
|
3,573 |
|
Deposit received from
parent |
— |
|
|
— |
|
|
545 |
|
|
— |
|
Net preferred units and
preferred shares issued |
— |
|
|
— |
|
|
195 |
|
|
72 |
|
Net partnership units
issued |
2 |
|
|
2 |
|
|
9 |
|
|
781 |
|
Net
capital provided by non-controlling interest and other |
(824 |
) |
|
5,019 |
|
|
763 |
|
|
5,745 |
|
Cash (used by) from financing activities |
(187 |
) |
|
7,703 |
|
|
2,126 |
|
|
9,542 |
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
|
|
|
|
|
|
Change during the period |
$ |
(192 |
) |
|
$ |
130 |
|
|
$ |
47 |
|
|
$ |
313 |
|
Cash reclassified as held for sale |
— |
|
|
3 |
|
|
— |
|
|
(13 |
) |
Impact of foreign exchange on cash |
47 |
|
|
17 |
|
|
(7 |
) |
|
(13 |
) |
Balance, beginning of period |
1,012 |
|
|
677 |
|
|
827 |
|
|
540 |
|
Balance, end of period |
$ |
867 |
|
|
$ |
827 |
|
|
$ |
867 |
|
|
$ |
827 |
|
Brookfield Infrastructure Partners
L.P.Statements of Funds from
Operations
|
For the three months |
|
For the twelve months |
|
ended December 31 |
|
ended December 31 |
US$
millions, unaudited |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
Utilities |
$ |
218 |
|
|
$ |
223 |
|
|
$ |
854 |
|
|
$ |
850 |
|
Transport |
237 |
|
|
202 |
|
|
806 |
|
|
833 |
|
Midstream |
110 |
|
|
86 |
|
|
379 |
|
|
320 |
|
Data |
92 |
|
|
54 |
|
|
266 |
|
|
175 |
|
Corporate |
(93 |
) |
|
(79 |
) |
|
(312 |
) |
|
(279 |
) |
Total |
564 |
|
|
486 |
|
|
1,993 |
|
|
1,899 |
|
|
|
|
|
|
|
|
|
Financing costs |
(188 |
) |
|
(146 |
) |
|
(623 |
) |
|
(585 |
) |
Other
income |
22 |
|
|
18 |
|
|
84 |
|
|
70 |
|
Funds from operations (FFO) |
398 |
|
|
358 |
|
|
1,454 |
|
|
1,384 |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
(326 |
) |
|
(222 |
) |
|
(1,034 |
) |
|
(895 |
) |
Deferred taxes and other items |
259 |
|
|
(113 |
) |
|
(26 |
) |
|
(256 |
) |
Net income attributable to the partnership |
$ |
331 |
|
|
$ |
23 |
|
|
$ |
394 |
|
|
$ |
233 |
|
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 limited partners,
the general partner, and non-controlling interests – redeemable
partnership units held by Brookfield, Exchange LP Units and class A
shares of BIPC.
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 |
|
For the twelve months |
|
ended December 31 |
|
ended December 31 |
US$,
unaudited |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
Earnings per limited partnership unit1 |
$ |
0.58 |
|
|
$ |
(0.06 |
) |
|
$ |
0.35 |
|
|
$ |
0.06 |
|
Add back or deduct the
following: |
|
|
|
|
|
|
|
Depreciation and amortization |
0.70 |
|
|
0.48 |
|
|
2.22 |
|
|
1.98 |
|
Deferred taxes and other items |
(0.42 |
) |
|
0.35 |
|
|
0.56 |
|
|
1.02 |
|
FFO per unit2 |
$ |
0.86 |
|
|
$ |
0.77 |
|
|
$ |
3.13 |
|
|
$ |
3.06 |
|
- Average number of limited
partnership units outstanding on a time weighted average basis for
the three and twelve-month periods ended December 31, 2020
were 295.4 million and 294.7 million, respectively (2019
– 293.5 million and 285.6 million). Earnings per limited
partnership unit have been adjusted to reflect the dilutive impact
of the special distribution.
- Average number of partnership units
outstanding on a fully diluted time weighted average basis,
assuming the exchange of redeemable partnership units held by
Brookfield, Exchange LP units, and class A shares of BIPC for
limited partnership units, as if the special distribution had been
completed prior to the periods presented, for the three and
twelve-month periods ended December 31, 2020 were 465.0
million and 464.9 million, respectively (2019 – 464.8 million and
452.9 million). Average number of units outstanding on a fully
diluted time weighted average basis, excluding the impact of the
special distribution, for the three and twelve-month periods ended
December 31, 2020 were 418.5 million and 418.4 million,
respectively (2019 – 418.3 million and 407.6 million).
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 |
US$
millions, unaudited |
Dec 31, 2020 |
|
|
Dec 31, 2019 |
|
|
|
|
|
Assets |
|
|
|
Operating groups |
|
|
|
Utilities |
$ |
2,896 |
|
|
$ |
3,112 |
|
Transport |
4,209 |
|
|
4,058 |
|
Midstream |
2,245 |
|
|
2,127 |
|
Data |
1,995 |
|
|
1,318 |
|
Corporate cash and cash equivalents |
464 |
|
|
273 |
|
|
$ |
11,809 |
|
|
$ |
10,888 |
|
|
|
|
|
Liabilities |
|
|
|
Corporate borrowings |
$ |
3,158 |
|
|
$ |
2,475 |
|
Other
liabilities |
2,062 |
|
|
1,284 |
|
|
5,220 |
|
|
3,759 |
|
Capitalization |
|
|
|
Partnership capital |
6,589 |
|
|
7,129 |
|
|
$ |
11,809 |
|
|
$ |
10,888 |
|
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 limited partners, the general partner and
non-controlling interests – redeemable partnership units held by
Brookfield, Exchange LP Units, and class A shares of BIPC.
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.
Brookfield Infrastructure Corporation
ReportsFourth Quarter 2020 Results
The Board of Directors of Brookfield
Infrastructure Corporation (“BIPC” or our “company”) (NYSE, TSX:
BIPC) today has declared a quarterly dividend in the amount of
$0.51 per class A exchangeable subordinate voting share of BIPC (a
“Share”), payable on March 31, 2021 to shareholders of record as at
the close of business on February 26, 2021. This dividend is
identical in amount per Share and has identical record and payment
dates to the quarterly distribution announced today by BIP on BIP’s
units.
The Shares of BIPC are structured with the
intention of being economically equivalent to the non-voting
limited partnership units of Brookfield Infrastructure Partnership
L.P. (“BIP” or the “Partnership”) (NYSE: BIP; TSX: BIP.UN). We
believe economic equivalence is achieved through identical
dividends and distributions on the Shares and BIP’s units and each
Share being exchangeable at the option of the holder for one BIP
unit at any time. Given the economic equivalence, we expect that
the market price of the Shares will be significantly impacted by
the market price of BIP’s units and the combined business
performance of our company and BIP as a whole. In addition to
carefully considering the disclosure made in this news release in
its entirety, shareholders are strongly encouraged to carefully
review BIP’s letter to unitholders, supplemental information and
its other continuous disclosure filings. BIP’s letter to
unitholders and supplemental information are available at
www.brookfield.com/infrastructure. Copies of the
Partnership’s continuous disclosure filings are available
electronically on EDGAR on the SEC’s website at
www.sec.gov or on SEDAR at
www.sedar.com.
Results
The net income and Funds from Operations (FFO)
of BIPC is fully attributed to the Partnership and the earnings of
BIPC are fully captured in the Partnership’s financial statements
and results.
|
For the three months endedDecember 31, |
|
For the year endedDecember 31, |
US$
millions, unaudited1 |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net (loss) income attributable to the Partnership |
$ |
(102 |
) |
|
$ |
51 |
|
|
$ |
(552 |
) |
|
$ |
197 |
|
FFO2 |
$ |
105 |
|
|
$ |
110 |
|
|
$ |
401 |
|
|
$ |
432 |
|
BIPC reported a net loss for the year of $552
million compared to net income of $197 million in the prior year.
Earnings for the current year benefited from capital commissioned
into rate base at our U.K. regulated distribution business and
inflation-indexation at our Brazilian regulated gas transmission
business. These positive impacts were more than offset by
revaluation losses recognized on our Shares that are classified as
liabilities under IFRS, and the impact of foreign exchange.
Our business generated FFO of $401 million for
the year, representing a 4% increase over the prior year after
adjusting for a weaker Brazilian real. Results benefited from
inflationary-indexation and additions to rate base, however these
positive factors were more than offset by the impacts of foreign
exchange and lower connections activity at our U.K. regulated
distribution business.
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 U.S. Securities Act of 1933, as
amended, Section 21E of the U.S. Securities Exchange Act of 1934,
as amended, “safe harbor” provisions of the United States Private
Securities Litigation Reform Act of 1995 and in any applicable
Canadian securities regulations. The words “believe”, “expect”,
“will” derivatives thereof and other expressions which are
predictions of or indicate future events, trends or prospects and
which do not relate to historical matters, identify the above
mentioned and other forward-looking statements. Forward-looking
statements in this news release include statements regarding the
impact of the market price of BIP’s units and the combined business
performance of our company and BIP as a whole on the market price
of the Shares. 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 favorable 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 transactions in
the competitive infrastructure space (including the ability to
complete announced and potential transactions that may be subject
to conditions precedent, and the inability to reach final agreement
with counterparties to transactions 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, changes
in technology which have the potential to disrupt the business and
industries in which we invest, 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 U.S.
registration statement on Form F-1 and Canadian prospectus filed in
connection with the distribution of the Shares on March 31, 2020
with securities regulators in Canada and the United States and the
documents incorporated by reference therein, including under “Risk
Factors” in the Partnership’s most recent Annual Report on Form
20-F and other risks and factors that are described therein and in
other documents filed by the Partnership and BIPC with the
securities regulators in Canada and the United States. Except as
required by law, Brookfield Infrastructure Corporation undertakes
no obligation to publicly update or revise any forward-looking
statements or information, whether as a result of new information,
future events or otherwise.
- Brookfield Infrastructure
Corporation was established on August 30, 2019 by the Partnership.
On March 30, 2020, the Partnership contributed its regulated
utilities businesses in Brazil and the U.K. to our company. For the
periods prior to March 30, 2020, the financial statements represent
a combined carve-out of the assets, liabilities, revenues,
expenses, and cash flows of the businesses that were contributed to
our company effective March 30, 2020.
- 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. We also exclude from FFO dividends paid
on exchangeable shares of our company that are presented as
interest expense, as well as interest expense on loans payable to
the Partnership which represent the Partnership’s investment in our
company. A reconciliation of net income to FFO is available on page
17 of this release.
Brookfield Infrastructure
Corporation Consolidated Statements of Financial
Position
|
As of |
US$
millions, unaudited |
Dec 31, 2020 |
|
|
Dec 31, 2019 |
|
|
|
|
|
Assets |
|
|
|
Cash and cash equivalents |
$ |
192 |
|
|
$ |
204 |
|
Accounts receivable and
other |
394 |
|
|
390 |
|
Property, plant and
equipment |
5,111 |
|
|
4,497 |
|
Intangible assets |
2,948 |
|
|
3,936 |
|
Goodwill |
528 |
|
|
667 |
|
Deferred tax asset and other |
171 |
|
|
159 |
|
Total assets |
$ |
9,344 |
|
|
$ |
9,853 |
|
|
|
|
|
Liabilities and
Equity |
|
|
|
Accounts payable and
other |
$ |
505 |
|
|
$ |
487 |
|
Exchangeable and class B
shares |
2,221 |
|
|
— |
|
Non-recourse borrowings |
3,477 |
|
|
3,526 |
|
Loans payable to Brookfield
Infrastructure |
1,143 |
|
|
— |
|
Financial liabilities |
1,031 |
|
|
1,008 |
|
Deferred tax liabilities and
other |
1,539 |
|
|
1,555 |
|
|
|
|
|
Equity |
|
|
|
Equity in net assets
attributable to the Partnership |
(1,722 |
) |
|
1,654 |
|
Non-controlling interest |
1,150 |
|
|
1,623 |
|
Total equity |
(572 |
) |
|
3,277 |
|
Total liabilities and equity |
$ |
9,344 |
|
|
$ |
9,853 |
|
Brookfield Infrastructure
CorporationConsolidated Statements of Operating
Results
|
For the three months |
|
For the twelve months |
|
ended December 31 |
|
ended December 31 |
US$
millions, unaudited |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
Revenues |
$ |
375 |
|
|
$ |
406 |
|
|
$ |
1,430 |
|
|
$ |
1,619 |
|
Direct operating costs |
(68 |
) |
|
(67 |
) |
|
(244 |
) |
|
(244 |
) |
General and administrative
expense |
(10 |
) |
|
(9 |
) |
|
(33 |
) |
|
(30 |
) |
Depreciation and amortization expense |
(71 |
) |
|
(77 |
) |
|
(283 |
) |
|
(308 |
) |
|
226 |
|
|
253 |
|
|
870 |
|
|
1,037 |
|
Interest expense |
(61 |
) |
|
(36 |
) |
|
(214 |
) |
|
(156 |
) |
Mark-to-market on hedging
items and foreign currency revaluation |
(25 |
) |
|
9 |
|
|
(61 |
) |
|
5 |
|
Remeasurement of exchangeable
and class B shares |
(79 |
) |
|
— |
|
|
(511 |
) |
|
— |
|
Other
expense |
(15 |
) |
|
(12 |
) |
|
(47 |
) |
|
(44 |
) |
Income before income tax |
46 |
|
|
214 |
|
|
37 |
|
|
842 |
|
Income tax expense |
|
|
|
|
|
|
|
Current |
(44 |
) |
|
(44 |
) |
|
(167 |
) |
|
(175 |
) |
Deferred |
(19 |
) |
|
(25 |
) |
|
(102 |
) |
|
(97 |
) |
Net (loss) income |
$ |
(17 |
) |
|
$ |
145 |
|
|
$ |
(232 |
) |
|
$ |
570 |
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
Partnership |
$ |
(102 |
) |
|
$ |
51 |
|
|
$ |
(552 |
) |
|
$ |
197 |
|
Non-controlling interest |
85 |
|
|
94 |
|
|
320 |
|
|
373 |
|
Brookfield Infrastructure
CorporationConsolidated Statements of Cash
Flows
|
For the three months |
|
For the twelve months |
|
ended December 31 |
|
ended December 31 |
US$
millions, unaudited |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
Operating
Activities |
|
|
|
|
|
|
|
Net (loss) income |
$ |
(17 |
) |
|
$ |
145 |
|
|
$ |
(232 |
) |
|
$ |
570 |
|
Adjusted for the following
items: |
|
|
|
|
|
|
|
Depreciation and amortization expense |
71 |
|
|
77 |
|
|
283 |
|
|
308 |
|
Mark-to-market on hedging items and other |
37 |
|
|
1 |
|
|
110 |
|
|
35 |
|
Remeasurement of exchangeable and class B shares |
79 |
|
|
— |
|
|
511 |
|
|
— |
|
Deferred income tax expense |
19 |
|
|
25 |
|
|
102 |
|
|
97 |
|
Change
in non-cash working capital, net |
(44 |
) |
|
(22 |
) |
|
(44 |
) |
|
73 |
|
Cash from operating activities |
145 |
|
|
226 |
|
|
730 |
|
|
1,083 |
|
|
|
|
|
|
|
|
|
Investing
Activities |
|
|
|
|
|
|
|
Purchase of long-lived assets, net of disposals |
(108 |
) |
|
(133 |
) |
|
(399 |
) |
|
(441 |
) |
Cash used by investing activities |
(108 |
) |
|
(133 |
) |
|
(399 |
) |
|
(441 |
) |
|
|
|
|
|
|
|
|
Financing
Activities |
|
|
|
|
|
|
|
Distributions to
non-controlling interest |
(173 |
) |
|
(190 |
) |
|
(436 |
) |
|
(525 |
) |
Distributions to, net of
contributions from, the Partnership |
— |
|
|
(114 |
) |
|
(33 |
) |
|
(250 |
) |
Proceeds from borrowings |
66 |
|
|
149 |
|
|
551 |
|
|
316 |
|
Repayments of borrowings |
(16 |
) |
|
(14 |
) |
|
(399 |
) |
|
(55 |
) |
Cash used by financing activities |
(123 |
) |
|
(169 |
) |
|
(317 |
) |
|
(514 |
) |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
|
|
|
|
|
|
Change during the period |
$ |
(86 |
) |
|
$ |
(76 |
) |
|
$ |
14 |
|
|
$ |
128 |
|
Impact of foreign exchange on cash |
28 |
|
|
(5 |
) |
|
(26 |
) |
|
(23 |
) |
Balance, beginning of period |
250 |
|
|
285 |
|
|
204 |
|
|
99 |
|
Balance, end of period |
$ |
192 |
|
|
$ |
204 |
|
|
$ |
192 |
|
|
$ |
204 |
|
Brookfield Infrastructure
CorporationStatements of Funds from
Operations
|
For the three months |
|
For the twelve months |
|
ended December 31 |
|
ended December 31 |
US$
millions, unaudited |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
Utilities |
$ |
144 |
|
|
$ |
149 |
|
|
$ |
545 |
|
|
$ |
585 |
|
Corporate |
(10 |
) |
|
(9 |
) |
|
(33 |
) |
|
(30 |
) |
Total |
134 |
|
|
140 |
|
|
512 |
|
|
555 |
|
|
|
|
|
|
|
|
|
Financing costs |
(18 |
) |
|
(20 |
) |
|
(71 |
) |
|
(80 |
) |
Other
income |
(11 |
) |
|
(10 |
) |
|
(40 |
) |
|
(43 |
) |
Funds from operations (FFO) |
105 |
|
|
110 |
|
|
401 |
|
|
432 |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
(40 |
) |
|
(39 |
) |
|
(151 |
) |
|
(148 |
) |
Deferred taxes and other items |
(167 |
) |
|
(20 |
) |
|
(802 |
) |
|
(87 |
) |
Net (loss) income attributable to the Partnership |
$ |
(102 |
) |
|
$ |
51 |
|
|
$ |
(552 |
) |
|
$ |
197 |
|
Notes:
Funds from operations in this statement is on a
segmented basis and represents the operations of Brookfield
Infrastructure Corporation 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 shareholders
includes net income attributable to the Partnership prior to and
after the special distribution.
The Statements of Funds from Operations above
are prepared on a basis that differs from net income as presented
in Brookfield Infrastructure Corporation’s Consolidated Statements
of Operating Results on page 15 of this release, which is prepared
in accordance with IFRS. Management uses FFO as a key measure to
evaluate operating performance. Readers are encouraged to consider
both measures in assessing our company’s results.
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