Brookfield Infrastructure Partners L.P. (Brookfield Infrastructure,
BIP, or the Partnership) (NYSE: BIP; TSX: BIP.UN) today announced
its results for the year ended December 31, 2023.
“We successfully executed our business strategy
and achieved all our capital allocation and performance targets
during 2023,” said Sam Pollock, Chief Executive Officer of
Brookfield Infrastructure. “We believe 2024 will be an even better
year, and we are already off to a strong start on our capital
recycling and deployment initiatives.”
| |
For the twelve monthsended December 31 |
| US$ millions (except per unit
amounts), unaudited1 |
2023 |
|
2022 |
|
Net income attributable to the partnership2 |
$ |
432 |
|
$ |
407 |
|
– per unit3 |
|
0.14 |
|
|
0.14 |
| FFO4 |
|
2,288 |
|
|
2,087 |
|
– per unit5 |
|
2.95 |
|
|
2.71 |
For the year ended December 31, 2023, we
reported net income attributable to the partnership of
$432 million. Current year results benefited from strong
operational performance and gains from our capital recycling
program. These positive impacts were partially offset by higher
financing costs and one-time transaction fees associated with our
growth initiatives, as well as lower mark to market gains on our
hedging activities.
Funds from operations (FFO) for 2023 was $2.3
billion, an increase of 10% compared to 2022. Organic growth for
the year was 8%, reflecting strong levels of inflation in the
countries where we operate, volume growth across the majority of
our critical infrastructure networks, and the commissioning of
approximately $1 billion of new capital projects that are now
contributing to earnings. Additionally, we deployed over $2 billion
into new investments in the third and fourth quarter of 2023 that
favorably impacted results, offset by the impact of $1.9 billion of
asset sales that primarily closed in the second quarter of
2023.
Segment Performance
The following table summarizes FFO by
segment:
| |
For the twelve months ended December 31 |
| US$
millions, unaudited |
2023 |
|
|
2022 |
|
|
FFO by segment |
|
|
|
|
Utilities |
$ |
879 |
|
|
$ |
739 |
|
|
Transport |
|
888 |
|
|
|
794 |
|
|
Midstream |
|
684 |
|
|
|
743 |
|
|
Data |
|
275 |
|
|
|
239 |
|
|
Corporate |
|
(438 |
) |
|
|
(428 |
) |
|
FFO |
$ |
2,288 |
|
|
$ |
2,087 |
|
The utilities segment generated FFO of $879
million, compared to $739 million in the prior year, representing
an increase of 19%. This growth can be attributed to inflation
indexation, which benefited our results by approximately 6%, and
the contribution associated with approximately $500 million of
capital commissioned into our rate base. Results also benefited
from strong performance at HomeServe, which we privatized in
January of 2023.
FFO for the transport segment was $888 million,
representing a 12% increase compared to $794 million generated in
the prior year. Base business results primarily benefited from
inflationary tariff increases and higher volumes driven by strong
economic activity surrounding our networks. In particular, during
the year our rail networks realized an average annual rate increase
of 8% and volumes were up 2% from the previous year. At our
diversified terminals, rates and volumes benefited from strong
demand for bulk goods and commodities that underpin the global
economy. Across our toll road portfolio, annual traffic levels and
tariffs increased 4% and 9%, respectively, compared to prior year.
Current year results additionally benefited from the acquisition of
Triton, our global intermodal logistics operation, which closed at
the end of the third quarter and is performing ahead of
expectations.
FFO for the midstream segment totaled $684
million, compared to $743 million in the previous year. The decline
is primarily due to the partial sale of our interest in a U.S. gas
pipeline in June of 2023 and the normalization of market sensitive
revenues at our diversified Canadian midstream business. Results
for 2023 were supported by increased utilization and higher
contracted cash flows across the segment compared to last year. The
outlook for our midstream businesses remains strong, particularly
as we continue to have success executing commercial agreements and
increasing rates as a result of a lack of new investment in the
sector.
The data segment generated FFO of $275 million,
compared to $239 million in the previous year, an increase of 15%.
The increase is largely attributable to three large-scale
acquisitions completed during the year, comprised of a European
telecom tower operation in the first quarter and two hyperscale
data center platforms in the third and fourth quarters. The
existing businesses performed well and continue to benefit from
sector tailwinds and network densification requirements.
Update on Strategic Initiatives
It was another outsized year for new investments
in 2023 where we deployed over $2 billion in three acquisitions,
including the take-private of Triton, our global intermodal
logistics operation. We also acquired two geographically diverse
hyperscale data center platforms in support of our view that the
digital economy will continue to grow exponentially from industry
tailwinds created by the rollout of 5G and artificial
intelligence.
We completed an additional data center
investment last month acquiring 40 sites out of bankruptcy from
Cyxtera. This multi-faceted transaction included the acquisition of
associated real estate underlying several of the sites from
third-party landlords and the contribution of 10 retail colocation
sites in the U.S. that we already own. The newly created platform
will be a leading retail colocation data center provider, with over
330 megawatts of capacity deployed in high demand areas across
North America. The total purchase price of approximately $1.3
billion implies a 2024E EBITDA multiple of 8x, which was fully
financed and did not require any new equity capital.
Our confidence in the digitalization investment
theme continues in 2024 with the acquisition of American Tower’s
operations in India (ATC India). The business consists of a
portfolio of 78,000 telecom sites with a transaction value of $2
billion. The acquisition is being pursued as a follow-on for our
existing tower business, Summit Digitel, which has 175,000 towers
in the country. The combined platform will be one of the largest
tower platforms globally, with 253,000 sites in complementary
locations. ATC India will also diversify our existing customer mix,
provide a perpetual asset base and deepen our strategic
relationships with key mobile network operators in India. We
believe we are acquiring ATC India at an attractive valuation of
below 6x 2024E EBITDA. Brookfield Infrastructure’s equity
contribution is expected to be approximately $150 million and the
transaction is expected to close in the second half of 2024,
subject to regulatory approvals.
Following a successful year of dispositions in
2023, we commenced preparation for the next phase of our capital
recycling plans. We recently completed several opportunistic asset
level financings to right-size the capital structure at two mature
pipeline operations in North America. Combined, these financings
generated an incremental $550 million for the partnership, and more
importantly, reduced the equity required in a future sale of these
pipelines. These activities, combined with the optimism we have
seen return to the investment landscape, set us up well to achieve
our $2 billion target this year.
Distribution and Dividend Declaration
The Board of Directors has declared a quarterly
distribution in the amount of $0.405 per unit, payable on March 29,
2024 to unitholders of record as at the close of business on
February 29, 2024. This distribution represents a 6% increase
compared to the prior year. The regular quarterly dividends on the
Cumulative Class A Preferred Limited Partnership Units, Series 1,
Series 3, Series 9, Series 11, Series 13 and Series 14 have also
been declared, as well as the capital gains 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 $0.405 per share, also payable on March 29, 2024 to
shareholders of record as at the close of business on February 29,
2024.
Conference Call and Quarterly Earnings
Details
Investors, analysts and other interested parties
can access Brookfield Infrastructure’s Fourth Quarter 2023 Results,
as well as Letter to Unitholders and Supplemental Information,
under the Investor Relations section at
https://bip.brookfield.com.
To participate in the Conference Call today at
9:00am EST, please pre-register at
https://register.vevent.com/register/BIa85ff17e639f42a596b55045813991d5.
Upon registering, you will be emailed a dial-in number, direct
passcode and unique PIN. The Conference Call will also be Webcast
live at https://edge.media-server.com/mmc/p/5pt8renp.
Additional Information
The Board has reviewed and approved this news
release, including the summarized unaudited financial information
contained herein.
– ends –
About Brookfield 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 the Americas, Asia Pacific and Europe. We are
focused on assets that have contracted and regulated revenues that
generate predictable and stable cash flows. 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
http://bip.brookfield.com.
Brookfield Infrastructure is the flagship listed
infrastructure company of Brookfield Asset Management, a global
alternative asset manager with over $850 billion of assets under
management. For more information, go to https://brookfield.com.
Contact Information
|
Media: |
Investors: |
| Simon Maine |
Stephen Fukuda |
| Managing Director |
Vice President |
| Corporate Communications |
Corporate Development &
Investor Relations |
| Tel: +44 739 890 9278 |
Tel: +1 416 956 5129 |
| Email:
simon.maine@brookfield.com |
Email:
stephen.fukuda@brookfield.com |
| |
|
Cautionary Statement Regarding Forward-looking
Statements
This news release may contain forward-looking
information within the meaning of Canadian provincial securities
laws and “forward-looking statements” within the meaning of
applicable securities laws. 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 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 impact
of health pandemics 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, BIPC exchangeable LP units
and BIPC exchangeable shares.
Any statements contained herein with respect to
tax consequences are of a general nature only and are not intended
to be, nor should they be construed to be, legal or tax advice to
any person, and no representation with respect to tax consequences
is made. Unitholders and shareholders are urged to consult their
tax advisors with respect to their particular circumstances.
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,
BIPC exchangeable LP units and BIPC exchangeable shares.
References to the Partnership are to Brookfield
Infrastructure Partners L.P.
- Please refer to page 11 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, BIPC
exchangeable LP units and BIPC exchangeable shares.
- Average number of limited partnership units outstanding on a
time weighted average basis for the twelve-month period ended
December 31, 2023 was 459.4 million (2022: 458.1
million).
- We define FFO as net income excluding the impact of
depreciation and amortization, deferred income taxes,
mark-to-market and other income (expenses) that are not related to
the revenue earning activities and are not normal, recurring cash
operating items necessary for business operations. FFO includes
balances attributable to the partnership generated by investments
in associates and joint ventures accounted for using the equity
method and excludes amounts attributable to non-controlling
interests based on the economic interests held by non-controlling
interests in consolidated subsidiaries. We believe that FFO, when
viewed in conjunction with our IFRS results, provides a more
complete understanding of factors and trends affecting our
underlying operations. FFO is a measure of operating performance
that is not calculated in accordance with, and does not have any
standardized meaning prescribed by IFRS as issued by the
International Accounting Standards Board. FFO is therefore unlikely
to be comparable to similar measures presented by other issuers. A
reconciliation of net income to FFO is available on page 9 of this
release. Readers are encouraged to consider both measures in
assessing our company’s results.
- Average number of partnership units outstanding on a fully
diluted time weighted average basis for the twelve-month period
ended December 31, 2023 was 776.9 million (2022: 771.2
million).
|
Brookfield Infrastructure Partners L.P. |
|
Consolidated Statements of Financial Position |
| |
| |
As of December 31 |
| US$
millions, unaudited |
2023 |
|
2022 |
|
|
|
|
|
| Assets |
|
|
|
|
Cash and cash equivalents |
$ |
1,857 |
|
$ |
1,279 |
| Financial assets |
|
787 |
|
|
785 |
| Property, plant and equipment
and investment properties |
|
52,879 |
|
|
37,991 |
| Intangible assets and
goodwill |
|
30,333 |
|
|
20,611 |
| Investments in associates and
joint ventures |
|
5,402 |
|
|
5,325 |
|
Deferred income taxes and other |
|
9,526 |
|
|
6,978 |
|
Total assets |
$ |
100,784 |
|
$ |
72,969 |
|
|
|
|
|
| Liabilities and
partnership capital |
|
|
|
| Corporate borrowings |
$ |
4,911 |
|
$ |
3,666 |
| Non-recourse borrowings |
|
40,904 |
|
|
26,567 |
| Financial liabilities |
|
2,875 |
|
|
2,067 |
| Deferred income taxes and
other |
|
18,078 |
|
|
15,115 |
| |
|
|
|
| Partnership
capital |
|
|
|
| Limited partners |
|
5,321 |
|
|
5,372 |
| General partner |
|
28 |
|
|
27 |
| Non-controlling interest
attributable to: |
|
|
|
|
Redeemable partnership units held by Brookfield |
|
2,190 |
|
|
2,263 |
|
Exchangeable units/shares1 |
|
1,605 |
|
|
1,361 |
|
Perpetual subordinated notes |
|
293 |
|
|
293 |
|
Interest of others in operating subsidiaries |
|
23,661 |
|
|
15,320 |
|
Preferred unitholders |
|
918 |
|
|
918 |
|
Total partnership capital |
|
34,016 |
|
|
25,554 |
|
Total liabilities and partnership capital |
$ |
100,784 |
|
$ |
72,969 |
- Includes non-controlling interest
attributable to BIPC exchangeable shares, BIPC exchangeable LP
units and Exchange LP units.
|
Brookfield Infrastructure Partners L.P. |
|
Consolidated Statements of Operating Results |
| |
| |
For the twelve months ended December 31 |
| US$
millions, except per unit information, unaudited |
2023 |
|
|
2022 |
|
|
|
|
|
|
|
Revenues |
$ |
17,931 |
|
|
$ |
14,427 |
|
| Direct operating costs |
|
(13,470 |
) |
|
|
(10,510 |
) |
| General and administrative
expense |
|
(413 |
) |
|
|
(433 |
) |
|
|
|
4,048 |
|
|
|
3,484 |
|
| Interest expense |
|
(2,501 |
) |
|
|
(1,855 |
) |
| Share of earnings from
associates and joint ventures |
|
459 |
|
|
|
12 |
|
| Mark-to-market (losses)
gains |
|
(118 |
) |
|
|
173 |
|
| Other
income |
|
141 |
|
|
|
121 |
|
|
Income before income tax |
|
2,029 |
|
|
|
1,935 |
|
| Income tax expense |
|
|
|
|
Current |
|
(576 |
) |
|
|
(474 |
) |
|
Deferred |
|
(5 |
) |
|
|
(86 |
) |
|
Net income |
|
1,448 |
|
|
|
1,375 |
|
|
Non-controlling interest of others in operating subsidiaries |
|
(1,016 |
) |
|
|
(968 |
) |
|
Net income attributable to partnership |
$ |
432 |
|
|
$ |
407 |
|
|
|
|
|
|
| Attributable to: |
|
|
|
|
Limited partners |
$ |
102 |
|
|
$ |
101 |
|
|
General partner |
|
265 |
|
|
|
240 |
|
|
Non-controlling interest |
|
|
|
|
Redeemable partnership units held by Brookfield |
|
42 |
|
|
|
42 |
|
|
Exchangeable units/shares1 |
|
23 |
|
|
|
24 |
|
|
Basic and diluted earnings per unit attributable to: |
|
|
|
|
Limited partners2 |
$ |
0.14 |
|
|
$ |
0.14 |
|
- Includes non-controlling interest
attributable to BIPC exchangeable shares, BIPC exchangeable LP
units and Exchange LP units.
- Average number of limited
partnership units outstanding on a time weighted average basis for
the twelve-month period ended December 31, 2023 was 459.4
million (2022: 458.1 million).
|
Brookfield Infrastructure Partners L.P. |
|
Consolidated Statements of Cash Flows |
| |
| |
For the twelve months ended December 31 |
| US$
millions, unaudited |
2023 |
|
|
2022 |
|
|
|
|
|
|
| Operating
Activities |
|
|
|
|
Net income |
$ |
1,448 |
|
|
$ |
1,375 |
|
| Adjusted for the following
items: |
|
|
|
|
Earnings from investments in associates and joint ventures, net of
distributions received |
|
323 |
|
|
|
563 |
|
|
Depreciation and amortization expense |
|
2,739 |
|
|
|
2,158 |
|
|
Mark-to-market, provisions and other |
|
201 |
|
|
|
(147 |
) |
|
Deferred income tax expense |
|
5 |
|
|
|
86 |
|
| Change
in non-cash working capital, net |
|
(638 |
) |
|
|
(904 |
) |
|
Cash from operating activities |
|
4,078 |
|
|
|
3,131 |
|
|
|
|
|
|
| Investing
Activities |
|
|
|
| Net (investments in) proceeds
from: |
|
|
|
|
Operating assets |
|
(10,145 |
) |
|
|
(281 |
) |
|
Associates |
|
9 |
|
|
|
(589 |
) |
|
Long-lived assets |
|
(2,325 |
) |
|
|
(2,734 |
) |
|
Financial assets |
|
191 |
|
|
|
61 |
|
| Net settlements of foreign
exchange contracts |
|
— |
|
|
|
178 |
|
| Other
investing activities |
|
(720 |
) |
|
|
— |
|
|
Cash used by investing activities |
|
(12,990 |
) |
|
|
(3,365 |
) |
|
|
|
|
|
| Financing
Activities |
|
|
|
| Distributions to limited and
general partners |
|
(1,516 |
) |
|
|
(1,418 |
) |
| Net borrowings: |
|
|
|
|
Corporate |
|
1,164 |
|
|
|
1,124 |
|
|
Subsidiary |
|
4,490 |
|
|
|
2,493 |
|
| Net preferred shares
redeemed |
|
— |
|
|
|
(243 |
) |
| Partnership units
(repurchased) issued |
|
(13 |
) |
|
|
13 |
|
| Settlement of deferred
consideration |
|
— |
|
|
|
(1,224 |
) |
| Net capital provided by (to)
non-controlling interest |
|
6,072 |
|
|
|
(458 |
) |
| Lease liability repaid and
other |
|
(778 |
) |
|
|
(231 |
) |
|
Cash from financing activities |
|
9,419 |
|
|
|
56 |
|
|
|
|
|
|
| Cash and cash
equivalents |
|
|
|
|
Change during the period |
$ |
507 |
|
|
$ |
(178 |
) |
|
Cash reclassified as held for sale |
|
— |
|
|
|
(37 |
) |
|
Impact of foreign exchange on cash |
|
71 |
|
|
|
88 |
|
|
Balance, beginning of period |
|
1,279 |
|
|
|
1,406 |
|
|
Balance, end of period |
$ |
1,857 |
|
|
$ |
1,279 |
|
|
Brookfield Infrastructure Partners L.P. |
|
Reconciliation of Net Income to Funds from
Operations |
| |
| |
For the twelve monthsended December 31 |
| US$
millions, unaudited |
2023 |
|
|
2022 |
|
|
|
|
|
|
|
Net income |
$ |
1,448 |
|
|
$ |
1,375 |
|
|
Add back or deduct the following: |
|
|
|
|
Depreciation and amortization |
|
2,739 |
|
|
|
2,158 |
|
|
Share of earnings from investments in associates and joint
ventures |
|
(459 |
) |
|
|
(12 |
) |
|
FFO contribution from investments in associates and joint
ventures1 |
|
923 |
|
|
|
886 |
|
|
Deferred tax expense |
|
5 |
|
|
|
86 |
|
|
Mark-to-market losses (gains) |
|
118 |
|
|
|
(173 |
) |
|
Other expense2 |
|
183 |
|
|
|
115 |
|
|
Consolidated Funds from Operations |
|
4,957 |
|
|
|
4,435 |
|
|
FFO attributable to non-controlling interests3 |
|
(2,669 |
) |
|
|
(2,348 |
) |
|
FFO |
$ |
2,288 |
|
|
$ |
2,087 |
|
- FFO contribution from investments
in associates and joint ventures correspond to the FFO attributable
to the partnership that are generated by its investments in
associates and joint ventures accounted for using the equity
method.
- Other expense corresponds to
amounts that are not related to the revenue earning activities and
are not normal, recurring cash operating expenses necessary for
business operations. Other income/expenses excluded from FFO
primarily includes gains on dispositions of subsidiaries,
associates and joint ventures, gains or losses relating to foreign
currency translation reclassified from accumulated comprehensive
income to other expense, acquisition costs, gains/losses on
remeasurement of borrowings, amortization of deferred financing
costs, fair value remeasurement gains/losses, accretion expenses on
deferred consideration or asset retirement obligations, and gains
or losses on debt extinguishment.
- Amounts attributable to
non-controlling interests are calculated based on the economic
ownership interests held by non-controlling interests in
consolidated subsidiaries. By adjusting FFO attributable to
non-controlling interests, our partnership is able to remove the
portion of FFO earned at non-wholly owned subsidiaries that are not
attributable to our partnership.
|
Brookfield Infrastructure Partners L.P. |
|
Statements of Funds from Operations per Unit |
| |
| |
For the twelve months ended December 31 |
| US$,
unaudited |
2023 |
|
2022 |
|
|
|
|
|
|
Earnings per limited partnership unit1 |
$ |
0.14 |
|
$ |
0.14 |
| Add back or deduct the
following: |
|
|
|
|
Depreciation and amortization |
|
1.84 |
|
|
1.66 |
|
Deferred taxes and other items |
|
0.97 |
|
|
0.91 |
|
FFO per unit2 |
$ |
2.95 |
|
$ |
2.71 |
- Average number of limited
partnership units outstanding on a time weighted average basis for
the twelve-month period ended December 31, 2023 was 459.4
million (2022: 458.1 million).
- Average number of partnership units
outstanding on a fully diluted time weighted average basis for the
twelve-month period ended December 31, 2023 was 776.9 million
(2022: 771.2 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 Corporation
Reports Strong 2023 Year-End Results&
Announces Dividend Increase
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
$0.405 per class A exchangeable subordinate voting share of BIPC (a
“Share”), payable on March 29, 2024 to shareholders of record as at
the close of business on February 29, 2024. This dividend
represents a 6% increase compared to the prior year. This dividend
is identical in amount per Share and has identical record and
payment dates to the quarterly distribution announced today by BIP
on its 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
https://bip.brookfield.com. Copies of the Partnership’s continuous
disclosure filings are available electronically on EDGAR on the
SEC’s website at https://sec.gov or on SEDAR+ at
https://sedarplus.ca.
Results
The net income of BIPC is captured in the
Partnership’s financial statements and results.
BIPC reported net income of $606 million
compared to $1,619 million in the prior year. After removing the
impact of the revaluation on our own Shares that are classified as
liabilities under IFRS, underlying earnings were modestly above the
prior year. Earnings benefited from the acquisition of Triton
International, our global intermodal logistics operation, inflation
indexation across our businesses and capital commissioned into rate
base at our U.K. regulated distribution business. These benefits
were partially offset by one-time transaction costs associated with
the acquisition of our global intermodal logistics operation and
higher financing costs at our U.K. regulated distribution business
as a result of incremental borrowings.
Cautionary Statement Regarding Forward-looking
Statements
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
impact of health pandemics 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 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 BIPC with the securities regulators in Canada and the
United States including “Risk Factors” in BIPC’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
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 |
|
Consolidated Statements of Financial Position |
| |
|
| |
As of December 31 |
| US$
millions, unaudited |
2023 |
|
|
2022 |
|
|
|
|
|
|
| Assets |
|
|
|
|
Cash and cash equivalents |
$ |
539 |
|
|
$ |
445 |
|
| Due from Brookfield
Infrastructure |
|
1,288 |
|
|
|
566 |
|
| Property, plant and
equipment |
|
14,151 |
|
|
|
4,718 |
|
| Intangible assets |
|
3,699 |
|
|
|
2,847 |
|
| Investments in associates |
|
— |
|
|
|
428 |
|
| Goodwill |
|
1,726 |
|
|
|
518 |
|
|
Deferred tax asset and other |
|
2,506 |
|
|
|
656 |
|
|
Total assets |
$ |
23,909 |
|
|
$ |
10,178 |
|
|
|
|
|
|
| Liabilities and
Equity |
|
|
|
| Accounts payable and
other |
$ |
1,099 |
|
|
$ |
781 |
|
| Loans payable to Brookfield
Infrastructure |
|
26 |
|
|
|
26 |
|
| Exchangeable and class B
shares |
|
4,153 |
|
|
|
3,426 |
|
| Non-recourse borrowings |
|
12,028 |
|
|
|
4,577 |
|
| Financial liabilities |
|
75 |
|
|
|
72 |
|
| Deferred tax liabilities and
other |
|
2,460 |
|
|
|
1,657 |
|
| |
|
|
|
| Equity |
|
|
|
| Equity in net assets
attributable to the Partnership |
|
(399 |
) |
|
|
(1,119 |
) |
|
Non-controlling interest |
|
4,467 |
|
|
|
758 |
|
|
Total equity |
|
4,068 |
|
|
|
(361 |
) |
|
Total liabilities and equity |
$ |
23,909 |
|
|
$ |
10,178 |
|
|
Brookfield Infrastructure Corporation |
|
Consolidated Statements of Operating Results |
| |
| |
For the twelve monthsended December 31 |
| US$
millions, unaudited |
2023 |
|
|
2022 |
|
|
|
|
|
|
|
Revenues |
$ |
2,503 |
|
|
$ |
1,886 |
|
| Direct operating costs |
|
(778 |
) |
|
|
(542 |
) |
| General
and administrative expense |
|
(67 |
) |
|
|
(69 |
) |
|
|
|
1,658 |
|
|
|
1,275 |
|
| Interest expense |
|
(697 |
) |
|
|
(544 |
) |
| Share of (losses) earnings
from investments in associates |
|
(20 |
) |
|
|
4 |
|
| Remeasurement of exchangeable
and class B shares |
|
34 |
|
|
|
1,058 |
|
|
Mark-to-market and other |
|
(1 |
) |
|
|
88 |
|
|
Income before income tax |
|
974 |
|
|
|
1,881 |
|
| Income tax (expense)
recovery |
|
|
|
|
Current |
|
(348 |
) |
|
|
(341 |
) |
|
Deferred |
|
(20 |
) |
|
|
79 |
|
|
Net income |
$ |
606 |
|
|
$ |
1,619 |
|
|
|
|
|
|
| Attributable to: |
|
|
|
|
Partnership |
$ |
111 |
|
|
$ |
1,094 |
|
|
Non-controlling interest |
|
495 |
|
|
|
525 |
|
|
Brookfield Infrastructure Corporation |
|
Consolidated Statements of Cash Flows |
| |
| |
For the twelve monthsended December 31 |
| US$
millions, unaudited |
2023 |
|
|
2022 |
|
|
|
|
|
|
| Operating
Activities |
|
|
|
|
Net income |
$ |
606 |
|
|
$ |
1,619 |
|
| Adjusted for the following
items: |
|
|
|
|
Earnings from investments in associates, net of distributions
received |
|
23 |
|
|
|
29 |
|
|
Depreciation and amortization expense |
|
365 |
|
|
|
211 |
|
|
Mark-to-market and other |
|
73 |
|
|
|
(2 |
) |
|
Remeasurement of exchangeable and class B shares |
|
(34 |
) |
|
|
(1,058 |
) |
|
Deferred income tax expense (recovery) |
|
20 |
|
|
|
(79 |
) |
| Change
in non-cash working capital, net |
|
6 |
|
|
|
173 |
|
|
Cash from operating activities |
|
1,059 |
|
|
|
893 |
|
|
|
|
|
|
| Investing
Activities |
|
|
|
| Disposal of (investments in)
associates |
|
435 |
|
|
|
(455 |
) |
| Purchase of long-lived assets,
net of disposals |
|
(519 |
) |
|
|
(521 |
) |
| Purchase of financial assets
and other |
|
(4 |
) |
|
|
(71 |
) |
|
Acquisition of subsidiaries |
|
(3,086 |
) |
|
|
— |
|
|
Cash used by investing activities |
|
(3,174 |
) |
|
|
(1,047 |
) |
|
|
|
|
|
| Financing
Activities |
|
|
|
| Net capital provided by (to)
non-controlling interest |
|
2,453 |
|
|
|
(448 |
) |
| Net (repayments)
borrowings |
|
(238 |
) |
|
|
1,550 |
|
| Other financing
activities |
|
(32 |
) |
|
|
— |
|
|
Settlement of deferred consideration |
|
— |
|
|
|
(1,106 |
) |
|
Cash from (used by) financing activities |
|
2,183 |
|
|
|
(4 |
) |
|
|
|
|
|
| Cash and cash
equivalents |
|
|
|
|
Change during the period |
$ |
68 |
|
|
$ |
(158 |
) |
|
Impact of foreign exchange on cash |
|
26 |
|
|
|
134 |
|
|
Balance, beginning of period |
|
445 |
|
|
|
469 |
|
|
Balance, end of period |
$ |
539 |
|
|
$ |
445 |
|
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