BROOKFIELD, NEWS,
“Our business has performed well during the quarter, reflecting the critical nature of our assets and the regulated and contractual frameworks that support them,” said
For the three months ended | For the six months ended | |||||||||
US$ millions (except per unit amounts), unaudited1 | 2020 | 2019 | 2020 | 2019 | ||||||
Net income2 | $ | (61 | ) | $ | 98 | $ | 58 | $ | 128 | |
– per unit3,4 | $ | (0.25 | ) | $ | 0.11 | $ | (0.12 | ) | $ | 0.06 |
FFO5 | $ | 333 | $ | 337 | $ | 691 | $ | 688 | ||
– per unit (split-adjusted)6 | $ | 0.72 | $ | 0.76 | $ | 1.49 | $ | 1.55 |
Underlying results for the partnership benefitted from inflation-indexation, capital commissioned into earnings in the last 12 months as well as the benefit of our asset rotation strategy. These positive factors were more than offset by fair value adjustments related to our corporate hedging program which totaled nearly
During the second quarter, our business generated Funds from Operations (FFO) of
Segment Performance
Our utilities segment generated FFO of
FFO from our Transport segment was
Our energy segment generated FFO of
FFO from our data infrastructure segment was
The following table presents FFO by segment:
For the three months ended | For the six months ended | |||||||||||
US$ millions, unaudited | 2020 | 2019 | 2020 | 2019 | ||||||||
FFO by segment | ||||||||||||
Utilities | $ | 130 | $ | 143 | $ | 276 | $ | 280 | ||||
Transport | 108 | 135 | 228 | 274 | ||||||||
Energy | 106 | 96 | 221 | 203 | ||||||||
Data Infrastructure | 43 | 30 | 85 | 58 | ||||||||
Corporate | (54 | ) | (67 | ) | (119 | ) | (127 | ) | ||||
FFO | $ | 333 | $ | 337 | $ | 691 | $ | 688 |
Update on Strategic Initiatives
During the quarter, we made progress on several initiatives:
- North American Electricity Transmission – The sale of our North American electricity transmission operation closed in July, resulting in
$60 million of proceeds to BIP and an IRR of 21%. We are advancing two other asset sale processes that we expect will generate over$700 million of additional liquidity. We believe that essential and de-risked infrastructure businesses that performed uninterrupted throughout this recent period will attract strong interest at premium prices. Indian Telecom Towers – The closing of our large-scale acquisition of 130,000 telecom towers inIndia from Reliance Jio is expected shortly. We have received positive feedback recently from Indian regulators that the remaining approvals are on track. Since we signed our deal, Reliance Jio has raised approximately$20 billion of equity capital from technology companies and private equity investors which has further solidified the credit quality of our anchor tenant. We will invest approximately$500 million of equity (BIP’s share) in the business.- Capital Market Investments – During the broad market sell-off in March, we acquired stakes in several high-quality infrastructure companies at attractive entry points. The ensuing rebound allowed us to monetize some of our positions and realize substantial profits in a short period of time. We have fully exited a number of these investments, realizing total profits of approximately
$40 million (BIP’s share – approximately $25 million). We continue to accumulate positions in a handful of companies that we hope will lead to broader strategic initiatives in time. U.S. Midstream – Dislocation in North American energy markets may provide unique opportunities to invest at value. Our focus is on highly contracted businesses with solid counterparties, limited exposure to volume and pricing risk and long-life, critical infrastructure that complements our existing operations. We believe several opportunities exist to implement this strategy, both in the public and private markets.
Lastly, we are very pleased with the market’s response thus far to
Board of Directors Update
After 13 years on the
Distribution and Dividend Declaration
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 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 global alternative asset manager with over
Please note that
For more information, please contact:
Media: Senior Vice President, Communications Tel: (416) 369-8236 Email: claire.holland@brookfield.com | Investors: Managing Director, Investments Tel: (416) 956-5196 Email: rene.lubianski@brookfield.com |
Conference Call and Quarterly Earnings Details
Investors, analysts and other interested parties can access Brookfield Infrastructure’s Second Quarter 2020 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
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, general partnership units,
References to the Partnership are to
1. Please refer to page 12 for results of
2. 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.
3. Average number of limited partnership units outstanding on a time weighted average basis for the three and six-month period ended
4. Results in a loss on a per unit basis for the six-month periods ended
5. 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 release.
6. Average number of partnership units outstanding on a fully diluted time weighted average basis, assuming the exchange of redeemable partnership units held by Brookfield,
Consolidated Statements of Financial Position
As of | ||||
US$ millions, unaudited | 2020 | 2019 | ||
Assets | ||||
Cash and cash equivalents | $ | 1,380 | $ | 827 |
Financial assets | 439 | 149 | ||
Property, plant and equipment | 22,279 | 23,013 | ||
Intangible assets | 12,658 | 14,386 | ||
Investments in associates and joint ventures | 4,336 | 4,967 | ||
Investment properties | 403 | 416 | ||
6,166 | 6,553 | |||
Deferred income taxes and other | 3,661 | 5,997 | ||
Total assets | $ | 51,322 | $ | 56,308 |
Liabilities and partnership capital | ||||
Corporate borrowings | $ | 3,074 | $ | 2,475 |
Non-recourse borrowings | 17,860 | 18,544 | ||
Financial liabilities | 2,383 | 2,173 | ||
Deferred income taxes and other | 9,262 | 10,939 | ||
Partnership capital | ||||
Limited partners | 3,823 | 5,048 | ||
General partner | 17 | 24 | ||
Non-controlling interest attributable to: | ||||
Redeemable partnership units held by Brookfield | 1,520 | 2,039 | ||
Class A shares of BIPC | 576 | – | ||
12 | 18 | |||
Interest of others in operating subsidiaries | 11,860 | 14,113 | ||
Preferred unitholders | 935 | 935 | ||
Total partnership capital | 18,743 | 22,177 | ||
Total liabilities and partnership capital | $ | 51,322 | $ | 56,308 |
Consolidated Statements of Operating Results
US$ millions, except per unit information, unaudited | For the three months ended | For the six months ended | ||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Revenues | $ | 1,946 | $ | 1,685 | $ | 4,142 | $ | 3,278 | ||||
Direct operating costs | (1,063 | ) | (840 | ) | (2,302 | ) | (1,638 | ) | ||||
General and administrative expense | (72 | ) | (64 | ) | (133 | ) | (125 | ) | ||||
Depreciation and amortization expense | (375 | ) | (323 | ) | (775 | ) | (615 | ) | ||||
436 | 458 | 932 | 900 | |||||||||
Interest expense | (247 | ) | (241 | ) | (529 | ) | (453 | ) | ||||
Share of earnings from associates and joint ventures | 11 | 34 | 59 | 52 | ||||||||
Mark-to-market on hedging items | (75 | ) | 52 | 123 | 34 | |||||||
Other (expense) income | (28 | ) | 12 | (234 | ) | 22 | ||||||
Income before income tax | 97 | 315 | 351 | 555 | ||||||||
Income tax (expense) recovery | ||||||||||||
Current | (55 | ) | (62 | ) | (113 | ) | (125 | ) | ||||
Deferred | (8 | ) | 1 | (56 | ) | (11 | ) | |||||
Net income | 34 | 254 | 182 | 419 | ||||||||
Non-controlling interest of others in operating subsidiaries | (95 | ) | (156 | ) | (124 | ) | (291 | ) | ||||
Net (loss) income attributable to partnership | $ | (61 | ) | $ | 98 | $ | 58 | $ | 128 | |||
Attributable to: | ||||||||||||
Limited partners | (67 | ) | 42 | (15 | ) | 36 | ||||||
General partner | 45 | 39 | 91 | 77 | ||||||||
Non-controlling interest – redeemable partnership units held by Brookfield | (29 | ) | 17 | (8 | ) | 15 | ||||||
Non-controlling interest – class A shares of | (10 | ) | – | (10 | ) | – | ||||||
Basic and diluted (loss) earnings per unit attributable to: | ||||||||||||
Limited partners1 | $ | (0.25 | ) | $ | 0.11 | $ | (0.12 | ) | $ | 0.06 |
1. | Average number of limited partnership units outstanding on a time weighted average basis for the three and six-month period ended |
Consolidated Statements of Cash Flows
US$ millions, unaudited | For the three months ended | For the six months ended | ||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Operating Activities | ||||||||||||
Net income | $ | 34 | $ | 254 | $ | 182 | $ | 419 | ||||
Adjusted for the following items: | ||||||||||||
Earnings from investments in associates and joint ventures, net of distributions received | 27 | 19 | 72 | 32 | ||||||||
Depreciation and amortization expense | 375 | 323 | 775 | 615 | ||||||||
Mark-to-market on hedging items, provisions and other | 84 | (44 | ) | 265 | 10 | |||||||
Deferred income tax expense (recovery) | 8 | (1 | ) | 56 | 11 | |||||||
Change in non-cash working capital, net | 87 | 29 | (13 | ) | 54 | |||||||
Cash from operating activities | 615 | 580 | 1,337 | 1,141 | ||||||||
Investing Activities | ||||||||||||
Net (investments in) proceeds from: | ||||||||||||
Operating assets | — | (40 | ) | 722 | (2,190 | ) | ||||||
Associates | — | 323 | — | 135 | ||||||||
Long-lived assets | (266 | ) | (276 | ) | (642 | ) | (513 | ) | ||||
Financial assets | (103 | ) | (39 | ) | (256 | ) | (39 | ) | ||||
Disposal of investment held on behalf of parent | — | 581 | — | — | ||||||||
Net settlements of foreign exchange contracts | 1 | 37 | 83 | 36 | ||||||||
Cash (used by) from investing activities | (368 | ) | 586 | (93 | ) | (2,571 | ) | |||||
Financing Activities | ||||||||||||
Distributions to limited and general partners | (283 | ) | (251 | ) | (565 | ) | (501 | ) | ||||
Net borrowings (repayments): | ||||||||||||
Corporate | 272 | (965 | ) | 665 | (510 | ) | ||||||
Subsidiary | 72 | (275 | ) | 231 | 847 | |||||||
Deposit received from parent | — | 456 | — | 823 | ||||||||
Net preferred units and preferred shares issued | — | — | — | 72 | ||||||||
Net partnership units issued (repurchased) | 3 | 2 | 5 | (24 | ) | |||||||
Capital provided by non-controlling interest, net of distributions, and other | (166 | ) | (143 | ) | (958 | ) | 890 | |||||
Cash (used by) from financing activities | (102 | ) | (1,176 | ) | (622 | ) | 1,597 | |||||
Cash and cash equivalents | ||||||||||||
Change during the period | $ | 145 | $ | (10 | ) | $ | 622 | $ | 167 | |||
Impact of foreign exchange on cash | 9 | 5 | (69 | ) | 8 | |||||||
Balance, beginning of period | 1,226 | 720 | 827 | 540 | ||||||||
Balance, end of period | $ | 1,380 | $ | 715 | $ | 1,380 | $ | 715 |
Statements of Funds from Operations
For the three months ended | For the six months ended | |||||||||||
US$ millions, unaudited | 2020 | 2019 | 2020 | 2019 | ||||||||
Adjusted EBITDA | ||||||||||||
Utilities | $ | 174 | $ | 190 | $ | 367 | $ | 371 | ||||
Transport | 145 | 184 | 311 | 373 | ||||||||
Energy | 138 | 123 | 286 | 250 | ||||||||
Data Infrastructure | 53 | 39 | 109 | 75 | ||||||||
Corporate | (72 | ) | (64 | ) | (133 | ) | (125 | ) | ||||
Total | 438 | 472 | 940 | 944 | ||||||||
Financing costs | (148 | ) | (154 | ) | (299 | ) | (294 | ) | ||||
Other income | 43 | 19 | 50 | 38 | ||||||||
Funds from operations (FFO) | 333 | 337 | 691 | 688 | ||||||||
Depreciation and amortization | (222 | ) | (234 | ) | (469 | ) | (454 | ) | ||||
Deferred taxes and other items | (172 | ) | (5 | ) | (164 | ) | (106 | ) | ||||
Net income attributable to the partnership | $ | (61 | ) | $ | 98 | $ | 58 | $ | 128 |
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.
Statements of Funds from Operations per Unit
For the three months ended | For the six months ended | ||||||||||
US$, unaudited | 2020 | 2019 | 2020 | 2019 | |||||||
Earnings per limited partnership unit1 | $ | (0.25 | ) | $ | 0.11 | $ | (0.12 | ) | $ | 0.06 | |
Add back or deduct the following: | |||||||||||
Depreciation and amortization | 0.48 | 0.53 | 1.01 | 1.03 | |||||||
Deferred taxes and other items | 0.49 | 0.12 | 0.60 | 0.46 | |||||||
FFO per unit2 | $ | 0.72 | $ | 0.76 | $ | 1.49 | $ | 1.55 |
1. | Average number of limited partnership units outstanding on a time weighted average basis for the three and six-month periods ended |
2. | Average number of partnership units outstanding on a fully diluted time weighted average basis, assuming the exchange of redeemable partnership units held by Brookfield, 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 six-month periods ended |
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.
Statements of
As of | ||||
US$ millions, unaudited | 2020 | 2019 | ||
Assets | ||||
Operating groups | ||||
Utilities | $ | 1,785 | $ | 2,178 |
Transport | 3,214 | 3,991 | ||
Energy | 2,932 | 3,128 | ||
Data Infrastructure | 1,217 | 1,318 | ||
Cash and cash equivalents | 999 | 273 | ||
$ | 10,147 | $ | 10,888 | |
Liabilities | ||||
Corporate borrowings | $ | 3,074 | $ | 2,475 |
Other liabilities | 1,125 | 1,284 | ||
4,199 | 3,759 | |||
Capitalization | ||||
Partnership capital | 5,948 | 7,129 | ||
$ | 10,147 | $ | 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
Brookfield Infrastructure Corporation Reports
Second Quarter 2020 Results
The Board of Directors of
The Shares of BIPC are structured with the intention of being economically equivalent to the non-voting limited partnership units of
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 ended | For the six months ended | |||||||||
US$ millions, unaudited1 | 2020 | 2019 | 2020 | 2019 | ||||||
Net income attributable to the Partnership | $ | (266 | ) | $ | 48 | $ | (149 | ) | $ | 96 |
FFO2 | $ | 90 | $ | 108 | $ | 197 | $ | 213 |
BIPC reported net losses for the quarter of
Our business generated FFO of
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
1.
2. 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.
Consolidated Statements of Financial Position
As of | |||||
US$ millions, unaudited | 2020 | 2019 | |||
Assets | |||||
Cash and cash equivalents | $ | 161 | $ | 204 | |
Accounts receivable and other | 351 | 390 | |||
Financial assets | 56 | 29 | |||
Property, plant and equipment | 4,309 | 4,497 | |||
Intangible assets | 2,849 | 3,936 | |||
499 | 667 | ||||
Deferred tax asset and other | 129 | 130 | |||
Total assets | $ | 8,354 | $ | 9,853 | |
Liabilities and Equity | |||||
Accounts payable and other | $ | 419 | $ | 487 | |
Exchangeable and class B shares | 1,851 | – | |||
Non-recourse borrowings | 3,114 | 3,526 | |||
Loans payable to Brookfield Infrastructure | 1,120 | – | |||
Financial liabilities | 1,013 | 1,008 | |||
Deferred tax liabilities and other | 1,354 | 1,555 | |||
Equity | |||||
Equity in net assets attributable to the Partnership | (1,611 | ) | 1,654 | ||
Non-controlling interest | 1,094 | 1,623 | |||
Total equity | (517 | ) | 3,277 | ||
Total liabilities and equity | $ | 8,354 | $ | 9,853 |
Consolidated Statements of Operating Results
US$ millions, unaudited | For the three months ended | For the six months ended | ||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Revenues | $ | 322 | $ | 404 | $ | 706 | $ | 807 | ||||
Direct operating costs | (54 | ) | (58 | ) | (116 | ) | (116 | ) | ||||
General and administrative expense | (8 | ) | (7 | ) | (14 | ) | (13 | ) | ||||
Depreciation and amortization expense | (67 | ) | (77 | ) | (143 | ) | (156 | ) | ||||
193 | 262 | 433 | 522 | |||||||||
Interest expense | (62 | ) | (40 | ) | (94 | ) | (81 | ) | ||||
Mark-to-market on hedging items and foreign currency revaluation | (20 | ) | (3 | ) | (22 | ) | (1 | ) | ||||
Remeasurement of exchangeable and class B shares | (238 | ) | – | (140 | ) | – | ||||||
Other expense | (15 | ) | (9 | ) | (25 | ) | (21 | ) | ||||
Income before income tax | (142 | ) | 210 | 152 | 419 | |||||||
Income tax expense | ||||||||||||
Current | (35 | ) | (43 | ) | (79 | ) | (87 | ) | ||||
Deferred | (17 | ) | (24 | ) | (66 | ) | (48 | ) | ||||
Net income | $ | (194 | ) | $ | 143 | $ | 7 | $ | 284 | |||
Attributable to: | ||||||||||||
Partnership | $ | (266 | ) | $ | 48 | $ | (149 | ) | $ | 96 | ||
Non-controlling interest | 72 | 95 | 156 | 188 |
Consolidated Statements of Cash Flows
US$ millions, unaudited | For the three months ended | For the six months ended | ||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Operating Activities | ||||||||||||
Net income | $ | (194 | ) | $ | 143 | $ | 7 | $ | 284 | |||
Adjusted for the following items: | ||||||||||||
Depreciation and amortization expense | 67 | 77 | 143 | 156 | ||||||||
Mark-to-market on hedging items, provisions and other | 35 | 18 | 48 | 27 | ||||||||
Remeasurement of exchangeable and class B shares | 238 | – | 140 | – | ||||||||
Deferred income tax expense | 17 | 24 | 66 | 48 | ||||||||
Change in non-cash working capital, net | 5 | (7 | ) | (56 | ) | 4 | ||||||
Cash from operating activities | 168 | 255 | 348 | 519 | ||||||||
Investing Activities | ||||||||||||
Purchase of long-lived assets, net of disposals | (63 | ) | (103 | ) | (184 | ) | (198 | ) | ||||
Cash used by investing activities | (63 | ) | (103 | ) | (184 | ) | (198 | ) | ||||
Financing Activities | ||||||||||||
Affiliate distributions to non-controlling interest | (87 | ) | (108 | ) | (188 | ) | (204 | ) | ||||
Distributions to, net of contributions from, the Partnership | — | (39 | ) | (33 | ) | (72 | ) | |||||
Proceeds from non-recourse borrowings | — | 51 | 435 | 108 | ||||||||
Repayments of non-recourse borrowings | — | (21 | ) | (380 | ) | (41 | ) | |||||
Cash used by financing activities | (87 | ) | (117 | ) | (166 | ) | (209 | ) | ||||
Cash and cash equivalents | ||||||||||||
Change during the period | $ | 18 | $ | 35 | $ | (2 | ) | $ | 112 | |||
Impact of foreign exchange on cash | — | 3 | (41 | ) | 1 | |||||||
Balance, beginning of period | 143 | 174 | 204 | 99 | ||||||||
Balance, end of period | $ | 161 | $ | 212 | $ | 161 | $ | 212 |
Statements of Funds from Operations
For the three months ended | For the six months ended | |||||||||||
US$ millions, unaudited | 2020 | 2019 | 2020 | 2019 | ||||||||
Adjusted EBITDA | ||||||||||||
Utilities | $ | 124 | $ | 146 | $ | 266 | $ | 288 | ||||
Corporate | (8 | ) | (7 | ) | (14 | ) | (13 | ) | ||||
Total | 116 | 139 | 252 | 275 | ||||||||
Financing costs | (17 | ) | (20 | ) | (36 | ) | (40 | ) | ||||
Other income | (9 | ) | (11 | ) | (19 | ) | (22 | ) | ||||
Funds from operations (FFO) | 90 | 108 | 197 | 213 | ||||||||
Depreciation and amortization | (36 | ) | (37 | ) | (74 | ) | (74 | ) | ||||
Deferred taxes and other items | (320 | ) | (23 | ) | (272 | ) | (43 | ) | ||||
Net income attributable to the Partnership | $ | (266 | ) | $ | 48 | $ | (149 | ) | $ | 96 |
Notes:
Funds from operations in this statement is on a segmented basis and represents the operations of
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.
Source:
2020 GlobeNewswire, Inc., source