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Press release from Marketwire

Brookfield Infrastructure Reports Strong 2012 First Quarter Results

Tuesday, May 08, 2012

Brookfield Infrastructure Reports Strong 2012 First Quarter Results07:30 EDT Tuesday, May 08, 2012HAMILTON, BERMUDA--(Marketwire - May 8, 2012) - Brookfield Infrastructure (NYSE:BIP)(TSX:BIP.UN) -Investors, analysts and other interested parties can access Brookfield Infrastructure's 2012 first quarter results as well as the Letter to Unitholders and Supplemental Information on the web site under the Investor Relations section at www.brookfieldinfrastructure.com.The 2012 first quarter results conference call can be accessed via webcast on May 8, 2012 at 9:00 a.m. ET at www.brookfieldinfrastructure.com or via teleconference at 1-800-319-4610 toll free in North America. For overseas calls please dial 1-412-858-4600, at approximately 8:50 a.m. ET. The teleconference taped rebroadcast can be accessed at 1-800-319-6413 (password: 9245#) until midnight on June 8, 2012.Brookfield Infrastructure today announced its results for the first quarter ended March 31, 2012. Three months ended Mar 31US$ millions (except per unit amounts)20122011FFO(1)$108$98- per unit(2)$0.58$0.62Net income$14$45- per unit(2)$0.08$0.29Brookfield Infrastructure posted strong results for the quarter ended March 31, 2012 with funds from operations ("FFO")(1) totalling $108 million ($0.58 per unit) compared to FFO of $98 million ($0.62 per unit) in the first quarter of 2011. Results reflect a significant increase in FFO from Brookfield Infrastructure's transport and energy segment, partially offset by below average performance in its timber business. Per unit FFO of $0.58 was modestly lower than the prior year due to the impact of an equity issuance in October of last year, which primarily funded the expansion of the Partnership's Australian railroad. Cash flow from this investment will continue to rise over the next four quarters. Following a 7% distribution increase in February 2012, the payout ratio(3) for the quarter will be 65%, at the mid-point of the targeted range of 60% to 70%. "Organic growth initiatives, such as the expansion of our Australian railroad, are beginning to contribute meaningfully to our business. Cash flow from this investment will continue to ramp up during the course of the year," said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure Group. "We are working on a number of opportunities to increase the cash flow in all our operating platforms by developing organic projects and selectively making acquisitions."Segment PerformanceBrookfield Infrastructure's increase in FFO was primarily driven by the Partnership's transport and energy segment with FFO of $62 million, compared to $45 million the previous year. This segment's strong performance reflects a doubling of FFO from its Australian railroad, as a result of contribution from three expansion projects that have been commissioned and an increase in grain volume following a record harvest in Western Australia.Brookfield Infrastructure's utilities segment generated FFO of $65 million in the first quarter of 2012, versus $61 million in the first quarter of 2011. The increase in FFO was driven by inflation indexation, favourable foreign exchange rates, and additions to rate base across the majority of its operations.Brookfield Infrastructure's timber operations reported FFO of $6 million in the first quarter of 2012, compared to $10 million in 2011. This segment's performance was negatively impacted by a decline in realized prices due to a build up of inventory primarily in the Chinese market, which was partially offset by firm demand from Japan.The following table presents net income and FFO by segment: Three months ended Mar 31US$ millions, unaudited20122011Net income by segmentUtilities$32$30Transport and energy2630Timber(10)6Corporate and other(34)(21)Net income$14$45FFO by segmentUtilities$65$61Transport and energy6245Timber610Corporate and other(25)(18)FFO$108$98Investment Grade Credit Rating Brookfield Infrastructure recently engaged Standard & Poor's (S&P) in a ratings advisory role in relation to the issuance of corporate debt. S&P has initiated coverage of Brookfield Infrastructure with an investment grade rating of BBB+. Brookfield Infrastructure anticipates completing the corporate debt issue in the next two quarters.Distribution Declaration The Board of Directors has declared a quarterly distribution in the amount of US$0.375 per unit, payable on June 29, 2012 to unitholders of record as at the close of business on May 31, 2012. Distributions are eligible for reinvestment under the Partnership's Distribution Reinvestment Plan. Information on this Plan and on declared distributions can be found on Brookfield Infrastructure's website under Investor Relations/Distributions.Additional InformationThe Letter to Unitholders and the Supplemental Information for the three months ended March 31, 2012 contain further information on Brookfield Infrastructure's strategy, operations and financial results. Unitholders are encouraged to read these documents, which are available at www.brookfieldinfrastructure.com.Brookfield Infrastructureoperates high quality, long-life assets that generate stable cash flows, require relatively minimal maintenance capital expenditures and, by virtue of barriers to entry and other characteristics, tend to appreciate in value over time. Its current business consists of the ownership and operation of premier utilities, transport and energy, and timber assets in North and South America, Australasia, and Europe. It also seeks acquisition opportunities in other infrastructure sectors with similar attributes. The payout policy targets 3% to 7% annual growth in distributions. Units trade on the New York and Toronto stock exchanges under the symbols BIP and BIP.UN, respectively. For more information, please visit Brookfield Infrastructure's website at www.brookfieldinfrastructure.com.Note: This news release contains forward-looking information within the meaning of Canadian provincial securities laws and "forward-looking statements" within the meaning of Section 27A of the 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", "could", "estimate", "tend to", "continue", "believe", "expect", "target" 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 expansion of Brookfield Infrastructure's business and funds from operations through growth opportunities within its operations and the level of distribution growth over the next several years, as well as our ability to access corporate debt at a low cost. 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 the Partnership and 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, the ability to achieve growth within Brookfield Infrastructure's businesses and in particular completion on time and on budget of various large capital projects at some of the mining customers of our railroad business, which themselves depend on access to capital and continuing favourable commodity prices, the competitive business environment for our timber operations, the fact that success of Brookfield Infrastructure is dependent on market demand for an infrastructure company, which is unknown, the availability of equity and debt financing for Brookfield Infrastructure, the ability to effectively complete new acquisitions in the competitive infrastructure space and to integrate acquisitions into existing operations, 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 subsidiary and operating entities.References to the Partnership are to Brookfield Infrastructure Partners L.P.(1)FFO is equal to net income plus depreciation, depletion and amortization, deferred taxes and certain other items. A reconciliation of net income to FFO is available in the Partnership's Supplemental Information for the three months ended March 31, 2012 at www.brookfieldinfrastructure.com.(2)Average number of units outstanding on a fully diluted time weighted average basis for the three months ended March 31, 2012 was 185.1 million (2011 -157.4 million).(3)Payout ratio is defined as distributions to unitholders divided by FFO.Brookfield Infrastructure Partners L.P.Statements of Funds from OperationsFor the three month period ended March 31(US$ millions, except per unit information, unaudited)20122011Operating platforms - revenues less direct costsUtilities$104$97Transport and energy10384Timber1217Corporate and other(20)(13)Total operating platforms - revenues less direct costs199185Financing costs(93)(89)Other income22Total funds from operations (FFO)10898Depreciation and amortization(70)(48)Deferred income taxes and other items(24)(5)Net income attributable to partnership$14$45Funds from operations (FFO) per unit$0.58$0.62Net income per unit$0.08$0.29Notes:Funds from operations in this statement is on a segmented basis and represents the operations of Brookfield Infrastructure net of charges associated with related liabilities and non-controlling interests. Readers are encouraged to refer to Brookfield Infrastructure's Supplemental Information which is available at www.brookfieldinfrastructure.com.The Statements of Funds from Operations above are prepared on a basis that is consistent with the Partnership's Supplemental Information and differs from net income (loss) as presented in Brookfield Infrastructure's Consolidated Statements of Operating Results on page 7 of this release, which is prepared in accordance with IFRS. Management uses funds from operations (FFO) as a key measure to evaluate performance and to determine the underlying value of its businesses. Readers are encouraged to consider both measures in assessing Brookfield Infrastructure's results.Brookfield Infrastructure Partners L.P.Statements of Partnership CapitalNet Invested Capital(US$ millions, except per unit information, unaudited)March 31, 2012December 31, 2011AssetsOperating PlatformsUtilities$1,435$1,324Transport and energy2,2712,214Timber635648Cash and cash equivalents579Other assets2155$4,367$4,320LiabilitiesCorporate borrowings$32$-Non-recourse borrowings120114152114CapitalizationPartnership capital4,2154,206$4,367$4,320Net book value per unit$22.77$22.72Notes:Partnership capital in these statements represents Brookfield Infrastructure's investments in its operations on a segmented basis, net of underlying liabilities and non-controlling interests. Accordingly, the statements above differ from Brookfield Infrastructure's Consolidated Statements of Financial Position contained in its financial statements, which are prepared in accordance with IFRS. Readers are encouraged to consider both bases of presentation in assessing Brookfield Infrastructure's financial position and to refer to Brookfield Infrastructure's Supplemental Information, available at www.brookfieldinfrastructure.com.Brookfield Infrastructure Partners L.P.Consolidated Statements of Financial PositionAs of(US$ millions, unaudited)March 31, 2012December 31, 2011AssetsCash and cash equivalents$119$153Accounts receivable and other252215Other current assets107110Total current assets478478Property, plant and equipment4,8914,073Intangible assets2,9652,924Standing timber2,8852,890Investments in associates1,4211,400Goodwill604591Investment properties197194Deferred income taxes and other763719Total assets$14,204$13,269Liabilities and partnership capitalAccounts payable and other$416$381Non-recourse borrowings681145Total current liabilities1,097526Corporate borrowings32-Non-recourse borrowings4,5364,740Deferred income taxes and other2,3572,094Preferred shares2020Total liabilities8,0427,380Partnership capitalNon-controlling interest1,9471,683Limited partners' capital3,5403,539General partner capital1919Retained earnings201260Reserves455388Total partnership capital6,1625,889Total liabilities and partnership capital$14,204$13,269Brookfield Infrastructure Partners L.P.Consolidated Statements of Operating ResultsFor the three-month period endedMarch 31,(US$ millions, unaudited)20122011Revenues$451$390Direct operating costs(240)(202)General and administrative expenses(20)(14)Depreciation and amortization expense(49)(25)142149Interest expense(95)(83)Share of earnings from investments in associates112Fair value adjustments(6)(5)Other expenses(22)(4)Income before income tax2069Income tax recovery32Net income$23$71Net (income) attributable to non-controlling interest(9)(26)Net income attributable to partnership$14$45Net income per partnership unit$0.08$0.29Calculation of Limited partners' interest in net income attributable to partnership:Net income attributable to partnership$14$45Less: General partner interest(4)-Limited partners' interest in net income$10$45Earnings per unit:Basic and diluted earnings per unit attributable to:Limited partners$0.05$0.29Brookfield Infrastructure Partners L.P.Consolidated Statements of Cash FlowsFor the three-month period endedMarch 31,(US$ millions, unaudited)20122011Operating ActivitiesNet income$23$71Adjusted for the following items:Earnings from investments in associates, net of distributions received6(12)Depreciation and amortization expense4925Fair value adjustments65Provisions and other items205Deferred tax recovery(4)(3)Change in restricted cash1(12)Change in non-cash working capital, net(1)36Cash from operating activities100115Investing ActivitiesAcquisition of subsidiary, net of cash acquired(55)-Investments in long-lived assets(138)(75)Net settlement of foreign exchange contracts9(6)Cash used by investing activities(184)(81)Financing ActivitiesDistribution to unitholders(73)(49)Corporate borrowings3285Subsidiary borrowings11245Subsidiary distributions to non-controlling interest(22)(15)Cash from financing activities4966Cash and cash equivalentsChange during the period(35)100Impact of foreign exchange on cash15Balance, beginning of period153154Balance, end of period$119$259FOR FURTHER INFORMATION PLEASE CONTACT: Katherine VyseInvestors: Brookfield InfrastructureSenior Vice President, Investor Relations416-369-8246katherine.vyse@brookfield.comORAndrew WillisMedia: Brookfield InfrastructureSenior Vice President, Communications and Media416-369-8236andrew.willis@brookfield.comwww.brookfieldinfrastructure.com