Brookfield Infrastructure Partners(BIP) - 2024 Q1 - Quarterly Report

Brookfield Infrastructure Partners L.P. (BIP) 2023 Year-End Results Financial Highlights Brookfield Infrastructure Partners reported strong 2023 results, with Funds from Operations (FFO) increasing 10% to $2.3 billion, driven by 8% organic growth and contributions from new investments, while Net income attributable to the partnership was $432 million | Financial Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net income attributable to the partnership | $432 million | $407 million | | Net income per unit | $0.14 | $0.14 | | Funds from Operations (FFO) | $2,288 million | $2,087 million | | FFO per unit | $2.95 | $2.71 | - FFO growth of 10% was supported by 8% organic growth, reflecting strong inflation linkage, volume growth, and the commissioning of approximately $1 billion in new capital projects[5] - Over $2 billion was deployed into new investments in Q3 and Q4 2023, which favorably impacted results, partially offset by $1.9 billion of asset sales that closed in Q2 2023[5] - CEO Sam Pollock stated, "We believe 2024 will be an even better year, and we are already off to a strong start on our capital recycling and deployment initiatives"[4] Segment Performance Overall FFO growth was driven by strong performance in the Utilities and Transport segments, which increased by 19% and 12% respectively, with the Data segment also seeing a 15% increase due to acquisitions, partially offset by a decline in the Midstream segment primarily from a partial asset sale | FFO by Segment (US$ millions) | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Utilities | $879 | $739 | +19% | | Transport | $888 | $794 | +12% | | Midstream | $684 | $743 | -8% | | Data | $275 | $239 | +15% | | Total FFO | $2,288 | $2,087 | +10% | Utilities The Utilities segment generated FFO of $879 million, a 19% increase from the prior year, primarily driven by inflation indexation of approximately 6%, contributions from $500 million of newly commissioned capital, and strong performance from the HomeServe business acquired in January 2023 - FFO increased by 19% to $879 million in 2023 from $739 million in 2022[6] - Key growth drivers included inflation indexation (~6%), commissioning of ~$500 million of capital into the rate base, and the acquisition of HomeServe[6] Transport The Transport segment's FFO increased by 12% to $888 million, supported by inflationary tariff increases and higher volumes across its networks, with rail networks seeing an 8% rate increase and 2% volume growth, and toll roads experiencing a 4% increase in traffic and 9% tariff growth, alongside a positive contribution from the acquisition of Triton - FFO increased by 12% to $888 million in 2023 from $794 million in 2022[7] - Performance drivers included: - Rail networks: 8% average annual rate increase and 2% volume growth - Toll roads: 4% increase in traffic levels and 9% tariff increase - Contribution from the acquisition of Triton, a global intermodal logistics operation[7] Midstream The Midstream segment's FFO decreased to $684 million from $743 million in the previous year, primarily due to the partial sale of a U.S. gas pipeline and normalization of market-sensitive revenues, though results were supported by increased utilization and higher contracted cash flows - FFO declined to $684 million in 2023 from $743 million in 2022[8] - The decrease was mainly due to the partial sale of a U.S. gas pipeline and normalization of market-sensitive revenues at a Canadian midstream business[8] Data The Data segment's FFO grew by 15% to $275 million, largely driven by three significant acquisitions completed during the year, including a European telecom tower operation and two hyperscale data center platforms - FFO increased by 15% to $275 million in 2023 from $239 million in 2022[1] - Growth was primarily attributable to three large-scale acquisitions made during the year[1] Update on Strategic Initiatives In 2023, the company deployed over $2 billion in acquisitions, including Triton and two hyperscale data center platforms, and post-year-end, acquired 40 data center sites from Cyxtera for approximately $1.3 billion and American Tower's India operations for $2 billion, while progressing on its capital recycling plan targeting $2 billion in proceeds for 2024 - Deployed over $2 billion in three acquisitions in 2023, including the take-private of Triton and two hyperscale data center platforms[9] - Acquired 40 data center sites from Cyxtera for ~$1.3 billion, creating a leading retail colocation provider in North America[10] - Acquired American Tower's operations in India (78,000 telecom sites) for $2 billion, creating one of the largest tower platforms globally with 253,000 sites[11] - The company is on track to achieve its $2 billion capital recycling target for 2024, having already generated $550 million from opportunistic financings of two North American pipeline operations[12] Distribution and Dividend Declaration The Board of Directors announced the 15th consecutive distribution increase, raising the quarterly payout by 6% to $0.405 per unit, payable on March 29, 2024, to unitholders of record as of February 29, 2024 - Declared a quarterly distribution of $0.405 per unit, representing a 6% increase compared to the prior year[3][13] - This marks the 15th consecutive distribution increase for the company[3] Consolidated Financial Statements This section presents the unaudited consolidated financial statements for Brookfield Infrastructure Partners L.P. as of and for the year ended December 31, 2023, including the Statement of Financial Position, Statement of Operating Results, and Statement of Cash Flows Consolidated Statements of Financial Position As of December 31, 2023, Total Assets increased to $100.8 billion from $73.0 billion in 2022, driven by significant growth in property, plant, and equipment, while Total Liabilities rose to $66.8 billion from $47.4 billion, primarily due to an increase in non-recourse borrowings | Balance Sheet Item (US$ millions) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Assets | $100,784 | $72,969 | | Total Liabilities | $66,768 | $47,415 | | Total Partnership Capital | $34,016 | $25,554 | Consolidated Statements of Operating Results For the year ended December 31, 2023, Revenues grew to $17.9 billion from $14.4 billion in 2022, with Net Income Attributable to Partnership at $432 million, a slight increase from $407 million in the prior year, as higher revenues were partially offset by increased direct operating and interest expenses | Income Statement Item (US$ millions) | 2023 | 2022 | | :--- | :--- | :--- | | Revenues | $17,931 | $14,427 | | Net Income | $1,448 | $1,375 | | Net Income Attributable to Partnership | $432 | $407 | Consolidated Statements of Cash Flows For 2023, Cash from operating activities increased to $4.1 billion, Cash used by investing activities was significantly higher at $13.0 billion due to acquisitions, and Cash from financing activities was a strong inflow of $9.4 billion, driven by new borrowings and capital from non-controlling interests, resulting in a net increase in cash of $507 million | Cash Flow Item (US$ millions) | 2023 | 2022 | | :--- | :--- | :--- | | Cash from operating activities | $4,078 | $3,131 | | Cash used by investing activities | $(12,990) | $(3,365) | | Cash from financing activities | $9,419 | $56 | | Change in cash during the period | $507 | $(178) | Reconciliation of Non-IFRS Measures This section provides a reconciliation of the non-IFRS measure, Funds from Operations (FFO), to the most directly comparable IFRS measure, Net Income, which management uses as a key measure to evaluate operating performance Reconciliation of Net Income to FFO For 2023, the company reconciled a Net Income of $1.45 billion to Funds from Operations (FFO) of $2.29 billion, with primary adjustments including adding back $2.74 billion in depreciation and amortization and including a $923 million FFO contribution from investments in associates and joint ventures | Reconciliation Item (US$ millions) | 2023 | 2022 | | :--- | :--- | :--- | | Net Income | $1,448 | $1,375 | | Depreciation and amortization | $2,739 | $2,158 | | FFO attributable to non-controlling interests | $(2,669) | $(2,348) | | Other adjustments | $769 | $902 | | FFO | $2,288 | $2,087 | Statements of Funds from Operations per Unit FFO per unit increased to $2.95 in 2023 from $2.71 in 2022, derived by adjusting the IFRS-based earnings per limited partnership unit for non-cash items like depreciation and amortization | FFO per Unit Calculation (US$) | 2023 | 2022 | | :--- | :--- | :--- | | Earnings per limited partnership unit | $0.14 | $0.14 | | Depreciation and amortization | $1.84 | $1.66 | | Deferred taxes and other items | $0.97 | $0.91 | | FFO per unit | $2.95 | $2.71 | Brookfield Infrastructure Corporation (BIPC) 2023 Year-End Results BIPC Financial Highlights and Dividend Brookfield Infrastructure Corporation (BIPC) reported 2023 net income of $606 million, a decrease from $1.6 billion in the prior year primarily due to the accounting revaluation of its own shares, though underlying earnings were modestly higher year-over-year, and the Board declared a 6% increase in the quarterly dividend to $0.405 per share, identical to the distribution on BIP units - BIPC reported net income of $606 million for 2023, compared to $1,619 million in 2022, with the decline mainly due to the impact of the revaluation of its own shares, which are classified as liabilities under IFRS[45] - The Board of Directors declared a quarterly dividend of $0.405 per share, a 6% increase from the prior year, which is economically equivalent to the BIP distribution[42] BIPC Consolidated Financial Statements This section presents the unaudited consolidated financial statements for Brookfield Infrastructure Corporation (BIPC) as of and for the year ended December 31, 2023, including the Statement of Financial Position, Statement of Operating Results, and Statement of Cash Flows BIPC Consolidated Statements of Financial Position As of December 31, 2023, BIPC's Total Assets grew significantly to $23.9 billion from $10.2 billion in 2022, driven by a large increase in property, plant, and equipment, while Total Liabilities also increased substantially, primarily due to a rise in non-recourse borrowings | Balance Sheet Item (US$ millions) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Assets | $23,909 | $10,178 | | Total Liabilities | $19,841 | $10,539 | | Total Equity | $4,068 | $(361) | BIPC Consolidated Statements of Operating Results For 2023, BIPC's Revenues increased to $2.5 billion from $1.9 billion in 2022, with Net Income at $606 million, down from $1.6 billion, largely due to a negative variance of over $1 billion in the 'Remeasurement of exchangeable and class B shares' line item compared to the prior year | Income Statement Item (US$ millions) | 2023 | 2022 | | :--- | :--- | :--- | | Revenues | $2,503 | $1,886 | | Remeasurement of exchangeable shares | $34 | $1,058 | | Net Income | $606 | $1,619 | BIPC Consolidated Statements of Cash Flows For 2023, BIPC generated $1.06 billion in Cash from operating activities, with Cash used by investing activities increasing to $3.17 billion due to acquisitions, and Financing activities providing a net cash inflow of $2.18 billion, resulting in a net increase in cash of $68 million for the year | Cash Flow Item (US$ millions) | 2023 | 2022 | | :--- | :--- | :--- | | Cash from operating activities | $1,059 | $893 | | Cash used by investing activities | $(3,174) | $(1,047) | | Cash from (used by) financing activities | $2,183 | $(4) | | Change in cash during the period | $68 | $(158) | Other Information 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, focusing on assets with contracted and regulated revenues that generate stable cash flows, and is the flagship listed infrastructure company of Brookfield Asset Management - The company owns and operates assets across the utilities, transport, midstream, and data sectors in the Americas, Asia Pacific, and Europe[19] - It is the flagship listed infrastructure company of Brookfield Asset Management, a global alternative asset manager with over $850 billion of assets under management[20] Forward-Looking Statements This news release contains forward-looking statements regarding business expansion, transaction completions, and future performance, with the company cautioning that these statements are based on reasonable assumptions but are subject to known and unknown risks and uncertainties that could cause actual results to differ materially - The document contains forward-looking information concerning future events, trends, and prospects, which are not historical facts[22] - Readers are cautioned not to place undue reliance on these statements as future performance is subject to numerous risks and uncertainties, including economic conditions, market demand, and the ability to complete and integrate transactions[23]