Mr. Sam Pollock reports
BROOKFIELD INFRASTRUCTURE ANNOUNCES YEAR-END 2011 RESULTS
Brookfield Infrastructure Partners LP has provided its results for the year ended Dec. 31, 2011.
Three months ended Year ended
Dec. 31, Dec. 31,
(in millions of U.S. dollars) 2011 2010 2011 2010
FFO (1) $95 $46 $392 $197
Per unit (2) $0.54 $0.39 $2.41 $1.79
Net income $54 $407 $187 $458
Per unit (2) $0.30 $3.41 $1.15 $4.17
Brookfield Infrastructure posted strong results for the year ended Dec. 31, 2011, with funds from operations (FFO) (1) totalling $392-million ($2.41 per unit) compared with FFO of $197-million ($1.79 per unit) in 2010. The 35-per-cent increase in FFO per unit was largely attributable to accretion from the merger with Prime Infrastructure during the fourth quarter of 2010. Results also reflect a significant increase in FFO from Brookfield Infrastructure's utilities and timber segments, partially offset by below average performance in its transport and energy segment.
"Brookfield Infrastructure units provided a total return to unitholders of 39 per cent (3) in 2011. The strong performance in the unit price reflects the growth in our distributions and the significant investor interest in companies such as Brookfield Infrastructure with secure cash flows and growth generated from self-sustaining business models," said Sam Pollock, chief executive officer of Brookfield Infrastructure Group. "Our performance in 2011 also demonstrates our diversification, which has enabled our business to produce stable cash flow throughout very challenging economic conditions."
Mr.
Pollock added, "We expect to increase our funds from operations in the future through both organic growth and acquisitions, while maintaining a conservative, investment grade balance sheet."
Segment performance
Brookfield Infrastructure's utilities segment generated FFO of $275-million in 2011, versus $144-million in 2010. In addition to the favourable impact of the Prime merger, growth in this segment was driven by its U.K.-regulated distribution business. The transport and energy segment generated FFO of $167-million, compared with $91-million in 2010. This segment's performance was negatively impacted by adverse operating conditions in both its North American gas transmission business and Australian railway.
Brookfield Infrastructure's timber operations reported FFO of $33-million in 2011, compared with $11-million last year. Realized prices increased by 14 per cent versus last year, reflecting strong demand from Asian markets. In response to this price environment, Brookfield Infrastructure increased its harvest by 28 per cent over last year. For the year, the timber segment's earnings before interest, taxes, depreciation and amortization (EBITDA) margin was 39 per cent.
The attached table presents net income and FFO by segment.
Three months ended Year ended
Dec. 31, Dec. 31,
In millions of U.S. dollars 2011 2010 2011 2010
Net income (loss) by segment
Utilities $56 $7 $163 $45
Transport and energy (4) 29 47 75
Timber 46 17 91 24
Corporate and other (44) 354 (114) 314
---- ---- ---- ----
Net income $54 $407 $187 $458
==== ==== ==== ====
FFO by segment
Utilities $71 $42 $275 $144
Transport and energy 44 19 167 91
Timber 5 2 33 11
Corporate and other (25) (17) (83) (49)
---- ---- ---- ----
FFO $95 $46 $392 $197
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Increased distributions
The board of directors has declared a quarterly distribution in the amount of 37.5 U.S. cents per unit, payable on March 30, 2012, to unitholders of record as at the close of business on Feb. 29, 2012. This distribution represents a 7-per-cent increase, and it is consistent with Brookfield Infrastructure's policy of targeting a sustainable distribution in the range of 60 to 70 per cent of FFO. For 2011, Brookfield Infrastructure's distribution implied a payout ratio (4) of 55 per cent of FFO.
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.
Renewal of normal course issuer bid
The Toronto Stock Exchange accepted a notice filed by Brookfield Infrastructure of its intention to renew its normal course issuer bid. Brookfield Infrastructure believes that in the event that limited partnership units trade in a price range that does not fully reflect their value, the acquisition of units may represent an attractive use of available funds.
Under the normal course issuer bid, the board of directors of the general partner of Brookfield Infrastructure authorized Brookfield Infrastructure to repurchase up to $40-million of units. Under the rules of the Toronto Stock Exchange, Brookfield Infrastructure may purchase an aggregate of up to 13,003,085 units, representing 10 per cent of the public float of the units on Jan. 31, 2012. At the close of business on Jan. 31, 2012, there were issued and outstanding 132,352,111 units and a public float of 130,030,851 units. Under the normal course issuer bid, Brookfield Infrastructure may purchase up to 24,339 units on the Toronto Stock Exchange during any trading day, which represents 25 per cent of the average daily trading volume of the units on the Toronto Stock Exchange for the six months ended Jan. 31, 2012. Repurchases are authorized to commence on Feb. 13, 2012, and will terminate on Feb. 12, 2013, or earlier should Brookfield Infrastructure complete its repurchases prior to such date. All purchases will be made through the facilities of the Toronto Stock Exchange or the New York Stock Exchange, and all units acquired under the normal course issuer bid will be cancelled. Brookfield Infrastructure did not acquire any units in the past 12 months under its previous normal course issuer bid, which expired on Dec. 9, 2011. Repurchases will be subject to compliance with applicable United States federal securities laws, including Rule 10b-18 under the United States Securities Exchange Act of 1934, as amended, as well as applicable Canadian securities laws.
Additional information
The letter to unitholders and the supplemental information for the three and 12 months ended Dec. 31, 2011, contain further information on Brookfield Infrastructure's strategy, operations and financial results. Unitholders are encouraged to read these documents, which are available at the company's website.
The 2011 fourth quarter results conference call can be accessed via webcast
on Feb. 9, 2012, at 9 a.m. ET at the company's website 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 (pound sign)) until midnight on March 9, 2012.
(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 and 12 months ended Dec. 31, 2011, at
the company's website.
(2) Average number of units outstanding on a fully diluted weighted average
basis for the three and 12 months ended Dec. 31, 2011, was
approximately 177.3 million and 162.5 million, respectively (2010
-- 119.4 million and 109.9 million).
(3) Based on trading prices on the New York Stock Exchange.
(4) Payout ratio is defined as distributions to unitholders divided by FFO.
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATING RESULTS
(in millions of U.S. dollars)
For the three-month For the 12-month
period ended period ended
Dec. 31, Dec. 31,
2011 2010 2011 2010
Revenues $404 $216 $1,636 $634
Direct operating costs (230) (149) (899) (413)
General and administrative
expenses (18) (12) (61) (35)
------ ------ ------ ------
156 55 676 186
------ ------ ------ ------
Investment income 5 5 13 9
Interest expense (85) (46) (335) (144)
Earnings (losses) from
investments in associates 38 (4) 76 52
Depreciation and
amortization expense (37) (14) (127) (29)
Fair value gains and other
items - 424 - 424
Fair value adjustments 210 4 356 12
Other expenses (66) (19) (61) (24)
------ ------ ------ ------
Income before income tax 221 405 598 486
Income tax (expense)
recovery (66) 25 (158) 15
------ ------ ------ ------
Net income $155 $430 $440 $501
====== ====== ====== ======
Net income attributable to
non-controlling interest (101) (23) (253) (43)
Net income attributable to
partnership $54 $407 $187 $458
====== ====== ====== ======
We seek Safe Harbor.
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