Brookfield Infrastructure Partners L.P.
NYSE : BIP
TSX : BIP.UN

Brookfield Infrastructure Partners L.P.

May 06, 2011 07:30 ET

Brookfield Infrastructure Announces Strong First Quarter 2011 Results

HAMILTON, BERMUDA--(Marketwire - May 6, 2011) - Brookfield Infrastructure (NYSE:BIP)(TSX:BIP.UN) -

Investors, analysts and other interested parties can access Brookfield Infrastructure's 2011 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 2011 first quarter results conference call can be accessed via webcast on May 6, 2011 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#).

Brookfield Infrastructure (NYSE:BIP)(TSX:BIP.UN) today announced its results for the first quarter ended March 31, 2011.

US$ millions (except per unit amounts)1Three months ended March 31
20112010
FFO2$98$45
– per unit3$0.62$0.42
Net income (loss)$45$(1)
– per unit3$0.29$(0.01)

Brookfield Infrastructure posted strong results for the first quarter of 2011, with funds from operations ("FFO")2 totalling $98 million ($0.62 per unit) compared to FFO of $45 million ($0.42 per unit) in the first quarter 2010. The increase in FFO was largely attributable to the merger with Prime Infrastructure during the fourth quarter of 2010. However, results also reflect a solid performance from its utility business and a significant increase in FFO from its timber business, which offset some weakness in its transport and energy business. Overall, after deducting maintenance capital expenditures, Brookfield Infrastructure generated an adjusted funds from operations ("AFFO") yield4 of 10% for the quarter.

"Brookfield Infrastructure's strong performance during the quarter highlighted the benefits of our broadly diversified portfolio of assets," said Sam Pollock, Chief Executive Officer of Brookfield's Infrastructure Group. "We continue to expect our global mix of businesses to generate sustainable and growing cash flows, benefitting from economic growth and rising commodity prices."

Segment Performance

Brookfield Infrastructure's utilities segment generated FFO of $61 million in the first quarter 2011, with an AFFO yield of 13%5. Performance was driven by strong performances from its Australian coal terminal, its Chilean electricity transmission and its UK distribution businesses. The transport and energy segment generated FFO of $45 million, with an AFFO yield of 8%. This quarter's results reflect the rate settlement and weak conditions in the U.S. natural gas market, which negatively impacted Brookfield Infrastructure's natural gas transmission business, as well as the drought in Western Australia, which reduced the volume of grain transported on its railroad.

Timber operations reported FFO of $10 million in the first quarter 2011, compared to $2 million in the first quarter of last year, driven by continued strength in the export market and a sharp increase in pricing in the U.S. domestic market. On average, export prices increased by 22% and domestic prices rose by 18%, versus the first quarter of 2010. In response, Brookfield Infrastructure increased its harvest levels by 29%, versus the comparable period last year.

The following table presents net income and FFO by segment:

US$ millions, unauditedThree months ended March 31
2011 2010
Net income (loss) by segment
Utilities $ 30 $ 11
Transport and energy30 10
Timber6 3
Corporate(21) (25)
Net income (loss) $ 45 $ (1)
FFO by segment
Utilities $ 61 $ 27
Transport and energy45 27
Timber10 2
Corporate(18) (11)
FFO $ 98 $ 45

Distribution Declaration

The Board of Directors has declared the Partnership's quarterly distribution in the amount of US$0.31 per unit, payable on June 30, 2011 to unitholders of record as at the close of business on May 31, 2011. During the first quarter, Brookfield Infrastructure's distribution implied a payout ratio6 of 50% of FFO, on a recurring basis, which is below its targeted range of 60% to 70%.

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 Information

The Letter to Unitholders and the Supplemental Information for the three months ended March 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 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", "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 through growth opportunities within its operations, the level of distribution growth over the next several years, and future distribution growth prospects in general. 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 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 Brookfield Infrastructure's first quarter 2011 and 2010 results, outlined above, reflect the adoption of International Financial Reporting Standards ("IFRS"). In addition, to assist the Partnership's unitholders in evaluating the performance of its expanded operations, the results are reported as operating segments, grouped according to similarities in underlying revenue frameworks: utilities, transport and energy and timber.
2 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, 2011 at www.brookfieldinfrastructure.com.
3 Average number of units outstanding on a fully diluted weighted average basis for the first quarter of 2011 was approximately 157.4 million (Q1 -2010 - 106.7 million).
4 AFFO yield is equal to FFO less maintenance capital expenditures divided by average invested capital, expressed on an annualized basis.
5 AFFO yield at Brookfield Infrastructure's utilities segment excludes impact of developer contributions at our European energy distribution operation.
6 Payout ratio is defined as distributions to unitholders divided by FFO.

Brookfield Infrastructure Partners L.P.
Statements of Funds from Operations

(US$ millions, except per unit information, unaudited)For the three-month period ended March 31
20112010
Operating platforms – revenues less direct costs
Utilities$97$48
Transport and Energy8446
Timber178
Corporate and other(13)(8)
Total operating platforms – revenues less direct costs18594
Interest and other income11
Expenses
Financing costs8947
Cash taxes(1)3
Total funds from operations$98$45
Depreciation and amortization(48)(31)
Deferred income taxes and other items(5)(15)
Net income (loss) attributable to partnership$45$(1)
Fund from operations per unit$0.62$0.42
Net income (loss) per unit$0.29$(0.01)

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. Readers are encouraged to refer to Brookfield Infrastructure's Financial Review and Supplemental Information which is available at www.brookfieldinfrastructure.com.

The basis of presentation in this statement differs from the Consolidated and Combined Statements of Operating Results on page 7.

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 and Combined Statements of Operations on page 7 of this release, which is prepared in accordance with IFRS. Management uses funds from operations 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 Invested Capital

Net Invested Capital
(US$ millions, unaudited)March 31, 2011December 31, 2010
Assets
Operating Platforms
Utilities$1,346$1,370
Transport and Energy1,5661,451
Timber610602
Cash and financial assets2115
Other assets225190
$3,768$3,628
Liabilities
Corporate borrowings$103$18
Non-recourse borrowings110113
Other liabilities170117
383248
Capitalization
Partnership capital3,3853,380
$3,768$3,628
Net book value per unit$21.51$21.47
Notes:
Invested capital in these statements represents the capital invested by Brookfield Infrastructure 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 and Combined Balance Sheets contained in its annual 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 Financial Review and Supplemental Information, available at http://www.brookfieldinfrastructure.com/.

Brookfield Infrastructure Partners L.P.
Consolidated and Combined Statements of Financial Position
(US$ millions, unaudited)As of
March 31, 2011
As of
December 31, 2010
Assets
Current assets
Cash and cash equivalents$259$154
Accounts receivable and other176187
Inventory5238
Financial assets (current)56
Assets classified as held for sale1,8721,859
Current assets2,3642,244
Property, plant and equipment3,1152,995
Intangible assets2,9342,903
Standing timber2,5742,578
Investments in associates1,0791,069
Goodwill591591
Investment properties179175
Financial assets (non-current)120118
Other assets (non-current)6259
Deferred income tax asset438377
Total assets$13,456$13,109
Liabilities and partnership capital
Accounts payable and other$275$240
Non-recourse borrowings (current)301615
Financial liabilities (current)2829
Liabilities directly associated with assets classified as held for sale1,8721,859
Total current liabilities2,4762,743
Corporate borrowings10318
Non-recourse borrowings (non-current)4,3783,960
Financial liabilities (non-current)10197
Other liabilities (non-current)278261
Deferred income tax liabilities1,0931,025
Preferred shares2020
Total liabilities8,4498,124
Partnership capital
Limited partner's capital2,8812,881
General partners' capital1919
Retained earnings299302
Other comprehensive income186178
Non-controlling interest1,6221,605
Total partnership capital5,0074,985
Total liabilities and partnership capital$13,456$13,109

Brookfield Infrastructure Partners L.P.
Consolidated and Combined Statements of Operating Results
(US$ millions, unaudited)For the three-month period ended March 31
20112010
Revenues$390$136
Cost of revenues(202)(87)
General and administrative expenses(13)(8)
Gross margin17541
Interest expense(83)(31)
Income before under noted9210
Earnings from investments in associates121
Depreciation and amortization expense(25)(5)
Fair value adjustments(5)6
Other expense(5)(2)
Income before income tax6910
Income tax recovery (expense)2(3)
Net income$71$7
Net (income) attributable to non-controlling interests(26)(8)
Net income (loss) attributable to partnership$45$(1)

Brookfield Infrastructure Partners L.P.
Consolidated and Combined Statements of Cash Flows
For the three-month period ended March 31
(US$ millions, unaudited)20112010
Operating Activities
Net income$71$7
Adjusted for the following items:
Earnings from investments in associates(12)(1)
Depreciation and amortization expense255
Fair value adjustments5(6)
Provisions and other items52
Deferred tax recovery(3)1
Change in restricted cash(12)
Impact of foreign exchange on cash5(1)
Change in non-cash working capital, net3610
Cash from operating activities12017
Investing Activities
Investments in or partial sale of operating assets
Additional investments in associates(3)(11)
Partial sale of operating assets29
Long-lived assets(72)(3)
Net settlement of foreign exchange contracts(6)
Cash (used by) from investing activities(81)15
Financing Activities
Distribution to unitholders(49)(29)
Corporate borrowings103
Subsidiary borrowings27(16)
Distributions to non-controlling interest(15)
Cash from (used by) financing activities66(45)
Cash and cash equivalents
Change during the year105(13)
Balance, beginning of period154107
Balance, end of period$259$94

Contact Information