Brookfield Infrastructure Partners LP has released its results for the fourth quarter ended Dec. 31, 2021.
"Two thousand twenty-one was a remarkable year for Brookfield Infrastructure, highlighted by our strong organic growth, capital recycling accomplishments, and the deployment of significant capital into new investments and other growth initiatives," said Sam Pollock, chief executive officer of Brookfield Infrastructure. "We begin this year with a strong liquidity position and half of our 2022 deployment target already secured."
FINANCIAL HIGHLIGHTS (in millions, except per-unit amounts) For the three months ended Dec. 31, For the 12 months ended Dec. 31, 2021 2020 2021 2020 Net income attributable to the partnership $138 $331 $1,093 $394 Per unit 0.14 0.58 1.74 0.35 FFO 486 398 1,733 1,454 Per unit (split-adjusted) 0.97 0.86 3.64 3.13
For the year ended Dec. 31, 2021, the partnership reported net income attributable to the partnership of $1.1-billion compared with $400-million for the prior year. Current year results reflect strong operating performance and organic growth across the partnership's portfolio, in addition to the initial contribution from growth capital deployed during the year. Net income in the current year also includes gains associated with the disposition of several businesses completed during the year, most notably the sale of the partnership's district energy portfolio. These positive factors were partially offset by an increase in future U.K. tax rates, which led to the recognition of a non-recurring deferred tax expense during the year.
Funds from operations (or FFO) of $1.7-billion for the year reflects a 19-per-cent increase compared with 2020. Results were supported by strong growth from the partnership's base business, the full recovery from shutdown-related effects experienced in 2020, and the significant contribution from over $3-billion deployed in growth initiatives. Organic growth for the year of 9 per cent reflected the initial benefits of elevated inflation levels, the commissioning of nearly $900-million in new capital projects over the past year, and higher market-sensitive revenues driven primarily by increased demand for transportation services. FFO excludes the earnings associated with the sale of various assets, which generated approximately $2-billion of net proceeds for Brookfield Infrastructure in 2021.
The utilities segment generated FFO of $705-million compared with $659-million in the prior year. FFO growth on a same-store basis was 11 per cent. This growth reflects inflation indexation, the commissioning of approximately $430-million of capital into rate base during the year, and higher connections activity at the partnership's U.K. regulated distribution business. Two thousand twenty-one results also reflect the acquisition of an additional interest in the partnership's Brazilian regulated gas transmission operation completed in April. Comparative period financial results included a full year of earnings from the partnership's U.K. smart meter portfolio and North American district energy platform, both of which the partnership sold in the first half of 2021.
FFO for the transport segment was $701-million, an improvement of nearly 20 per cent compared with the prior year. Results benefited from strong organic growth driven by volume increases, inflationary tariff increases and a full-year contribution from the partnership's U.S. LNG (liquefied natural gas) export terminal. The partnership's transport segment is a significant beneficiary of the robust economic recovery occurring in most of the partnership's investment markets. Prior-year results included approximately $25-million of additional earnings associated with the partial disposition of the partnership's Australian export terminal and Chilean toll road operation completed in the past 12 months.
FFO for the midstream segment totalled $492-million in 2021, an increase of approximately $200-million, or 70 per cent, compared with the prior year. This step-change increase reflects the acquisition of IPL, which was completed in the fourth quarter. Current year results also reflect elevated commodity prices across the partnership's existing businesses. This price environment and record storage volumes following extraordinary performance in the first quarter of the year led to same-store growth of 43 per cent. Prior-year results reflected an additional 12.5-per-cent ownership in the partnership's U.S. gas pipeline, which was sold in March.
The data segment generated FFO of $238-million in 2021, an increase of 21 per cent. Results reflect the construction of 12,000 telecom tower sites across the partnership's portfolios in India and France to accommodate mobile data growth and corresponding network densification requirements. The partnership's highly contracted data transmission and storage businesses have also benefited from inflation indexation and higher rates across the portfolio.
Update on strategic initiatives
The partnership completed or advanced several important initiatives in, and subsequent to, the fourth quarter of 2021:
Australian regulated utility -- The closing of the partnership's investment in AusNet Services Ltd. is ahead of schedule and expected to occur mid-February, after having received shareholder approval in late January. This portfolio of high-quality utility businesses in Victoria, Australia, provides electricity and gas transmission and distribution services across its critical networks. The partnership is excited to own a highly coveted perpetual regulated utility franchise that is well positioned to participate in the decarbonization of Victoria's economy to meet its legislated 2050 net zero target. The partnership expects to invest approximately $500-million.
Australian smart meters -- In December, the partnership agreed to acquire a 50-per-cent interest in Intellihub, the leading provider of electricity smart meters in Australia and New Zealand. Total equity required for the investment is approximately $870-million (the partnership's share $215-million). The business has 1.2 million meters leased and contractual relationships with energy retailers that cover 99 per cent of the consumer market. The partnership believes that point-of-consumption metering will continue to be an essential component of the electricity network with digitalization and decarbonization goals accelerating the deployment of smart meters in the region. The transaction is expected to close in late Q1 2022.
Distribution and dividend increase
The board of directors has declared a quarterly distribution in the amount of 54 cents per unit, payable on March 31, 2022, to unitholders of record as at the close of business on Feb. 28, 2022. This distribution represents a 6-per-cent increase compared with the prior year. The regular quarterly dividends on the cumulative Class A preferred limited partnership units, Series 1, Series 3, Series 7, Series 9, Series 11, Series 13 and Series 14, have also been declared, as well as the dividend for BIP Investment Corp. senior preferred shares, Series 1. In conjunction with the partnership's distribution declaration, the board of directors of BIPC has declared an equivalent quarterly dividend of 54 cents per share, also payable on March 31, 2022, to shareholders of record as at the close of business on Feb. 28, 2022.
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 the partnership's website.
About Brookfield Infrastructure Partners L
Brookfield Infrastructure is a leading global infrastructure company that owns and operates high-quality, long-life assets in the utilities, transport, mid-stream and data sectors across North and South America, Asia Pacific, and Europe. The company is focused on assets that have contracted and regulated revenues that generate predictable and stable cash flows. Investors can access its portfolio either through Brookfield Infrastructure Partners LP, a Bermuda-based limited partnership, or Brookfield Infrastructure Corp., a Canadian corporation.
Conference call and quarterly earnings details
Investors, analysts and other interested parties can access Brookfield Infrastructure's 2021 year-end results as well as the letter to unitholders and supplemental information on Brookfield Infrastructure's website under the investor relations section at the partnership's website.
The conference call can be accessed via webcast on Feb. 2, 2022, at 9 a.m. Eastern Time or via teleconference at 1-866-688-9459 toll-free in North America. For overseas calls please dial 1-409-216-0834, at approximately 8:50 a.m. Eastern Time. A recording of the teleconference can be accessed at 1-855-859-2056 or 1-404-357-3406 (conference ID: 7897200).
CONSOLIDATED STATEMENTS OF OPERATING RESULTS (in millions, except per-unit information) For the three months For the 12 months ended Dec. 31, ended Dec. 31, 2021 2020 2021 2020 Revenues $3,252 $2,534 $11,537 $8,885 Direct operating (costs) (2,375) (1,875) (8,247) (6,548) General and administrative (expense) (113) (93) (406) (312) 764 566 2,884 2,025 Interest (expense) (383) (372) (1,468) (1,179) Share of (losses) earnings from associates and joint ventures (13) 55 88 131 Mark-to-market on hedging items (loss) 84 (73) 80 (16) Other income 91 452 1,749 234 Income before income tax 543 628 3,333 1,195 Income tax (expense) recovery Current (expense) (115) (54) (374) (237) Deferred (expense) 36 - (240) (54) Net income 464 574 2,719 904 Non-controlling interest of others in operating subsidiaries (loss) (326) (243) (1,626) (510) Net income attributable to partnership 138 331 1,093 394 Attributable to Limited partners 50 182 556 141 General partner 56 46 210 183 Non-controlling interest Redeemable partnership units held by Brookfield 20 74 229 55 Exchangeable units/shares 12 29 98 15 Basic and diluted earnings per unit attributable to Limited partners 0.14 0.58 1.74 0.35