GlobeNewswire Inc | May 6, 2021 06:45AM EDT

May 06, 2021

BROOKFIELD, NEWS, May 06, 2021 (GLOBE NEWSWIRE) -- Brookfield Infrastructure (NYSE: BIP; TSX: BIP.UN) today announced its results for the first quarter ended March 31, 2021.

After an incredibly resilient 2020, our business continued into 2021 with a powerful start to the year, led by strong organic growth and several advanced capital recycling initiatives, said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure. We are well-positioned to benefit from an extended period of economic expansion, given our inflation-linked revenues and businesses with positive linkage to GDP growth.

For the three months ended March 31US$ millions (except per unit amounts), unaudited^1 2021 2020Net income^2 $ 190 $ 119 ? per unit^3 $ 0.27 $ 0.13 FFO^4 $ 431 $ 358 ? per unit (split-adjusted)^5 $ 0.93 $ 0.77

Brookfield reported net income for the three-month period ended March 31, 2021 of $190 million ($0.27 per unit) compared to $119 million ($0.13 per unit) in the prior year. Net income per unit more than doubled, reflecting strong organic growth and contributions from recently completed acquisitions. Current year results also benefited from favorable commodity markets and the recognition of a gain on the partial disposition of our U.S. gas pipeline. These positive factors were partially offset by lower unrealized gains recognized on our corporate hedging program relative to the prior year.

Funds from Operations (or FFO) of $431 million for the quarter increased by 20% over the same period last year as a result of strong base business growth and the contribution from new investments acquired in 2020. FFO grew organically by 8% due to inflationary tariff increases, modestly higher volumes associated with the early stages of the economic recovery, and the completion of $800 million of new capital projects during the last 12 months. Results for the quarter were further supplemented by favorable market dynamics produced by weather events that led to exceptional performance in our midstream segment. These positive factors were partially offset by the impact of foreign exchange in a number of our segments and a higher management fee relative to the prior year.

Segment Performance

The utilities segment generated FFO of $166 million, an improvement of 7% over the prior year on a constant currency basis. All businesses within the segment are performing well, with results benefiting from inflation indexation and the commissioning of $375 million of capital into rate base during the last 12 months. These contributions were partially offset by the sale of two mature businesses in 2020.

FFO for our transport segment was $162 million, an increase of 17% compared to the prior year. The gradual reopening of economies has contributed to volume growth at our rail and ports businesses. Supported by robust demand for commodities in Australia and Brazil, volumes on our rail networks increased almost 10%. Container volumes at our ports increased by almost 20% compared to the prior year, driven primarily by consumer led activity in the U.S. and Australia. Results also benefited from the contribution of our U.S. LNG export terminal that was acquired in September. These positive factors were partially offset by asset sales as a result of capital recycling and foreign exchange.

FFO from our midstream segment totaled $146 million, a nearly twofold increase compared to the prior year. Strong performance reflects robust customer demand and the completion of an expansion project at our U.S. gas pipeline. Results for the quarter also benefited from the operational strength and preparedness of our gas storage business through the extreme weather conditions experienced in the U.S. Going forward, the continued development of the Montney Basin by producers with LNG Canada commitments should provide a further uplift to the segment as customers contract the unused capacity in our infrastructure.

FFO from the data segment totaled $60 million, an increase of over 40% compared to the prior year. This reflects the contribution of the Indian telecom tower acquisition completed in August, as well as organic growth of 7% across our existing businesses. This organic growth includes inflationary price increases built into our telecom tower and data center customer contracts, as well as the rollout of additional points-of-presence and fiber-to-the-home at our French telecom operation.

The following table presents FFO by segment:

For the three months ended March 31US$ millions, unaudited 2021 2020FFO by segment Utilities $ 166 $ 165 Transport 162 139 Midstream 146 77 Data 60 42 Corporate (103 ) (65 )FFO $ 431 $ 358

Update on Strategic Initiatives

We completed or advanced several important initiatives in the first quarter of 2021:

I.U.S. Gas Pipeline In early March, we completed the sale of a 25% minority interest (BIPs share 12.5%). Net proceeds to BIP totaled $412 million, which equates to an enterprise value of approximately $5.2 billion on a 100% basis. The transaction valued the company approximately $300 million above our IFRS carrying value. Further, since the recapitalization of the business in 2015, over 75% of invested capital has been returned to Brookfield Infrastructure and we realized an IRR of 21% on the partial sale.

II.North American District Energy Business As discussed in the prior quarter, we are advancing two separate transactions to complete the divestment of our U.S. and Canadian district energy platforms. These sales achieve a multiple of capital of over six times and underscore the meaningful value created over eight years of ownership. We anticipate closing of the Canadian transaction to occur in the next month, with the sale of the U.S. operation following shortly thereafter. Total proceeds to Brookfield Infrastructure from these sales are approximately $950million.

III.Portfolio of Smart Meters in the U.K. Subsequent to quarter end, we agreed to sell our portfolio of smart meters in the U.K. at an attractive valuation reflecting the highly contracted nature of the business and high growth trajectory under the U.K.s energy transition plan. The portfolio will be carved out of our U.K. regulated distribution business and sold on a stand-alone basis. During our ownership period and including the proceeds from the sale, we earned an IRR of 58%. Brookfield Infrastructure will receive net proceeds after debt repayment of approximately $350 million.

IV. Inter Pipeline Ltd. In February, Brookfield Infrastructure and its institutional partners formally launched a $5.0 billion takeover offer to shareholders of IPL to privatize the company. If successful, Brookfield Infrastructure will deploy approximately $2billion, comprised of cash and shares of BIPC, into a high-quality portfolio of Canadian midstream assets. We believe that IPL, as part of a larger, more diversified enterprise, will benefit from our proven operating capabilities, our renewable energy expertise as well as stewardship around ESG transition investing.

V.Brazilian Regulated Transmission Business Subsequent to quarter-end, Brookfield Infrastructure, alongside its institutional partners, acquired from Petrobras the remaining 10% interest in our Brazilian regulated gas transmission business not already owned. We are funding the acquisition with additional asset-level debt and thus do not require further capital. The investment is a great opportunity to increase our exposure to a fully contracted, inflation-linked cash flow producing asset that we have owned and operated for four years, and therefore know very well.

Board of Directors Update

We welcome the re-appointment of John Mullen as an independent Director of both BIP and BIPC effective from May 5, 2021. John formerly served as a director of the Partnership from May 2017 to February 2020. John has a long and distinguished career as an executive and a director, having held senior positions in multinational transportation and logistics companies for more than two decades. John was formerly the Chief Executive of DHL Global, and Managing Director and Chief Executive of Asciano Limited. John is currently the Chair of Telstra Corporation Limited, Australias largest telecommunications company, and also the Chair of Brambles Limited, a supply-chain logistics company operating in more than 60 countries.

Distribution and Dividend Declaration

The Board of Directors has declared a quarterly distribution in the amount of $0.51 per unit, payable on June 30, 2021 to unitholders of record as at the close of business on May 31, 2021. This distribution represents a 5% increase compared to the prior year. The regular quarterly dividends on the Cumulative Class A Preferred Limited Partnership Units, Series 1, Series 3, Series 5, Series 7, Series 9, Series 11, Series 13 and Series 14 have also been declared, as well as the dividend for BIP Investment Corporation Senior Preferred Shares, Series 1. In conjunction with the Partnerships distribution declaration, the Board of Directors of BIPC has declared an equivalent quarterly dividend of $0.51 per share, also payable on June30, 2021 to shareholders of record as at the close of business on May31, 2021.

Additional Information

The Board has reviewed and approved this news release, including the summarized unaudited financial information contained herein.

Brookfield Infrastructures Letter to Unitholders and Supplemental Information are available at www.brookfield.com/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 across North and South America, Asia Pacific and Europe. We are focused on assets that generate stable cash flows and require minimal maintenance capital expenditures. Investors can access its portfolio either through Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN), a Bermuda-based limited partnership, or Brookfield Infrastructure Corporation (NYSE, TSX: BIPC), a Canadian corporation. Further information is available at www.brookfield.com/infrastructure.

Brookfield Infrastructure is the flagship listed infrastructure company of Brookfield Asset Management, a global alternative asset manager with over $600 billion of assets under management. For more information, go to www.brookfield.com.

Please note that Brookfield Infrastructure Partners previous audited annual and unaudited quarterly reports have been filed on SEDAR and Edgar, and can also be found in the shareholders section of its website at www.brookfield.com/infrastructure. Hard copies of the annual and quarterly reports can be obtained free of charge upon request.

For more information, please contact:

Media: Investors:Claire Holland Kate WhiteSenior Vice President, Communications Manager, Investor RelationsTel: (416) 369-8236 Tel: (416) 956-5183Email: claire.holland@brookfield.com Email: kate.white@brookfield.com

Conference Call and Quarterly Earnings Details

Investors, analysts and other interested parties can access Brookfield Infrastructures First Quarter 2021 Results as well as the Letter to Unitholders and Supplemental Information on Brookfield Infrastructures website under the Investor Relations section at www.brookfield.com/infrastructure.

The conference call can be accessed via webcast on May 6, 2021 at 9:00 a.m. Eastern Time at https://edge.media-server.com/mmc/p/9ux6ugkb 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: 7676738).

Note: This news release may contain 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, target, future, growth, expect, believe, may, derivatives thereof 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 may include statements regarding expansion of Brookfield Infrastructures business, the likelihood and timing of successfully completing the transactions referred to in this news release, statements with respect to our assets tending to appreciate in value over time, the future performance of acquired businesses and growth initiatives, the commissioning of our capital backlog, the pursuit of projects in our pipeline, the level of distribution growth over the next several years and our expectations regarding returns to our unitholders as a result of such growth. 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 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 and services, the ability to achieve growth within Brookfield Infrastructures businesses and in particular completion on time and on budget of various large capital projects, which themselves depend on access to capital and continuing favourable commodity prices, and our ability to achieve the milestones necessary to deliver the targeted returns to our unitholders, the impact of market conditions on our businesses, 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 impact of health pandemics such as the COVID-19 on our business and operations, the ability to effectively complete transactions in the competitive infrastructure space (including the ability to complete announced and potential transactions that may be subject to conditions precedent, and the inability to reach final agreement with counterparties to transactions referred to in this press release as being currently pursued, given that there can be no assurance that any such transaction will be agreed to or completed) and to integrate acquisitions into existing operations, the future performance of these acquisitions, changes in technology which have the potential to disrupt the business and industries in which we invest, the market conditions of key commodities, the price, supply or demand for which can have a significant impact upon the financial and operating performance of our business 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 Infrastructures 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 subsidiaries and operating entities. Brookfield Infrastructures results include limited partnership units held by public unitholders, redeemable partnership units, general partnership units, Exchange LP units, and BIPC exchangeable shares.

References to the Partnership are to Brookfield Infrastructure Partners L.P.

-- Please refer to page 12 for results of Brookfield Infrastructure Corporation. -- Includes net income attributable to limited partners, the general partner, and non-controlling interests Redeemable Partnership Units held by Brookfield, Exchange LP Units, and BIPC exchangeable shares. -- Average number of limited partnership units outstanding on a time weighted average basis for the three-month period ended March31, 2021 was 295.4million (2020 293.6million). Earnings per limited partnership unit for the three-month period ended March 31, 2020 have been adjusted to reflect the dilutive impact of the special distribution. -- FFO is defined as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. A reconciliation of net income to FFO is available on page 9 of this release. -- Average number of partnership units outstanding on a fully diluted time weighted average basis for the three-month period ended March31, 2021 was 465.0 million (2020: 464.8 million, adjusted for the BIPC special distribution).

Brookfield Infrastructure Partners L.P.Consolidated Statements of Financial Position

As of March Dec 31,US$ millions, unaudited 31, 2020 2021 Assets Cash and cash equivalents $ 1,140 $ 867 Financial assets 464 425 Property, plant and equipment and investment 29,735 32,102 propertiesIntangible assets and goodwill 18,377 18,401 Investments in associates and joint ventures 4,972 5,528 Deferred income taxes and other 6,554 4,008 Total assets $ 61,242 $ 61,331 Liabilities and partnership capital Corporate borrowings $ 2,422 $ 3,158 Non-recourse borrowings 19,431 20,020 Financial liabilities 3,128 3,374 Deferred income taxes and other 14,309 13,106 Partnership capital Limited partners 4,129 4,233 General partner 19 19 Non-controlling interest attributable to: Redeemable partnership units held by Brookfield 1,643 1,687 BIPC exchangeable shares and Exchange LP units 633 650 Interest of others in operating subsidiaries 14,204 13,954 Preferred unitholders 1,324 1,130 Total partnership capital 21,952 21,673 Total liabilities and partnership capital $ 61,242 $ 61,331

Brookfield Infrastructure Partners L.P.Consolidated Statements of Operating Results

For the three months ended March 31US$ millions, except per unit information, unaudited 2021 2020 Revenues $ 2,683 $ 2,196 Direct operating costs (1,346 ) (1,239 )General and administrative expense (95 ) (61 )Depreciation and amortization expense (469 ) (400 ) 773 496 Interest expense (355 ) (282 )Share of earnings from associates and joint ventures 67 48 Mark-to-market on hedging items 35 198 Other income (expense) 27 (206 )Income before income tax 547 254 Income tax expense Current (94 ) (58 )Deferred (40 ) (48 )Net income 413 148 Non-controlling interest of others in operating (223 ) (29 )subsidiariesNet income attributable to partnership $ 190 $ 119 Attributable to: Limited partners $ 89 $ 52 General partner 50 46 Non-controlling interest Redeemable partnership units held by Brookfield 37 21 BIPC exchangeable shares and Exchange LP units 14 ? Basic and diluted earnings per unit attributable to: Limited partners^1 $ 0.27 $ 0.13

-- Average number of limited partnership units outstanding on a time weighted average basis for the three-month period ended March31, 2021 was 295.4million (2020 293.6million). Earnings per limited partnership unit for the three-month period ended March 31, 2020 have been adjusted to reflect the dilutive impact of the special distribution.

Brookfield Infrastructure Partners L.P.Consolidated Statements of Cash Flows

For the three months ended March 31US$ millions, unaudited 2021 2020 Operating Activities Net income $ 413 $ 148 Adjusted for the following items: Earnings from investments in associates and joint ventures, (8 ) 45 net of distributions receivedDepreciation and amortization expense 469 400 Mark-to-market on hedging items, provisions and other (94 ) 181 Deferred income tax expense 40 48 Change in non-cash working capital, net (94 ) (100 )Cash from operating activities 726 722 Investing Activities Net (investments in) proceeds from: Operating assets (96 ) 722 Sale of associates 412 ? Long-lived assets (321 ) (376 )Financial assets 125 (153 )Net settlements of foreign exchange contracts 1 82 Cash from investing activities 121 275 Financing Activities Distributions to limited and general partners (303 ) (282 )Net (repayments) borrowings: Corporate (764 ) 393 Subsidiary 173 159 Deposit received from parent 400 ? Preferred units issued 194 ? Partnership units issued 3 2 Net capital provided to non-controlling interest and other (245 ) (792 )Cash used by financing activities (542 ) (520 ) Cash and cash equivalents Change during the period $ 305 $ 477 Cash reclassified as held for sale (6 ) ? Impact of foreign exchange on cash (26 ) (78 )Balance, beginning of period 867 827 Balance, end of period $ 1,140 $ 1,226

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

For the three months ended March 31US$ millions, unaudited 2021 2020 Adjusted EBITDA Utilities $ 223 $ 214 Transport 233 195 Midstream 185 100 Data 82 56 Corporate (95 ) (61 )Total 628 504 Financing costs (186 ) (151 )Other (expense) income (11 ) 5 Funds from operations (FFO) 431 358 Depreciation and amortization (280 ) (247 )Deferred taxes and other items 39 8 Net income attributable to the partnership $ 190 $ 119

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. Adjusted EBITDA is defined as FFO excluding the impact of interest expense and other income or expenses. Net income attributable to the partnership includes net income attributable to limited partners, the general partner, and non-controlling interests redeemable partnership units held by Brookfield, Exchange LP Units and BIPC exchangeable shares.

The Statements of Funds from Operations above are prepared on a basis that is consistent with the Partnerships Supplemental Information and differs from net income as presented in Brookfield Infrastructures 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 operating performance. Readers are encouraged to consider both measures in assessing Brookfield Infrastructures results.

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

For the three months ended March 31US$, unaudited 2021 2020 Earnings per limited partnership unit^1 $ 0.27 $ 0.13 Add back or deduct the following: Depreciation and amortization 0.60 0.53 Deferred taxes and other items 0.06 0.11 FFO per unit^2 $ 0.93 $ 0.77

-- Average number of limited partnership units outstanding on a time weighted average basis for the three-month period ended March31, 2021 was 295.4million (2020 293.6million). Earnings per limited partnership unit for the three-month period ended March 31, 2020 have been adjusted to reflect the dilutive impact of the special distribution. -- Average number of partnership units outstanding on a fully diluted time weighted average basis for the three-month period ended March31, 2021 was 465.0 million (2020: 464.8 million, adjusted for the BIPC special distribution).

Notes:

The Statements of Funds from Operations per unit above are prepared on a basis that is consistent with the Partnerships Supplemental Information and differs from net income per limited partnership unit as presented in Brookfield Infrastructures Consolidated Statements of Operating Results on page 7 of this release, which is prepared in accordance with IFRS. Management uses Funds from Operations per unit (FFO per unit) as a key measure to evaluate operating performance. Readers are encouraged to consider both measures in assessing Brookfield Infrastructures results.

Brookfield Infrastructure Partners L.P. Statements of Partnership Capital

As ofUS$ millions, unaudited March 31, Dec 31, 2021 2020 Assets Operating groups Utilities $ 2,902 $ 2,896 Transport 4,081 4,209 Midstream 1,989 2,245 Data 1,924 1,995 Cash and cash equivalents 500 464 $ 11,396 $ 11,809 Liabilities Corporate borrowings $ 2,422 $ 3,158 Other liabilities 2,550 2,062 4,972 5,220 Capitalization Partnership capital 6,424 6,589 $ 11,396 $ 11,809

Notes:

Partnership capital in these statements represents Brookfield Infrastructures investments in its operations on a segmented basis, net of underlying liabilities and non-controlling interests, and includes partnership capital attributable to limited partners, the general partner and non-controlling interests redeemable partnership units held by Brookfield, Exchange LP Units, and BIPC exchangeable shares.

The Statements of Partnership Capital above are prepared on a basis that is consistent with the Partnerships Supplemental Information and differs from the Brookfield Infrastructures Consolidated Statements of Financial Position on page 6 of this release, which is prepared in accordance with IFRS. Readers are encouraged to consider both bases of presentation in assessing Brookfield Infrastructures financial position.

Brookfield Infrastructure Corporation ReportsFirst Quarter 2021 Results

The Board of Directors of Brookfield Infrastructure Corporation (BIPC or our company) (NYSE, TSX: BIPC) today has declared a quarterly dividend in the amount of $0.51 per class A exchangeable subordinate voting share of BIPC (a Share), payable on June 30, 2021 to shareholders of record as at the close of business on May 31, 2021. This dividend is identical in amount per Share and has identical record and payment dates to the quarterly distribution announced today by BIP on BIPs units.

The Shares of BIPC are structured with the intention of being economically equivalent to the non-voting limited partnership units of Brookfield Infrastructure Partnership L.P. (BIP or the Partnership) (NYSE: BIP; TSX: BIP.UN). We believe economic equivalence is achieved through identical dividends and distributions on the Shares and BIPs units and each Share being exchangeable at the option of the holder for one BIP unit at any time. Given the economic equivalence, we expect that the market price of the Shares will be significantly impacted by the market price of BIPs units and the combined business performance of our company and BIP as a whole. In addition to carefully considering the disclosure made in this news release in its entirety, shareholders are strongly encouraged to carefully review BIPs letter to unitholders, supplemental information and its other continuous disclosure filings. BIPs letter to unitholders and supplemental information are available at www.brookfield.com/infrastructure. Copies of the Partnerships continuous disclosure filings are available electronically on EDGAR on the SECs website at www.sec.gov or on SEDAR at www.sedar.com.

Results

The net income and Funds from Operations1 (FFO) of BIPC are captured in the Partnerships financial statements and results.

BIPC reported a net loss for the quarter of $178million compared to net income of $117million in the same period of the prior year2. Earnings for the current quarter benefited from capital commissioned into rate base at our U.K. regulated distribution business and inflation-indexation at our Brazilian regulated gas transmission business. These positive impacts were more than offset by revaluation losses recognized on the Shares that are classified as liabilities under IFRS, and the impact of foreign exchange. Excluding the revaluation of our Shares and the associated dividends paid, net income attributable to the Partnership was $18 million for the first quarter.

Our business generated FFO of $104 million for the quarter, representing a 6% increase on a constant currency basis. FFO in the current quarter benefited from inflationary-indexation and additions to rate base, however these positive factors were more than offset by an increase in management fees attributable to our company and the impact of foreign exchange.

Note: This news release may contain 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 believe, expect, will derivatives thereof 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 the impact of the market price of BIPs units and the combined business performance of our company and BIP as a whole on the market price of the Shares. 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 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 and services, the ability to achieve growth within Brookfield Infrastructures businesses and in particular completion on time and on budget of various large capital projects, which themselves depend on access to capital and continuing favorable commodity prices, and our ability to achieve the milestones necessary to deliver the targeted returns to our unitholders, the impact of market conditions on our businesses, 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 transactions in the competitive infrastructure space (including the ability to complete announced and potential transactions that may be subject to conditions precedent, and the inability to reach final agreement with counterparties to transactions being currently pursued, given that there can be no assurance that any such transaction will be agreed to or completed) and to integrate acquisitions into existing operations, the future performance of these acquisitions, changes in technology which have the potential to disrupt the business and industries in which we invest, the market conditions of key commodities, the price, supply or demand for which can have a significant impact upon the financial and operating performance of our business and other risks and factors described in the documents filed by BIPC with the securities regulators in Canada and the United States including Risk Factors in BIPCs most recent Annual Report on Form 20-F and other risks and factors that are described therein. Except as required by law, Brookfield Infrastructure Corporation 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.

-- FFO is defined as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. We also exclude from FFO dividends paid to the holders of the Shares which are presented as interest expense, as well as interest expense on loans payable to the Partnership which represent the Partnerships investment in our company. A reconciliation of net income to FFO is available on page 17 of this release. -- Brookfield Infrastructure Corporation was established on August 30, 2019 by the Partnership. On March 30, 2020, the Partnership contributed its regulated utilities businesses in Brazil and the U.K. to our company.For the periods prior to March 30, 2020, the financial statements represent a combined carve-out of the assets, liabilities, revenues, expenses, and cash flows of the businesses that were contributed to our company effective March 30, 2020.

Brookfield Infrastructure CorporationConsolidated Statements of Financial Position

As ofUS$ millions, unaudited March 31, Dec 31, 2021 2020 Assets Cash and cash equivalents $ 124 $ 192 Accounts receivable and other 415 394 Property, plant and equipment 5,208 5,111 Intangible assets 2,661 2,948 Goodwill 485 528 Deferred tax asset and other 169 171 Total assets $ 9,062 $ 9,344 Liabilities and Equity Accounts payable and other $ 433 $ 505 Exchangeable and class B shares 2,394 2,221 Non-recourse borrowings 3,435 3,477 Loans payable to Brookfield Infrastructure 1,153 1,143 Financial liabilities 1,041 1,031 Deferred tax liabilities and other 1,518 1,539 Equity Equity in net assets attributable to the Partnership (1,932 ) (1,722 )Non-controlling interest 1,020 1,150 Total equity (912 ) (572 )Total liabilities and equity $ 9,062 $ 9,344

Brookfield Infrastructure CorporationConsolidated Statements of Operating Results

For the three months ended March 31US$ millions, unaudited 2021 2020 Revenues $ 399 $ 384 Direct operating costs (69 ) (62 )Depreciation and amortization expense (75 ) (76 ) 255 246 Interest expense (63 ) (32 )Remeasurement of exchangeable and class B shares (173 ) 98 Mark-to-market and other expenses (34 ) (18 )(Loss) income before income tax (15 ) 294 Income tax expense Current (53 ) (44 )Deferred (18 ) (49 )Net (loss) income $ (86 ) $ 201 Attributable to: Partnership $ (178 ) $ 117 Non-controlling interest 92 84

Brookfield Infrastructure CorporationConsolidated Statements of Cash Flows

For the three months ended March 31US$ millions, unaudited 2021 2020 Operating Activities Net (loss) income $ (86 ) $ 201 Adjusted for the following items: Depreciation and amortization expense 75 76 Mark-to-market on hedging items and other 21 13 Remeasurement of exchangeable and class B shares 173 (98 )Deferred income tax expense 18 49 Change in non-cash working capital, net (77 ) (61 )Cash from operating activities 124 180 Investing Activities Purchase of long-lived assets, net of disposals (95 ) (121 )Cash used by investing activities (95 ) (121 ) Financing Activities Distributions to non-controlling interest (106 ) (101 )Distributions to, net of contributions from, the ? (33 )PartnershipProceeds from borrowings 46 435 Repayments of borrowings (18 ) (380 )Cash used by financing activities (78 ) (79 ) Cash and cash equivalents Change during the period $ (49 ) $ (20 )Impact of foreign exchange on cash (19 ) (41 )Balance, beginning of period 192 204 Balance, end of period $ 124 $ 143

Brookfield Infrastructure CorporationStatements of Funds from Operations

For the three months ended March 31US$ millions, unaudited 2021 2020 Adjusted EBITDA Utilities $ 146 $ 142 Corporate (10 ) (6 )Total 136 136 Financing costs (18 ) (19 )Other expenses (14 ) (10 )Funds from operations (FFO) 104 107 Depreciation and amortization (41 ) (38 )Remeasurement of exchangeable and class B shares (173 ) 98 Deferred taxes and other items (68 ) (50 )Net (loss) income attributable to the Partnership $ (178 ) $ 117

Notes:

Funds from operations in this statement is on a segmented basis and represents the operations of Brookfield Infrastructure Corporation net of charges associated with related liabilities and non-controlling interests. Adjusted EBITDA is defined as FFO excluding the impact of interest expense and other income or expenses. Net income attributable to shareholders includes net income attributable to the Partnership prior to and after the special distribution.

The Statements of Funds from Operations above are prepared on a basis that differs from net income as presented in Brookfield Infrastructure Corporations Consolidated Statements of Operating Results on page 15 of this release, which is prepared in accordance with IFRS. Management uses FFO as a key measure to evaluate operating performance. Readers are encouraged to consider both measures in assessing our companys results.