Intrinsic value of Brookfield Infrastructure Partners LP - BIP

Previous Close

$44.82

  Intrinsic Value

$209.47

stock screener

  Rating & Target

str. buy

+367%

Previous close

$44.82

 
Intrinsic value

$209.47

 
Up/down potential

+367%

 
Rating

str. buy

We calculate the intrinsic value of BIP stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 12.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  31.60
  28.94
  26.55
  24.39
  22.45
  20.71
  19.14
  17.72
  16.45
  15.31
  14.27
  13.35
  12.51
  11.76
  11.09
  10.48
  9.93
  9.44
  8.99
  8.59
  8.23
  7.91
  7.62
  7.36
  7.12
  6.91
  6.72
  6.55
  6.39
  6.25
Revenue, $m
  6,122
  7,894
  9,989
  12,426
  15,216
  18,366
  21,881
  25,759
  29,996
  34,587
  39,525
  44,800
  50,406
  56,334
  62,579
  69,135
  76,000
  83,171
  90,650
  98,440
  106,545
  114,974
  123,734
  132,838
  142,298
  152,131
  162,352
  172,981
  184,038
  195,545
Variable operating expenses, $m
  3,698
  4,320
  5,055
  5,910
  6,889
  7,995
  9,228
  10,589
  12,076
  13,687
  13,871
  15,722
  17,689
  19,770
  21,961
  24,262
  26,671
  29,188
  31,813
  34,546
  37,391
  40,349
  43,423
  46,618
  49,938
  53,389
  56,976
  60,706
  64,586
  68,624
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,698
  4,320
  5,055
  5,910
  6,889
  7,995
  9,228
  10,589
  12,076
  13,687
  13,871
  15,722
  17,689
  19,770
  21,961
  24,262
  26,671
  29,188
  31,813
  34,546
  37,391
  40,349
  43,423
  46,618
  49,938
  53,389
  56,976
  60,706
  64,586
  68,624
Operating income, $m
  2,424
  3,574
  4,934
  6,516
  8,326
  10,371
  12,653
  15,170
  17,920
  20,900
  25,654
  29,078
  32,716
  36,564
  40,618
  44,873
  49,328
  53,983
  58,837
  63,894
  69,154
  74,625
  80,311
  86,220
  92,360
  98,742
  105,376
  112,275
  119,452
  126,921
EBITDA, $m
  4,765
  6,144
  7,776
  9,672
  11,844
  14,296
  17,032
  20,051
  23,349
  26,923
  30,766
  34,872
  39,236
  43,850
  48,711
  53,814
  59,158
  64,740
  70,562
  76,625
  82,934
  89,495
  96,314
  103,400
  110,764
  118,418
  126,374
  134,647
  143,254
  152,211
Interest expense (income), $m
  366
  885
  1,416
  2,055
  2,811
  3,689
  4,695
  5,831
  7,098
  8,497
  10,024
  11,680
  13,460
  15,362
  17,383
  19,521
  21,773
  24,137
  26,612
  29,197
  31,894
  34,703
  37,626
  40,665
  43,823
  47,106
  50,517
  54,062
  57,747
  61,580
  65,567
Earnings before tax, $m
  1,539
  2,158
  2,879
  3,705
  4,637
  5,676
  6,822
  8,071
  9,423
  10,875
  13,974
  15,618
  17,354
  19,181
  21,097
  23,100
  25,192
  27,371
  29,640
  31,999
  34,452
  36,999
  39,646
  42,397
  45,255
  48,225
  51,314
  54,527
  57,872
  61,354
Tax expense, $m
  416
  583
  777
  1,000
  1,252
  1,533
  1,842
  2,179
  2,544
  2,936
  3,773
  4,217
  4,686
  5,179
  5,696
  6,237
  6,802
  7,390
  8,003
  8,640
  9,302
  9,990
  10,705
  11,447
  12,219
  13,021
  13,855
  14,722
  15,625
  16,566
Net income, $m
  1,124
  1,575
  2,102
  2,705
  3,385
  4,144
  4,980
  5,892
  6,879
  7,939
  10,201
  11,401
  12,669
  14,002
  15,400
  16,863
  18,390
  19,981
  21,637
  23,359
  25,150
  27,010
  28,942
  30,950
  33,036
  35,204
  37,459
  39,805
  42,246
  44,789

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  48,205
  62,155
  78,655
  97,840
  119,808
  144,616
  172,291
  202,825
  236,191
  272,341
  311,217
  352,756
  396,895
  443,576
  492,747
  544,371
  598,422
  654,889
  713,780
  775,118
  838,940
  905,305
  974,285
  1,045,968
  1,120,460
  1,197,879
  1,278,360
  1,362,052
  1,449,115
  1,539,727
Adjusted assets (=assets-cash), $m
  48,205
  62,155
  78,655
  97,840
  119,808
  144,616
  172,291
  202,825
  236,191
  272,341
  311,217
  352,756
  396,895
  443,576
  492,747
  544,371
  598,422
  654,889
  713,780
  775,118
  838,940
  905,305
  974,285
  1,045,968
  1,120,460
  1,197,879
  1,278,360
  1,362,052
  1,449,115
  1,539,727
Revenue / Adjusted assets
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
Average production assets, $m
  23,753
  30,628
  38,758
  48,212
  59,036
  71,261
  84,898
  99,944
  116,385
  134,199
  153,355
  173,824
  195,574
  218,576
  242,806
  268,244
  294,878
  322,703
  351,722
  381,947
  413,396
  446,098
  480,088
  515,411
  552,118
  590,267
  629,925
  671,165
  714,066
  758,716
Working capital, $m
  6
  8
  10
  12
  15
  18
  22
  26
  30
  35
  40
  45
  50
  56
  63
  69
  76
  83
  91
  98
  107
  115
  124
  133
  142
  152
  162
  173
  184
  196
Total debt, $m
  26,226
  38,056
  52,048
  68,317
  86,945
  107,983
  131,451
  157,344
  185,638
  216,293
  249,260
  284,485
  321,915
  361,500
  403,198
  446,974
  492,809
  540,694
  590,634
  642,648
  696,769
  753,047
  811,541
  872,329
  935,498
  1,001,149
  1,069,397
  1,140,368
  1,214,198
  1,291,037
Total liabilities, $m
  40,878
  52,708
  66,700
  82,969
  101,597
  122,635
  146,103
  171,996
  200,290
  230,945
  263,912
  299,137
  336,567
  376,152
  417,850
  461,626
  507,461
  555,346
  605,286
  657,300
  711,421
  767,699
  826,193
  886,981
  950,150
  1,015,801
  1,084,049
  1,155,020
  1,228,850
  1,305,689
Total equity, $m
  7,327
  9,448
  11,956
  14,872
  18,211
  21,982
  26,188
  30,829
  35,901
  41,396
  47,305
  53,619
  60,328
  67,424
  74,898
  82,744
  90,960
  99,543
  108,495
  117,818
  127,519
  137,606
  148,091
  158,987
  170,310
  182,078
  194,311
  207,032
  220,266
  234,039
Total liabilities and equity, $m
  48,205
  62,156
  78,656
  97,841
  119,808
  144,617
  172,291
  202,825
  236,191
  272,341
  311,217
  352,756
  396,895
  443,576
  492,748
  544,370
  598,421
  654,889
  713,781
  775,118
  838,940
  905,305
  974,284
  1,045,968
  1,120,460
  1,197,879
  1,278,360
  1,362,052
  1,449,116
  1,539,728
Debt-to-equity ratio
  3.580
  4.030
  4.350
  4.590
  4.770
  4.910
  5.020
  5.100
  5.170
  5.220
  5.270
  5.310
  5.340
  5.360
  5.380
  5.400
  5.420
  5.430
  5.440
  5.450
  5.460
  5.470
  5.480
  5.490
  5.490
  5.500
  5.500
  5.510
  5.510
  5.520
Adjusted equity ratio
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,124
  1,575
  2,102
  2,705
  3,385
  4,144
  4,980
  5,892
  6,879
  7,939
  10,201
  11,401
  12,669
  14,002
  15,400
  16,863
  18,390
  19,981
  21,637
  23,359
  25,150
  27,010
  28,942
  30,950
  33,036
  35,204
  37,459
  39,805
  42,246
  44,789
Depreciation, amort., depletion, $m
  2,341
  2,570
  2,841
  3,156
  3,517
  3,925
  4,379
  4,881
  5,429
  6,023
  5,112
  5,794
  6,519
  7,286
  8,094
  8,941
  9,829
  10,757
  11,724
  12,732
  13,780
  14,870
  16,003
  17,180
  18,404
  19,676
  20,997
  22,372
  23,802
  25,291
Funds from operations, $m
  3,465
  4,146
  4,943
  5,861
  6,903
  8,069
  9,359
  10,773
  12,308
  13,962
  15,313
  17,195
  19,188
  21,288
  23,494
  25,805
  28,219
  30,738
  33,361
  36,091
  38,929
  41,880
  44,945
  48,130
  51,440
  54,880
  58,457
  62,177
  66,049
  70,079
Change in working capital, $m
  1
  2
  2
  2
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
Cash from operations, $m
  3,463
  4,144
  4,941
  5,859
  6,900
  8,065
  9,356
  10,769
  12,304
  13,957
  15,308
  17,190
  19,182
  21,282
  23,488
  25,798
  28,212
  30,731
  33,354
  36,083
  38,921
  41,871
  44,936
  48,121
  51,430
  54,870
  58,447
  62,167
  66,038
  70,068
Maintenance CAPEX, $m
  -602
  -792
  -1,021
  -1,292
  -1,607
  -1,968
  -2,375
  -2,830
  -3,331
  -3,880
  -4,473
  -5,112
  -5,794
  -6,519
  -7,286
  -8,094
  -8,941
  -9,829
  -10,757
  -11,724
  -12,732
  -13,780
  -14,870
  -16,003
  -17,180
  -18,404
  -19,676
  -20,997
  -22,372
  -23,802
New CAPEX, $m
  -5,706
  -6,874
  -8,130
  -9,454
  -10,825
  -12,225
  -13,637
  -15,046
  -16,441
  -17,813
  -19,157
  -20,469
  -21,750
  -23,002
  -24,230
  -25,438
  -26,634
  -27,825
  -29,019
  -30,224
  -31,449
  -32,702
  -33,990
  -35,323
  -36,706
  -38,149
  -39,658
  -41,240
  -42,902
  -44,650
Cash from investing activities, $m
  -6,308
  -7,666
  -9,151
  -10,746
  -12,432
  -14,193
  -16,012
  -17,876
  -19,772
  -21,693
  -23,630
  -25,581
  -27,544
  -29,521
  -31,516
  -33,532
  -35,575
  -37,654
  -39,776
  -41,948
  -44,181
  -46,482
  -48,860
  -51,326
  -53,886
  -56,553
  -59,334
  -62,237
  -65,274
  -68,452
Free cash flow, $m
  -2,844
  -3,522
  -4,210
  -4,887
  -5,532
  -6,127
  -6,657
  -7,107
  -7,469
  -7,736
  -8,322
  -8,391
  -8,362
  -8,239
  -8,028
  -7,734
  -7,363
  -6,924
  -6,422
  -5,865
  -5,259
  -4,611
  -3,924
  -3,205
  -2,457
  -1,683
  -887
  -71
  764
  1,616
Issuance/(repayment) of debt, $m
  9,840
  11,830
  13,992
  16,269
  18,628
  21,038
  23,468
  25,893
  28,294
  30,655
  32,967
  35,225
  37,430
  39,585
  41,697
  43,777
  45,835
  47,885
  49,940
  52,014
  54,122
  56,277
  58,495
  60,788
  63,169
  65,652
  68,248
  70,970
  73,830
  76,839
Issuance/(repurchase) of shares, $m
  661
  545
  406
  211
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  10,501
  12,375
  14,398
  16,480
  18,628
  21,038
  23,468
  25,893
  28,294
  30,655
  32,967
  35,225
  37,430
  39,585
  41,697
  43,777
  45,835
  47,885
  49,940
  52,014
  54,122
  56,277
  58,495
  60,788
  63,169
  65,652
  68,248
  70,970
  73,830
  76,839
Total cash flow (excl. dividends), $m
  7,657
  8,853
  10,188
  11,594
  13,096
  14,911
  16,811
  18,786
  20,825
  22,920
  24,645
  26,835
  29,068
  31,346
  33,670
  36,043
  38,472
  40,961
  43,517
  46,149
  48,862
  51,667
  54,571
  57,583
  60,712
  63,969
  67,361
  70,900
  74,594
  78,454
Retained Cash Flow (-), $m
  -1,785
  -2,120
  -2,508
  -2,916
  -3,339
  -3,771
  -4,206
  -4,641
  -5,072
  -5,495
  -5,909
  -6,314
  -6,709
  -7,095
  -7,474
  -7,847
  -8,216
  -8,583
  -8,951
  -9,323
  -9,701
  -10,087
  -10,485
  -10,896
  -11,323
  -11,768
  -12,233
  -12,721
  -13,234
  -13,773
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  5,872
  6,733
  7,680
  8,677
  9,757
  11,140
  12,605
  14,145
  15,754
  17,425
  18,736
  20,521
  22,359
  24,250
  26,195
  28,197
  30,256
  32,378
  34,566
  36,825
  39,161
  41,579
  44,086
  46,687
  49,390
  52,201
  55,128
  58,179
  61,360
  64,681
Discount rate, %
  10.80
  11.34
  11.91
  12.50
  13.13
  13.78
  14.47
  15.20
  15.96
  16.75
  17.59
  18.47
  19.40
  20.37
  21.38
  22.45
  23.58
  24.75
  25.99
  27.29
  28.66
  30.09
  31.59
  33.17
  34.83
  36.57
  38.40
  40.32
  42.34
  44.45
PV of cash for distribution, $m
  5,300
  5,431
  5,480
  5,417
  5,266
  5,133
  4,893
  4,561
  4,156
  3,702
  3,151
  2,684
  2,232
  1,810
  1,432
  1,103
  828
  604
  429
  295
  197
  128
  80
  48
  28
  16
  9
  4
  2
  1
Current shareholders' claim on cash, %
  94.9
  91.9
  90.2
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5

Brookfield Infrastructure Partners L.P. owns and operates utilities, transport, energy and communications infrastructure businesses in North and South America, Europe and Asia Pacific. The Company's segments include utilities, transport, energy, communications infrastructure and other. The utilities segment consists of regulated businesses, including regulated distribution (electricity and natural gas connections), electricity transmission and a regulated terminal (coal export terminal). The transport segment consists of open access systems that provide transportation, storage and handling services for freight, bulk commodities and passengers. The Company's energy segment consists of systems that provide transportation, storage and distribution services. The Company's communications infrastructure segment provides services and infrastructure to the media broadcasting and telecommunication sectors.

FINANCIAL RATIOS  of  Brookfield Infrastructure Partners LP (BIP)

Valuation Ratios
P/E Ratio 31.2
Price to Sales 5.5
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 15.4
Price to Free Cash Flow 184.6
Growth Rates
Sales Growth Rate 14%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 32.7%
Cap. Spend. - 3 Yr. Gr. Rate 10.2%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 155.5%
Total Debt to Equity 166.9%
Interest Coverage 2
Management Effectiveness
Return On Assets 3.7%
Ret/ On Assets - 3 Yr. Avg. 3.2%
Return On Total Capital 3%
Ret/ On T. Cap. - 3 Yr. Avg. 2.2%
Return On Equity 8.2%
Return On Equity - 3 Yr. Avg. 6.1%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 49.7%
Gross Margin - 3 Yr. Avg. 54.3%
EBITDA Margin 64.1%
EBITDA Margin - 3 Yr. Avg. 58.8%
Operating Margin 20.8%
Oper. Margin - 3 Yr. Avg. 26.9%
Pre-Tax Margin 25.7%
Pre-Tax Margin - 3 Yr. Avg. 21%
Net Profit Margin 17.6%
Net Profit Margin - 3 Yr. Avg. 12.6%
Effective Tax Rate 2.8%
Eff/ Tax Rate - 3 Yr. Avg. 8.9%
Payout Ratio 145.8%

BIP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BIP stock intrinsic value calculation we used $4652 million for the last fiscal year's total revenue generated by Brookfield Infrastructure Partners LP. The default revenue input number comes from 0001 income statement of Brookfield Infrastructure Partners LP. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BIP stock valuation model: a) initial revenue growth rate of 31.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.8%, whose default value for BIP is calculated based on our internal credit rating of Brookfield Infrastructure Partners LP, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Brookfield Infrastructure Partners LP.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BIP stock the variable cost ratio is equal to 68.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for BIP stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Brookfield Infrastructure Partners LP.

Corporate tax rate of 27% is the nominal tax rate for Brookfield Infrastructure Partners LP. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BIP stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BIP are equal to 388%.

Life of production assets of 30.9 years is the average useful life of capital assets used in Brookfield Infrastructure Partners LP operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BIP is equal to 0.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5542 million for Brookfield Infrastructure Partners LP - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 277.351 million for Brookfield Infrastructure Partners LP is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Brookfield Infrastructure Partners LP at the current share price and the inputted number of shares is $12.4 billion.

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