Brookfield Infrastructure Partners L.P. Q2 FY2023 earnings call

• Generated FFO of $552 million in Q2 2023, up 8% y/y. Organic growth near high end of 6%-9% target range. - Capital recycling initiatives: Secured $1.9 billion in asset sale proceeds in 2023, with $1.4 billion closed. Examples include sale of NZ integrated data distribution business, partial sale of U.S. gas pipeline, and sale of financial asset portfolio. - Digitalization in data centers: Expanded data center operations via acquisitions of Data4 and Compass, with over 1.25 gigawatts of capacity expected in next few years. - Strategic initiatives: Triton privatization near closing, with regulatory approvals received and shareholder vote set for Aug 24. Data center investments expected to drive FFO growth.

Utility segment: Generated FFO of $224 million, an increase of 19% from the same period last year. Organic growth for utilities was 10%. Transport segment: FFO was $199 million, an increase of 5% from the prior year once excluding the divested U.S. container terminal. Midstream segment: Generated FFO of $161 million, a modest decrease compared with the prior year. Data segment: FFO was $72 million, an increase of 20% from the same period last year.

• Expect closing of Triton transaction shortly after shareholder support. - Data center investments to provide meaningful FFO growth in coming years. - Continued ability to pass through inflationary tariff increases for next several quarters. - Will pursue new and follow-on investment opportunities offering returns above target levels.

• Normalization of market sensitive revenues. - Operational impacts like wildfires in Alberta briefly taking facilities down (but immaterial). - Regulatory challenges in certain regions, e.g., discussions with Peruvian municipality regarding toll road.

Q: Can you speak to best practices and synergies across the large scale data center platform, especially with partnerships?

A: Sam Pollock and Udhay Mathialagan discuss extracting synergies, sharing best practices where in control/co-control, and collaborative approach in JVs.

Q: What's the outlook for M&A in different asset classes and geographies?

A: Sam Pollock mentions consistent capital availability globally, digital sector attractive, certain midstream assets still attractive with robust cash flow.

Q: How have wildfires in Alberta impacted midstream assets?

A: Ben Vaughan states two facilities in a business were briefly taken down but are back up, no impact on Heartland facility.

Q: Impact of AI on data center business?

A: Udhay Mathialagan says AI creates new opportunities, hyperscalers accelerating capacity securing, enabling larger campuses with lower land costs and renewable integration.