Brookfield Infrastructure Partners LP Q3 FY2023 earnings call

• Strong financial and operating results with FFO up 7% due to good operating performance and asset recycling. - Balance sheet and liquidity: Strong fundamentals, corporate liquidity ~$2.1B at end of Q3, raised ~$2B from capital recycling in 2023. - Strategic initiatives: Exceeded new investment targets for 3 consecutive years, capital backlog self-funded, locked in over 90% of debt rates with average maturity ~7 years, started share buybacks. - Data center updates: Strong industry tailwinds, North America retail colocation had record bookings, Chicago data center site acquired, Asia Pacific data center development in Seoul and India JV with Reliance. - Other segments: Utilities expanded residential decarbonization, Transport VLI in Brazil growing with rail volumes and tariffs, Midstream Heartland Petrochemical ramping up production.

Utilities: FFO was $229 million, an increase of 17% compared to the comparable period last year. Organic growth over 10% reflecting inflation indexation and $500 million of capital into rate base. Transport: FFO for the quarter was $205 million, with organic growth of 7% compared to the same period last year. Toll road tariffs increased 8% and rail networks had ~7% rate increases. Midstream: FFO was $163 million, a decrease of 5% compared to the prior period due to partial sale of U.S. gas pipeline and normalization of market sensitive revenues. Data: FFO was $66 million, an increase of 10% from the same period last year due to acquisitions of European telecom tower and hyperscale data center platform.

• Exceeded new investments target for three consecutive years, providing substantial built-in growth. - Locked in over 90% of debt rates with average maturity of approximately seven years, providing cash flow visibility. - Began repurchasing equity, considering further buybacks while deploying capital into new opportunities. - Target $2 billion of asset sales in 2024.

• Market volatility and economic conditions impacting asset valuations and sales. - Interest rate risks despite hedging strategies. - Geopolitical and macroeconomic factors causing divergent conditions in different regions.

Q: Expand on your comments in the letter on the investment landscape in terms of where you're seeing the most attractive opportunities by geography and by sector, and also how you think about pacing your investments in an environment where the stress associated with higher interest rates, arguably hasn't been fully absorbed yet?

A: Sam Pollock talks about attractive opportunities in most regions, focusing on North America, Europe, and seeing interest in Asia, with best value in businesses needing growth capital like telecom. Pacing is patient but bold if great opportunities arise.

Q: With respect to your pipeline of assets sales for 2024, would Some of that pipeline have debt that is portable to the prospective buyers, which is presumably an advantage in this market?

A: David Krant states the vast majority of assets for sale in 2024 have portable debt, which is an advantage in the market.

Q: Can you talk about your take on the housing market there, housing starts? And then, just more broadly, this is one of the assets that you've owned, the longest, although it's not in a limited life fund. So but can you talk about your long-term perspective on the business?

A: Sam Pollock discusses the U.K. housing market pullback but the business has a large backlog of housing connections and expects rebound, highlighting the business's inflation-linked, diversified cash flows and 20% annual growth over 10 years.

Q: Given the markets focus on funding liquidity across a variety of sectors, how do you think about your existing liquidity position? And could you accelerate asset sales to further bolster the balance sheet or look for other levers like marketable security sales?

A: David Krant says current liquidity is over $2 billion, $2B asset sales earmarked for 2024, and has pockets to find additional liquidity if needed.

Q: Just wanted to close the loop on this latest Cyxtera investment, can you reconcile the total purchase price of 1.3 billion you highlighted in your head remarks and the $775 million has been quoted in press? And what is BIPs actual commitment to this 1.3 billion?

A: Sam Pollock explains the 1.3 billion includes land leases and the 750M for Cyxtera, funding in place from lenders, no capital required from BIP, closing in Q1 2024