Brookfield Infrastructure Corporation Q2 FY2024 earnings call

• Strategic initiatives: Public and private infrastructure deal flow was low early in the year, but focus on tuck-in and organic growth. In 2024, 7 follow-on acquisitions totaling nearly $4B of enterprise value were secured/completed. Project backlog increased 15% to ~$7.7B. In midstream, supporting producer activity with contracted facility and pipeline expansions. In data segment, commercializing land bank and investing over $1B in growth capital. - Capital markets activity: Completed ~$5B of non-recourse financings in Q2, bucketed into rightsizing capital structures, maturity extensions (refinanced $3.4B in maturities with modest rate increase), and opportunistic repricings (reduced financing cost by over $7M annually). - Business outlook: G7 nations initiated monetary easing, strong alignment with 3D's (digitalization, decarbonization, globalization), active discussions with tech companies on virtual infrastructures, tailwinds from AI adoption supporting data center growth, strong balance sheet and liquidity position.

For the three months ended June 30, 2024, Brookfield Infrastructure generated FFO of $608 million. By operating segments: Utilities generated FFO of $180 million, a decline due to capital recycling and higher interest costs, but base business grew organically after removing impacts. Transport segment FFO was $319 million, a 60% increase over prior year, mainly due to acquisition of global intermodal logistics and incremental stake in Brazilian operation. Midstream segment FFO was $143 million, ahead of prior year after excluding capital recycling, with strong demand in North American gas storage. Data segment FFO was $78 million, an 8% increase over prior year, from recent acquisitions and strong leasing activity.

• Expect back half of 2024 to be active for M&A due to improved interest rate environment and industry tailwinds like AI. - Strong alignment with global megatrends offers growth opportunity. - Strict adherence to financial guardrails has resulted in strong balance sheet and liquidity, enabling support for growth initiatives.

• Forward-looking statements subject to known and unknown risks, future results may differ materially. - Impact of capital recycling, higher interest costs, and foreign exchange on results.

Q: Pick up on comments regarding capital deployment opportunities tied to AI across data, utility and midstream, especially on leverage in utilities and natural gas vectors.

A: AI infrastructure includes data centers, equipment, power, transmission. Utilities relate to power supply for AI data centers, natural gas for supporting facilities like LNG, and natural gas complexes in discussions with hyperscalers.

Q: Thoughts on derisking in deals like Intel and feedback from investors, and participation in future deals.

A: Private investors more patient than public. Brookfield has diversified businesses with cash flow and high IRR platform businesses. Intel transaction will be high returning, though some time to see benefits. Shareholders patient with dividend growth.

Q: Thoughts on $2.5B asset sale proceeds, use and acquisition activity exceeding figure.

A: Intention to redeploy into higher earning investments, continue cycle of buying, adding value, selling. Expect to continue buying high-quality assets with returns in plus/minus 15% range. Pipeline balanced across regions.

Q: Midstream M&A activity, potential for mature investments sale, and data center development pipeline.

A: Midstream sector has opportunities, deployment through subsidiary platforms. Natural gas storage business may see partners or sell down pieces. Data center development active globally, with construction underway in many regions, and capital recycling advanced.