Brookfield Infrastructure Partners LP

Good day, ladies and gentlemen, and welcome to the Brookfield Infrastructure First Quarter 2019 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require operator assistance, please press star, then zero on your touch-tone telephone. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Melissa Lowe. You may begin.

Thank you, Operator, and good morning. Good morning. Thank you all for joining us for Brookfield Infrastructure Partners' first quarter earnings conference call for 2019. On the call today is Sam Pollack, our Chief Executive Officer, Bahir Manios, our Chief Financial Officer, and Ben Vaughn, our Chief Operating Officer. Following their remarks, we look forward to taking your questions and comments. At this time, I'd like to remind you that in responding to questions and in talking about our growth initiatives and our financial and operating performance, we may make forward-looking statements. These statements are subject to known and unknown risks, and future risk results may differ materially. For further information on known risk factors, I would encourage you to review our annual report on Form 20S, which is available on our website. With that, I'd like to turn the call over to Bihir.

Great. Thank you, Melissa, and good morning, everyone. I'm pleased this morning to discuss our results of operations for the quarter and provide you an update on our liquidity positions. So first, just on our results, we're off to a strong start in 2019. We generated funds from operations, or FFO, of $351 million for the quarter, or $0.88 on a per-unit basis, and that's up from $333 million in the prior year. On a per-unit basis, our results were up 4% compared to the prior year, and our payout ratio for the period was 71%. after taking into account our recent 7% distribution increase. Results for the quarter reflect strong performance by each one of our operating segments, which in total delivered 10% organic growth over 2018, exceeding our annual long-term target range of 6% to 9%. Organic growth was generated by inflation indexation across approximately 75% of our business, solid GDP-driven volume growth, predominantly at our transport operations, and contributions from accretive capital projects commissioned during the period. Our results also benefited from contributions from our recently acquired businesses. These positive factors were partially offset by the impact of a weaker Brazilian real, which reduced earnings by $13 million in the quarter. Our utility segment contributed to FFO of $137 million, compared to $169 million in the prior year. Underlying performance was strong, as our operating groups were able to grow their results by 5% on a same-store basis over the prior year. This was predominantly driven by inflationary increases to our rate base, combined with another strong quarter of results at our UK regulated distribution business. These contributions were offset by us having less capital invested following the sale of our Chilean electricity transmission business in March of last year. Higher interest expenses associated with the financing completed our Brazilian regulated gas transmission operation and a $9 million impact from foreign exchange. Our UK regulated distribution business maintained its momentum following a record year of performance in 2018. Sales and connection activity exceeded the prior year by 8% and 16% respectively. At the end of March, our order book stood at an all-time high of 1.1 million connections, which is 12% higher than the prior year. In particular, the multi-utility product offering continues to be attractive to developers, as evidenced by the strong results which have materialized from our fiber offering and where sales are 50% higher than the prior year. At our Brazilian electricity transmission business, we're making good progress on the development of 4,300 kilometers of transmission lines. The first three segments of which total approximately 1,600 kilometers, which are fully operational. And construction for the remaining 2,700 kilometers is on track. In April, we exercised our first option to acquire a 50% interest in 500 kilometers of operating lines from our partner, bringing our ownership to 100%. We plan on exercising our buyout options for the remaining operating lines later this year. FFO from our transport segment was $139 million for the quarter, in line with the prior year results. The segment benefited from organic growth of 6%, driven by higher tariff and traffic levels across our global toll road portfolio, strong volumes at our container terminals, and higher revenues at our Australian rail operations. These positive contributions were partially offset by the previously announced sale of a 33% interest in our Chilean toll road operation that closed in February and the expiry of one of the state concessions at our Brazilian toll road business. FFO for this segment was also reduced by $4 million as a result of foreign exchange, primarily the result of a decline in the Brazilian real. Despite uncertainty over Brexit, our UK port operation is thriving. Container and bulk volumes remain robust, exceeding the prior year by 45% and 5% respectively. Volume increases from our bulk and unitized customers have been driven by new contract wins and strong organic customer growth. With our container terminal nearing its capacity, we're now proceeding with the fourth phase of its expansion, comprising a total capital investment of $17 million. This will increase throughput capacity by a further 20% by mid-2020. Our energy segment contributed FFO of $107 million, which represents a 62% improvement from the prior year. This step change increase is attributable to organic growth and contributions from two recently acquired North American businesses. Our North American natural gas transmission business delivered another strong quarter, generating FFO that was 23% higher versus the prior year. Results for this business are benefiting from robust demand for transport services and contributions from the first phase of its Gulf Coast expansion project. On our gas storage operations, FFO is 43% above prior year levels as the business earned higher spreads related to cold weather conditions. Within our distributed energy operating group, Several new growth initiatives are underway at our recently acquired North American residential energy infrastructure business. We recently partnered with multiple home builders to be the exclusive provider of smart home technology for over 3,000 new homes. This offering will create opportunities for the sale of additional products and services to its new customer base. We're currently progressing a partnership with a utility in Texas for a pilot program that will offer our residential infrastructure products to a subset of its existing clients. If this pilot is successful, the program has the potential to generate meaningful sales leads when we roll this out to its full customer base. FFO for our data infrastructure segment was $28 million, and that was up from $19 million last year. Recent investments in our global data center portfolio contributed FFO of $7 million for the quarter. FFO at our French telecommunication business grew by 13% due to inflationary increases and new points of presence added to our tower network. Commercialization for the second of the four fiber to the home concessions held by our French telecommunication infrastructure business has commenced with a level of take-up that's above underwriting and market averages thus far. Our Build to Suit program continues to grow with over 300 towers built over the last 12 months. We currently have a contracted backlog of 900 towers, which is expected to be delivered over the next three years. This will provide us with strong visibility into the next phase of organic growth for the business. So now I'll briefly take you through our liquidity position. Our balance sheet remains strong with total liquidity of approximately $3 billion at the end of the period, of which approximately $1.9 billion was at the corporate level. Liquidity was strengthened during the year by a Canadian dollar $100 million preferred share issuance and the sale of a 33% interest and a financing in our Chilean toll road business that generated after-tax proceeds of approximately $360 million. In line with our capital recycling strategy, we considered this to be an opportune time to monetize a portion of our Chilean toll road investment as the asset had reached the mature phase of its life cycle. We acquired a 51% interest in this road through a series of transactions during 2011 and 2012 for a total of $340 million. Since acquisition, we implemented a number of initiatives to improve operating margins and raised investment-grade debt that lowered our cost of capital. This, coupled with strong tariff growth and a favorable tariff regime, has resulted in significant value appreciation. In February, we completed the partial sale of our interest and realized a multiple of invested capital of approximately three times. Additionally, as this investment is held at amortized costs under IFRS, the partial sale resulted in a $350 million accounting gain that was recognized in the quarter. Because we monetized a non-controlling interest and retained control of this asset, accounting rules require the gain to be recorded directly to our unit holder equity account. Over the course of the year, we expect to further enhance our liquidity levels as we execute on our capital recycling program. In this regard, we've entered into an agreement to sell our bulk European port operations, with a sale expected to complete in June of this year, subject to regulatory approvals. We expect to receive net after-tax proceeds of $130 million from this sale, which is approximately equal to the carrying value of the business. We remain on track to generate additional proceeds of $1.5 to $2 billion in the next 12 to 18 months from several other sale processes that are underway. And so with that, thanks for your time this morning, and I'll now turn the call over to Sam.