Brookfield Infrastructure Partners LP

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Hello, and thank you for standing by. Welcome to the Brookfield Infrastructure Partners Q3 2022 results conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. It is now my pleasure to introduce Chief Financial Officer David Krantz.

Thank you, Andrew, and good morning, everyone. Welcome to Brookfield Infrastructure Partners' third quarter 2022 earnings conference call. As introduced, my name is David Krantz, and I'm the Chief Financial Officer of Brookfield Infrastructure. I'm also joined today by our Chief Executive Officer, Sam Pollack. I'll begin with a discussion of our third quarter financial and operating results, as well as touch on our recent capital markets activity and balance sheet strength. I'll then turn the call over to Sam, who will provide an update on our strategic initiatives and concluding remarks. Following our commentary this morning, we will be joined by Ben Vaughn, our Chief Operating Officer, for our question and answer period. At this time, I would like to remind you that in our remarks today, we make forward-looking statements. These statements are subject to known and unknown risk, and future 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. Brookfield Infrastructure delivered another strong quarter, with funds from operations, or FFO, per unit of 68 cents, a 15% increase compared to the same period last year. Our favorable results were driven by organic growth of 10 percent and the contribution of nearly $2 billion of capital deployed over the past 12 months. Taking a closer look at our operating results by segment, FFO from our utilities business were 8 percent above the prior year at $196 million. The base business benefited from inflation indexation and the commissioning of approximately $500 million of capital into the rate base during the last year. Results also benefited from the contribution of two Australian utility acquisitions completed earlier this year. These positive contributions were partially offset by the impact of increased borrowing costs at our Brazilian utilities and the fact that the prior year included the final contribution from our district energy operations. Within our segment, we continue to build out platforms in our North American and European residential infrastructure business. In North America, we completed the tuck-in acquisition of Quebec's largest rental water heater provider, with 280,000 customers under contract. This investment expands our geographic footprint and will serve as a base for expansion into eastern Canada. It also provides a platform to expand into new products and sales channels within the region. During the quarter, we also advanced our growth plans at our North American Submetering business with an agreement to expand operations into the Brookfield-managed residential portfolio and take over the metering of over 45 multifamily buildings across 15 U.S. states. This strategy of leveraging the broader Brookfield ecosystem has successfully accelerated organic growth for us in the past, specifically at our district energy platform and more recently in our indoor wireless systems business. At our European residential infrastructure business, we are advancing the rollout of the heat pump rental product launched last quarter. offering customers a financing solution to reduce the upfront cost has led to approximately 1,400 units sold in the first four months alone, well exceeding our expectations. We are now focusing on installation efforts as we continue to build up our rental backlog. Moving to our transport segment, FFO was $203 million for the quarter, an increase of 12% compared to the prior year. Results benefited from strong organic growth driven by increased rates that were in line with inflation and stronger volumes. At our diversified terminals, volumes were up 7% compared with the prior year, driven by our U.S. LNG export terminal that commissioned a sixth commercial liquefaction train earlier in the year. Volumes at our rail operations were up 2% over the prior year, following strong performance in the U.S. and in Brazil. Rates across our rail networks were up 9%, highlighted by our Brazilian rail operation, which increased tariffs by 20% on it. Across our global toll road portfolio, traffic levels increased 3% compared to the prior year, while tariffs are now 10% higher than this time last year. Prior year results included contributions from businesses that were sold, including our U.S. container terminal in the second quarter and our Chilean toll road operation in 2021. Our Australian export terminal recently announced that it had agreed on access pricing with all its existing users for a 10-year period to be applied retroactively from July 1, 2021. The new rate reflects a 29% increase to the previous framework, with all users subject to a 100% take or pay volume and annual price escalator for inflation. This outcome provides significant cash flow certainty while preserving the strong contractual protection associated with this critical infrastructure. Moving to our midstream segment, we generated FFO of $172 million, which is a 67% increase over the prior year. This result was primarily due to the contribution from our diversified Canadian midstream operation, which only partially contributed in the comparable period. At a base business level, results continue to benefit from increased producer activity and strong market-sensitive revenues. I'm pleased to report that we remain on track with the ramp-up of our Heartland petrochemical complex. In October, our propane dehydrogenation plant, which processes propane into polymer-grade propylene, or PGP, commenced production. Having completed commissioning of the back end of the complex earlier this year, this step completes the integrated startup and will begin ramping up production gradually over the balance of the year. Finally, our highly contracted data business continues to perform well in the current environment with FFO increasing to $60 million for the quarter. Underlying growth from additional points of presence, incremental megawatts commissioned, and inflationary price escalators were partially offset by the impact of foreign exchange during the quarter. The strong operational and financial performance I have just outlined is highly supportive of our investment-grade profile and access to capital. As central banks intensify their hawkish policy stance and commit to reduce inflation to target levels through future rate hikes, we continue to proactively access the capital markets to extend near-term maturities. Of three most notable financings completed recently totaled 1.7 billion dollars. They termed out 2023 and 2024 asset level maturities at costs that are in line with that of the maturing debt. Our proactive financing strategy has positioned us well heading into 2023 as less than 2% of our asset level debt matures over the next 12 months. Our corporate balance sheet remains well capitalized with no corporate maturities until 2024. The high proportion of fixed rate debt in our capital structure has largely insulated us from rising rates this year and we continue to maintain an active currency hedging strategy to protect our cash flows and investment values. During the quarter, over 80% of our FFO was denominated in or hedged to the U.S. dollar, and that program remains in place for the next 24 months. In terms of corporate liquidity, we ended the quarter with $2.3 billion that will increase to nearly $3 billion following the completion of three secured asset sales announced earlier this year. These sales were in addition to the sale of our U.S. container terminal that closed earlier this year for approximately $350 million. Of the three secured sales, the New Zealand Telecom Tower portfolio sale closed yesterday. Our Brazilian electricity transmission lines are expected to close later this month, and the Indian toll roads are on track to close by the end of the year. In addition, several sale processes are underway that combined are expected to generate further $1.5 billion of net proceeds to the partnership. I would like to thank you all for your time this morning, and I'll now pass the call over to Sam.