Brookfield Infrastructure Partners LP

standing by and welcome to the Brookfield infrastructure partners first quarter 2023 results conference call and webcast at this time all participants are in listen-only mode after the speaker's presentation there will be a question and answer session to ask a question during this session you'll need to press star 1 1 on your telephone if you'd like to remove yourself from the queue simply press star 1 1 again as a reminder today's program is being recorded And now I'd like to introduce your host for today's program, Mr. David Krant, Chief Financial Officer. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Welcome to Brookfield Infrastructure Partners' first quarter 2023 earnings conference call. My name is David Krant, and I am the Chief Financial Officer of Brookfield Infrastructure Partners. I'm also joined today by our Chief Executive Officer, Sam Pollack, and Dave Joyn, a managing partner on our investments team focused on global transport opportunities. I'll begin with the discussion of our first quarter financial and operating results, as well as our balance sheet strength and liquidity position. I'll then turn the call over to Dave, who will discuss global supply chain investment opportunities. Finally, Sam will provide an update on our strategic initiatives and priorities for the balance of the year. Following our commentary, we'll be joined by Ben Vaughn, our Chief Operating Officer, for our question and answer period. this time i would like to remind you that in our remarks today we may make forward-looking statements these statements are subject to known and unknown risks and future results may differ materially for further information on our known risk factors i would encourage you to review our annual report on form 20f which is available on our website now with that during the first quarter of 2023 we generated strong financial and operational results Our regulated and contracted business generated funds from operations, or FFO, of $554 million, or 70 cents per unit, both increasing 12% over the prior year. Organic growth was strong at 9%, which is the high end of our annual target, reflecting the benefits of elevated levels of inflation on our tariffs, strong volumes across our transport networks, and the commissioning of approximately $1 billion in new capital projects over the last 12 months. Results were further supported by the contribution of approximately $2.4 billion of capital deployed in new acquisitions over the past year. Partially offsetting the strong underlying performance of our business was the normalization of market-sensitive revenues as the prior year benefited from elevated commodity prices, as well as the impact of asset sales. Diving deeper into our segments, starting with utilities, we generated FFO of $208 million, an increase of 25% from the same period last year. The current quarter benefited from the expansion of our residential decarbonization infrastructure platform in North America and Europe, following the acquisition of HomeServe that closed earlier in the quarter. Results also benefited from the strong organic growth of over 10% within our base business, as well as a full quarter contribution from an Australian regulated utility we acquired midway through February last year. In January, we completed the acquisition of HomeServe to bolster our global residential decarbonization infrastructure platform. As part of our business plan to establish leading residential demand-side decarbonization businesses, we subsequently separated the North American and European operations to facilitate integration into our existing regional operations. We've begun to unlock synergies, including enhanced procurement opportunities, as well as driving higher sales through cross-selling our multi-product offerings. Our global footprint is comprised of operations in six countries with over 260,000 installations completed annually. Moving to our transport segment, where FFO for the first quarter was $192 million, an increase of 11% on a same-store basis. As a result of strong customer demand and activity levels, we continue to benefit from higher flows across our networks and increased rates that are generally in line with inflation in the countries we operate in. Specifically, our global toll road portfolio saw traffic levels increase 3%, our rail networks transported 11% more volumes, and our global ports business moved 5% more cargo relative to the prior year. Our midstream segment generated FFO of $198 million, consistent with the prior year. Our base business continues to benefit from strong utilization due to increased long-term contracting and strategic capital projects designed to enhance the accessibility of our infrastructure. At our diversified Canadian midstream operation, volumes on our conventional systems increased 6% from the same period in the prior year. Utilization at our Western Canadian natural gas gathering and processing operation increased to record highs, and our US gas pipeline has fully contracted its storage services, while transportation throughput increased 11% over the prior year. Strong performance at our North American gas storage business continued from the fourth quarter, offsetting the normalization of market sensitive revenues at our U.S. gas pipeline and diversified Canadian midstream business. Finally, our data segment generated an FFO of $70 million, an increase of 21% from the same period last year. Organic growth for the segment was 9%, resulting from additional points of presence and inflationary tariff escalators across the portfolio. Our integrated data distribution business in New Zealand benefited from a recovery in roaming revenue due to an uptake in international travel, as well as fiber connectivity requirements from the commissioning of new third-party data centers connected to our network. Current quarter results also benefited from the acquisition of a European telecom tower business in February and the contribution from an Australian fiber operation acquired in August of last year. In addition to the strong financial and operational start to the year, our balance sheet is in excellent shape, Despite capital market volatility driven by monetary policy and isolated banking failures during the quarter, we are confident in the strength of our balance sheet. This strength was recently validated by S&P, who reaffirmed our BBB Plus credit rating, as well as a newly secured investment grade credit rating of BBB Plus from Fitch. This second rating will help us further expand our access to capital and highlights the positive evolution of our credit over time. Our ability to source capital has been proven through cycles and is underpinned by the stable and predictable cash flows generally associated with infrastructure assets. Over the last few months, we raised over $5 billion of capital from nine relationship banks across North America, Europe, and Asia to backstop and support our recently secured transactions. We ended the first quarter with total corporate liquidity of $2.4 billion, which will further be enhanced by proceeds expected from our capital recycling program that Sam will touch on shortly. Now, before that, I would like to thank you all for your time this morning, and I will now pass the call over to Dave Joint to further discuss our transport business and supply chain investments.

Thank you, David, and good morning, everyone. This is Dave Joint speaking, and I'm pleased to join today's call to discuss the investment outlook for infrastructure assets that underpin global supply chains. Over the last decade and a half, we have developed a large and diversified transport portfolio. In particular, we've made significant investments in rail and port infrastructure. Our operations form a critical backbone for global supply chains and are highly utilized or contracted to provide predictable and increasing cash flows benefiting from economic growth. Today, we own and operate a transportation network with over 25 billion of assets under management serving a large and diversified group of customers across the globe. In recent years, geopolitical tensions and the COVID-19 pandemic have caused substantial disruptions, forcing companies to rethink their global supply chains. On one hand, we are witnessing a wave of onshoring projects associated with high-tech and strategic components such as semiconductors, medical essentials, and EV batteries. We are finding that these deglobalization initiatives are creating significant investment opportunities for us. On the other hand, though, lower value goods such as apparel, furniture, or household items continue to be manufactured in low-cost jurisdictions, primarily in Asia. Rather than reshoring, companies are instead looking to geographically diversify their supplier base, reducing their reliance on any one location or supplier. in what many are terming a China plus one strategy. In aggregate, we expect that these diversification efforts will increase the total distance goods travel in global supply chains and will therefore result in higher demand for container-based transportation. These trends are tied to a greater desire for supply chain resilience and support the value of our in-place asset base. as well as create new and exciting investment opportunities within our transport segment. Most recently, we announced our intention to acquire Triton International in a $13.3 billion take private transaction, which will further enhance our infrastructure footprint underpinning global supply chains. Triton is the world's largest owner and lessor of intramodal containers, and is a critical provider of global transport logistics infrastructure. The size and scale of Triton's global network differentiates it from competitors, driving lower procurement and financing costs and enjoying structurally high fleet utilization and margins. We were attracted to Triton's highly contracted asset base with approximately 90% of its fleet under long-term contract and limited recontracting exposure. Furthermore, Triton has a strong going in yield with highly cash flow generative assets that are linked to the long-term expansion and decentralization of global trade. In the context of our broader transportation franchise, we expect the acquisition will improve customer relationships and create new organic growth opportunities across our portfolio. Adding Triton to our global rail port and logistics businesses will make us one of the most integrated providers of freight transportation services in the world. allowing us to unlock new efficiencies for our customers. More strategically, Triton is uniquely positioned to provide valuable insight into global trade flows. Its size allows it to be one of the first companies to observe real-time changes in market demand, which can be inferred by the ratio of new lease origination to fleet returns. This has implications for Triton's ability to react quickly to market changes but also benefits the commercial positioning of our broader portfolio and improves our intelligence in capital allocation. Our investment in Triton is just one example of a large opportunity set we anticipate stemming from the ongoing changes to global supply chains. In closing, I also wanted to note that even as we enter a period of slowing economic growth, it is important to remember the long-term resilience and durability of our transport businesses. Our global rail franchise provides cost-effective, low emission, and highly efficient transportation for the inputs of everyday life. Our port and bulk terminal assets act as critical gateways for the import and export of essential goods and commodities. Meanwhile, TREG provides the containers that are necessary for the movement of goods amongst global port, rail, and road networks. That concludes my remarks. I will now pass the call over to Sam.