Brookfield Infrastructure Partners LP

Hello, and welcome to the Brookfield Infrastructure Partners Q1 2025 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. You will then hear an automated message advising your hand has been raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Chief Financial Officer David Krantz.

Thank you, Andrew, and good morning, everyone. Welcome to Brookfield Infrastructure Partners' first quarter earnings conference call. As introduced, my name is David Krantz, and I'm the Chief Financial Officer of Brookfield Infrastructure. I'm joined today by our Chief Executive Officer, Sam Pollack, and Dave Joint. managing partner on our investment team, focused, and head of global transport. I'll begin the call today with a discussion of our first quarter 2025 financial and operating results, followed by an update on our strategic initiatives. I'll then turn the call over to Dave, who'll discuss the impact of the U.S. tariff policy on the global economy and the strong positioning of our business. And finally, Sam will provide an outlook and our priorities for the year ahead. Now, at this time, I'd 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 known risk factors, I would encourage you to review our latest annual report on Form 20S, which is available on our website. Brookfield Infrastructure had a solid start to the year, delivering consistent financial performance and significantly progressing its capital deployment and recycling initiatives. First on results. We generated funds from operations or SFO of $646 million or 82 cents per unit in the first quarter, which normalized for the impacts of foreign exchange was up 12% ahead of our targets and reflective of the strong underlying performance of our business. In total results were up 5% over the prior year. This increase was driven by strong inflation indexation, higher revenues across our critical infrastructure networks, the commissioning of over 1 billion from our capital backlog, and the contribution from tuck-in acquisitions completed last year. Results also benefited from the increased utilization at our midstream investments and strong contracting within our data center businesses. Taking a closer look at our results by segment, our utilities operations generated FFO of $192 million, slightly ahead of the prior year. FFO would have increased 13% year over year when adjusting for currency impact and the impact of capital recycling. This reflects the inflationary benefits embedded within our portfolio and the contribution of $450 million of capital that we've commissioned into Rayface in the last 12 months. Moving on to our transport segment, FFO was $288 million compared to $302 million in the prior year period. After normalizing for the impact of foreign exchange, results for the segment were in line with the prior year. Despite experiencing some volume contraction across our rail and port businesses, the impact was largely offset by record utilization levels at our global intermodal logistics operation, as well as higher volumes and rates across our toll road portfolio. Our midstream segment generated FFO of $169 million, which was up 8% over the prior year when adjusting for the impact of capital recycling and FX. The growth reflects strong volumes and higher pricing across our midstream assets, particularly for marketed products at our Canadian diversified midstream operation. We continue to see elevated activity levels across our networks more generally, which is driving strong asset utilization and new commercial opportunities. Lastly, FFO from our data segment was $102 million, representing a step change increase of 50% compared to last year. The increase is attributable to strong organic growth in our data center platforms and the contribution from the tuck in acquisition of a tower portfolio in India that closed in the third quarter of 2024. In addition to the strong financial operating results we've also made excellent progress on our strategic initiatives to start the year. Starting with capital recycling we've now secured $1.4 billion of sale proceeds to start the year. which has helped us maintain our conviction around delivering on our five to $6 billion asset sale program. This month, we signed an agreement to exit our Australian container terminal operation, which will result in proceeds of $1.2 billion or approximately $500 million net to BIP. During our nine year ownership period, the business more than doubled its EBITDA and is now the largest and lowest container terminal operator in the Australian market. Reflecting on the quality of the business, our exit multiple is approximately 18 times EBITDA, and we generated a strong IRR of 17% and nearly a four times multiple of capital. We expect the transaction will close in the second half of the year, subject to customary closing conditions. Also during the quarter, we completed the previously announced sale of a minority stake in a portfolio of fully contracted containers held in our global intermodal logistics operation, which generated over $120 million net to BIP. We remain on track to close the remaining assets sales that we've announced this year, which include a 25% interest in our US gas pipeline that will generate proceeds of $400 million net to bid. As well as the sale of an initial 30% interest in a 244 megawatt portfolio of operating sites at our European hyperscale data center platform. Now, at the same time, our new investment pipeline remains robust and we expect it will continue to grow. We recently secured the $9 billion acquisition of Colonial Enterprises, which operates the largest refined products pipeline system in the United States and spans 5,500 miles between Texas and New York. This equity investment is expected to be approximately $500 million, and the transaction closing is expected in the second half of the year. This acquisition checks all of the boxes with respect to our established energy investment criteria. Colonial has strong utilization with a competitive market position. The acquisition represents a rare opportunity to invest in a high quality energy infrastructure asset that forms part of the backbone of the U.S. economy. Second, we acquire for value, generally well below replacement cost. Colonial was purchased at a transaction multiple of approximately nine times EBITDA. Third, the asset is highly cash generative to provide a quick return of capital. Colonial is a mid-teen going-in cash yield that is expected to increase over time, which results in a seven-year payback period expected for an investment. And lastly, there was minimal value paid for the growth or opportunity to transition the asset. The value we paid is largely for the in-place assets with conservative assumptions around terminal value and utilization profile over time. The cash flow profile for this business is highly stable and resilient, supported by a transparent regulatory framework and direct inflation linkage. Now with that, that concludes my remarks for this morning. I'll turn the call over to Dave Joint, who will discuss the US tariff policy and the impacts on our business.

Thanks, David, and good morning, everyone. The evolving tariff and trade situation has created economic uncertainty that is manifesting itself in many parts of the market. And while it is impossible to predict what will happen with any precision, we did want to share our perspectives on what we're seeing, what impacts, if any, this could have on our operating businesses, and what opportunities this period of turbulence could create for us. In short summary, as owners of large-scale, irreplaceable, and highly contracted infrastructure businesses, we are more insulated than most. Our assets are comprised of regional networks and systems that facilitate the flow of goods, commodities, energy, data, and people for which we charge a usage fee. We do not, for the most part, produce or sell goods that are subject to tariffs, and thus will not experience any direct or immediate material impact. However, tariffs and trade tensions could have second or third order impacts, which are worth considering. First, there is a question whether this could all create inflationary pressures. Should this transpire, we fully expect to be able to pass through any increased costs to end users throughout our contractual frameworks or the underlying pricing power of our businesses. This is something we have demonstrated in the recent past. Second, there's a question about our exposure to global trade. This is most prevalent in our transport networks, which represent roughly 40% of our FFO. However, when you examine our operations, our focus on long-term contracted cash flows means that we have very little exposure here. For example, the three largest businesses in our diversified terminal subsegment make up about half of our transport segment's FFO and have little to no immediate correlation with GDP. Our US LNG and Australian export terminals derive the majority of their revenues from long-term take-or-pay contracts. Our global intermodal logistics operation has a seven-year weighted average contract term, is operating close to 99% utilization, and has strong operational flexibility. If global trade slows, the business will organically right-size its fleet by selling end-of-life containers into the secondary market, something which it does every year. This means the business could harvest cash and maintain high utilization rates. Further, the business has de-risked its growth profile for the year, having secured the acquisition of a high-quality portfolio of fully contracted containers at higher rates than would otherwise be available in the market today. The acquisition represents approximately 6% growth to the business's existing fleet and is entirely self-funded. Finally, there is a question about input costs for our major capital projects. We view this risk as manageable as we have proactively built diversified supply chains for our critical inputs, For our development plans in the US, including new data center projects, we have either locked in construction costs or have components that are locally sourced. Our international businesses likewise have the ability to source locally or are in jurisdictions not imposing tariffs on imports. In closing, I would only add that some of our best investments historically have been made during periods of dislocation. Market uncertainty and volatility often create ripe conditions for acquiring assets below their intrinsic value. Take private transactions can be done at attractive entry points, or public companies can become open to asset sales or carve-outs. At the same time, many buyers of assets stay on the sidelines, grappling with the uncertainty of the moment, which reduces the competition for new acquisitions. Those with long-term conviction and strong access to capital, such as Brookfield Infrastructure, stand to benefit from these moments. I'll now pass the call over to Sam.