Brookfield Infrastructure Partners LP

Good day and thank you for standing by. Welcome to the Brookfield Infrastructure Partners second quarter 2025 results conference call and webcast. At this time, all participants are in a listen only mode. After the speakers presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to David Crant, Chief Financial Officer. Please go ahead.

Thank you, Liz and good morning everyone. Welcome to Brookfield Infrastructure Partners second quarter 2025 earnings conference call. As introduced, my name is David Crant and I'm the Chief Financial Officer of Brookfield Infrastructure. I'm joined today by our Chief Executive Officer, Sam Pollock and Brian Baker, an operating partner responsible for managing our Canadian midstream franchises. Also joining us today are Ben Vaughan, our Chief Operating Officer and Dave Joint, our managing partner in our transportation business. I'll begin the call today with a discussion of our second quarter financial and operating results, followed by an update on our capital recycling initiatives. I'll then hand the call over to Brian, who will discuss the positive outlook for Canada's energy sector. And finally, Sam will provide an update on our recent new investments and conclude with an outlook for the business. 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 20 F, which is available on our website. Brookfield Infrastructure has another strong quarter, delivering stable and increasing financial results, as well as making significant progress on its capital deployment and recycling objectives. First on results, we generated funds from operations, or FFO, of $638 million, or 81 cents per unit, in the second quarter, up 5% compared to the previous year. This result improves to a 9% increase when excluding the effects of foreign exchange, highlighting the strength and stability of our underlying base business performance. The increase was primarily driven by strong organic growth above our target range, as well as contributions from tuck-in acquisitions completed in the prior year. Taking a closer look at results by segment, our utilities generated FFO of $187 million, slightly ahead of the prior year. Results benefited from inflation indexation, along with contributions from approximately $450 million of capital added to the rate base. The strong underlying performance was partially offset by the sale of our Mexican-regulated natural gas transmission business, that closed in the first quarter of this year. Moving to our transport segment, FFO was $304 million. After adjusting for capital recycling initiatives and foreign exchange, results were slightly ahead of the prior year as well. The solid underlying performance was supported by high-affet utilization at our global intermodal logistics operations, continued volume strength at our rail and port businesses, and increases in both traffic levels and rates on our toll roads. Our midstream segment generated FFO of $157 million, representing a 10% increase over the same period last year, driven by strong organic growth across our franchises. In particular, our Canadian diversified midstream operation performed well due to higher customer activity levels and strong asset utilization. In a moment, Brian will speak to the strong momentum we are continuing to experience across the Canadian midstream operations. And lastly, FFO from our data segment was $113 million, representing a step-change increase of 45% compared to the prior year. This growth was driven by the contribution from the Tuck-in acquisition of a tower portfolio in India completed last year, along with the commissioning of newly built capacity and initiating new billings across our data center platforms. In addition to our solid operating results, we continue to demonstrate strong execution of our capital recycling strategy to self-fund our growth. We have secured $2.4 billion of sale proceeds to date this year, already achieving an annual record for BIP, with several incremental sales processes in the queue for the second half of the year. Included in this total are four recently secured asset sales. The first is the sale of a 23% interest in our Australian export terminal, the world's largest metallurgical coal export facility. We acquired our interest in the business in 2010 and partially exited our investment in 2020 through a public listing in Australia. Since then, we have achieved several key value creation milestones, including extending contract durations and simplifying our tariff schedule. This sale was completed in June and resulted in approximately $280 million in proceeds. We have realized a cumulative return of 22% and a multiple of capital of four times, while still retaining a 26% interest in the business. The second is the secure sell down of an incremental 60% stake in a 244 megawatt portfolio of operating sites at our European hyperscale data center platform. This results in an additional $200 million in proceeds and finalizes our planned sell down of 90% for total proceeds of approximately $300 million net to BIP. We expect to fully complete the transaction in the third quarter of this year. The third sale is a further 33% divestiture in a portfolio of fully contracted containers at our global intermodal logistics operations, replicating the prior sale under the same established framework. We expect incremental proceeds to be approximately $115 million with closing anticipated in the third quarter of this year. We have now sold approximately two thirds of this portfolio and generated over $230 million in net proceeds to BIP. Finally, we agreed to terms for the partial sale of our UK port operation, which will generate approximately $385 million of proceeds and deliver an IRR of 19% and a seven and a half times multiple of our capital. Since acquiring a 59% interest in 2009, we have successfully completed a comprehensive modernization of the ports operations, which included expanding the infrastructure to service large vessels and attracting new long-term contracts. These value creating initiatives resulted in EBITDA tripling during our ownership so far. The transaction is expected to close in the fourth quarter of this year, after which we will own a 25% interest in the business, which allows us to participate in the next stage of growth in a highly strategic infrastructure asset. That concludes my remarks for this morning and I'll now turn the call over to Brian, who will highlight the attractive backdrop for Canada's energy sector.

Thank you, David and good morning, everyone. Canada's energy industry is benefiting from several trends that support growth and strengthen the outlook for the sector in the coming years. This positive backdrop in turn benefits BIP's three Canadian midstream businesses relating to new investment opportunities, higher levels of organic growth and more optionality at exit. The Canadian government is focused on energy security and diversifying its trade relationships. This alignment provides support to five key trends that collectively underpin our positive regional midstream sector outlook. The first is the strong demand profile for Canadian energy. Countries are increasingly seeking out diversification of energy supply, which has created new demand for Canadian energy internationally. At the same time, investment in artificial intelligence is creating massive demand for electricity locally. For example, Alberta has approximately 12 gigawatts of requested power demand from data centers up from 200 megawatts only a few years ago. This would represent a doubling of the province's current peak energy demand. Second is that there is improved end market diversification. Several key Canadian infrastructure projects have recently been completed to enhance global market access. One of these projects, LNG Canada, is set to ramp up production over the next 12 months with a potential second phase under consideration that could double its capacity. Several other LNG projects are also on track to add over 5 million tons per annum of export capacity by the end of 2028. Third, Canada has a highly economic resource. Our assets are strategically positioned near some of the most abundant and economically attractive resource basins in North America with decades of future production potential. The Montney, for example, has 80 to 90 years of remaining gas resources at a production rate that is almost 40% greater than what is being produced today. These reserves ensure Canada will be cost competitive globally, offering domestic producers attractive returns that incentivize production growth. The fourth is social license. Public support for the responsible development of Canada's energy resources and associated infrastructure has improved considerably across the country. This presents a significant opportunity to further align the country's economic interests with its natural resource advantages. It reinforces the case for continued investment in the midstream sector by established operators like us that have a strong operating track record prioritizing safety and sustainability. And fifth, we're seeing improved investor interest. Strategics, financial investors, and international investors have all expressed interest publicly to invest more capital in the Canadian energy sector, given the critical nature of Canadian midstream assets, its world-class operating track record, and attractiveness of the resource basin. We expect to directly benefit from all of these trends across our Canadian midstream portfolio, with leading franchises across transportation, gathering and processing, and natural gas storage. Specifically, our natural gas gathering and processing business has experienced a 15% increase in utilization to approximately 85% over the past two years. We have simultaneously executed longer-term contracts that have improved contract duration by more than two years to reach 11 years on average. Our long-haul transportation pipelines are experiencing a resurgence of new commercial interest, with over $90 million Canadian dollars of contracted EBITDA coming into service in the next six months, and a large pipeline of new connection opportunities that are all incremental to our underwriting at very attractive build multiples. In the last two years, our North American gas storage operation has benefited from contracted capacity and rates increasing to the highest levels we experienced during our ownership. We expect the lengthening of contract duration and higher rates to persist, as storage demand continues to rise in support of new gas production, the build-out of Canadian LNG export capacity, and other sources of demand. These commercial benefits that can be realized with no incremental capital investment will further contribute to the business's high-free cashflow conversion. These are just several examples of the positive impact that has been experienced so far within our business. We're equally enthusiastic about the strong growth outlook across the Canadian midstream franchise. At our two largest midstream platforms alone, we expect EBITDA growth of $650 to $750 million Canadian dollars between 2024 and 2027, with further upside related to approximately $2 billion Canadian dollars of identified organic growth projects that are being advanced and not currently in our backlog. While these benefits accrue to our in-place franchise, we are excited by the momentum in the Canadian midstream sector as we aim to continue investing to acquire new platforms, develop new infrastructure projects, and ultimately deploy our large-scale and flexible capital at strong risk-adjusted returns. That concludes my remarks for this morning, and I'll now pass the call over to Sam.