Mr. Sam Pollock reports

BROOKFIELD INFRASTRUCTURE REPORTS STRONG 2023 YEAR-END RESULTS & ANNOUNCES 15TH CONSECUTIVE DISTRIBUTION INCREASE

Brookfield Infrastructure Partners LP has released its results for the year ended Dec. 31, 2023.

"We successfully executed our business strategy and achieved all our capital allocation and performance targets during 2023," said Sam Pollock, chief executive officer of Brookfield Infrastructure. "We believe 2024 will be an even better year, and we are already off to a strong start on our capital recycling and deployment initiatives."

For the year ended Dec. 31, 2023, the company reported net income attributable to the partnership of $432-million. Current-year results benefited from strong operational performance and gains from the company's capital recycling program. These positive impacts were partially offset by higher financing costs and one-time transaction fees associated with Brookfield's growth initiatives, as well as lower mark to market gains on its hedging activities.

Funds from operations (FFO) for 2023 was $2.3-billion, an increase of 10 per cent compared with 2022. Organic growth for the year was 8 per cent, reflecting strong levels of inflation in the countries where the company operates, volume growth across the majority of its critical infrastructure networks and the commissioning of approximately $1-billion of new capital projects that are now contributing to earnings. Additionally, Brookfield deployed over $2-billion into new investments in the third and fourth quarter of 2023 that favourably impacted results, offset by the impact of $1.9-billion of asset sales that primarily closed in the second quarter of 2023.

The utilities segment generated FFO of $879-million, compared with $739-million in the prior year, representing an increase of 19 per cent. This growth can be attributed to inflation indexation, which benefited the company's results by approximately 6 per cent, and the contribution associated with approximately $500-million of capital commissioned into the company's rate base. Results also benefited from strong performance at HomeServe, which Brookfield privatized in January of 2023.

FFO for the transport segment was $888-million, representing a 12-per-cent increase compared with $794-million generated in the prior year. Base business results primarily benefited from inflationary tariff increases and higher volumes driven by strong economic activity surrounding the company's networks. In particular, during the year, Brookfield's rail networks realized an average annual rate increase of 8 per cent and volumes were up 2 per cent from the previous year. At the company's diversified terminals, rates and volumes benefited from strong demand for bulk goods and commodities that underpin the global economy. Across Brookfield's toll-road portfolio, annual traffic levels and tariffs increased 4 per cent and 9 per cent, respectively, compared with the prior year. Current-year results additionally benefited from the acquisition of Triton, the company's global intermodal logistics operation, which closed at the end of the third quarter and is performing ahead of expectations.

FFO for the mid-stream segment totalled $684-million, compared with $743-million in the previous year. The decline is primarily due to the partial sale of Brookfield's interest in a United States gas pipeline in June of 2023 and the normalization of market-sensitive revenues at the company's diversified Canadian mid-stream business. Results for 2023 were supported by increased utilization and higher contracted cash flows across the segment compared with last year. The outlook for Brookfield's mid-stream businesses remains strong, particularly as it continues to have success executing commercial agreements and increasing rates as a result of a lack of new investment in the sector.

The data segment generated FFO of $275-million, compared with $239-million in the previous year, an increase of 15 per cent. The increase is largely attributable to three large-scale acquisitions completed during the year, composed of a European telecom tower operation in the first quarter, and two hyperscale data centre platforms in the third and fourth quarters. The existing businesses performed well and continue to benefit from sector tailwinds and network densification requirements.

Update on strategic initiatives

It was another outsized year for new investments in 2023 where Brookfield deployed over $2-billion in three acquisitions, including the take-private of Triton, the company's global intermodal logistics operation. Brookfield also acquired two geographically diverse hyperscale data centre platforms in support of the company's view that the digital economy will continue to grow exponentially from industry tailwinds created by the rollout of 5G and artificial intelligence.

Brookfield completed an additional data centre investment last month acquiring 40 sites out of bankruptcy from Cyxtera. This multifaceted transaction included the acquisition of associated real estate underlying several of the sites from third party landlords and the contribution of 10 retail co-location sites in the U.S. that Brookfield already owns. The newly created platform will be a leading retail co-location data centre provider, with over 330 megawatts of capacity deployed in high-demand areas across North America. The total purchase price of approximately $1.3-billion implies a 2024E EBITDA (earnings before interest, taxes, depreciation and amortization) multiple of eight times, which was fully financed and did not require any new equity capital.

Brookfield's confidence in the digitalization investment theme continues in 2024 with the acquisition of American Tower's operations in India (ATC India). The business consists of a portfolio of 78,000 telecom sites with a transaction value of $2-billion. The acquisition is being pursued as a follow-on for the company's existing tower business, Summit Digitel, which has 175,000 towers in the country. The combined platform will be one of the largest tower platforms globally, with 253,000 sites in complementary locations. ATC India will also diversify Brookfield's existing customer mix, provide a perpetual asset base and deepen the company's strategic relationships with key mobile network operators in India. Brookfield believes it is acquiring ATC India at an attractive valuation of below six times 2024E EBITDA. Brookfield Infrastructure's equity contribution is expected to be approximately $150-million and the transaction is expected to close in the second half of 2024, subject to regulatory approvals.

Following a successful year of dispositions in 2023, Brookfield commenced preparation for the next phase of its capital recycling plans. The company recently completed several opportunistic asset-level financings to right-size the capital structure at two mature pipeline operations in North America. Combined, these financings generated an incremental $550-million for the partnership, and, more importantly, reduced the equity required in a future sale of these pipelines. These activities, combined with the optimism the company has seen return to the investment landscape, set Brookfield up well to achieve its $2-billion target this year.

Distribution and dividend declaration

The board of directors has declared a quarterly distribution in the amount of 40.5 cents per unit, payable on March 29, 2024, to unitholders of record as at the close of business on Feb. 29, 2024. This distribution represents a 6-per-cent increase compared with the prior year. The regular quarterly dividends on the cumulative Class A preferred LP units, Series 1, Series 3, Series 9, Series 11, Series 13 and Series 14 have also been declared, as well as the capital gains dividend for BIP Investment Corp. senior preferred shares, Series 1. In conjunction with the partnership's distribution declaration, the board of directors of BIPC has declared an equivalent quarterly dividend of 40.5 cents per share, also payable on March 29, 2024, to shareholders of record as at the close of business on Feb. 29, 2024.

Conference call and quarterly earnings details

Investors, analysts and other interested parties can access Brookfield Infrastructure's fourth quarter 2023 results, as well as letter to unitholders and supplemental information, under the investor relations section at the company's website.

To participate in the conference call today at 9 a.m. ET, please preregister on-line. Upon registering, you will be e-mailed a dial-in number, direct passcode and unique PIN (personal identification number). The conference call will also be webcast live on-line.

Additional information

The board has reviewed and approved this news release, including the summarized unaudited financial information contained herein.

About Brookfield Infrastructure Partners LP

Brookfield Infrastructure is a leading global infrastructure company that owns and operates high-quality, long-life assets in the utilities, transport, mid-stream and data sectors across the Americas, Asia Pacific and Europe. The company is focused on assets that have contracted and regulated revenues that generate predictable and stable cash flows. Investors can access its portfolio either through Brookfield Infrastructure Partners, a Bermuda-based limited partnership, or Brookfield Infrastructure Corp., a Canadian corporation.

Brookfield Infrastructure is the flagship listed infrastructure company of Brookfield Asset Management, a global alternative asset manager with over $850-billion of assets under management.

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