Mr. Sam Pollock reports

BROOKFIELD INFRASTRUCTURE REPORTS FIRST QUARTER 2024 RESULTS

Brookfield Infrastructure Partners LP (Brookfield Infrastructure, BIP or the partnership) has released its results for the first quarter ended March 31, 2024.

"The benefits of inflation indexation, better than expected economic activity and strong contributions from new investments have favourably impacted our financial results," said Sam Pollock, chief executive officer of Brookfield Infrastructure Partners. "With the base business performing well, and successful capital recycling, we are positioned for success over the balance of 2024."

Brookfield Infrastructure reported net income of $170-million for the three-month period ended March 31, 2024, compared with $23-million in the prior year. Current-quarter results benefited from strong operational performance and the contribution from recent acquisitions. The current period also reflects higher mark-to-market gains relative to losses incurred in the prior period. These positive impacts were partially offset by higher borrowing costs associated with the company's recent capital recycling initiatives.

Funds from operations (FFO) of $615-million increased by 11 per cent compared with the same period last year. This increase reflects organic growth of 7 per cent, as well as strong contributions associated with over $2-billion of new investments, partially offset by the impact of the company's capital recycling program and higher interest costs. Organic growth during the period was supported by inflation indexation, strong transportation volumes and the commissioning of over $1-billion of new capital from Brookfield Infrastructure Partners' capital backlog.

Segment performance

The utilities segment generated FFO of $190-million, compared with $208-million in the same period last year. The decline is primarily attributable to the sale of the company's interest in an Australian regulated utility business. After adjusting for asset sales and financings completed, organic growth for the segment was approximately 8 per cent. This growth is primarily from inflation indexation and the commissioning of over $450-million of capital into the rate base during the last 12 months.

FFO for the transport segment was $302-million, representing a 57-per-cent increase over the same period last year. The step-change is attributable to strong underlying performance and the acquisition of Triton, which is performing well above the company's plan. The balance of Brookfield Infrastructure Partners' transport operations grew by 10 per cent, driven by inflationary tariff increases and higher volumes. Brookfield Infrastructure Partners' rail networks and toll roads realized average rate increases of 9 per cent and 7 per cent, respectively, over the same period last year, highlighting the benefits of inflation indexation. Traffic levels on the company's roads increased by 4 per cent and its diversified terminals recorded 7 per cent higher volumes.

Brookfield Infrastructure Partners' midstream segment generated FFO of $170-million, which is comparable with the prior year after excluding the impact of capital recycling initiatives. Although the company's direct commodity price exposure is limited, the prevailing environment has been very favourable for customer activity levels and demand for the company's critical midstream assets. This demand has been most robust across Brookfield Infrastructure Partners' North American gas storage operations, where the company has extended contract durations and achieved rates higher than last year.

FFO from Brookfield Infrastructure Partners' data segment was $68-million, which is comparable with the same period last year. Results for the quarter benefited from a full quarter contribution from the company's German telecom tower operation, two hyperscale data centre platform acquisitions and the purchase of 40 retail co-location data centre sites out of bankruptcy. These acquisitions were largely offset by the sale of the company's interest in a New Zealand integrated data distribution business, which closed in June, 2023.

Update on strategic initiatives

Market conditions have continued to improve during 2024. Activity levels for M&A (merger and acquisition) processes have increased, and, as a result, the environment for transacting should be more balanced this year as compared with the prior year. The company has made significant progress on its capital recycling plans, securing $1.2-billion in proceeds, of which $1.1-billion has been closed to date. This success sets Brookfield Infrastructure Partners up well to achieve its $2-billion annual capital recycling target.

In April, the company signed binding documentation to sell the fibre platform within its French telecom infrastructure business to a financial buyer. The transaction has an enterprise value of over 1 billion euros (approximately 175 million euros net to the company) and is expected to result in an IRR (internal rate of return) of 17 per cent and a multiple of capital of approximately 1.9 times. Brookfield Infrastructure Partners expects to generate up to $100-million in net-to-the-company proceeds when the transaction closes later this year.

During the quarter, Brookfield Infrastructure Partners also completed several opportunistic asset-level financings to right-size capital structures and pull forward future sale proceeds. At its Brazilian regulated gas transmission business, the company completed a $1.6-billion financing that resulted in approximately $500-million of proceeds net to the company. When combined with two refinancings completed at two pipeline operations in North America, Brookfield Infrastructure Partners has generated over $1-billion for the partnership, while making these businesses more attractive to a wider buyer universe.

The investment pipeline remains quite full, but the company is being very selective in pursuing only those opportunities with high-risk-adjusted returns. There are a significant number of organic and tuck-in opportunities that are the company's primary focus at the moment, since these are typically Brookfield Infrastructure Partners' highest returning investments.

Brookfield Infrastructure Partners' largest investment in the quarter was a low-risk follow-on investment. The company acquired an incremental 10-per-cent stake in its Brazilian integrated rail and logistics provider from an existing shareholder for approximately $365-million. The purchase increased the company's ownership to 21 per cent (37-per-cent total Brookfield ownership) in a high-performing business with strong fundamentals at an over 20-per-cent discount to the company's view of fair value. Additionally, the acquisition improves Brookfield's governance as it is now the business's largest shareholder.

Brookfield Infrastructure Partners is also continuing to advance the follow-on acquisition of a portfolio of telecom towers in India, which is expected to close in Q4 2024, subject to regulatory approvals. The total equity consideration is expected to be approximately $1-billion, with the company's share expected to be approximately $150-million. All together, Brookfield Infrastructure Partners' total capital deployment so far this year is over $500-million.

Distribution and dividend declaration

The board of directors has declared a quarterly distribution in the amount of 40.5 cents per unit, payable on June 28, 2024, to unitholders of record as at the close of business on May 31, 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 Brookfield Infrastructure Corp. (BIPC) has declared an equivalent quarterly dividend of 40.5 cents per share, also payable on June 28, 2024, to shareholders of record as at the close of business on May 31, 2024.

Conference call and quarterly earnings details

Investors, analysts and other interested parties can access Brookfield Infrastructure's first quarter 2024 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. Eastern Time, 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.

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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