Thank you for standing by and welcome to the Brookfield Infrastructure Partners Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. I would like to hand the call over to, CFO, David Krant. Please go ahead.

Thank you, operator and good morning everyone. Welcome to Brookfield Infrastructure Partners’ Second Quarter 2022 Earnings Conference Call. As introduced my name is David Krant, and I’m the Chief Financial Officer of Brookfield Infrastructure Partners. Joining me today is Sam Pollock, our Chief Executive Officer; and Matt Grimes, Senior Vice President of our investments team for the Infrastructure Group. I will begin today with a discussion of our financial and operating results for the second quarter of 2022 as well as touch on the strength of our balance sheet and current liquidity position. I will then turn the call over to Matt who will walk through how decarbonization can influence capital allocation and new investment themes. Finally, Sam will provide an update on strategic initiatives and provide concluding remarks. Following our commentary, we will be joined by Ben Vaughan, our Chief Operating Officer for our question and answer period. At this time, I would like to remind you that in our remarks today, we may make Forward-Looking Statements. The 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 annual report on Form 20-F, which is available on our website. We are pleased to report another quarter of record financial results. Funds From Operations or FFO increased 30%, compared to the same period last year, while FFO per unit was 20% higher at $0.67. Organic growth remained robust at 10%, reflecting the benefits of elevated inflation, as well as the commissioning of approximately $1 billion of new capital projects, and over $3billion of capital deployed and new investments over the last 12-months. Taking a closer look at our operating results by segment, starting with utilities, adjusted EBITDA increased 14% relative to the…

Thank you, David and good morning, everyone. I’m pleased to be joining today’s call to discuss decarbonization of the global economy and the resulting investment opportunities. Our view is that this multi-decade initiative will require substantial infrastructure investment to improve and replace the existing energy supply chain. To achieve these aggressive net zero targets, governments, businesses and individuals must balance increasing energy consumption with the goal of reducing carbon footprints. This fundamental shift in how the world is powered is expected to be a catalyst for growth in our existing businesses, both organically and through new investment activity. We separate these opportunities into two categories. Firstly, supply side, which relates to the industries and companies directly responsible for the carbon emissions. And secondly, demand side, which focuses on consumer preferences for energy efficient solutions. On the supply side, we believe the fuels used today to power the global economy will either transition to a net zero economy or be run off safely and responsibly. Our existing midstream assets are predominantly natural gas, highly utilized and strategically located. We believe these characteristics favorably position us to participate in the energy transition through the adoption of emerging technologies, as well as through the shift in the global energy mix from coal to natural gas, LNG and eventually to hydrogen. To-date, we have been most active on demand side decarbonization initiatives to assist those seeking ways to increase energy efficiency, lower energy consumption and reduce reliance on fossil fuels. Recently, we have made investments in both smart meters and sub metering, which enable energy demand management through real time information about energy usage. We are also investing in building a platform of residential energy infrastructure businesses in North America and Europe. The combination of evolving regulatory requirements and growing preference for low carbon,…

Thank you, Matt and good morning, everyone. As David discussed, we have had a strong first half of the year. On top of our operational achievements and strong financial performance, we have successfully deployed to secure new investments for BIP, totaling approximately $2.8 billion well in excess of our estimated 1.5 billion annual target. As mentioned last quarter, we successfully invested approximately 700 million into two Australian utility investments, including the take private of an Australian regular utility business AusNet, and the acquisition of an Australian smart meter in business and telehealth. This quarter, we have secured three additional acquisitions in the utilities and data segments for a further capital commitment of approximately $2.1 billion. In early May, we announced an agreement to acquire Uniti Group, a provider of wholesale and retail telecommunications services to customers and businesses in Australia. We have now received shareholder and court approvals and expect this transaction to close in early August. Total Brookfield equity for the investment is estimated to be $850 million, with BIP share at approximately 200 million. During the quarter, we also signed an agreement to acquire HomeServe a leading global provider of home services operating across North American Europe, which Matt discussed earlier in the call. The total equity required for this investment is estimated to be $5 billion with BIP share at approximately $1.3 billion. The acquisition is expected close in the fourth quarter of this year.

Deutsche Telekom will retain a 49% stake in the assets and will continue to be an anchored customer under a 30-year master services agreement. Total portfolio equity for the investment is estimated to be $2.5 billion with BIP share at approximately 600 million. During the quarter, we were equally successful on the capital recycling front. In the past several weeks, we signed definitive agreement to sell for assets generating nearly $900 million in aggregate proceeds to BIP. In June, we signed agreement and close the sale of our 49% interest at U.S. container terminal business in Los Angeles and Oakland to our existing partner. Over our eight-year hold period, we successfully execute our business plan to grow and diversify volumes, as well as fully automate operations at the Los Angeles terminal. These enhancements combined with a supportive market backdrop and constrained terminal capacity, created an opportune time to monetize the business and attractive valuation. Our exit multiple was over 40 times pre-pandemic EBITDA and was approximately 20 times last year’s normalized EBITDA which was a record for the business. The sales result in an IRR of 90% during a holding period, with proceeds after debt repayment of 700 million or approximately 280 million net to BIP. We also signed agreements business and exit EBITDA multiple of over 14 times with proceeds of over $600 million or approximately 200 million net of BIP. Closings is expected in Q4, and is subject to customary regulatory approvals. In mid July, we signed an agreement to sell a 1,500 mobile telecom tower portfolio that was previously owned within our New Zealand telecom business. In 2019, we acquired a 50% stake in a fully integrated telecom network for approximately seven times EBITDA. Three-years later, we were able to successfully exit the towers at a 34…

Our first question comes from the line of Robert Hope of Scotiabank. Robert Hope your line is open.

Good morning everyone. First question as economic conditions soften does this change where you are focusing your time for new investments, or maybe to put this another way, do you think that softening conditions could yield opportunities in verticals where you have been a little bit more quiet in recent years, something like transport?

Hi, Robert. Maybe I will tackle that. This is Sam. I would guess that - maybe I will start-off by saying, at the moment, we are at the early stages of any real impact from the rising rates. So I think the potential opportunities are probably in the quarters ahead us. We do expect that valuations for the most part, as I mentioned in my remarks for infrastructure assets should hold, because many investors are looking past near-term conditions and the compounding impact of inflation will support valuations. But as you know, we also said - you alluded to, there will be some groups and investors who have taken on too much leverage and as a result could face liquidity. And so, we think the opportunities could arise and the assets that typically are most affected are the ones you highlighted, which are transportation assets. And that is because, they tend to be more GDP-focused and aren’t as contracted. So, they will be the ones where we will see some pressure. At the moment, we haven’t seen any particular opportunities arise on that front. But, I think over the coming quarters, that is where likely the opportunities could arise.

Alright. I appreciate that. And then just as a follow-up, just looking at your own liquidity, pro forma of the asset sales and the pending acquisitions, you are kind of where you are right now. Could we see you further bolster your liquidity or even accelerate additional asset sales to further bolster the balance sheet, if we do enter in recessionary conditions that could yield some incremental opportunities for yourself?

I will tackle this one, and Dave might add some comments as well. For the most part, we have a five-year plan on when we think it is appropriate time to dispose of our businesses based on where we think they are in their life cycle and where we have achieved most of the operating plan that we have set up for them. We do take into account each year changes that taken place within those assets and market conditions. But for the most part, we have so many ways to access capital. We tend not to look to accelerate asset sales. So, I guess in short, we probably wouldn’t do that. We probably wouldn’t change our timing on asset sales. We would utilize the other forms of capital that we have. But the only thing I would also add is every year given the scale of our business, we have a number of large businesses that we intend to sell. And so, we have continuous source of capital from recycling activities that are available to deploy new opportunities.

Thank you.

Our next question comes from the line of Maurice Choy of RBC Capital Markets. Maurice Choy please go ahead.

Good morning. I just want to follow-up on that question about investments. You mentioned that infrastructure assets tend to hold their value through recessionary conditions, at least until the sellers have liquidity issues, as you say, are used for seeing more opportunities to buy assets at a lower going you rate, the greater organic growth, versus buying assets at a good a deep value, which has been a hallmark of a few over recent years?

Maurice I didn’t quite get the full question. Let me just paraphrase and tell me if I got this right. I think the question was, in this market condition, will we have an opportunity to buy at a lower multiples reflecting maybe lower platform value or goodwill or not reflecting as much growth in the business?

No, I understand the mix between buying assets at a deep value versus buying assets at a lower going yield with a greater platform opportunity, especially given us sellers are not selling or lowering their prices in face of the lack of security issues on their side?

So I think the - I don’t think today, the opportunity for some of those deep distress acquisitions exist. I don’t think that is yet the market we are in. So I don’t see, this is not the financial crisis type conditions nor the conditions we saw in Brazil back in 2015, 2016, where we had some really deep value opportunities. That is not to say they might not they could arise, but it is not here today, that is for sure. But I do think that, the opportunity to buy growth platforms at lower valuations. Yes, I think that is definitely the market environment we are in and what we will look to do.

Understood that makes sense. Thank you for that. And my second question is about midstream. You obviously have some exposure primarily through your midstream segment, but also through some of the assets, other segments, including and transport. How do you broadly view your exposure to the sub sector and whether it is related to IPL assets or not? Do you see the potential to add more exposure or even find options to monetize some of these assets in the near-term?

I think what we have mentioned in the past and would reiterate today is that we think midstream investments are a key component of our portfolio mix and what we think are very attractive assets and critical to the world economy. And we recognize that midstream assets will evolve and transition into different fuels overtime. But for the most part, they are going to be critical for the next couple of decades. As far as quantum or what percentage we would have within our broader portfolio. I think that will always evolve, because we are constantly buying and selling assets, depending on their maturity profile. And that will - I don’t think we have a specific target in mind or what the right amount is. I think our goal is always to have a diversified portfolio across sectors and regions. So that we have minimal exposure to changes in political, regulatory, or sector dynamics that might take place from time to time. So, other than trying to bounce that diversity requirement, we don’t really have a percentage in mind.

Great, thank you very much.

Thank you. Our next question comes from the line of Robert Catellier of CIBC. Robert Catellier your line is open.

Thanks, good morning everyone I would like to start with the comments on decarbonization. And maybe you can discuss what ways you are most likely to leverage assisted companies and their renewable and transition platforms to secure new opportunities?

Hi Robert maybe I will tackle that one. I guess the first thing I would mention is while we have different investment groups that deployed capital within the various funds, we are all one team and so, we work very closely with the renewable and transition group. And so, it is very seamless as to how we exchange information and ideas and philosophies. We very much, compare notes on opportunities and particularly, I think what we try to achieve is within our existing franchises that we already own take the learnings from the various groups to drive value within those businesses and I think some of the ideas that we talked about on the...

We are dropped off, I think is are you talking about within existing franchises, you take the learnings and drive value?

Yes. So first of all, let me just apologize for the lines dropping, and clearly we need to make data investments in this country. But just coming back to the lessons learned, yes, we work very closely with the renewables transition group on our strategies and share not only best practices, but just learnings from our various investments. And we collectively think from a crypto perspective that, the decarbonization trends, represent an opportunity to invest many billions of dollars over the next couple of decades. And, in particular, not only on new investments, but on investments and franchise that we have today. And obviously, the residential infrastructure business where we are tackling the demand side equation, we think is particularly large. And so, we have benefited from the assistance of the renewables group. So in short, yes, we are working closely together and will continue to do so.

Okay. I just wanted to follow-up on the HPC polypropylene plant startup a bit. Just a little bit more color on how that sort of process going? I know, there is - it takes time and you can’t rush it, but is the product on spec, have you had to call on a contractors to perform any warranty work or anything like that? And then other than start up with a facility 70% contracted, is there anything more required to de risk that asset and consider other options such as partnering or perhaps the best thing to stake?

Sure, Robert, it is Ben speaking maybe I will handle the first part of that question. And maybe just to remind everyone, since we took over IPL, the first phase of getting Heartland up and running was to complete construction and so we have now that is behind us. And the startup was planned to occur in three phases. The first was to get the central utility block up and running. The second was to operate the polypropylene plant. And then the third is to start the PDH side of the facility. So, in the spring of this year, we successfully commissioned the central utility block, and there weren’t any major warranty claims or any material issues, Robert, in that startup. We got it running with what I would describe as normal course, startup challenges, but got it up and running. In July this year, we commissioned the polypropylene plant. And maybe just to add a bit of color to what Dave mentioned in his speaking notes. We were able to achieve full output from the extruder and achieve full capacity on a daily basis for railcar loading. So the polypropylene end of the plant is up and running well. And once again, there were no major - achieve full output from the extruder and achieve full capacity on a daily basis for railcar loading. So the polypropylene end of the plant is up and running well. And once again, there were no major - a few learnings along the way that I would describe once again, as completely normal course, for the startup of a plant. And then we are excited because during August and September, we are starting up the PDH side. And so once we get the PDH side up and running, we do expect to complete the ramp up to full production at the plant in the fall and towards the end of this year. So far no major issues and in the commissioning and operations of the plant is progressing as we had, as we initially planned. So hopefully that is a little bit of extra color. And maybe I will you know, in terms of de risking Heartland going forward, we have been able to make the spec of product that we were targeting for the commissioning. We have a bit of a wider spec menu that we expect to make as the plant reaches full operation. And as we make that we will look to continue to just de risk the revenue side of the plant, as you mentioned at 70% contracted today. And as we move our product into the market, we will look to achieve more contracts, where it is practicable to do so. And continue to just direct the revenue side as we bet down the operations. And with that, maybe I will leave the more strategic question about the plant for either Sam or David coming up.

Thanks Ben. I guess the only thing I would add, I guess, regarding your question was or we looking to bring in a partner, which at this point in time, we are not looking to bring any partners but that is obviously an opportunity that we can consider down the road.

Okay. That was a great color. Thank you.

Yes. Thank you.

Thank you. Our next question comes from the line of Devin Dodge of BMO Capital Markets. Devin Dodge your line is open.

Thanks, good morning. I wanted to ask about Brazil and the level of - at least a general level of investor interest down there. Are you still expecting to be a net seller in Brazil or are you seeing improved prospects for new investments that could see BIP redeploy any recycled capital back into the country?

Hi, Devin. We look - we are always looking for opportunities within the country. It is been in an area of focus for us, given our long history in the country. Given the significant asset base that we currently have, we have investments in most of, if not all the key segments of infrastructure sector in Brazil. There hasn’t been too much for us to look at more recently. And most of our investments have been add-ons to our existing business, whether it is growing our transmission or growing our data center business, or even adding onto our gas transmission business. So I would say it is mostly been organic growth. I think likely that that is going to be our investment posture for at least the next little while. And possibly there will be some exits, as a number of the businesses are becoming more mature. So, it is probably, I hate to say that we are net seller because it sounds more negative. But just from the life cycle of our businesses that may be the case. But to extent another opportunity arises, that is great value. We would definitely look it.

Okay. Thanks for that. That is a good color. Second question, I was going to ask about Vodafone New Zealand, with the towers carved out, there really isn’t much, what we would consider to be kind of infrastructure remaining in the business. Can you give an update on your plans for the remainder of the company and are there other candidates out there where you think there were opportunities to acquire the towers that are integrated with the retail operations?

So, maybe just the first part, I would say, we still think that the Vodafone business, it does have significant infrastructure remaining. It has very substantial wireline business that provides significant internet and other services to the country. And so, we would actually say, it does have a tremendous infrastructures bones to it. So I think, we still like the business and whether or not we decide to operate on a holistic basis today or further separate the operating business from that remaining infrastructure opponent is something to consider. But, we are very happy with the business that we have and we think there is lots of value chains to generate. I guess on your second question, are there similar type opportunities to buy these fully-integrated telecom utilities and separate out some of the infrastructure assets? Yes. I think there are still are a number around the world that we can look at and give them the success of this transaction. If one came up that made sense from a value perspective, we would definitely consider it.

Okay that is helpful. Thanks, I will turn it over.

Thank you.

Thank you. Our next question comes from the line of Frederic Bastien of Raymond James. Frederic Bastien your line is open.

Good morning guys. Good results. I was wondering if you could provide your views on the CHIPS Act and whether you see it as a positive catalyst for this. From what I gather, this could bode well for your joint venture with DigitalBridge. But since I’m no expert in that space, was hoping you could add a bit of color here?

So maybe just to clarify, I guess, the JV, we have with DigitalBridge is on the Deutsche Telekom business in Germany, and I think we are excited about that opportunity. I don’t think the CHIPS Act will impact that business. But, it is related to the reonshoring of the semiconductor facilities into the U.S., which has been an area of focus for us. And we do think that it will provide the impetus and the additional source of capital to make those chip facilities more viable and profitable, and probably encourage a number of the semiconductor businesses to proceed. And we are in discussions to help facilitate the development of those businesses. And so I think, you know, we hope that that will, in the not too distant future help us secure a transaction. And hopefully in future cores, we can talk with that.

Okay, sorry for the confusion. But it does sound like it is an underappreciated part of your story here. That is all I have, actually I will pass it on to others. Thank you.

Thanks Fred.

Thank you. Our next question comes from the line of Andrew Kuske of Credit Suisse. Andrew Kuske your line is open.

Thanks, good morning. Maybe just in the context of the decarb opportunity that you have highlighted on this call and in the letter. Obviously buildings is one of the biggest culprits from an admission standpoint. Industrials and autos gets a lot of focus, but buildings is a big issue. How do you see the interplay of BIP, the flagship funds, and then just the broader transition fund, and how it is all sort of worked together in the context of the investment potential for BIP?

Hi Andrew. I didn’t quite - maybe to make sure I answered your question properly. Do you want me to bring it back to buildings in particular on the real estate side, or just where I think BIP in particular will play a focus on it? I think maybe just clarify the first part of your question.

Yes, unfairness is probably a bit of both is you have got your residential strategy, which is very BIP centric, but you have also got buckets and the bigger broader Brookfield family of office exposure, residential exposure. So there is a bunch of different levers and then from a capital deployment standpoint, you have got a bunch of buckets of capital from different sources that you can effectively spend or invest. So I’m just sort of curious on how you think about that broadly and then more specifically to BIP.

Okay. So I will probably go on the safe side and maybe leave some of the real estate related answers to Brian or Bruce on the later call, because I probably won’t properly - answer properly. But on the real estate side, where it relates to our businesses, mostly on the metering side, where we think there is a huge opportunity to deploy capital and grow our submetering businesses both in North America as well as Australia. So that is primary focus and to extent that we can expand those businesses to other geographies, we will definitely do that. And we think that is an important component, a component of improving the efficiency of real estate, both residential and industrial. But I think where we have the most immediate and largest potential in our business, really is on the residential side of the business, particularly as it relates to driving the deployment of new rental products through Enercare and now leveraging the benefit of HomeServe. And really just growing the number of products that we provide to customers and assisting them in financing those. And today we have expanded the products to generators, rooftop and solar, as well as the HVAC and different types of HVAC and heat pumps. So I think the array of products has grown dramatically. And I think over the coming decade, the number of products will grow even more and become more relevant in the sense of that become more expensive and more sophisticated. And so people will need our services that much more. So I think the market opportunity is truly in the billions of dollars. And we think, we are well positioned to be leaders in building that business.

I appreciate that color and maybe just a follow-up. When you think about securitizing those cash flow streams and effectively repackaging them, are there certain markets like say, the U.S. market and to a certain degree, the Canadian market where it is are well established that that can be done? Does that mean those areas grow at a faster rate than maybe some areas where securitization could just be a bit more difficult? Because there is not as many examples or precedents where that is been done?

You know look, I think there is lots of pools of capital to grow this business, not even outside of North America, whether it is Australia or Europe, there is a pretty, there is lots of deep pools of capital and low cost capital that will still make an attractive value proposition for our customers. Obviously, to the extent that we have the securitization, that is the gold standard as far as driving down cost of capital, particularly in this type of business. And so North America I think is the best suited. But look, I think there are lots of pools of capital that we can tap into to grow the business elsewhere.

Okay. Very much appreciate it. Thank you.

Okay. Thank you.

Thank you. Our final question comes from the line of Naji Baydoun of Industrial Alliance. Naji Baydoun, your line is open.

probably of discussion in the previous quarter, but just want to see if you can provide more details on that Q2.

Sorry, Naji. Can you repeat that? We just missed the first part of that.

Sure. I’m just wondering if you can break down the components of organic growth in the quarter? The 10% that you posted.

Hey, Naji. It is David here. I can tackle that one. So if we looked a little deeper into the 10% for the quarter, I would say the primary driver is going to be the outsized inflation that we are benefiting from today. And you will recall that benefit all four of our segments. Most notably, it would be across utilities, transport and data that you are seeing those benefits, in the upwards of 80% to 95% of those businesses. So I would say, on average of the 10%, 6% of it almost 7% is from the inflation indexation. Volumes overall were pretty resilient. I would say, they are pretty flat when you are looking year-over-year in terms of total trends. And then the other key driver would be the commissioning of capital projects. We have our normal course addition to rate base at BIP UK, for example. But I would say the larger and chunkier ones that you are seeing in this quarter would be the 6th train at Sabine in our transport sector. And then one of the lines within quantum are Brazilian Electricity Transmission Project was commissioned in the first quarter, that is now fully contributing to revenues relatives to the prior year. So those would be the two. So on the utilities on the transport side where you are seeing outside CapEx in this current quarter. But those would be the two biggest drivers looking year-over-year.

Okay. That is perfect. That is great color. And I think initially when you started to see some of this higher inflation dynamics you were, maybe pointing or the ability to hit the high end of your organic growth targets. I noticed some of that language is no longer there in the supplemental. But do you still see sort of a lag in terms of inflation impacting results and still being able to potentially hit the upper end of organic growth targets, let’s say, this year and the next one.

Definitely for the back half of this year, Naji, and I wouldn’t read into just not touching on it in the current quarter. We had a ton of strategic initiatives to highlight. But, I wouldn’t read too much into that. I would say for the back half of this year, inflation still runs well above our target range and all of the markets in which we are operating. So we will look to capture that and continue to benefit from that. And to your point, we do have a number of our regulated utilities in Australia and the UK that do have a bit of a lag between, the risk free rate and when you pass through current inflation. So, we should see incremental benefits looking ahead to 2023. So no, I still expect next year to be above our target range as well, based on the current environment we are in.

Okay, fantastic. Thank you.

Thank you. At this time, I would like to turn the call back over to Sam Pollock, CEO for closing remarks. Sir.

Thank you operator. And thank you everyone for joining the call this morning. We do apologize for the technical difficulties that we had and appreciate your bearing with us. And more importantly, thank you for your support and look forward to speaking to you our next quarter but also add our Investor Day presentation which is on September 29th. Details of that are available on our website. So thank you very much and enjoy the rest of your summer.

This concludes today’s conference call. Thank you for participating. You may now disconnect.