Q3 2023 Brookfield Infrastructure Partners L.P. Earnings Call

Thank you for standing by Bulking to Brookfield infrastructure Partners' third quarter 2023 results conference call and webcast. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you'll need to press star one on your telephone.

Speaker 1: Thank you for standing by and welcome to Brookfield Infrastructure Partners, third quarter 2023 results conference call and webcast.

Speaker 1: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone.

Speaker 1: To remove yourself from the queue, simply press star 1 1 again.

To remove yourself from the queue simply press Star one again as a reminder, today's program is being recorded and now I'd like to introduce your host for today's program, David Gray Chief Financial Officer. Please go ahead Sir.

Speaker 1: As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, David Crank, Chief Financial Officer. Please go ahead, sir.

Speaker 2: Thank you, operator, and good morning, everyone. Welcome to Brookfield Infrastructure Partners' third quarter 2023 earnings conference call. As introduced, my name is David Kretz, and I'm the Chief Financial Officer of Brookfield Infrastructure.

Thank you operator, and good morning, everyone welcome to Brookfield infrastructure Partners' third quarter 2023 earnings Conference call as introduced my name is David Crafts, and Im the Chief financial Officer of Brookfield infrastructure.

Speaker 2: I'm also joined today by our Chief Executive Officer, Sam Pollock.

I'm also joined today by our Chief Executive Officer, Sam Pollock for the <unk>.

Speaker 2: For the call this morning, I'll begin with a discussion of our strong financial and operating results. I will then touch on our balance sheet strength and the success we've had in our asset sale program this year.

This morning, I'll begin with a discussion of our strong financial and operating results I will then touch on our balance sheet strength and the success we've had in our asset sale program. This year.

Speaker 2: I'll then turn the call over to Sam, who will provide an update on our strategic initiatives and capital allocation.

I'll, then turn the call over to Sam who will provide an update on our strategic initiatives and capital allocation.

Speaker 2: Following our commentary, we will be joined by Ben Vaughn, our Chief Operating Officer for Question and Answer Period.

Following our commentary we will be joined by Ben Vaughan, Our Chief operating officer for question and answer period.

Speaker 2: At this time, a bike reminds 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.

At this time I would 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.

Speaker 2: For further information on known risk factors, I would encourage you to review our annual report on Form 20F, which is available on our website.

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.

Beginning with our financial and operating results. We are pleased to report another quarter of excellent financial results due to good operating performance and the successful execution of our asset recycling strategy.

Speaker 2: Beginning with our financial and operating results, we're pleased to report another quarter of excellent financial results due to good operating performance and the six-exual execution of our asset recycling strategy.

Speaker 2: Funds from Operations or FFO for the quarter was $560 million dollars an increase of 7% compared to the same period in 2020.

Funds from operations or <unk> for the quarter was $560 million, an increase of 7% compared to the same period in 2022.

Speaker 2: Results benefited from our business's unique ability to capture current inflation levels, combined with the commissioning of nearly 1 billion capital projects over the last 12 months.

<unk> benefited from our businesses unique ability to capture current inflation levels combined with the commissioning of nearly $1 billion of capital projects over the last 12 months.

Speaker 2: Looking ahead, we are well positioned for a strong end of the year. Considering that our European HyperSkill Data Center platform was the only new investment to contribute this quarter, with the remaining $1.6 billion of new investments having closed at quarter end or shortly thereafter.

Looking ahead, we are well positioned for a strong end of the year considering that our European Hyperscale data Center platform was the only new investments to contribute this quarter with the remaining $1 $6 billion of new investments haven't closed at quarter end or shortly thereafter.

Taking a closer look at our results by segment, our utilities business generated <unk> of $229 million, an increase of 17% from the comparable period last year.

Speaker 2: Taking a closer look at a results by segment, our utilities businesses generated FFO of $229 million, an increase of 17% from the comparable period last year. Organic growth for the segment was over 10% reflecting inflation indexation and the commissioning of approximately $500 million of capital into rate base during the last 12 months.

Organic growth for the segment was over 10%, reflecting inflation indexation and the commissioning of approximately $500 million of capital into rate base. During the last 12 months.

Speaker 2: Current quarter results benefited from the expansion of our residential decarbonization infrastructure platform in North America and Europe following the acquisition of HomeServe earlier this year.

Current quarter results benefited from the expansion of our residential de carbonization infrastructure platform in North America and Europe. Following the acquisition of Homeserve earlier this year.

This positive contribution was partially offset by the sale of our interest in our Australian regulated utility and largest of this year.

Speaker 2: This positive contribution was partially offset by the sale of our interest and our Australian regulated utility in August of this year.

Moving to our transport segment.

Speaker 2: Moving to our transport segment, as I've over the quarter was $205 million with organic growth of 7% compared to the same period last year.

So for the quarter was $205 million with organic growth of 7% compared to the same period last year.

Rates at each of our businesses have increased reflecting the positive impact of inflation has on our results.

Speaker 2: Right to each of our businesses have increased reflecting the positive impact inflation has on our results.

Speaker 2: Specifically, our global toll road tariffs have increased 8% and our rail networks are passing through rate increases of approximately 7% relative to last.

Specifically, our global toll road tariffs have increased 8% and our rail networks are passing through rate increases of approximately 7% relative to last year.

Speaker 2: Overall, volumes remain consistent across our portfolio, reinforcing the criticality of our assets, despite softness in the broader global transportation network.

Overall volumes remained consistent across our portfolio reinforcing the criticality of our assets despite softness in the broader global global Transportation network.

A bright spot within our transport segment, as VLSI or integrated route and logistics provider in Brazil Bridge.

Speaker 2: A bright spot within our transport statement is VLI. Our integrated rail and logistic provider in Brazil.

Speaker 2: Brazil's competitive advantages in the export of key agricultural commodity such as soy, corn, and sugar combined with strong fertilizer imports have supported growing rail volumes and tariffs.

Brazil has competitive advantages and the export of key agricultural commodities, such as soy corn and sugar combined with strong fertilizer imports have supported growing rail volumes and tariffs.

Speaker 2: Over the past decade, we have been able to realize average annual volume and tariff increases of 5 and 9% respectively. As a result, EBITDA has increased nearly...

Over the past decade, we have been able to realize average annual volume and tariff increases of 5% to 9% percent respectively.

As a result, EBITDA increased nearly six times during our ownership.

Speaker 2: Our mid-tune segment F and F O was $163 million, a decrease of 5% compared to the prior period. This is due to the partial fail of our interest in a US gas pipeline in June , and the normalization of market-sensitive revenues at our Canadian-diversified mid-stream business.

Our midstream segment <unk> was $163 million, a decrease of 5% compared to the prior period.

This was due to the partial sale of our interest in a U S gas pipeline in June and the normalization of market sensitive revenues at our Canadian diversified midstream business.

Operator: After this speaker's presentation, it will be a question and answer session. The ask a question during this session, you'll need to press star 1-1 on your telephone. To remove yourself from the cues simply press star 1-1 again.

Speaker 2: results were supported by an increased utilization and higher contracted castles across the segments compared to last year, as well as the initial contribution from the Heartland Petrochemical Complex.

Results were supported by increased utilization and higher contracted cash flows across the segment compared to last year as well as the initial contribution from the Heartland petrochemical complex.

Operator: As a reminder, today's program is being recorded and now I'd like to reduce your host's today's program David Krant, Chief Financial Officer. Please go ahead, sir. Thank you, operator and good morning, everyone.

Speaker 2: During the third quarter, Hartland ramped up production and sold over 200 million pounds of polypropylene. We were operating at target production levels and we expect to continue at these levels into 2024.

During the third quarter Heartland ramped up production and sold over 200 million pounds of polypropylene, we're operating at targeted production levels and we expect to continue at these levels into 2024.

David Krant: Welcome to Brookfield Infrastructure Partners, third quarter, 2023 earnings conference call. It's introduced to my name is David Krant, and I'm the Chief Financial Officer of Brookfield Infrastructure. I'm also joined today by our Chief Executive Officer, Sam Pollock. For the call this morning, I'll begin with a discussion of our strong financial and operating results. I'll then touch on our balance sheet strength and the success we've had in our asset cell program this year.

Speaker 2: All commercial arrangements underpinning approximately 70% of the capacity are in service and the fourth quarter is expected to provide a full period contribution to results.

All commercial arrangements underpinning approximately 70% of the capacity are in service in the fourth quarter is expected to provide a full period contribution to results.

Speaker 2: Lastly, FFO from our data segment was $66 million, representing an increase of 10% from the same period last year.

Lastly, <unk> from our data segment was $66 million, representing an increase of 10% from the same period last year.

Speaker 2: The increase is attributable to the acquisition of a European Telecom Tower operation in February of 2023 and a European HyperSkill Data Center platform in Miss Audia.

The increase is attributable to the acquisition of a European Telecom tower operation in February of 2023, and a European Hyperscale data Center platform Miss August.

David Krant: I'll then turn the call over to Sam, who will provide an update on our strategic initiatives and capital allocation. Following our commentary, we'll be joined by Ben Vaughn, our Chief Operating Officer for question and answer period. 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 annual report on Form 20A, which is available on our website.

Speaker 2: The prior period included contributions from a New Zealand integrated data distribution business that we sold in June .

The prior period included contributions from our New Zealand integrated data distribution business that we sold in June of this year.

Speaker 2: At our Data Center businesses, we continue to experience strong industry tailwinds driving elevated demand for Kappa.

At our data center businesses, we continued to experience strong industry tailwind is driving elevated demand for capacity.

Speaker 2: In North America, our US retail co-location business had record capacity bookings during the past two quarters and recently initiated a densification program to create incremental capacity at existing sites.

In North America, our U S retail co location business had record capacity bookings during the past two quarters and recently initiated a densification program to create incremental capacity at existing sites.

David Krant: Beginning with our financial and operating results, we are pleased to report another quarter of excellent financial results due to good operating performance and the successful execution of our asset recycling strategy. Funds from operations or FFO for the quarter was $560 million and increase of 7% compared to the same period in 2022. Results benefited from our business' unique ability to capture current inflation levels, combined with the commissioning of nearly 1 billion of capital products over the last 12 months.

And our U S. Hyperscale platform, we acquired a 200 acre site in Chicago that can accommodate 200 megawatts of capacity.

Speaker 2: In our US HyperSkilt platform, we acquired a 200 acre site in Chicago that can accommodate 200 megawatts of capacity.

Speaker 2: Chicago is a fast growing Tier 1 market for data centers with under 5% vacancy rates And we have already received advanced indications of interest from major hyperscale cuts

Chicago is a fast growing tier one market for data centers with under 5% vacancy rate and we have already received advanced indications of interest from major hyperscale customers.

In the Asia Pacific region, we commercialize our inaugural data Center development in Seoul Korea.

Speaker 2: In the age of Pacific region, we commercialized our inaugural data center development in Seoul, Korea, South Korea. We executed a 15-year contract with a global hyperscaler for 13 megawatts of capacity that has built an inflation escalation and a pass through of electricity costs.

South Korea, we executed a 15 year contract with a global Hyperscale or for 13 megawatts of capacity that has built an inflation escalation and a pass through of electricity costs.

David Krant: Looking ahead, we are well positioned for a strong end of the year, considering that our European Hyperscaled Data Center platform was the only new investment to contribute this quarter, with the remaining $1.6 billion of new investment having closed at quarter end or shortly thereafter. Taking a closer look at a results by segment, our utility businesses generated FFO of $229 million, and increase of 17% from the comparable period last year. Organic growth for the segment was over 10% reflecting inflation and the commissioning of approximately $500 million of capital into rate-based during the last 12 months.

Speaker 2: Construction is commenced and is forecast to be completed by the end of 2025.

Construction has commenced and is forecast to be completed by the end of 2025.

Speaker 2: In India, Reliance Industries is joining our existing joint venture on an equal basis. The current development platform includes two land parcel in Chennai and Mumbai, with total capacity potential of up to 160 megawatts.

In India reliance industries are joining our existing joint venture on an equal basis. The current development platform includes two land parcels in Chennai, and Mumbai with total capacity potential of up to 160 megawatts.

Speaker 2: Transitioning from our resilient and growing financial results into remarks on our balance sheet and liquidity position. The fundamentals of our business remain strong, as the benefit of inflation escalation and a disciplined financing approach have largely insulated us from rising rates.

Transitioning from our resilient and growing financial results and the remarks on our balance sheet and liquidity position. The fundamentals of our business remains strong as the benefit of inflation escalation and a disciplined financing approach has largely insulated us from rising rates.

David Krant: Current quarter results benefited from the expansion of our residential decarbonization infrastructure platform in North America and Europe following the acquisition of home serve earlier this year. This positive contribution was partially offset by the sale of our interest in our Australian regulated utility in logist of this year. Moving to our transport segment, FFO for the quarter was $205 million, with organic growth 7% compared to the same period last year. Racer each of our businesses have increased reflecting the positive impact inflation has on our results.

Speaker 2: Furthermore, the debt capital markets have been extremely favorable for infrastructure assets providing an overall net positive backdrop to business conditions.

Furthermore, the debt capital markets have been extremely favorable for infrastructure assets, providing an overall net positive backdrop to business conditions.

Speaker 2: We have proven our ability to deliver on our strategy through market cycle, sourcing several value-based investments during this period of capital dislocation, while completing our annual capital recycling objective.

We have proven our ability to deliver on our strategy through market cycle sourcing several value based investments during this period of capital dislocation, while completing our annual capital recycling objectives in.

Speaker 2: In total, we have raised nearly $2 billion of proceeds this year from our program.

In total we have raised nearly $2 billion of proceeds this year from our program.

Speaker 2: Achieving our capital recycling objectives has required additional focus as the current MAC market backdrop favors buyers. We can continue to execute in this environment as we benefit from owning a high quality and diversified asset base across sectors and geographies that we leverage to monetize assets at the highest value.

Achieving our capital recycling objectives has required additional focus of the current Mac market backdrop favors buyers. We can continue we continue to execute in this environment as we benefit from owning a high quality and diversified asset base across sectors and geographies that we leverage to monetize at the highest valuations we.

David Krant: Specifically, our global toll road tariffs have increased 8% and our rail networks are passing through rating of approximately 7% relative to last year. Overall, volumes remain consistent across our portfolio, reinforcing the criticality of our assets, despite softness in the broader global transportation network. A bright spot within our transport segment is VLI, our integrated rail and logistic provider in Brazil. Brazil's competitive advantages in the export of key agricultural commodities such as soy, corn, and sugar, combined with strong fertilizer imports, have supported growing rail volumes and tariffs.

Speaker 2: We also tailor the size and structure of our assets to attract the most suitable buyers.

Also tailor the size and structure of our assets to attract the most suitable buyers.

Speaker 2: Our capital recycling success has resulted in a strong liquidity position. At the end of Q3, our corporate liquidity was approximately $2.1 billion, which reflects the funding of all announced to transact.

Our capital recycling success has resulted in a strong liquidity position at the end of Q3, our corporate liquidity was approximately $2 1 billion, which reflects the funding of all announced transactions.

Speaker 2: This available liquidity combined with our target $2 billion of asset sales in 2024 provides a solid foundation for us to capitalize on the current investment landscapes that favors well-capitalized buyers with access to capital. That concludes my remarks for this morning. I'll now turn the call over to you.

This available liquidity combined with our target $2 billion of asset sales in 2024 provides a solid foundation for us to capitalize on the current investment landscape that favors well capitalized buyers with access to capital.

David Krant: Over the past decade, we have been able to realize average annual volume and tariff increases of 5 and 9% respectively, as a result, even as increasingly six times during our ownership. Our midstream segment, F and F, was $163 million, a decrease of 5% compared to the prior period. This is due to the partial fail of our interest in a US gas pipeline in June, and the normalization of market-sensitive revenues at our Canadian diversified midstream business.

That concludes my remarks for this morning, I'll now turn the call over to Sam.

Okay. Thank you David and good morning, everyone.

Speaker 3: From my remarks today, I'm going to provide an update on our strategic initiatives and conclude with a brief discussion on the operating environment and our favorable

From my remarks today, I'm going to provide an update on our strategic initiatives and conclude with a brief discussion on the operating environment and our favorable outlook.

Speaker 3: The market environment we've been operating in has created a strong environment for capital deployment.

The market environment, we've been operating in has created a strong environment for capital deployment.

David Krant: Results were supported by an increased utilization and higher contracted castles across the segments compared to last year, as well as the initial contribution from the Heartland Petrochemical Complex. During the third quarter, Heartland ramped up production and sold over 200 million pounds of polypropylene. We were operating at target production levels and we expected to continue at these levels into 2024. All commercial arrangements underpinning approximately 70% of the capacity are in service, and the fourth quarter is expected to provide a full period contribution to results.

Speaker 3: We have surpassed our annual new investment objective for the third year in a row, closing the acquisitions of two marquee, data center platform.

We have surpassed our annual new investment objective for the third year in a row closing the acquisitions of two marquee data center platforms as well as the leading global logistics business trade internationally.

Speaker 3: as well as a leading global logistics business, Trident International.

Speaker 3: The risk-adjusted returns we expect to generate in these investments are well in excess of our targets and are representative of the value entry points that can be achieved in this market.

The risk adjusted returns we expect to generate in these investments are well in excess of our targets and are represented up the value entry points that can be achieved in this market.

The take private of trade and closed on September 28.

Speaker 3: We invested approximately $1.2 billion for a 28% interest that was funded primarily using new BIPC shares as transactions.

David Krant: Lastly, FFO from our data segment was $66 million, representing an increase of 10% from the same period last year. The increase is attributable to the acquisition of a European telecom tower operation in February of 2023 and a European hyperscale data center platform in Miss August. The prior period included contributions from a New Zealand integrated data distribution business that we sold in June of this year. At our data center businesses, we continued to experience strong industry tailwinds driving elevated demand for capacity.

We invested approximately $1 2 billion.

Four of 28% interest that was funded primarily using new <unk> shares.

As transaction consideration.

Speaker 3: We expect to generate a base case IRR above our targets derived largely from the in-place cast yield.

We expect to generate a base case IRR above our targets derived largely from the in place cash yield.

Speaker 3: The leading market position in highly cash-generated nature of the business provides strong operational flexibility to invest in fleet replacements and growth during favorable markets, or to harvest cash in less attractive markets.

The leading market position and highly cash generative nature of the business provide strong operational flexibility to invest in fleet replacement and growth during favorable market or to harvest cash and less attractive markets.

Speaker 3: We're also very excited about the opportunities across our data center platform, which has grown significantly following the acquisitions of Data4 and Compass, which closed in August and October respectively.

We're also very excited but the opportunities across our data center platform, which has grown significantly following the acquisitions of data for encompass which closed in August and October respectively.

David Krant: In North America, our US retail co-location business had record capacity bookings during the past two quarters and recently initiated a densification program to create incremental capacity at existing sites. At our US hyperscale platform, we acquired a 200 acre site in Chicago that can accommodate 200 megawatts of capacity. Chicago is a fast growing Tier 1 market for data centers with under 5% vacancy rates, and we have already received advanced indications of interest from major hyperscale customers.

Speaker 3: Overnight, we signed an agreement to acquire a portfolio of data centers out of bankruptcy from Sixterra.

Overnight, we signed an agreement to acquire portfolio of data centers out of bankruptcy from sixth era.

We believe we will generate strategic value by combining <unk> with evoke to create a leading retail colocation data center provider with over 330 megawatts of capacity deployed in high demand areas across North America.

Speaker 3: We believe we will generate strategic value by combining Soxtera with Evoque to create a leading retail co-location data center provider with over 330 megawatts of capacity deployed in high demand areas across North America.

David Krant: In the Asia Pacific region, we commercialized our inaugural data center development in Seoul, Korea, South Korea. We executed a 15 year contract with a global hyperscale for 13 megawatts of capacity that has built an inflation escalation and a passive electricity cost. Construction is commenced and is forecast to be completed by the end of 2025. In India, reliance industries are joining our existing joint venture on an equal basis. The current development platform includes two land parcels in Chennai and Mumbai, with total capacity potential of up to 160 megawatts.

Speaker 3: The combined platform will have the scale, assets, and capabilities required to provide critical infrastructure ports over 2,500 customers to support the exponential increase in demand from industry tailwinds, including artificial intelligence and cloud deployment.

The combined platform will have the scale assets and capabilities required to provide critical infrastructure ports over 2500 customers to support the exponential increase in demand from industry tailwind, including artificial intelligence and cloud deployments.

Funding has been fully secured for the transaction, which is expected to close in the first quarter of 2024.

Speaker 3: Funding has been fully secured for the transaction, which is expected to close in the first quarter of 2024.

Touching briefly on the current operating environment.

Speaker 3: touching briefly on the current operating environment. It is clear that there are considerable impacts from geopolitical and macroeconomic facts.

It is clear that there are considerable impact from geopolitical and macroeconomic factors.

David Krant: Transitioning from our resilient and growing financial results into remarks on our balance sheet and liquidity position. The fundamentals of our business remain strong, as the benefit of inflation escalation and a disciplined financing approach have largely insulated us from rising rates. Furthermore, the debt capital markets have been extremely favorable for infrastructure assets, providing an overall net positive backdrop to business conditions. We have proven our ability to deliver on our strategy through market cycle, sourcing several value-based investments during this period of capital dislocation, while completing our annual capital recycling objectives.

Speaker 3: Also of note is that we are witnessing diverging economic conditions in several of our key markets.

Also of note is that we are witnessing diverging economic conditions in several of our key markets.

For instance, in Brazil interest rates are expected to decline as inflationary pressures the blend.

Speaker 3: For instance, in Brazil, interest rates are expected to decline as inflationary pressures have been

Speaker 3: In the US, a relative will be strong economic background.

In the U S are relatively strong economic background.

Speaker 3: Will likely result in interest rates at current levels for a while longer other regions seem to be somewhere in the middle

We will likely result in interest rates at current levels for a while longer.

Other regions seem to be somewhere in the middle.

Speaker 3: Our global footprint should allow us to arbitrage varying economic circumstances to right recycled capital on favorable terms in certain markets, while taking advantage of capital scarcity in others.

Our global footprint to allow us to arbitrage varying economic circumstances to recycle capital on favorable terms in certain markets, while taking advantage of capital scarcity and others.

David Krant: In total, we have raised nearly $2 billion of proceeds this year from our program. Achieving our capital recycling objectives has required additional focus as the current market backdrop favors buyers. We can continue to execute in this environment as we benefit from owning a high quality and diversified asset base across sectors and geographies that we leverage to monetize asset at the highest valuations. We also tailor the size and structure of our assets to attract the most suitable buyers.

Speaker 3: This has always been our playbook and we will continue to execute the same business strategy which has been successful over many years.

This has always been our playbook and we will continue to execute the same business strategy, which has been successful over many years.

Now I'd like to make a few comments in relation to our share price.

Speaker 3: Despite achieving solid financial results throughout the year and delivering on our strategic initiative,

Despite achieving solid financial results throughout the year and delivering on our strategic initiatives Britt.

Speaker 3: Berkville Infrastructure's unit price is disappointed under former

Brookfield infrastructure unit price is disappointing we underperformed recently.

This is not unique to us as utility infrastructure companies have generally traded off as investors focused on credit or other sector strategies.

Speaker 3: This is not unique to us. As utility infrastructure companies have generally traded off its investors focused on credit or other sector strides.

David Krant: Our capital recycling successes resulted in a strong liquidity position. At the end of Q3, our corporate liquidity was approximately $2.1 billion, which reflects the funding of all announced transactions. This available liquidity combined with our target $2 billion of asset sales in 2024 provides a solid foundation for us to capitalize on the current investment landscape. The favors well-capitalized buyers with access to capital. That concludes my remarks for this morning.

As we've noted in the past the utility and infrastructure sectors are highly resilient asset classes that generate growing and sustainable cash flows.

Speaker 3: As we have noted in the past, the utility and infrastructure sectors are highly resilient asset classes that generate growing and sustainable cash flows.

Indicative those attributes we have grown <unk> per unit in distributions per unit at compound annual rates of 11% and 8% respectively over the past decade.

Speaker 3: Indicator of those attributes, we have grown FFO per unit and distributions per unit at compound annual rates of 11 and 8 percent respectively over the past decade.

Speaker 3: Now looking ahead, there are several elements to our current situation that are worth highlighting.

Now looking ahead, there are several elements to our current situation there worth highlighting.

Sam Pollock: I'll now turn the call over to Sam. Thank you, David, and good morning everyone. From my remarks today, I'm going to provide an update on our strategic initiatives and conclude with a brief discussion on the operating environment and our favorite bug look. The market environment we've been operating in has created a strong environment for capital deployment. We've surpassed our annual new investment objective for the third year in a row. Closing the acquisitions of two marquee data center platforms, as well as a leading global logistics business, trade and international.

Speaker 3: First, our size of organic growth consists largely of embedded inflationary escalators and secured camp box mansion projects.

First our sizable organic growth consists largely of embedded inflationary escalators and secured capital expansion projects.

Speaker 3: This benefit compounds over long periods of time and provides us with a natural hedge to higher interest rates.

This benefit compounds over long periods of time and provides us with a natural hedge to higher interest rates.

Speaker 3: Also, our capital backlog is largely self-funded from a combination of committed CAPEX facilities and retained cash.

Also our capital backlog its largest self funded from a combination of committed capex facilities and retained cash flows.

Second we have exceeded our new investments target for three consecutive years.

Speaker 3: And secondly, we have exceeded our new investments target for three consecutive years.

Speaker 3: As a result, we have substantial built-in growth that provides us the flexibility to pace our investment activity in accordance for a capital recycling achievement.

As a result, we have substantial built in growth that provides us the flexibility to pace our investment activity in the courts for capital recycling achievements.

Sam Pollock: The risk adjusted returns we expect to generate in these investments are well-next at our targets, and are represented of the value entry points that could be achieved in this market. To take private of trade and closed on September 28th, we invested approximately $1.2 billion for a 28% interest that was funded primarily using new BIPC shares as transaction consideration. We expected to generate a base case IRR above our targets derived largely from the in-place cash yield.

Third we have locked in interest rates for over 90% of our debt.

Speaker 3: Third, we have locked in interest rates for over 90% of our debt, with an average maturity of approximately

With an average maturity of approximately seven years.

Speaker 3: This provides us with great visibility into our cash flow going forward.

This provides us with great visibility into our cash flow going forward.

Fourth in light of our strong conviction and the intrinsic value of our business and its growth trajectory.

Speaker 3: Fourth, in light of our strong conviction in the intrinsic value of our business and its growth trajectory, we see the merit in deploying capital to

We see the merit in deploying capital to repurchase our equity.

Sam Pollock: The leading market position in highly cash generous nature of the business provides strong operational flexibility to invest in fleet replacements and growth through favorable markets or to harvest cash in less attractive markets. We're also very excited about the opportunities across our data center platform, which has grown significantly following the acquisitions of data foreign compass, which closed in August and October respectively. Over a night, we signed an agreement to acquire portfolio of data centers out of bankruptcy from 6th era.

During the quarter, we began repurchasing equity and have bought close to 1 million units under our normal course issuer bid.

Speaker 3: During the quarter, we began repurchasing equity and have bought close to 1 million units under our normal course issuer bid.

Speaker 3: Going forward, we will consider further buybacks in conjunction with our ability to earn strong risk-adjusted returns by deploying capital and new investment opportunities.

Going forward, we will consider further buybacks in conjunction with our ability to earn strong risk adjusted returns by deploying capital in new investment opportunities.

Speaker 3: In summary, we've demonstrated our ability to use our size, scale, and diversification to continue recycling capital at good valuations while earning higher returns on our new investments.

In summary.

We have demonstrated our ability to use our size scale and diversification to continue recycling capital at good valuations, while earning higher returns on our new investments.

Sam Pollock: We believe we will generate strategic value by combining 6th era with a boat to create a leading retail colocation data center provider with over 303 megawatts of capacity deployed in high demand areas across North America. The combined platform will have the scale, assets and capabilities required to provide critical infrastructure ports over 2,500 customers to support the exponential increase in demand from industry tailwinds, including artificial intelligence and cloud deployment. Funding has been fully secured for the transaction, which is expected to close in the first quarter of 2024.

On recycling over the last three years, we've generated approximately $4 5 billion of proceeds from 16 asset sales.

Speaker 3: on recycling over the last three years we've generated approximately $4.5 billion of proceeds from 16 assets sales.

Speaker 3: Each was completed at a premium to the IFRS carrying value at the time of sale, and the combined gain over book value was approximately 70%.

Which was completed at a premium to the IRS carrying value at the time of sale and the combined gain over book value was approximately 70%.

On deployment, our 2023 investments are expected to provide us with some of the best risk adjusted returns we have seen in the last decade.

Speaker 3: On deployment, our 2023 investments are expected to provide us with some of the best risk-adjusted returns we have seen in the last decade.

Speaker 3: Combining these acquisitions with our existing platform investments provides significant embedded growth in our business today.

Combined these acquisitions with our existing platform investments provide significant embedded growth in our business today.

Speaker 3: We remain committed to providing Unihorse with a stable and growing distribution within the 5-9% range annually, while maintaining a payout ratio between 16-70% and a strong balance sheet.

We remain committed to providing unit horse the stable and growing distribution within the 5% to 9% range annually, while maintaining a payout ratio of between $60 to 70% and a strong balance sheet.

Sam Pollock: A touching briefly on the current operating environment, it is clear that there are considerable impacts from geopolitical and macroeconomic factors. Also, note is that we are witnessing diverging economic conditions in several of our key markets. For instance, in Brazil, interest rates are expected to decline as inflationary pressures of wind. In the US, a relatively strong economic background will likely result in interest rates at current levels for a while longer. Other regions seem to be somewhere in the middle. Our global footprint should allow us to arbitrage varying economic circumstances to write recycled capital on favorable terms in certain markets, while taking advantage of capital scarcity in others.

Speaker 3: We have a track record of returning capitol investors with nearly $9 billion of distributions paid to Unaheul.

We have a track record of returning capital to investors with nearly $9 billion of distributions paid to unit holders.

Speaker 3: Ultimately we believe providing strong cash flow and income growth creates unit holder value which will be reflected in our unit price over time

Ultimately, we believe providing strong cash flow and income growth creates unit holder value, which will be reflected in our unit price over time.

This concludes my remarks, and I will.

Speaker 3: This concludes my remarks and I'll now pass it back to the operator for questions and questions.

Now pass it back to the operator for questions for questions.

Speaker 1: Certainly, once again, ladies and gentlemen, if you have a question at this time, please press star 11. One moment for our first question.

Certainly once again, ladies and gentlemen, if you have a question at this time. Please press star 111 moment for our first question.

Our first question comes from the law and they are slow in Roswell from Keybanc. Your question. Please.

Speaker 1: Our first question comes to the line. There's Sherilyn Radbrun from TV Power. Your question, please.

Sam Pollock: This has always been our playbook, and we will continue to execute the same business strategy, which has been successful over many years.

Thanks, very much and good morning I.

Speaker 4: Thanks very much and good morning. I was wondering if you could start by expanding on your comments and the letter on the investment landscape in terms of where you're seeing the most attractive opportunities by geography and by sector. And also how you think about piecing your investments in an environment where the stress associated with higher interest rates arguably hasn't been fully absorbed yet.

I was wondering if you could start by expanding on your comments in the letter on the investment landscape in terms of where you're seeing the most attractive opportunities by geography and by sector and also how you think about pacing your investment in an environment, where the stress associated with higher interest rates arguably.

Sam Pollock: I'd like to make a few comments in relation to our share price. Despite achieving solid financial results throughout the year, and delivering on our strategic initiatives, virtual infrastructure's unit price is disappointingly underporn recently. This is not unique to us, as utility infrastructure companies have generally traded off its investors focused on credit or other sector strategies. As we have noted in the past, the utility infrastructure sectors are highly resilient asset classes that generate growing and sustainable cash flows. Indicator of those attributes, we have grown FFO per unit and distributions per unit at compound annual rates of 11 and 8 percent respectively over the past decade.

Has it been fully absorbed yet.

Hi, Cheryl and thank you for for those questions I think.

Speaker 3: Hi, Sharland. Thank you for those questions. I think

Speaker 3: There's two of them in there, I think the first is just where we see value in just the tone of the market, and then the second one is just on our own pacing of investments. On the first portion...

There's two of them in there I think the first which is where we see.

Value in just the tone of the market and then the second one just on our own pacing of investments.

On the first.

A portion of your question.

We do see.

Sam Pollock: Looking ahead, there are several elements to our current situation that are worth highlighting. First, our size of organic growth consists largely of embedded inflationary escalators and secured capital expansion projects. This benefit compounds over long periods of time and provides us with a natural hedge to higher interest rates. Also, our capital backlog is largely self-funded from a combination of committed capex facilities and retained cash flows. Now, second, we have exceeded our new investments target for three consecutive years.

Speaker 3: attractive opportunities in most regions that we operate in. Frankly, we've...

Attractive opportunities.

In most in most regions that we operate in and frankly we've.

We probably focused our attention in North America and Europe in the past.

Speaker 5: We've probably focused our attention in North America and Europe in the past year or two and obviously given

Year, or two and and obviously.

Given.

Our base currency being U S dollars, its always favorable for us to invest in.

Speaker 5: Our base currency being US dollars. It's always favorable for us to invest.

Speaker 5: US dollar businesses, so that we don't have to deal with ethics issues. And so we tend to focus in this market when we see great opportunities. But we are seeing interesting opportunities.

U S dollar businesses.

So that we don't have to deal with.

FX issues and so we tend to focus in this market when we see great opportunities, but we are seeing interesting opportunities.

Sam Pollock: As a result, we have substantial built-in growth that provides us the flexibility to pace our investment activity in the courts for capital recycling achievements. Third, we have locked in interest rates for over 90 percent of our debt with an average maturity of approximately seven years. This provides us with great visibility into our cash flow going forward.

Speaker 5: coming our way in Asia at the moment. We do have a new team and a focus in South Korea in particular. We've also have done generally very well in Australia and because the team we have down there have hit above our weight, I guess, in terms of the amount of capital we've been able to deploy in that market.

Coming our way in Asia at the moment.

We do have.

Our new team and our focus in South Korea in particular, we've.

We've also.

Have.

<unk> done generally very well in Australia, and because of the team we have down there.

Have hit above our weight I guess in terms of the amount of capital we've been able to deploy in that market.

Sam Pollock: Fourth, in light of our strong conviction in the intrinsic value of our business and its growth trajectory, we see the merit in deploying capital to repurchase our equity. During the quarter, we began repurchasing equity in about close to 1 million units under our normal course issue or bid. Going forward, we will consider further buybacks in conjunction with our ability to earn strong risk adjusted returns by deploying capital and new investment opportunities.

Speaker 5: So I think the next little while I'm optimistic that we will find some very interesting opportunities in those two markets. But I'd say as a general comment, we do see good opportunities pretty much everywhere.

So I think in the next little while I'm optimistic that we will.

Find some very interesting opportunities in those two markets, but I'd say as a general comment we do see.

Good opportunities pretty much everywhere.

As far as sectors.

Speaker 5: As I've probably said on the previous call and maybe a couple calls before that

As I, probably said on the previous call and maybe the couple of calls before that.

Speaker 5: The best value tends to be in those businesses that need capital for growth. A lot of companies are start for growth capital and sectors, particularly the telecom sector, have tremendous capital projects in front of them. And so they need capital, and that's frankly where we can invest. And so they need capital for growth capital.

Yes.

Sam Pollock: In summary, we have demonstrated our ability to use our size, scale, and diversification to continue recycling capital at good valuations while earning higher returns in our new investments. On recycling, over the last three years, we have generated approximately 4.5 billion dollars of proceeds from 16 assets sales. Each was completed at a premium to the IFRS carrying value at the time of sale, and the combined gain over book value with approximately 70%.

The best value tends to be in those businesses that need capital for growth a lot of companies are stark for for growth capital and.

Sectors.

Particularly the.

The telecom sector.

<unk> tremendous capital projects in front of them and so they need capital and that's frankly, where we can invest for value today.

Speaker 5: But we are seeing interesting opportunities across transportation and utilities as well. So I realize I've cover up almost the whole universe of the infrastructure sector, but I do think there's a value to be had pretty much across the board. And as far as our own pacing, as we mentioned in our letter.

We are seeing interesting opportunities across transportation and utilities as well.

Sam Pollock: On deployment, our 2020 reinvestments are expected to provide us with some of the best risk-adjusted returns we have seen in the last decade. Combining these acquisitions with our existing platform investments provides significant embedded growth in our business today. We remain committed to providing unicorns with a stable and growing distribution within the 5-9% range annually while maintaining a payout ratio between 16-70% and a strong balance sheet. We have a track record of returning capital to investors with nearly 9 billion dollars of distributions paid to unicorns. Ultimately, we believe providing strong cash flow and income growth creates unitholder value which will be reflected in our unit price over time.

<unk>.

Realized cover up almost the whole universe of.

The infrastructure sector, but I do think there is.

Value to be had pretty much across the board.

And as far as our own pacing as we mentioned in our.

Our letter.

Speaker 5: You know, we have been very successful in recycling capital and using our liquidity to invest boldly where we've been seeing good opportunities in the last couple years.

We have been very successful in.

Recycling capital and using our liquidity to invest boldly when we're seeing good opportunities in the last couple of years.

Speaker 3: You know, I think we're going to benefit from that for the foreseeable future. And as far as, you know, what we would do in the future, I think it will be similar. If we see some amazing opportunities.

I think we're going to benefit from that for the foreseeable future.

And as far as.

What we would do in the future I think it will be similar if we see some amazing opportunities we will find the capital.

Operator: This concludes my remarks and I'll now pass it back to the operator for questions and questions. Certainly. Once again, ladies and gentlemen, if you have a question at this time, please press star 1-1. One moment for our first question. Our first question comes in a lot. And I'm scrolling right from TV Howard. Your question, please. Thanks very much and good morning.

Speaker 5: We will find the capital to take advantage of them, but the same time we don't feel any pressure to invest and reduce our liquidity, except in those circumstances where we see exceptional opportunities. So I think you'll see us being patient, but also investing boldly if we see a great opportunity.

To take advantage of them.

But at the same time, we don't feel any pressure to.

To invest and reduced our liquidity.

Except in those circumstances, where we see exceptional opportunity. So I think youll see us being patient, but also investing boldly if we see a great opportunity.

Speaker 4: Great, that's a great overview. I'll keep my second one short since that one had a few inside it. With respect to your pipeline of asset sales for 2024, would some of that pipeline have debts that is portable to the prospective buyers, which is presumably an advantage in this market?

Great. That's a great overview I'll keep my second one short one had a few inside it.

Robert Kwan: I was wondering if you could start by expanding on your comments and the letter on the investment landscape in terms of where you're seeing the most attractive opportunities by geography and by sector and also how you think about pacing your investments in an environment where the stress associated with higher interest rates arguably hasn't been fully absorbed yet.

With respect to your pipeline of asset sales for 2024 with some of that pipeline that is portable to the perspective buyers, which is presumably an advantage in this market.

Yes, Hi, Cherilyn I would say.

Speaker 5: Yeah, hi, Charlotte. I would say...

Sam Pollock: Hi, Sharon. Thank you for those questions. I think there's two of them in there. I think the first is just where we see value and just the tone of the market and then the second one just on our own pacing of investments. On the first portion of your question, we do see attractive opportunities in most regions that we operate in. Frankly, we've probably focused our attention in North America and Europe in the past year or two and obviously given our base currency being US dollars.

Speaker 5: The vast majority of the ones that we are selling have portable debt.

The vast.

Majority of the ones that we're selling have portable debt.

Speaker 5: And yes, that's one of the characteristics that we do look for at the moment in order to be selling businesses. Because I think that is an embedded value in those capital structures. And...

And yet.

That's one of the.

The characteristics that we do look for at the moment in order to be selling businesses, because I think that is embedded value in those capital structures and.

And allows us to.

Speaker 6: You'll continue to create value in this market environment. Thank you for the time.

Continue to create value in this market environment.

Thank you for the time.

Thank you one moment for our next question.

Speaker 1: And our next question comes from the line of Robert Kwan from RBC.

And our next question comes from the line of Robert Kwan from RBC.

Speaker 7: Good morning. If I can just catch on or ask you just around the Catholic allocation specifically how you are approaching by that, just, you know, do you think about by that, especially if this unit price?

Great Good morning.

Sam Pollock: Of course, it's always favorable for us to invest in US dollar businesses so that we don't have to deal with affects issues and so we tend to focus in this market when we see great opportunities. But we are seeing interesting opportunities coming our way in Asia at the moment. We do have a new team and a focus in South Korea in particular. We've also have done generally very well in Australia and because the team we have down there have hit above our weight I guess in terms of the amount of capital we've been able to deploy that market.

If I can just touch on or ask just around the capital allocation and specifically how you are approaching buybacks.

Do you think about buybacks, especially if the unit price.

Speaker 7: as being an investment in your own assets and the return you would get based on buying back the stock at these levels versus what you think intrinsic value is. And then more broadly, are there any other 10 options that you see is on the table to support the share price?

SBA and investment in your own assets and the return you would.

Yes.

Just on buying back the stock at.

These levels versus what you think intrinsic value is.

And then more broadly are there any other tangible options that you see is on the table too.

Support the share price.

Hi, Robert.

<unk>.

So on the first question on the buybacks look I think you've.

Speaker 5: So on the first question on the buyback, like I think you...

Sam Pollock: So I think the next little while I'm optimistic that we will find some very interesting opportunities in those two markets. But as a general comment, we do see good opportunities pretty much everywhere. As far as sectors, as I've probably said on the previous call, and maybe a couple calls before that, the best value tends to be in those businesses that need capital for growth. A lot of companies are start for growth capital and sectors, particularly the telecom sector.

Speaker 6: We've done a better job of describing how we think about it than I probably could. Yes, we do consider it as buying back businesses. We know it would understand well and have a good view on their future prospects. So we weigh that again, making a bet.

You've done a better job of describing how we think about it than I probably could.

Yes, we do.

Do you consider it as buying back.

Businesses, we know and understand well and have a good view on.

Their future prospects and so we weigh that against making investments.

Speaker 6: in new assets and the type of returns we can get on that. So that is the...

In new assets and the type of returns we can get on that so that is that is the.

Speaker 6: the decision we weigh. Obviously, what's attracted to a fine-your-own-ass is

The decision we way obviously.

What's attractive find your own assets is.

Speaker 6: you know they're very much de-risk as you know what you're getting and you understand them well and so you're you know in some respects you have a slightly rich lower return threshold and you would for new investments but we do weigh those two things and and obviously take a long-term perspective on it we're not just looking for you know the initial hit it's about you know are we doing same thing over Middle East about the same thing other opportunity at

They're very much de risked because you know what you are getting and you understand them well and so you're.

Sam Pollock: They have tremendous capital projects in front of them, and so they need capital, and that's where we can invest for value today. But we are seeing interesting opportunities across transportation and utilities as well. So I realize I've covered up almost the whole universe of the infrastructure sector, but I do think there's value to be had pretty much across the board. And as far as our own pacing, as we mentioned in our letter, we have been very successful in recycling capital and using our liquidity to invest boldly, where we've seen good opportunities in the last couple years.

In some respects you havent slightly rich.

Lower return.

Threshold than you would for new investments, but.

But we do weigh those two things and obviously.

Take a long term perspective on it we're not just looking for an initial hit it's about are we investing our capital for good long term value.

Speaker 5: our cap of for good long term value. So that definitely is how we look at duck buybacks.

That definitely is.

How we look at the buybacks.

As far as.

Things, we can do in the <unk>.

Speaker 6: things we can do in the short term. I think it...

Short term I.

Speaker 6: I think it's hard to do anything in particular other than continuing to describe the strength of the business and the prospects and the long-term value creation of the franchise. I think it's hard to describe the strength of the business and the long-term value creation of the franchise.

I think it's hard to do anything in particular other than.

Continuing to.

Sam Pollock: I think we're going to benefit from that for the foreseeable future. And as far as what we would do in the future, I think it will be similar. If we see some amazing opportunities, we will find the capital to take advantage of them. But at the same time, we don't feel any pressure to invest and reduce our liquidity, except in those circumstances where we see exceptional opportunities. So I think you'll see us being patient, but also investing boldly if we see a great opportunity.

Describe the.

Strength of the business and the prospects and the long term.

Creation of the franchise.

Think.

Speaker 6: We've always tried to convey to our unit holders that brick infrastructure is a long-term compound of wealth.

We've always tried to convey to our unit holders that.

Brooklyn infrastructure is a long term compound wealth.

Speaker 6: and that people should buy because they want to know that

And that.

People should buy because they want to.

No debt.

Putting aside where volatility might take place in the market because of what.

Speaker 6: putting aside where volatility might take place in the market because of what the capital markets do, we'll continue to deliver them with high assurance that dividend that they have today plus that five to nine percent growth. And we have a long track record doing that. And we'll...

The capital markets do we will continue to deliver them.

Sam Pollock: Great, that's a great overview. I'll keep my second one short since that one had a few inside it. With respect to your pipeline of asset sales for 2024, would some of that pipeline have debts that is portable to the prospective buyers, which is presumably an advantage in this market?

With assurance with high assurance.

That dividend that they have today, plus that 5% to 9% growth and we have a long track record of doing that and when we look at our business for the long term, we feel as comfortable more comfortable in our ability to do that and I think thats. The story, we just need to reinforce with investors.

Speaker 6: For the long term, we've realized comfortable or more comfortable in our ability to do that. And I think that's the story we just...

Sam Pollock: Yeah, hi, Charlotte. I would say the vast majority of the ones that we are selling have portable debt. And yes, that's one of the characteristics that we do look for at the moment in order to be selling businesses. Because I think that is an embedded value in those capital structures and allows us to continue to create value in this market environment.

Alright. Thanks.

Speaker 7: Just for my second question just to ask around.

My second question.

Asked around edge.

Speaker 7: BUUK. I guess first, can you talk about?

The U K.

I guess first can you talk about.

Speaker 7: your take on the housing market there, housing starts, and then just more broadly.

Your take on the housing market. There housing starts and then just more broadly. This is one of the assets that you've found.

Speaker 7: This is one of the assets that you've owned, the longest, although it's not the end, the limited life fund. But can you talk about your long-term perspective on the business, how you think about it, excuse me, the growth and valuation, and even just a little bit of the evolution from where you started with this business, to where you are today and where you think that business is gonna go in the future?

The long, yes, although it's not a limited lifespan. So but can you talk about your long term perspective on the business. How you think about excuse me the growth in valuation and even just a little bit the evolution from where you started with this business to where you are today and where you think that businesses is can you grow in the future.

Operator: Thank you for the time.

Operator: Thank you one moment for our next question.

Robert Hope: And our next question comes from the line of Robert Kwan from RBC. Great, good morning. If I can just catch on or ask you just around the capital allocation, specifically how you are approaching buybacks. Do you think about buybacks, especially if this unit price? As being an investment in your own assets and the return you would get based on buying back the stock at these levels versus what you think intrinsic value is. And then more broadly, are there any other 10 options that you see is on the table to support the share price?

Alright, okay.

Okay no. Thanks, Thanks Robert.

Speaker 6: No thanks. Thanks roberts, you for.

Four.

For shareholders and analysts who have been with us for a long time. They know this is one of mine and our company's favorite businesses we have.

Speaker 6: for shareholders and analysts who have been with us for a long time. They know this is one of mine and our company's favorite businesses. We have owned it since...

Owned it since.

We.

Speaker 6: Bob Babcock and Brown's business back in 2009.

By Babcock <unk> Brown business back in 2009, and then we've done a number of.

Speaker 6: We've done a number of tucking acquisitions and organic growth projects to build a company up towards today. But maybe just the only, the first part of question on housing starts, this is a business for those that you were less familiar with it, that really participates in the...

Tuck in acquisitions and organic growth projects to build the company up to where it is today.

But maybe just dealing with the <unk>.

First part of your question on on housing starts.

This is a business for those of you who are less familiar with it that.

Sam Pollock: Hi, Robert. So on the first question on the buyback, like I think you've done a better job of describing how we think about it than I probably could. Yes, we do consider it as buying back businesses we know and understand well and have a good view on their future process. And so we weigh that against making investments in new assets and the type of returns we can get on that. So that is the decision we weigh.

Really participate in the <unk>.

Speaker 6: housing growth or the increase in the stock of housing in the whole United Kingdom. What the business does is it basically works with developers to

Housing.

Growth.

The increase in the stock of housing in the hole.

It Kingdom.

Well the business does it.

It basically works with developers too.

Speaker 6: install all the last mile connections and over time, you know what's you know, especially about this business is the fact that

Install all the last mile connections and overtime.

Special about this business is the fact that.

Speaker 6: You know, when we first bought a Wii, Houston saw just gas connections. Today we provide, you know, five different connections into the home.

When we first bought it we used to install just gas connections today, we provide five different connections into the home, including water electricity fiber and different.

Sam Pollock: Obviously, what's attractive about buying your own assets is they're very much de-risk because you know what you're getting and you understand them well. And so you're, you know, in some respects, you have a slightly lower return threshold than you would for new investments. But we do weigh those two things and obviously take a long term perspective on it. We're not just looking for an initial hit. It's about, you know, are we investing our capital for good long term value.

Speaker 6: water electricity, fiber and different heating pumps as well. And so at unique business, today the housing market has pulled back quite a bit. I think...

Heating pumps as well and so it's unique business today. The housing market has pulled back quite a bit I think it's.

Speaker 6: somewhere in the range of 20% pullback from the prior year. So it's a housing is definitely weaker in the UK.

Somewhere in the range of 20% pullback from the prior year, So I'd say housing.

Definitely weaker in the UK.

What's great about this business and the fact that even though.

Speaker 6: What's great about this business is the fact that even though housing has pulled back pretty dramatic.

Housing has pulled back pretty dramatically.

Sam Pollock: So that definitely is how we look at duck buybacks. As far as things we can do in the short term, I think it's hard to do anything in particular other than, you know, continuing to, you know, describe the strength of the business and the prospects and the long term value creation of the franchise. I think we've always tried to convey to our unit holders that brick infrastructure is a long term compounder of wealth.

Speaker 6: one year, our connections that will be installed will in fact be higher than what they were last year. We'll have another record year of...

One year, our connections that will be installed will in fact be.

Be higher than what they were last year, we'll have another record year of installations.

Speaker 6: And we have a backlog of housing connections that represent about 70 years of our annual connection. So we have a big, big back.

And we have a backlog of housing connections that.

Represented about seven to eight years of our annual connections. So we have the big big backlog.

Speaker 6: And I think the only other thing I'd mention about the housing is even though it's been down this year, the amount of housing deficit that exists in the market is pretty substantial. Typically, there's about 200,000.

And I think the only other thing I had mentioned, but the housing is even though it's been down this year.

The amount of housing that.

Deficit that exists in the market, it's pretty substantial typically there's about 200000 plus.

Speaker 6: plus new homes built in the UK every year. And the government has had a long-term ambition to see that grow to over 300,000.

Plus.

New homes built.

Sam Pollock: And that, you know, people should buy because they want to know that, you know, putting aside where volatility might take place in the market because of, you know, what the capital markets do. So, you know, we'll continue to deliver them with assurance with high assurance that give it in that they have today plus that five to nine percent growth. And we have a long track record doing that. And when we look at our business for the long term, we feel as comfortable or more comfortable in our ability to do that. And I think that's the story we just need to reinforce with the investors. Right.

In the UK every year and the government has had a long term ambition to see that grow to over 300000, and so there's always lots of programs to encourage it and like most countries, including Canada.

Speaker 6: So there's always lots of programs to encourage it and like most countries, including Canada, the need for housing is pretty dramatic. So we expect while there's a pullback this year and housing starts, that that will rebound pretty quickly.

Operator: Thanks.

For housing is pretty dramatic so we expect while there is a pullback this year housing starts that that will rebound.

Pretty quickly.

Speaker 6: Just maybe just a couple of final comments on, you asked about the business.

Just maybe just a couple of final comments.

Yes.

The business in <unk>.

Speaker 6: and our thoughts on it. You know, we like this business because, you know, it basically is a perpetual asset base with inflation linked and highly diversified regulated cash flows.

And our thoughts on it.

We like this business because.

Sure.

Robert Hope: I'm just for my second question just to ask around the UK. I guess first, can you talk about your take on the housing market there, housing starts. And then just more broadly, you know, this is one of the assets that you've owned the longest, although it's not in a limited life fund. So, but can you talk about your long term perspective on the business? How do you think about it? Excuse me, the growth and valuation. And even just a little bit of the evolution from where you started with this business, to where you are today and where you think that business is going to go in the future. Thank you.

It basically is a.

Perpetual asset base with inflation linked and highly diversified regulated cash flows.

Speaker 6: And it's been growing FFO at about 20% per annum over the past 10 years so the growth

And it's been growing at about 20% per annum over the past 10 years. So the growth in the businesses is tremendous we do have many.

Speaker 6: tremendous. We do have many investors in the fund. Most of them are on the debt side. You know, we've issued about $2 billion of investment-grade debt into the U.S. markets. And it's a regular issue into the debt markets and has a very strong following. And we also have an institutional investor who's...

<unk> in the fund.

Most of them are on the debt side, we've issued about $2 billion of inverse.

<unk> grade debt into the U S markets and.

A regular issuer in the debt markets and has a very strong following.

And we also have a institutional investor who is.

Sam Pollock: Okay, no thanks, Robert. For shareholders and analysts who have been with us for a long time, they know this is one of mine and our company's favorite businesses. We have owned it since we bought Babcock and Brown's business back in 2009. And then we've got a lot of money. And we've done a number of tucking acquisitions and organic growth projects to build the company up towards today. But maybe just the only, the first part of your question on housing starts.

Speaker 6: been alongside us for the whole time, for about 10 years. A big European institution who owns 20% of the company.

Alongside us for the whole time for about 10 years.

European institution, who owns 20% of the company.

Speaker 6: and they have seen the growth in the company as a...

And.

They have seen the growth in the company as have we.

Speaker 6: And, you know, this is a company that, you know, today we don't typically talk about value, but it is a very meaningful value to us.

And this is a company that.

Today, we don't typically talk about value, but it is a very meaningful value to us.

We prepare valuations for them.

Speaker 6: We prepare valuations for them. Each year as we do for many of our other institutional bests.

Each year as we do for many of our other institutional investors.

Speaker 6: And to give you a sense, a big bore accounting firm put a value on this business at over 3.1 billion pounds.

To give you a sense.

A big four accounting firm.

Sam Pollock: This is a business for those of you who are less familiar with it, that really participate in the housing growth or the increase in the stock of housing in the company. The whole United Kingdom, what the business does is it basically works with developers to install all the last mile connections. And over time, you know, what's special about this business is the fact that when we first bought it, we used to install just gas connections.

Put a value on this business that.

At over $3 1 billion pounds.

Speaker 5: which is almost $4 billion US dollars. So, very sizable company, very successful.

Which is almost 4 billion U S. Dollar so very sizeable company very successful.

Speaker 8: And one that I hope we keep for a long time. That's great. Thanks, Julie.

And one that I hope, we keep for a long long time.

That's great thanks for that.

Thank you one moment for our next question.

And our next question.

Comes from the line of Devin Dodge from BMO capital markets. Your question. Please.

Speaker 1: comes with an online of Devon Dodge from BMO Capital Markets. Your question, please.

Speaker 9: Good morning. So we've been getting questions from investors on your ability to recycle capital in this type of market. I know you talked about it the investor day as well as in the prepared remarks earlier, but should we expect a bit of a low on monetization until long term interest rates stabilized. And then maybe just in the general sense, where are you seeing the most interest from potential buyers?

Hi, good morning, So we've been getting questions from investors on your ability to recycle capital.

Sam Pollock: Today, we provide, you know, five different connections into the home, including water, electricity, fiber, and, you know, different heating pumps as well. And so a unique business today, the housing market has pulled back, you know, quite a bit. I think it's somewhere in the range of 20% pull back from the prior years. So it's a housing is definitely weaker in the UK. OK, what's great about this business, the fact that even though housing has pulled back pretty dramatic this one year, our connections that have been installed will, in fact, be higher than what they were last year.

Of market.

You talked about at the Investor day.

As well as in the prepared remarks earlier, but so we expect a bit of a lull on monetization until long term interest rates stabilized and then maybe just in a general sense, where are you seeing the most interest from potential buyers.

Hi, there.

So.

Obviously.

<unk>.

Speaker 6: It's hard to predict exactly what the The mark will look like but what I would say though is that

It's hard to predict exactly what the.

The market will look like but what I would say, though is that.

Speaker 6: You know, we are bringing, you know, we will, you know, bring to market those businesses that, you know, we think will be highly sought after. You know, what I can say is that, you know, on the businesses that we've already launched processes.

We are bringing we will bring to market those businesses that we think it will be highly sought after what I can say is that on the.

Sam Pollock: We'll have another record here of installations. And we have a backlog of housing connections that represent about seven to eight years of our annual connection. So we have a big, big backlog. And, you know, I think the only other thing I'd mention about the housing is even though it's been down this year, the amount of housing deficit that exists in the market is pretty substantial. You know, typically there's about 200,000 plus new homes built in the UK every year.

The businesses that we've already launched processes.

Speaker 6: At the moment, and it's all the early days, the number of interested parties looking at it is substantial, so there is lots of investors out there looking for high-quality businesses. That's not stopped, and even though the last while has been relatively robust, and we still see large transactions in fact being done.

At the moment.

Albeit early days the number of interested parties looking at it is substantial so there is lots of investors out there looking for high quality businesses.

That has not stopped and even over the last while.

<unk> been relatively robust, we still see large transactions in fact being done.

I think.

Speaker 6: In this market environment, if I had to say where, you know, the sweet spot is, the sweet spot is probably more mid-market transactions than large-scale transactions. There's a lot more players in that segment.

In this market environment, if I had to say where.

Sam Pollock: And the government has had a long term ambition to see that grow to over 300,000. And so there's always lots of programs to encourage it. And like most countries including Canada, the need for housing is pretty dramatic. So, you know, we expect, while there's a pull back this year and the housing starts that that will rebound pretty quickly. Just maybe just a couple of final comments on, you asked about the business and our thoughts on it.

The sweet spot is the sweet spot is probably more mid market transactions than large scale transactions.

There's a lot more players.

That segment.

I think.

Speaker 6: you know given the

Given the.

Speaker 5: uncertainty around growth, highly contracted business.

Uncertainty around growth highly contracted businesses tend to be.

Speaker 5: tend to be, you know, have less divergence in views as far as valuations than say businesses with growth wedges. So again, that's something to keep in mind.

You'll have less divergence in views as far as valuations than say businesses with with growth wedges.

Sam Pollock: You know, we like this business because, you know, it basically is a perpetual asset base with inflation, the length, and highly diversified regulated cash flow. And it's been growing at about 20% per annum over the past 10 years. So the growth in the business is tremendous. We do have many investors in the fund. Most of them are on the debt side. We've issued about $2 billion of investment-grade debt into the US markets and it's a regular issue into the debt markets and has a very strong following.

So again, that's something to keep in mind.

Speaker 3: But then you also have the dynamics that some regions are in a different spot than others. I mentioned South American Brazil. They got ahead of the curve as far as tackling inflation and increasing interest rates. And

But then you also have the.

The dynamics that some regions are.

In a different spot than others, I mentioned, South America and Brazil.

They got ahead of the curve as far as tackling inflation and increasing interest rates and <unk>.

Speaker 6: rates there now are expected to drop pretty meaningful the over the next couple of months and I'd say the the market has improved significantly and the enthusiasm that market is actually quite high compared to some markets where You know people are a little more skittish

Rates there now are expected to drop pretty meaningfully over the next couple of months and I would say the the market has improved significantly and the enthusiasm that market is actually quite high.

Compared to some markets where.

Sam Pollock: And we also have an institutional investor who's been alongside us for the whole time for about 10 years, a big European institution who owns 20% of the company. And they have seen the growth in the company as have we. And this is a company that today we don't typically talk about value but is a very meaningful value to us. We prepare valuations for them. Each year as we do for many of our other institutional investors and to give you a sense, a big four accounting firm put a value on this business at over 3.1 billion pounds, which is almost $4 billion in US dollars. So a very sizable company, very successful. And one that I hope we keep for a long time.

People are a little more.

Skittish.

So.

Speaker 3: You know, I think one of the big benefits, and this is what we highlight in our letter, and we've said in the past, is having a business that's very diversified across many who lead.

I think one of the big benefits and this is what we highlighted in our letter and we've said in the past is having a business that is very diversified across many regions. We can.

Operator: That's great.

Speaker 3: you can bring access to sale in regions where people are more constructive, and there's lots of access to capital. And then in those regions where things are less constructive, we tend to be looking for opportunities there.

Bring assets to sell in regions, where people are more.

Constructive and Theres lots of access to capital in that in those regions, where things are less constructive we tend to be looking for opportunities there.

Operator: Thank you.

Dubai.

Sure.

Operator: One moment for our next question.

Speaker 10: Okay, no, I appreciate that. That's a good color. I guess we'll switch over to maybe the deal announced this morning, listen to General Sons, but I think it's fair to say that your initial investment in a retail collocation data center business has been, at least a bit of a challenge. Can you talk about the improvements that have been made at a bulk of the last couple of years and how the addition of the six-terra assets will further those efforts?

Okay, No I appreciate that color.

Two maybe the deal announced this morning with some general sense, but.

I think it's fair to say that your initial investment in our retail co location data center business has been.

At least a bit of a challenge can you talk about the improvements that have been made at evoke over the last couple of years and how the addition of their.

Their assets.

Further those efforts.

Okay, well, maybe I'll start and I'll turn it over to Ben here to talk but the things that we've done and and yes, I think it's fair comment that.

Speaker 5: Well, maybe I'll start an alternative to Ben here to talk about the things that we've done. Yes, I think it's fair to comment that the first couple years have been challenging as we...

The first.

A couple of years have been challenging as we.

Devin Dodge: And our next question comes from the line of Devon Dodge from BMO Capital Markets. Your question, please.

Speaker 6: you know, work through our tenant base there. But it has been a business that also last.

Work through our tenant base there.

But but it has been a business that over the last.

Sam Pollock: Good morning. So we've been getting questions from investors on your ability to recycle capital in this type of market. You know, I know you talked about it the investor day as well as in the prepared remarks earlier. But should we expect a bit of a low on monetization until long-term interest rates stabilized? And then maybe if in the general sense, where are you seeing the most interest from potential buyers?

I'd say year and a bit we've seen a real turnaround in its.

Speaker 5: say year in a bit we've seen a real turnaround and it's and it's

And the leasing profile in leasing.

Success, maybe bandwidth touch on that but as far as this six stirrer.

Speaker 5: success. So maybe Ben will touch on that. But as far as the 6th era, you know, the real opportunity here is, you know, the ability to, you know, not only by per value, but also execute a multifaceted transaction where we can, you know, reunite some of the underlying land leads.

The real opportunity here is the ability to.

Not only buy for value, but also execute a multifaceted transaction where.

Sam Pollock: Hi there. So, you know, obviously it's hard to predict exactly what the market will look like. But what I would say though is that, you know, we are bringing, you know, we will, you know, bring to market those businesses that we think will be highly sought after. You know, what I can't say is that, you know, on the businesses that we've already launched processes at the moment. And it's all the early days.

We can reignite some of the underlying land leases.

Speaker 6: that are associated with the SIXTERRA assets, combined some of those as well as the data centers in SIXTERRA, and then take that set of assets, combine it with our business, which is largely data centers with real estate that's owned. Take advantage of

<unk>.

Yeah.

Associated with the six Terra assets combined some of those as well as the data centers and <unk>.

And then take that set of assets combine it with our business, which is largely.

Data centers with real estate that's owned.

Take advantage.

Of significant.

Speaker 5: significant synergies from a sales and cost perspective.

Significant synergies from a sales and cost perspective, where we can.

Speaker 6: really reduced the overhead as a percentage of revenue quite dramatically because of the combination of the two businesses, and then it efficiently financed the business.

Really reduce the overhead.

Sam Pollock: The number of interested parties looking at it is substantial. So there is lots of investors out there looking for high quality businesses. That's not stopped. And even though the last while has been relative to robust, and we still see large transactions that back being done. I think in this market environment, if I had to say where, you know, the sweet spot is, the sweet spot is probably more mid market transactions than large scale transactions.

As a percentage of revenue quite dramatically because of the combination of the two businesses and then.

Efficiently finance the businesses because now you have much more scale as well as <unk>.

Speaker 6: because now you have much more scale as well as mostly owned real estate.

Most of the owned real estate and so it really is a very very different business than what the two worst separately and so we're very excited by that and and obviously I think the real when it's going to be the fact that we're buying at a time when the <unk> are really just starting for for the.

Speaker 3: So it really is a very, very different business than what the two were separate.

Speaker 11: So we're very excited by that and an obstacle I think the real win is going to be the fact that we're buying at a time when the tailwinds are really just starting for the

Sam Pollock: There's a lot more players in that sense. Smith, you know, I think, you know, given the uncertainty around growth, highly contracted businesses tend to be, you know, have less divergence in views as far as valuations than say, businesses with growth wedges. So again, that's something to keep in mind. But then you also have the dynamics that, you know, some regions are in a different spot than others, you know, I mentioned South American Brazil, you know, they got ahead of the curve as far as tackling inflation and increasing interest rates and rates there now are expected to drop pretty meaningful to you over the next couple of months.

The edge type centers that we have.

Ben if you want to add a little bit more what we've done with bulk.

Yes, maybe is as we've talked about on a few calls in the past what we've been up to at evoke is when we bought the business. It was in a moment when some enterprise clients. There was a significant migration towards the cloud. So what we did as we work to.

Speaker 7: Yeah, maybe as we've talked about on a few calls in the past, what we've been up to at a vote is, you know, when we bought the business, it was in a moment when some enterprise clients, there was a significant migration towards the cloud. So what we did is we worked to improve our data centers and position them both to be attractive to hyper-scalers as they need to move to the edge, continue to be attractive to enterprise clients.

Improve our data centers and position them both to be attractive to hyperscale or is they need to move to the edge.

Continue to be attractive to enterprise clients and also today, we are seeing.

Speaker 7: And also, you know, today we're seeing large demand from smaller companies engaged in AI.

Large demand from smaller companies engaged in AI businesses, and so with the under roof upgrades that we undertook over the last many years. The business today has a tremendous collyn its capacity utilization is going up tremendously we've had record sales quarters and like I said enterprise is coming back.

Speaker 7: So with the under roof upgrades that we undertook over the last many years

Speaker 7: The business today has a tremendous call on its capacity utilization is going up tremendously. We've got record sales quarters. And like I said, enterprise is coming back into retail co-lo. Hyperscalers are looking for edge applications and AI clients.

Sam Pollock: And I'd say the market has improved significantly. And the enthusiasm that market is actually quite high compared to some markets where, you know, people are a little more skittish. So, you know, I think one of the big benefits, and this is what we highlight in our letter, and we said in the past, is having a business that's very diversified across many regions. We can, you know, bring access to sale in regions where people are more constructive, and there's lots of access to capital, and then in those regions where things are less constructive, you know, we tend to be looking for opportunities there to buy. Okay, no, I appreciate that. That's good color. Okay.

Back into retail Colo.

<unk> they are looking for edge applications and AI clients have tremendous demand and I think as Sam mentioned in his opening comments as part of our under roof upgrades. We also identified an ability to bring on.

Speaker 12: have tremendous demand and I think as Sam mentioned in his opening comments

Speaker 12: As part of our under-revebrates, we also identified an ability to bring on a fairly significant amount of additional capacity at a very low cost per megawatt.

A fairly significant amount of additional capacity at a very low cost per megawatt so going forward with executing that now that the.

Speaker 12: So, you know, going forward with executing that now that the

The centers will reach full utilization and we're going to add capacity in the coming years to meet.

Speaker 13: We're going to add capacity in the coming years to meet the demand that we see in the market. a ref not only in the market because of the demand of the market. green stuff, they came down the market, and then totaled the demand, and added really good cost.

The demand that we see in the market. So it's been a real turnaround in the business.

Okay. Good to hear really good color I appreciate that I'll turn it over.

Thank you one moment for our next question.

David Krant: You can switch over to maybe the deal announced this morning, listen to general sense, but I think it's fair to say that your initial investment in a retail collocation data center business has been, you know, at least a bit of a challenge. Can you talk about the improvements that have been made at evoke over the last couple of years and how the addition of the six their assets will further those efforts.

And our next question comes from the line of Robert Hope from Scotia Bank. Your question. Please.

Speaker 1: And our next question comes from the line of Robert Hope from Scotiabank. Your question, please.

Speaker 10: Good morning. You know, just given the market's focus on funding liquidity across variety sectors, you know, how do you think about your existing liquidity position? And could you accelerate asset sales to further pull through the balance sheet or look for other levers like, you know, marketable securities sales?

Hi, good morning.

Just given the market's focus on funding and liquidity across a variety of sectors. How do you think about your existing liquidity position and could you accelerate asset sales to further bolster the balance sheet or look for other leavers marketable securities.

David Krant: Okay. Well, maybe I'll start an alternative ban here to talk about the things that we've done. And, and yes, I think for a comment that the first couple years have been challenging as we, you know, work through our tenant base there. But, but it has been a business that, although last, I'd say, year and a bit, we've seen a real turnaround in its, in its leasing profile and leasing success. So maybe ban will touch on that.

Speaker 2: Hey Robert, it's David here. Look, I think, first and foremost, we feel very good about our current liquidity position, as you'll see it's over $2 billion at the corporate level, and a lot of existing liquidity in each of our businesses, so that they can fund a lot of the organic growth that we talked about, as you've seen throughout.

Hey, Robert It's David here.

Look I think first and foremost we feel very good about our current liquidity position is youll see it it's over $2 billion at the corporate level and a lot of existing liquidity in each of our businesses. So that they can fund.

A lot of the organic growth that we talked about as you've seen throughout.

Speaker 2: our materials. I think from a liquidity perspective, I think the $2 billion of asset sales that we have earmarks for next year is a very actionable plan as you heard from Sam. We also have many pockets in the business where we think we can find additional liquidity if we need to accelerate our new investment opportunity. But when you perform with that with four billion of total liquidity, we think that's a significant amount to be operating at this environment.

Our materials I think from a liquidity perspective, I think the $2 billion of asset sales that we have earmarked for next year.

As a very actionable plan as you heard from Sam We also have many pockets in the business, where we think we can find additional liquidity, if we need to accelerate our new investment opportunity, but when you pro forma that with 4 billion of total liquidity. We think that's a significant amount to be operating at in this environment.

David Krant: But as far as the six era, you know, the real opportunity here is, you know, the ability to, you know, not only buy for value. But also execute a multifaceted transaction where we can, you know, reunite some of the underlying land leases that are associated with the six era assets, combined some of those as well as the data centers in six era. And then take that set of assets, combine it with our business, which is largely data centers with real estate that's owned, take advantage of significant synergies from a sales and cost perspective.

And going forward.

Thanks for that.

Speaker 10: Thanks for that. And then maybe just going back to the commentary on.

And then maybe just going back to the commentary on pacing.

Speaker 10: When we take a look at the environment, which could be full of opportunities, how is that balanced with a market where it could be?

When we take a look at the environment, which could be full of opportunities how does that balance with the market where it could be.

Speaker 10: more difficult to tell us or your unit price implies a higher cost of capital. How do you balance the potential for significant accretive acquisitions versus what we'll call your higher cost of capital as well as a little bit higher cost of capital?

More difficult to sell last tower or unit price implies a higher cost of capital how do you balance the potential for significant accretive acquisitions versus.

What we'd call to your higher cost of capital as well.

David Krant: We can really reduce the overhead as a percentage of revenue quite dramatically because of the combination of the two businesses and then especially finance the businesses because now you have much more scale as well as mostly own real estate and so it really is a very very different business than what the two were separately and so we're very excited by that and an obstinate, the real wind is going to be the fact that we're buying out of time when the tailwinds are really just starting for the edge type centers that we have. I don't know if any of you want to add a little bit more what we've done with the boat.

A little bit.

Higher.

The higher cost of capital.

Robert I guess, all I can say that we're just closely monitor our liquidity so.

Speaker 11: I guess all I can say is that we just closely monitor the liquidity. So we know what we have to live with as far as our capacity. And once we have visibility on our capital recycling program, that will gauge our aggressiveness.

We we know what we have to live.

With as far as.

Our capacity and once we have visibility on.

Our capital recycling program that will.

Gage, our aggressiveness in pursuing big opportunities in the meantime, we will continue to look at the tuck in acquisitions or the.

Speaker 11: pursuing big opportunities. And the meantime, we'll continue to look at the tucking acquiescence.

David Krant: Yeah, maybe as we've talked about on a few calls in the past what we've been up to at a boat is when we bought the business it was in a moment when some enterprise clients there was a significant migration towards the cloud so what we did is we work to improve our data centers and position them both to be attractive to hyper scalars as they need to move to the edge continue to be attractive to enterprise clients and also you know today we're seeing you know large demand from smaller companies engage in AI businesses and so with the under roof upgrades that we undertook over the last many years the business today has a tremendous call on its capacity utilization is going up tremendously we've had record sales quarters like I said enterprise is coming back into retail co-o hyperscalors are looking for edge applications and AI clients have tremendous demand and I think a Sam mentioned in his opening comments as part of our under roof upgrades we also identified an ability to bring on a fairly significant amount of additional capacity at a very low cost per megawatts so you know going forward with executing that now that the you know the centers will reach full utilization and we're going to add capacity in the coming years to meet you know the demand that we see in the market so it's been a real turnaround in the business okay good to hear I really appreciate that I'll turn it over thank you one moment for our next question and our next question comes from a line of Robert hope from Skoshoe bank your question please I like the morning you know just given the markets focus on funding liquidity across variety sectors you know how can you think about your existing liquidity position and could you accelerate asset sales for their full for the balance sheet or luck for other labor like you know marketable security sales hey Robert it's David here look I think first and foremost we feel very good about our current liquidity position as you'll see it's over $2 billion at the corporate level and a lot of existing liquidity in each of our businesses so that they can fund a lot of the organic growth that we talked about as you've seen throughout our materials I think from a liquidity perspective I think the $2 billion of asset sales that we have your mark for next year is a very actionable plan as you heard from Sam we also have many pockets in the business where we think we we can find additional liquidity if we can need to accelerate our new investment opportunity but when you perform with that with 4 billion of total liquidity we think that's a significant amount to be operating at this environment I'm going forward. Thanks for that.

Speaker 11: The businesses, the opportunities like the Sixth Era opportunity, which didn't really require any capital and We'll take advantage of those that there's lots of things we can do to create value in our businesses That doesn't require a lot of capital and those larger ones, you know will

The businesses the opportunities like the <unk> era.

Opportunity, which didn't really require any capital and.

We will take advantage of those theres lots of things, we can do to create value in our businesses that doesn't require a lot of capital and those larger ones will.

As we said.

Speaker 11: We said we'll match up with the cash that comes in from our assets.

<unk> match up with.

The cash that comes in from our asset sales.

Thank you.

Thank you one moment for our next question.

Okay.

Speaker 1: And our next question comes from the line of Robert Cartier from CIBC Capital Markets. Your question, please.

And our next question comes from the line of Robert <unk> from CIBC capital markets. Your question. Please.

Speaker 14: Good morning, thank you for your comments so far. I do want to get back to the Capital allocation subject. It looks like you've become considerably more active under the NCIB following quarter end. I'm just wondering if there's something more substantial that you can do there over time.

Hey, good morning. Thank you for your comments, so far do you want to get back to the capital allocation subject.

It looks like you've become considerably more active under the in CIB following quarter end.

Just wondering if there's something more substantial.

You can do there.

Over time.

Speaker 14: I've touched on this versus comparing repurchases versus investments. But I'm wondering how you're looking at this capital allocation in terms of some of your other options, like perhaps the leveraging, just given that seems to be with the market that's focused on in general.

You've touched on this so versus comparing repurchases versus investments, but I'm wondering how you're looking at this.

Capital allocation in terms of.

Some of your other options like perhaps to deleveraging.

Given that seems to be what the Mark just focused on in general.

Hi, Robert.

Speaker 11: So, you had a couple of different elements your question there. I think, you know, just to repeat from the... ... um...

So.

You had a couple of <unk>.

Different.

Elements of your question there I think.

Just to repeat from the.

The buyback of shares.

We will do that on a periodic basis with the.

Speaker 11: We will do that on a periodic basis with...

Speaker 11: existing programs that we have in place. And to extend that, you know, once we've done some capyre cycling, we may do something larger as opposed to, you know, making investments and new transactions. So I think that's all we're telling people is, it's part of our investment decision framework today given where we're trading.

The existing programs that we have in place and to the extent that once we've done some capital recycling, we may do something larger.

Opposed to.

Making investments in new transactions. So I think that's all we're telling people is it's part of our investment decision framework today, given where we're trading.

Yes.

Speaker 11: You know, in relation to delivering, we feel very comfortable with our balance sheet today, which has been strong and our maturies are as well laddored as they probably have ever been. We really don't have any maturies.

In relation to Delevering.

We feel very comfortable with.

Our balance sheet today, which has been strong in.

And our maturities are well ladder as they probably have ever been we really don't have any maturities.

Speaker 11: at the corporate level for many years and at the asset level.

At the corporate level for many years.

Sure.

And at the asset level.

Speaker 11: you know, it's not only extremely manageable, but very comfortable what we have. So there's nothing that we're looking to deliver in any particular case. I think our business, I think the other thing which, you know, we did flag and our, in our letter is, you know, even as interest rates go up, the inflation compounding within our business exceeds the amount of...

It's not only extremely manageable, but very comfortable but we have so.

There is nothing that we're looking to delever in any particular case I think.

And our business I think the other thing, which we did flag in our.

David Krant: And then maybe just going back to the commentary on pacing. When we take a look at the environment, which could be full of opportunities, how is that balanced with a market where it could be more difficult to sell out to or your unit price implies a higher cost of capital. How do you balance the potential for significant creative acquisitions versus what we'll call your higher cost of capital as well as a little bit higher cost of capital?

In our letter is even as interest rates go up the inflation compounding within our business.

Exceeds the amount of any increase in interest rates. So.

Speaker 11: So from that perspective, we are always delivering just because the businesses are growing. So I think...

From that perspective, we are always de levering just because the businesses are growing.

So.

I think thats just leave it at that.

<unk> I think that covers it well.

Speaker 14: Okay, thanks for that. And I just wanted to clarify something. In recent years, I've been talking about the value of your platform and bus.

Okay. Thanks for that and I just wanted to.

To clarify something.

In recent years have been talking about.

David Krant: Robert, I guess all I can say is that we just closely monitor liquidity. So we know what we have to live with as far as our capacity. And once we have visibility on our capital recycling program, that will, you know, gauge our aggressiveness in pursuing big opportunities. In the meantime, you know, we'll continue to, you know, look at the tuck-and-acquisitions or the businesses, the opportunities like the 6th era opportunity, which didn't really require any capital.

The value of your platform investments.

Speaker 14: And if I understand your comments correctly this morning

And if I understand your comments correctly this morning.

Speaker 14: said that in terms of monetizing assets, the sweet spot is more middle market, mid market rather than large scale. And given that you're looking to pace your new investments for the recycling, can we expect more in the next year or so in terms of tuckings rather than large acquisitions in the current environment?

In terms of monetizing.

The sweet spot is more middle market.

Mid market, rather than large scale and.

Given that youre looking to pace for new investments for recycling can we expect more.

And the next year or so in terms of tuck ins rather than.

Large acquisitions in the current environment.

Speaker 11: No, I wouldn't say that.

No.

No I wouldn't say that.

David Krant: And we'll take advantage of those. There's lots of things we can do to create value in our businesses. That doesn't require a lot of capital. And those larger ones, you know, will, as we said, you know, will match up with the cash that comes in from our asset sales. Thank you.

Speaker 11: but I give people the wrong impression. I think all...

I hope I Didnt give people the wrong impression.

Operator: One moment for our next question.

I think al.

Speaker 11: All we wanted to just flag was, you know, what was in the letter, namely that we've made lots of investments. There's no...

All we want to just flag was.

What within the letter, namely that we've.

We've made lots of investments there is no.

There is no pressure that we feel to deploy capital.

Speaker 5: there's no pressure that we feel to deploy cap.

Speaker 11: We will be optimistic. And as our liquidity increases with capital recycling,

We will be opportunistic.

And as our liquidity increases with with capital recycling will be on the lookout for great opportunities, whether it's buying our shares or making a big.

Robert Cartier: And our next question comes from the line of Robert Cartier from CIBC Capital Markets. Your question, please. Hey, good morning. Thank you for your comment so far. I do want to get back to the capital allocation subject. It looks like you've become considerably more active under the NCIB following quarter end. I'm just wondering if there's something more substantial that you can do there over time. And you've touched on this versus comparing repurchases versus investments. But I'm wondering how you're looking at this capital allocation in terms of some of your other options, like perhaps the leveraging just given that seems to be with the market is focused on in general.

Speaker 5: Yeah, we'll be on the lookout for great opportunities, whether it's buying our shares or making a big investment. We'll continue to do that. The tuck-ins are things that I would say that is a constant thing we're always doing. Those don't, generally don't require any capital. We can usually do them on our...

Investment.

We will continue to do that the tuck ins are things that I would say that is a constant thing. We're always doing those generally don't require any capital we can usually do them on our.

Speaker 6: lines that cred in each of the businesses. Those are just part of the regular business plans of creating value. And...

And lines of credit in each of the businesses those are.

Just part of the regular business plans of creating value.

And.

Speaker 3: and we'll continue to do that, particularly in this market where we see good opportunities.

And we will continue to do those.

In this market, where we see good opportunities.

Okay. Thank you.

Thank you one moment for our next question.

Yeah.

Yeah.

Sam Pollock: Hi, hi, Robert. So you had a couple of different elements, your question there. I think, you know, just to repeat from the buyback of shares, you know, we will do that, you know, on a periodic basis, you know, with the existing programs that we have in place. And to extend that, you know, once we've done some copper recycling, we may do something larger as opposed to, you know, making investments and new transactions.

Speaker 1: And our next question comes from the line of Frederick Bastion from Raymond James. Your question, please.

And our next question comes from the line of Frederic Bastien from Raymond James Your question. Please.

Hey, good morning.

Speaker 15: I just wanted to close the loop on this latest sterren investment. Can you reconcile the total purchase price of 1.3 billion he highlighted in your print remarks and the $775 million has been quoted in press.

Good morning.

I just wanted to close the loop on this latest stair investment can you reconcile the total purchase price of $1 3 billion you highlighted in the.

In your prepared remarks.

775 million Bucks, that's been quoted in the press.

Speaker 15: And what is BIP's actual commitment to this 1.2 billion?

And what what is your what is bps.

Actual commitment to this $1 2 billion.

Yes, sorry.

Sam Pollock: So I think that's all we're telling people is it's part of our investment decision framework today, given where we're trading. In relation to delivering, we feel very comfortable with our balance sheet today, which has been strong and our maturities are well-lattered as they've probably have ever been. We really don't have any maturities at the corporate level for many years. And at the asset level, it's not only extremely manageable, but very comfortable.

Speaker 3: The 1.3 includes all the purchases.

The $1 three includes all the purchases of the land leases.

Speaker 5: in addition to the 750 going to 6 there. So as I mentioned earlier, it's really a multi-faceted transaction with many, many different parties. Think of it as a true recapitalization of that business.

In addition to the 750 going to six there so as I mentioned earlier, it's really a multifaceted transactions many many different parties.

Think of it as a true.

Recapitalization of that business.

Before we combine it with ours.

Speaker 16: The funding is in place from a group of lenders to complete all the activitions. It's not requiring any capital from us. And closing is expected in the first quarter of 2020.

The funding is in place from.

A group of lenders to complete all of the acquisitions.

It's not requiring any capital from us and.

Sam Pollock: What we have, so there's nothing that we're looking to deliver in any particular case. I think our business, I think the other thing, which we did flag in our letter is even as interest rates go up, the inflation compounding within our business exceeds the amount of any increase in interest rates. So, from that perspective, we are always delivering, just because the businesses are growing. So, I think that just leaves us that on the stage getting asked why. I think that covers it well.

Closing is expected in the first quarter of.

2024, okay. Thanks for that color.

Couple more questions quickly.

In prior periods of market volatility, we've seen you make toehold investments and depressed public stocks, obviously, you have been buying your own stock but.

Speaker 15: In part periods of market volatility, we see you make toll-hold investments in the press public stocks. Obviously, you have been buying your own stock. But have you made such investment recently in other companies?

Have you made such investment recently in other companies.

Yeah.

Speaker 16: It's all we can't really comment too much on specifics. But we do periodically make investments in companies that trade down and to monitor them. And it's safe to say that at any given point in time, we probably have one or two that we've done that with.

So we can't really comment too much on specifics.

Sam Pollock: Okay, thanks for that. I just wanted to clarify something. In recent years, I've been talking about the value of your platform investments. And if I understand your comments correctly this morning, said that in terms of monetizing assets, the sweet spot is more middle market, mid market rather than large scale. And given that you're looking to pace your new investments for the recycling, can we expect more in the next year or so in terms of tuckings rather than large acquisitions in the current environment?

But we do periodically make.

Investments in companies that trade down and to monitor them and it's safe to say that at any given point in time, we probably have one or two that we've done that with.

I'd, rather not comment more than that.

Speaker 15: Lastly, where do you see the best opportunities for organic and inorganic growth in the midstream segment right now?

Fair enough lastly, where do you see the best opportunities for organic and inorganic growth in the midstream segment right now.

Speaker 15: The best opportunities for growth in midstream, whether it's organic or inorganic.

Sorry say it again the question was where do we see the best opportunities for growth in midstream.

Whether it's organic or inorganic.

Sam Pollock: No, I wouldn't say that. I hope I didn't give people the wrong impression. I think all we want to just flag was what was in the letter, namely that we've made lots of investments. There's no pressure that we feel to deploy capital. We will be optimistic. And as our liquidity increases with capital recycling, we'll be on the lookout for great opportunities. Whether it's buying our shares or making a big investment, we'll continue to do that.

Okay, Yes, I would say most of what we're focused on.

Speaker 16: Yeah, I say most of what we're focused on in the midstream sector is on the organic side. Maybe Ben, you want to touch upon a little bit of what we're doing.

In the midstream sector is on the organic side, maybe Ben you want to touch upon a little bit of what we're doing.

Speaker 16: in IPL and North River in relation to...

And.

IPL and <unk>.

North River in relation to.

Some of the.

Speaker 12: We'll see what we're focusing on in those businesses are what I would consider, you know.

Customer related.

Mostly what we're focusing on.

Those businesses are what I would consider.

Fairly.

Speaker 12: smaller scale but you know important projects for our clients to just help them with additional capacity and we're seeing utilization rates.

Smaller scale, but important.

Projects for our clients to just help them with additional capacity needs, we're seeing utilization rates.

Speaker 12: you know increase and reach pretty high levels across our midstream fleet. And so most of what we're engaged in is I'd call them quite side capital projects to allow our customers to bring either more barrels or gas through our facilities and they're very smaller scale and relatively lower risk capital projects that are highly accrued of course. So that's our main area.

Increase and reached pretty high levels across our midstream fleet and so most of what we're engaged in is I'd call them bite sized capital projects to allow our customers to framework either more barrels of gas through our facilities and theyre very.

Sam Pollock: The tuckings are things that I would say that is a constant thing we're always doing. Those don't generally don't require any capital. We can usually do them on our lines of credit in each of the businesses. Those are just part of the regular business plans of creating value. And we'll continue to have particular business market where we see good opportunities.

Operator: Thank you.

Frederic Bastien: Thank you one moment for our next question.

Smaller scale and <unk>.

Relatively lower risk capex projects that are highly accretive for us. So that's our main area of focus.

Speaker 11: I would say on a total dollar basis though, it's probably the next...

I would say on a on a total dollar basis, though.

And it's probably in the next couple of years, we've been investing.

Speaker 16: $400 million of capital but relatively...

$400 million of capital, but relatively.

Speaker 16: low ebba to the cat-bat ratios. So the very creatives, they represent a diversified number of.

Low.

EBIT as a capex ratios, so they're very accretive.

Frederic Bastien: And our next question comes from the line of Frederick Bastion from Raymond James. Your question, please. Hey, good morning.

They represent.

<unk> number of clients.

Speaker 6: lines and we're doing this both at ICL as well as Northrop.

And we're doing this both at IPL as well as.

Sam Pollock: I just wanted to close the loop on this latest sister investment. Can you reconcile the total purchase price of 1.3 billion? He highlighted in your program arts and the $775 million that's been quoted in press. And what is your, what is Bips' actual commitment to this 1.2 billion? Yeah, sorry. The 1.3 includes all the purchases of the land leases in addition to the 750 going to six there. So as I mentioned earlier, it's really a multifaceted transaction with many, many different parties.

No Sir.

That's great. Thanks, so much.

Thank you one moment for our next question.

Yeah.

Speaker 1: And our next question comes from the line of Patrick Kenny from NBF. Your question, please. Thanks. You're welcome.

And our next question comes from the line of Patrick Kenny from <unk>. Your question. Please.

Hey, good morning, guys.

To come back to the balance sheet.

Speaker 1: Your reference, I'm going to be course dead. I'll be over the next 12 months. Give me a minute.

You referenced.

Of course that over the next 12 months.

Maybe.

Brian.

Great.

Well over time.

Speaker 13: over. That's not what's that here. Comments from the market event. I just wanted to confirm whether or not there are B.A. businesses or

Notwithstanding.

To the comments around the markets.

Sure.

Okay.

Sam Pollock: Think of it as a true recapitalization of that business before we combine it with ours. And the funding is in place from a group of lenders to complete all the acquisitions. It's not requiring any capital from us. And closing is expected in the first quarter of 2024. Okay, thanks for that, Color Sam. A couple more questions quickly. In prior periods of market volatility, we seen you make toll hold investments in the press public stocks.

Just wanted to confirm whether or not there might be any businesses.

No.

It might be some liquidity support over the next 12 months.

Speaker 13: might be in the public liquidity support for the next couple.

Thanks.

Speaker 2: I didn't catch much of that admittedly, Pat. And David here, I think what I did, Pat, from feel free to jump in. What I think you're asking, but it was upcoming refinancing that we referenced in our materials and any need for liquidity or support from the business or from book-filling infrastructure.

I didn't catch much of that admittedly Pat.

David Here I think what I gave capture and feel free to jump in what I think youre asking about upcoming refinancings that we referenced in our materials and any need for liquidity or support from the business or from Brookfield infrastructure and.

Speaker 2: And I think, you know, we highlighted the well-lattered maturity profile in our materials. We have no concerns around the leverage in each any of our businesses that we have, or the need for financial support for them. As we've alluded to in the past, these are structured predominantly to investment grade level.

I think we highlighted the.

Well ladder maturity profile in our materials, we have no concerns around the leverage in each any of our businesses that we have.

Sam Pollock: Obviously, you have been buying your own stock. But have you made such investment recently in other companies? We can't really comment too much on specifics, but we do periodically make investments in companies that trade down and to monitor them. And it's safe to say that at any given point in time, we probably have 1 or 2 that we've done that with. But yeah, I'd rather not comment more than that. Okay, fair enough.

Or the need for financial support for them.

As we've alluded to in the past these are structured predominantly to investment grade levels.

Speaker 2: very sustainable amounts of leverage at the underlying businesses. And the reason we do that is for the ability to operate through cycles. And we've seen that come to fruition this year. So from a maturity standpoint, we have about 5% in the next 12 months.

Very sustainable amount of leverage of the underlying businesses and the reason we do that is for.

The ability to operate through cycles, and we've seen that come to fruition. This year. So.

I would say.

From a maturity standpoint, we have about 5% in the next 12 months.

Speaker 2: You know, when we think through the cost of that financing, you know, depending on when that debt was raised, you know, if it was in the last five years, it was probably, you know, somewhere in the 150 to 200 basis points, more expensive on base rates, you know, spreads for the sector have remained relatively constructive because of, you know, over the markets have been very open for high quality infrastructure businesses like ours. So, we're not feeling any concerns at the portfolio company or of upcoming refinancing. Okay,

When we think through the cost of that financing depending on when note that debt was raised you know if it was in the last five years it was probably.

Benjamin Vaughan: Lastly, where do you see the best opportunities for organic and inorganic growth in the midstream segment right now? So I say again, Fred, the question was, where do we see the best opportunities for growth in midstream, whether it's organic or inorganic? Okay, yeah, I say most of what we're focused on in the midstream sector is on the organic side. Maybe Ben, you want to touch upon a little bit of what we're doing in IPL and at North River in relation to some of the customer related products.

Somewhere in the 150 to 200 basis points more expensive on base rates spreads for the sector remained relatively constructive.

Because over the market has been very open for high quality infrastructure businesses like ours. So we're not we're not feeling any concerns at the portfolio company.

Coming for that refinancings.

Okay, No that's great David Thanks.

Benjamin Vaughan: Yeah, mostly what we're focusing on in those businesses are what I would consider, you know, fairly smaller scale, but you know, important projects for our clients to just help them with additional capacity. We're seeing utilization rates, you know, increase and reach pretty high levels across our midstream fleet. And so most of what we're engaged in is, I'd call them quite size capital projects to allow our customers to bring either more barrels or gas for our facilities.

Speaker 13: And then you guys provided a quick recap of your investor day highlights and I apologize if I missed it, but just wanted to confirm.

And then you guys provided a quick recap of your Investor day highlights.

I apologize if I missed it but just wanted to confirm.

On the back of the <unk> transaction here that you continue to expect that.

At 12% plus a full per unit growth over the next one to three years.

Speaker 2: Yes, nothing has changed in the environment from last month when we provided that. Perfect.

Yes, nothing has changed in the environment from last month, when we when we provided that.

Benjamin Vaughan: And they're very smaller scale and relatively lower risk of capital projects that are highly accrued of course, so that's our menu. I would say on a total dollar basis though, Ben, it's probably the next couple of years, we've been investing $400 million of capital but relatively low EBITDA to the cat-back ratios. So they're very creative, they represent a diversified number of clients. And what we're doing is both at ICL, ICL.

Perfect I'll leave it there thanks guys.

Speaker 1: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Sam Pollock for the remarks.

Thank you. This does conclude the question and answer session of today's program I'd like to hand the program.

Operator: That was great, thanks so much. Thank you one moment for our next question.

Back to Sam Pollock for any further remarks.

Okay. Thank you operator, and thank you everyone for joining the call. This morning.

Speaker 16: Okay, thank you operator and thank you everyone for joining the call this morning. We'd like to wish everyone a very happy upcoming holiday season and we look forward to providing you our fourth quarter and year in results, early new year.

We'd like to wish everyone, a very happy upcoming holiday season.

And we look forward to providing you our fourth quarter and year end results early in new year.

All the best Thank you.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

Speaker 1: Thank you, ladies and gentlemen, for your participation at today's conference. This does conclude the program. You may now disconnect. Good day. Thank you.

Yeah.

[music].

Speaker 17: And.

Okay.

Okay.

Okay.

[music].

Robert Hope: And our next question comes from the line, Patrick Kenny from NBF. Your question please. Thanks for coming back to the balance sheet zero. Your reference, you're going to be course debt over the next 12 months. Yes, could maybe create persons all over and notwithstanding your conservative comments from the markets and meant for that. Just wanted to confirm whether or not there may be any businesses or investments. Might be in public liquidity support over the next 12 months.

Yes.

[music].

Yes.

Robert Hope: I didn't catch much of that admittedly, Pat. It's David here. I think what I did capture and feel free to jump in. What I think you're asking about is upcoming refinancing that we referenced in our materials and any need for liquidity or support from the business or from fulfilling frustration. And I think we highlighted the well-lattered maturity profile in our materials. We have no concerns around the leverage in each any of our businesses that we have or the need for financial support for them.

Robert Hope: As we've alluded to in the past, these are structured predominantly to investment grade levels, very sustainable amounts of leverage at the underlying businesses. And the reason we do that is for the ability to operate through cycles. And we've seen that come to fruition this year. So from a maturity standpoint, we have about 5% in the next 12 months. When we think through the cost of that financing, depending on when that debt was raised, it was in the last 5 years.

Robert Hope: It was probably somewhere in the 150 to 200 basis points more expensive on base rates. Spreads for the sector have remained relatively constructive because of the markets have been very open for high quality infrastructure businesses like ours. So we're not we're not feeling any concerns at the portfolio company or of upcoming refinancing. Okay. Now that's great, David. Thanks.

Robert Hope: And then you guys provided a quick recap of your investor day highlights. And I apologize if I missed it, but just wanted to confirm on the back of the six era transaction here that you continue to expect that 12% plus FFO per unit growth over the next one to three years. Yeah, nothing has changed in the environment from last month when we provided that. Perfect.

Sam Pollock: I'll leave it there. Thanks, guys. Thank you. This does conclude the question-and-answer session of today's program.

Operator: I'd like to hand the program back to Sam Pollock for the remarks. Okay, thank you, operator. And thank you, everyone, for joining the call this morning. We'd like to wish everyone a very happy upcoming holiday season. And we look forward to providing you our fourth quarter and year-and-results, early new year, all the best. Thank you. Thank you, ladies and gentlemen, for your participation at today's conference. This does conclude the program.

Operator: You may now disconnect. Good day. Thank you.