Brookfield Infrastructure Partners/media/Files/B/...Sam Pollock, Managing Partner & CEO 3 Debt...
Transcript of Brookfield Infrastructure Partners/media/Files/B/...Sam Pollock, Managing Partner & CEO 3 Debt...
Brookfield Infrastructure Partners
INVESTOR DAY
SEPTEMBER 26 , 2019
2
Agenda
2019 – A Quick RecapSam Pollock, Managing Partner & CEO
3
Debt Capital Markets StrategyHadley Peer Marshall, Managing Director, Infrastructure
14
BIP: A Must-Own Utility InvestmentBahir Manios, Managing Partner & CFO
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Expanding Our Investor BaseSam Pollock, Managing Partner & CEO
45
3
2019 – A Quick Recap
Sam Pollock
Managing Partner & CEO
4
2019 has been a very successful year
Delivered robust financial performance
Maintained healthy balance sheet
Executed strategic priorities
Unit price reached all-time highs
5
June 2018 run-rate Mid-year run-rate 2019 exit run-rate Q1 2020 run-rate
FFO/unit
Added investments contributing to stronger FFO
1. Three months ended June 30, 2018 annualized.
2. Six months ended June 30, 2019 annualized.
3. Reflects a full year contribution from investments secured in 2018.
4. Reflects contribution from transactions secured in 2019 and announced capital recycling initiatives.
$3.00$3.46
~$3.75
On-track to deliver substantial increase in run-rate FFO per unit
17%
1 2 3
~$3.50
25%
4
6
Maintained solid financial position
$3 billion of total liquidity
No significant debt maturities in next five years
BBB+ credit rating and 25x corporate interest coverage
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$1.0BSALE
PROCEEDS1
17%IRR2
2.5xMULTIPLE OF
CAPITAL2
Executed strategic priorities
1. Includes the completed or secured sales of a partial stake in the Chilean Toll Road, European Ports, Colombian Regulated Electricity Distribution and Australian District
Energy businesses.
2. The European port, sold in Q2’19, and secured sale of the Australian District Energy business, were not included in the referenced metrics. These assets were
underwritten as part of a larger transaction composed of several assets (Prime Infrastructure) and therefore returns should only be viewed across the original portfolio of
assets acquired.
Selling four mature assets in the transport, energy and utilities sectors:
8
Executed strategic priorities (cont’d)
1. Transactions subject to customary conditions to completion.
Targeting to invest $1.3 billion into four high-quality businesses1
Redeploying proceeds into higher returning businesses:
$600MINDIAN TELECOM
TOWERS1
NEW ZEALAND DATA
DISTRIBUTION
$500MNORTH
AMERICAN RAIL1
$150MNORTH AMERICAN
GAS PIPELINE 1
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Acquired leading data infrastructure business in New Zealand
• High-quality data distribution business
• Nationwide wireless and fiber network
• ~2.5 million customers
• BIP’s equity: ~$200 million
$2.3BENTERPRISE VALUE
New Zealand Data
Distribution Business
10
Take-private of irreplaceable transportation network
1. Subject to customary conditions to completion.
• Largest short-haul rail operator in North
America
• ~26,000 km of track
• Diversified across commodity groups with
3,000+ customers
• BIP’s equity: ~$500 million
$8.4BENTERPRISE VALUE
North American Rail
Business1
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• Co-controlling interest in two operational
natural gas pipelines
• 740 km of newly-constructed assets
• No volume or commodity price risk
• Fully-contracted under long-term, take-or-
pay arrangement
• U.S. dollar contracts and shippers
• BIP’s equity: $150 million
Secured critical energy infrastructure in Mexico
1. Subject to customary conditions to completion.
$3.2BENTERPRISE VALUE
North American
Regulated Gas Pipeline1
12
Entered exclusivity for a large-scale Indian telecom tower portfolio
1. Subject to customary conditions to completion.
2. Master Services Agreement.
• Bilateral arrangement for corporate carve-out
• ~130,000 communication towers
• 30-year MSA2 with anchor customer
• BIP’s equity – ~$400 million
$7.9BENTERPRISE VALUE
Indian Telecom Towers
Business1
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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
BIP (NYSE) S&P 500 Index DJB Global Infra Index S&P Utilities Index Alerian MLP Index
Continued to deliver long-term value for unitholders
1. BIP (NYSE) returns since Jan 2008; BIP.UN (TSX) returns since Sept 2009.
Annualized total returnsAs at September 20, 2019 1 YEAR 3 YEAR 5 YEAR
SINCE
INCEPTION1
BIP 29% 18% 18% 18%
BIP.UN 33% 18% 22% 26%
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Debt Capital Markets Strategy
Hadley Peer Marshall
Managing Director, Infrastructure
15
Financing costs at historically low levels
Debt markets are extremely liquid
Increased investor appetite for infrastructure debt
New financing options
Credit market conditions are creating opportunities
16
Despite increased access to credit markets, we remain disciplined
Brookfield Infrastructure is focused on:
Balance sheet protection
vs.
Cost of capital arbitrage
17
• Term Loan B
• High Yield Bonds
• Private Debt Capital
• Project Finance Bank Lending
• Investment Grade Bonds
1
2
3
4
There are several ways to finance infrastructure assets
5
18
Unprecedented low all-in cost for borrowers
Credit spreads have not offset continued decline of U.S. Treasury rates
Source: Bloomberg – BBB Corporate Spreads.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10-Year Treasury BBB Corporate Spread
2002 2019
19
Debt activity is at record levels
Search for yield has led to ample supply across credit markets with noticeable
growth in non-investment grade lending
1. Institutional Term Loan B market includes all U.S. leverage loan market issuance.
Source: J.P. Morgan, S&P Global Market Intelligence.
-
500
1,000
1,500
2,000
2,500
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
US
$B
U.S. I.G. Corp Bonds U.S. High Yield Bonds Institutional Term Loan B Project / Infrastructure Debt1
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Leverage and covenant-lite debt exceeds financial crisis levels
Source: S&P Global Market Intelligence; Large Corp LBOs; non-adjusted.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
(2.50)
(2.00)
(1.50)
(1.00)
(0.50)
-
0.50
1.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
% o
f In
stitu
tio
na
l L
oa
ns
An
nu
al C
ha
nge
in S
en
ior
Deb
t / E
BIT
DA
Incremental turns of leverage Covenant-Lite
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Despite bull market conditions, we
continue to employ a highly disciplined
and conservative approach to
financing our business
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Our conservative approach
Maintain strong
liquidity levels1Resiliency through
economic cycles2
Unrestricted cash
flows to investors
3
Continued access to
multiple sources of
capital
4
5Flexibility to
achieve operating
and growth plans
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North American rail business1
Secured covenant-lite financing at attractive terms, with a leverage profile
that ensures ongoing access to a variety of financing sources
BROOKFIELD
INFRASTRUCTURE
~$2.6BUNDERWRITTEN
FINANCING OBTAINED
~4.25x DEBT / EBITDA
AVAILABLE
FINANCING
~$4.0BUNDERWRITTEN
FINANCING AVAILABLE
>6.50xDEBT / EBITDA
1. Transaction subject to customary conditions to completion.
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AVAILABLE
FINANCING
Western Canadian midstream business1
Structured flexible financing package for a highly-contracted business with a
stronger credit profile, relative to virtually all other N.A. midstream leveraged
loans
1. Transaction subject to customary conditions to completion.
2. Fully committed for both transaction closings.
~$1.5B2
UNDERWRITTEN
FINANCING OBTAINED
<4.0x TARGET DEBT/EBITDA
~$2.5BUNDERWRITTEN
FINANCING AVAILABLE
~6.25xDEBT / EBITDA
BROOKFIELD
INFRASTRUCTURE
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To summarize
Strong investor appetite for infrastructure debt1Historically lowest cost credit available2Disciplined and consistent approach to financing structures3
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BIP: A Must-Own Utility Investment
Bahir Manios
Managing Partner & CFO
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What makes BIP a must-own utility?
1Security of
cash flows
2Outsized growth
relative to peers
3Attractive relative
valuation
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1Our business generates
high-quality cash flows
Stable Underlying Cash Flows
High Margins and Strong Cash Conversion
Highly Diversified Business
Recession Resistant Attributes
i
ii
iii
iv
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Stable and resilient cash flows
Regulatory frameworks and contracted capacity underpin our steady, predictable
cash flows
1. As of June 30, 2019.
95% REGULATED OR
CONTRACTED1
i
30
$1.5B
$1.9B
2017 2018 2019
Adjusted EBITDA
$1.3B
$1.6B
2017 2018 2019
Unlevered Net Cash Flow
2019 EBITDA MARGINS1 OF
55%AND GROWING
Operations supported by strong margins and cash conversion ratios
Serving as a cushion against macro headwinds
1. Metrics are annualized using Q2-19 financial data.
2019 CASH CONVERSION1
87%
1 1
ii
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Cash flows are highly diversified
(A) By sector1
1. Presented using annualized Q2-19 YTD financial data and includes secured transactions that have not closed such as the North American Rail, North American Natural
Gas Pipeline and Indian Telecom businesses.
25% ENERGY
(2018 – 18%)
32% UTILITIES
(2018 – 40%)
30% TRANSPORT
(2018 – 37%)
13% DATA
(2018 – 5%)
iii
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Cash flows are highly diversified (cont’d)
(B) and by region1
1. Presented using annualized Q2-19 YTD financial data and includes secured transactions that have not closed such as the North American Rail, North American Natural
Gas Pipeline and Indian Telecom businesses.
EUROPE
20%
SOUTH AMERICA
25%
Utilities
Transport
NORTH AMERICA
30%
Energy
Data infrastructure
ASIA PACIFIC
25%
iii
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-
5
10
15
20
25
30
35
Utilities Transport Energy Data
% of Adjusted FFO1
Regulated/Contracted Volumes GDP Sensitive
Recession resistant characteristics
Majority of GDP sensitive cash flows in Transport segment
1. Presented using annualized Q2-19 YTD financial data and includes secured transactions that have not closed such as the North American Rail, North American Natural
Gas Pipeline and Indian Telecom businesses.
%
%
%
%
%
%
%
iv
%
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FFO1 Sensitivity (in US$ millions)
Transport FFO represents ~30% of pro-forma FFO $490
~40% of our Transport FFO is volume and rate agnostic (205)
~40% of our current Transport FFO is generated in Brazil (200)
Recession-sensitive FFO $85
% of Total BIP FFO 5%
1. Presented using annualized Q2-19 YTD funds from operations prior to corporate expenses.
Recession resistant characteristics (cont’d)iv
Impact on FFO from a possible global recession is insignificant
35
Our business also delivers
higher growth relative to a
traditional utility
2
36
FFO/UNIT
GROWTH
INFLATIONARY
PRICE INCREASES
75% of EBITDA
indexed to inflation
3-4%
VOLUME UPSIDE
FROM GDP
GROWTH
Contracted volumes
provide a floor, current
capacity offers
significant upside
1-2%
CASH FLOWS
REINVESTED
Over $2 billion of
capital backlog over
the next three years
2-3%
Well-positioned for sustainable organic growth
Multiple sources of recurring growth embedded in our businesses
6-9%
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Significant growth from inflation and volumes
1. Same-store EBITDA presented for businesses owned and acquired between 2013 and 2018, after adjusting for capital recycling program.
2. Presented using annualized Q2-19 YTD results.
2013 2014 2015 2016 2017 2018 2019
Utilities Transport Energy Data Infra
‘Same-store’ Constant-Currency EBITDA
(US$ millions)
6%
CAGR
$1,269$1,343
$1,419$1,480
$1,573$1,670
1
$1,752
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$275 $324 $326
$388 $411 $412
$1,100
2014 2015 2016 2017 2018 2019F Capital to beCommissioned
Highly visible growth from recurring, low-risk capital projects
1. Represents Q2’19 annualized financial data.
2. Presented as of June 30, 2019.
2
Growth Capital Invested
(US$ millions)
1
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• South American electricity transmission build-out
• Smart meter adoptions and installations
• U.S. natural gas pipeline capacity increase
• Data center rollout in South America and Asia Pacific
1
2
3
4
Meaningful large-scale expansions underway
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Attractive current valuation
relative to historic levels and
peer group
3
41
Attractive entry point compared to recent years
1. Presented on a next twelve-month basis using annualized Q2’19 YTD financial data, the mid-point of our organic growth target (7%) and pro-forma completed and
secured transactions.
2. Based on volume-weighted average price.
While our business keeps getting better
(in US$ millions, unless otherwise noted) 2017 2018 20191
AFFO $ 941 $ 982 $ 1,342
Return of Capital (68) (87) (106)
$ 873 $ 895 $ 1,236
Units Issued 376.8 395.4 418.1
Per share $ 2.32 $ 2.26 $ 2.96
Price-to-AFFO2 17.5x 17.5x 16.1x
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And it trades at a discount to its peers
1. Presented on a next twelve-month basis.
2. Reflects annualized Q2’19 levels.
3. S&P 500 Utilities index measured using Price/Earnings.
4. S&P 500 Utilities index presented using EV / next twelve months EBITDA.
BROOKFIELD
INFRASTRUCTURE
PARTNERS
16xPRICE / AFFO1
15xEV / EBITDA2
S&P 500
UTILITIES INDEX
20xEARNINGS MULTIPLE3
20xEV / EBITDA4
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Summary
Peer data presented above based on the S&P 500 Utilities index.
4.2%
7-9%
HighLow
4%
3.2%
BIPPeers
DIVIDEND YIELD
DIVIDEND GROWTH
DEGREE OF DIVERSIFICATION
44
Security Growth “Grow-tility”
45
Expanding Our Investor Base – Introducing BIPC
Sam Pollock
Managing Partner & CEO
46
Making Brookfield Infrastructure available to more investors!
Brookfield Infrastructure Partners L.P. (“BIP LP”)
is a category leader, with an exceptional business
and financial profile;
However…
we believe there remains an untapped market
of investors
47
We are launching Brookfield
Infrastructure Corporation (“BIPC”)
Structured with the intention of being
economically equivalent to BIP Units
48
BIP LP unitholders will receive
one (1) share of BIPC for every nine (9) units of BIP LP
Transaction overview
1. Subject to stock exchange and regulatory approvals.
NYSE: BIPC1 TSX: BIPC1
BIPC will be a publicly-listed Canadian corporation, created via an effective
stock split
We expect to complete the special distribution in the first half of 20201
49
Shares of BIPC intend to have the same economics as BIP LP units
Identical
dividends/distributions
Exchangeable to BIP LP
units at any time
We expect BIPC shares and BIP LP units will be considered
equivalent as a result of these attributes
50
We see many benefits in establishing BIPC
Broader index inclusion
Tax advantages for some
Expanded investor base
BIPCLISTED
CORPORATION
51
Pre-split
Unrestricted AUM LP Restricted AUM
Expanded investor base
Opportunity to attract new investors that would not otherwise invest in limited
partnerships due to tax reporting or other reasons
BIPC is expected to expand our universe of
potential investors
• U.S. retail investors
• Index funds / Exchange traded funds
• Active money managers
• Additional indices
• European investors
52
Broader index inclusion
1. Based on preliminary analysis, and subject to approval by index committees.
Today, BIP LP’s most
notable index
memberships include:
S&P/TSX Composite Index
S&P/TSX 60 Index
BIPC shares should be
eligible for inclusion into
additional indices
Russell Indices1
MSCI Indices1
53
Tax advantages
BIPC investors will receive:
Higher after-tax yield
(certain investors)
Dividends are expected to be
qualified for U.S. investors
U.S. federal tax rate of
24% vs. 41%
“Eligible” dividends for
Canadian investors
Common dividend
reporting slips
Annual Form 1099 (U.S.)
Annual Form T5 (Canada)
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How will this stock split work?
BIPC will be created via a stock split with an initial market capitalization of ~$2B
1. Redeemable Partnership Units held by Brookfield Asset Management.
Figures calculated based on NYSE unit price of $47.70 at September 20, 2019.
Should have no impact on Brookfield Infrastructure’s combined market cap
PRE-SPLIT POST-SPLIT
Units/Share Market Cap Units/Shares Market Cap
BIP LP 295 $ 14,072 295 $ 12,673
BIPC - - 46 1,976
RPUs1 122 5,819 122 5,241
Total 417 $ 19,891 463 $ 19,891
55
BIPC:
Questions You May Have
56
Why are we not implementing a full conversion?
Allows us to issue
preferred units at a
lower cost of capital
Provides Canadian
unitholders with higher
current after-tax yields
More cost-effective way
to hold investments
in certain jurisdictions
The continued existence of BIP LP alongside BIPC
provides three key advantages:
57
Is the BIPC float large enough?
• Estimated initial market float of $2 billion
• Investment decisions into BIPC should take into account size of the whole
organization (~$20 billion market cap)
• BIPC is expected to grow over time with:
‒ Follow-on equity issuances
‒ Potential for additional splits similar to this one
• Liquidity concerns mitigated through exchange mechanism
58
FFO
• No change
• BIP LP through its control of BIPC will consolidate
results going forward
NAV • No change on combined basis
Market Cap • No change on combined basis
Dividends/Distributions • No change on combined basis
Fees to BAM • No change on combined basis
What is the expected impact on BIP financial statements and metrics?
59
BIPC expected to have minimal impact on Brookfield Infrastructure
No incremental tax
consequences1No change in
management oversight
or governance2No impact to credit
ratings expected3
Immaterial admin
costs to maintain4Minimal financial
reporting implications5
60
Outlook
61
The outlook for our business in 2020 is strong
1. Long-term same-store, constant-currency growth target.
Expect same-store
growth at high end of
6-9%
New businesses will
contribute average
initial FFO yield of
~12%
1 2
1
62
Significant opportunities in data infrastructure and energy in North America
and Europe
Expertise and ability to execute many types of transactions
‒ Contrarian investments
‒ Carve-outs
‒ Take-privates
‒ Restructurings
Robust pipeline of new investments
Global franchise provides us flexibility to transact throughout all market cycles
63
Priorities – looking ahead
Close secured investments1Progress next phase of capital recycling plans2Execute on robust pipeline of opportunities 3
64
Takeaways
In a low interest
rate environment,
BIP is remaining
disciplined
BIP is a
“grow-tility”
providing investors
growth and security
BIPC will increase
our universe of
investors in 2020
65
Q & A
66
Notice to Recipients
All amounts are in U.S. dollars unless otherwise specified. Unless otherwise indicated, the statistical and financial data in this presentation is presented as of June 30, 2019.
DISCLAIMER
This presentation has been prepared for informational purposes only from information supplied by Brookfield Infrastructure and from third-party sources indicated herein. Such third-party information has notbeen independently verified. Brookfield Infrastructure makes no representation or warranty, expressed or implied, as to the accuracy or completeness of such information.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This presentation contains “forward-looking information” within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of applicable U.S. and Canadiansecurities laws. The words “expect”, “estimate”, “anticipate”, “plan”, “believe”, “seek”, “intend”, “forecast”, “project”, “target” or derivatives thereof and other expressions which are predictions of or indicate futureevents, trends or prospects and which do not relate to historical matters identify the above mentioned and other forward-looking statements and information. Forward-looking statements and information in thispresentation include statements regarding the creation of Brookfield Infrastructure Corporation (“BIPC”) and the future performance and prospects of BIPC and Brookfield Infrastructure following the specialdistribution of BIPC’s shares, including anticipated benefits associated with the creation of BIPC such as BIPC’s ability to attract new investors, BIPC’s eligibility for index inclusion and tax advantages relating toBIPC; BIPC’s impact on Brookfield Infrastructure; expansion of Brookfield Infrastructure’s business; growth in FFO (as defined below); participating in a growing asset class; the likelihood and timing ofsuccessfully completing the transactions and other initiatives referred to in this presentation; the integration of newly acquired businesses into our existing operations; the future prospects and financing of theassets that Brookfield Infrastructure operates or will operate; commissioning of our capital backlog; availability of investment opportunities; our intention to maintain an investment grade credit rating; thecontinued growth of Brookfield Infrastructure and its businesses in a competitive infrastructure sector; future revenue and distribution growth prospects in general and other statements with respect to ourbeliefs, outlooks, plans, expectations and intentions. These forward-looking statements and information are not historical facts but reflect our current expectations regarding future results or events and arebased on information currently available to us and on assumptions we believe are reasonable. Although we believe that our anticipated future results, performance or achievements expressed or implied bythese forward-looking statements and information are based on reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information becausethey involve assumptions, known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to differ materially from anticipated future results,performance or achievements expressed or implied by these forward-looking statements and information. These beliefs, assumptions and expectations can change as a result of many possible events orfactors, not all of which are known to us or are within our control. If a change occurs, our business, financial condition, liquidity and results of operations and our plans and strategies may vary materially fromthose expressed in the forward-looking statements and information herein.
Factors that could cause actual results of Brookfield Infrastructure to differ materially from those contemplated or implied by the statements in this presentation include general economic conditions in thejurisdictions in which we operate and elsewhere which may impact the markets for our products and services, the ability to achieve growth within Brookfield Infrastructure’s businesses and in particularcompletion on time and on budget of various large capital projects, which themselves depend on access to capital and continuing favorable commodity prices, the impact of market conditions on ourbusinesses, the fact that success of Brookfield Infrastructure is dependent on market demand for an infrastructure company, which is unknown, the performance of global capital markets, the availability andterms of equity and debt financing for Brookfield Infrastructure, the ability to effectively complete transactions in the competitive infrastructure space (including the ability to complete announced and potentialtransactions that may be subject to conditions precedent, and the inability to reach final agreement with counterparties to transactions being currently pursued, given that there can be no assurance that anysuch transaction will be agreed to or completed) and to integrate acquisitions into existing operations, the future performance of these acquisitions, the market conditions of key commodities, the price, supply ordemand for which can have a significant impact upon the financial and operating performance of our business, changes in technology which have the potential to disrupt the business and industries in which weinvest, uncertainty with respect to future sources of investment opportunities, our ability to achieve the milestones necessary to deliver the targeted returns to our unitholders, our active pipeline of newinvestment opportunities and growing backlog of committed organic growth capital expenditure projects may not be completed as planned, and other risks and factors described in the documents filed byBrookfield Infrastructure Partners L.P. (the “Partnership”) with the securities regulators in Canada and the United States including under “Risk Factors” in the Partnership’s most recent Annual Report on Form20-F, its most recent interim report, and the prospectus qualifying the special distribution of BIPC’s shares. The creation of BIPC is subject to stock exchange and regulatory approvals that have not yet beenreceived and there can be no assurances that the stock exchanges on which BIPC intends to apply to list its shares will approve the listing of BIPC’s shares or that BIPC will be included in any indices. Exceptas required by law, Brookfield Infrastructure undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events orotherwise.
A registration statement (including a prospectus) has been filed with the SEC for the special distribution. You should read the prospectus in that registration statement and other documents the BrookfieldInfrastructure and BIPC have filed with the SEC for more complete information about the special distribution. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov.Alternatively, a copy of the prospectus can be sent to you at no cost if you request it by contacting [email protected].
IMPORTANT NOTE REGARDING NON-IFRS FINANCIAL MEASURES
To measure performance we focus on net income as well as funds from operations (“FFO”), adjusted funds from operations (“AFFO”), adjusted EBITDA, rate base, return on rate base, adjusted EBITDA tointerest ratio, consolidated leverage, corporate interest coverage, constant currency basis and adjusted EBITDA margin, which we refer to throughout this presentation. We define FFO as net income excludingthe impact of depreciation and amortization, deferred income taxes, breakage and transaction costs and non-cash valuation gains or losses. We define AFFO as FFO less maintenance capital expenditures. Wedefine adjusted EBITDA as net income excluding the impact of depreciation and amortization, interest expense, current and deferred income taxes, breakage and transaction costs and non-cash valuation gainsor losses. We define rate base as a regulated or notionally stipulated asset base. We define return on rate base as adjusted EBITDA divided by time weighted average rate base. We define adjusted EBITDA tointerest ratio as adjusted EBITDA divided by interest expense on a proportionate basis, taking into account Brookfield Infrastructure’s ownership in operations. We define consolidated leverage as net debtdivided by net debt plus the market value of Brookfield Infrastructure based on the closing price of Brookfield Infrastructure’s units on the New York Stock Exchange (assuming full conversion of Brookfield’sinterest in Brookfield Infrastructure into units of Brookfield Infrastructure). We define corporate interest coverage as AFFO plus interest expense incurred on corporate debt divided by interest expense incurredon corporate debt. We define constant currency basis as current period earnings translated at prior period foreign exchange rates which allows the Partnership to remove the impact of changes in rates fromour operating results. We define adjusted EBITDA margin as adjusted EBITDA divided by revenues. These measures are not calculated in accordance with, and do not have any standardized meaningprescribed by International Financial Reporting Standards (“IFRS”). These measures are therefore unlikely to be comparable to similar measures presented by other issuers. These measures have limitationsas analytical tools. See the Reconciliation of Non-IFRS Financial Measures section of the Partnership’s most recent Annual Report on Form 20-F and most recent interim report for a more fulsome discussionincluding reconciliations to the most directly comparable IFRS measures.
Brookfield Infrastructure Partners
INVESTOR DAY
SEPTEMBER 26 , 2019