Ladies and gentlemen, thank you for standing by. And welcome to Brookfield Infrastructure Partners' First Quarter 2021 Results Conference Call and Webcast. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a Question-and-Answer session. Please be advised that today's conference is being recorded. It is now my pleasure to introduce CFO, David Krant.

Thank you, operator, and good morning everyone. Thank you all for joining us for Brookfield Infrastructure Partners first quarter earnings conference call for 2021. My name is David Krant and I am the Chief Financial Officer of Brookfield Infrastructure Partners. Joining me today is Sam Pollack, our Chief Executive Officer and our guest speaker this quarter Gabriele Montesi, Managing Director based in our London office.

Thank you, David, and good morning, everyone. I'm pleased to be joining you on today's call to provide a spotlight on our UK port operation, PD Ports. We acquired PD Ports in 2010 as part of the recapitalization of popcorn and brown infrastructure. Ever since, our management team has worked tirelessly to diversify the Port's customer base and reinvent the business. Today, as we shift towards a more sustainable economy, we believe PD Ports is on the brink of yet another transformation. But before I jump into more detail on its growth potential, let me take a step back and provide a quick overview of the merits of the business. As with any island country, or infrastructure is vital to the UK economy with an estimated 90% of the country's goods traded arriving by sea. Our operations span 13 sites and serve as the gateway to Northern England through critical rail and road linkages. This group of scars well located and connect land-up ports on worldwide markets and offer direct transport links to all corners of the UK. The business today is highly diversified through the following revenue streams. First, our statutory harbor authority status provides a perpetual right to look after a river system and charge customers to bus through it. These fees contribute over 40% of EBITDA and provide recurring, stable and inflation linked cash flows. Second, as a landlord port , we lease land adjacent to the port under long-term agreements with high-quality counterparties. These leases have embedded inflation escalation, extremely high renewal rates given the strategic location of the port, and contribute approximately 40% of EBITDA. Last, our port operation services contribute approximately 20% of EBITDA and involve handling services integral to our customers supply chains. The evolution of the port, however, did not happen overnight. To best position the business and enable it to benefit from attractive regional dynamics, we delivered a several value creation activities over the past decade.

Thank you, Gabs, and good morning, everyone. For my remarks today, I'll discuss the strategic initiatives we currently have underway, and then conclude the call with our outlook for the balance of 2021.

Thank you. Our first question comes from the line of Rupert Merer with National Bank.

Good morning. With the sale of the smart meter business in the UK, how are you thinking about the remaining portion of the UK utility? Maybe you could talk about some of the conditions there that might make the remaining part of the business less mature or less interesting for recycling at this point.

Hi, Rupert, I'll tackle that one. I probably said on many occasions that every one of our businesses could be sold at some point of time. The only caveat to that was probably be UK , that's probably a business that we will never sell, or at least can't foresee it at the moment. And really, it's because it has such a unique position in the market where it's able to reinvent itself with new products and essentially serve the homebuilding market in the United Kingdom, which is always growing and adding new products. So, this was an opportunity where we developed a specific line of products in that business, we matured the business. And once we thought it was fully valued, we'd sold that particular product line, but we have many product lines in the company, and we're looking at new product lines going forward. So I think, short answer is, we would not look to sell the business, but we may in the future, if we have certain businesses within the business that makes sense to harvest. That's probably what we would look to do.

So how easy is it to separate the smart meter business from the rest of the utility operations? Is there any loss in operating efficiency or opportunities to cross sell?

Look, every cargo requires some complexity. But this was a relatively standalone investment initiative, and one that others have standalone businesses like it. So it was easy for us to replicate what other businesses look like. We don't foresee any dis-synergies from the sale, if that's what your question was.

Yes. Great. Then just secondly, so strong volume growth in rails, strong volume growth at the ports, given that the pandemic really started in Q2 last year, what's the outlook for volume growth into Q2? I mean, I imagine we should expect more of the same of what we saw in Q1, but potentially, could we see bigger volume increases in Q2?

Yes, maybe I'll start and then Dave can jump in or Ben, but what you're seeing is a varying speed recovery. As you are aware, we have operations around the world. Some jurisdictions like Asia and North America, or the US, have started to recover quicker. And so, we have seen those volumes in those markets improve in the first quarter. We expect that to continue. In fact, I think, in our port and rail operations, we are seeing lots of new activity and initiated demand. So I think we'll continue to see growth in those regions. But what you'll also see is in regions that are lagging, where there are still restrictions related to COVID, particularly South America, where we have all the toll roads, we have a railroad, as well as India and a few other places, even Canada, for that matter, which is a bit behind, you'll see those markets start to pick up in the coming quarters. And so, we should see further improvement in results from businesses in those jurisdictions.

That's great. I'll get back in the queue. Thank you.

Thank you. Your next question comes from the line of Robert Kwan with RBC Capital Markets.

Great, good morning. If I can start with GDP , you talked about the potential EBITDA over the next five years not being fairly visible and quite possibly tripling by 2030. Just wondering, is there one or two things that really need to come together for that type of EBITDA growth to materialize, or is really just a collection of all the things that you've outlined?

Well, maybe I'll let Gab take a first stab at that and then I can add to it. So Gabs, do you want to describe?

Yes, hi, Rob, good morning. You should note that there's a number of different leavers that will come to fruition in the coming years. There's a very strong commercial pipeline that we built in recent years, with very favorable macro outlook. And then, there's a number of larger projects like, for example, the Anglo-American polaire, like mine , they will have a meaningful contribution to results. But there is a number of those, we have LNG regasification expected to come online in the coming years. And we also have additional momentum, for example, with the designation of Teesside as a free port, we expect that to drive further investment in the area. And it's a critical element of the Government's strategy to stimulate the local economy, which will benefit PD Ports. So there's a number of different elements that will come together and contribute to those expected results.

And how much of that is locked in today versus things that you think will unfold?

Yes, the way we think about is, there is another element of that that is contractually locked in, for example, the MGT power plant, and then there's element what we think is captive, are essentially customers that have invested significant amount of capital in the area or in the Port itself, and really have a vested interest in continuing to operate on through PD Ports. And those are the likes of Anglo-American with developing a multibillion mine with over 100 years lifetime. And then on top of that, we have more investment-driven growth, like the container terminal expansion. So rapidly, you could probably split those predominantly between captive and contracted, with additional optionality around the non-contracted growth.

Maybe I'll just add, there's really three elements to the growth wedges and Gabs described two of them, but the other one relates to the uplift in rent from the rent reviews, which we expect to see a number of them come to fruition over the coming quarters, and some to be reflected which you just know just got signed and arbitrary over the last two quarters. And so, there's significant lift from that. There's the lift from the investments from captive customers, which Gabs mentioned, which is MGT, the LNG, as well as Anglo-American operations, which are all well underway and very visible. And then, there are certain expansion initiatives that we're undertaking that we have in our control, which are reflective of the near capacity that we're at with our container terminal operation, where we know just from the growth of the last number of years that we require further investment to meet that demand. So I'd say for the growth in the next five years, we're extremely confident about the doubling. And then, the tripling, obviously, there's a few things that have to happen, but a lot of that's very visible as well.

In terms of DBI, and now that you've got the final approval to move to the new regulatory framework, in terms of your optimism there, what's the ability to move your fees up to something, let's say example to Gabs' point, or is your optimism really more about protection against some of the potential declines you could have seen in cost of capital parameters, given low interest rate environment around the future access arrangements?

Robert, it's Ben here. Optimism is more around the fact that our asset is fully used and utilized. So it's oversubscribed by its users. So there's a strong demand for the service that it provides. And, we think there could be room in the rate structure for some appreciation over time, given that it's oversubscribed and in strong demand. I don't know if I understood your question, but that's the fundamental underpinning of why we think this was a favorable development.

Got it. Yes, that's helpful. So you're expecting an actual or potential increase in EBITDA and cash flow versus just kind of protecting what you've got?

I think that's correct.

Look, I think if you look at how some of the light-touch regulatory approaches work for the airports, in Australia they are very constructive for both customers and for the owners, we expect that same environment for the facility.

Okay, if I can just finish with what you're seeing on the acquisition side, we've obviously seen an equity price recovery, so I don't know if that kind of takes away from potential other privatization opportunities. But, as you think about your discussions on carve outs, rising equity prices, maybe taking pressure of some of those companies to think about carve outs, and also if you can just touch on what you're seeing from the government privatization point of view, that'd be great.

Okay, so I think there's two questions there, maybe I'll start with the government situation, just the opportunities with both the Canadian and US governments, they have been vocal about encouraging infrastructure development. I'd say it's early days because we're still trying to determine what role they would like the private sector to play in a lot of those very ambitious infrastructure plans. We do think it makes sense for the private sector to have a big role in it, but that's still to be determined, and I think just given the amount of projects that are being contemplated, that will lead to opportunities. As it relates to the rest of the world, there's lots of opportunities that are being similarly discussed elsewhere. I think with balance sheets constraint, it's only a matter of time before new programs, new incentives are put in place for the private sector to generate growth through infrastructure. As is relates to carve outs, from different companies, look, it is a very highly liquid market environment, and companies looking to source capital have a number of opportunities in both the debt and credit markets to source capital. But I would say that we've always been successful in finding opportunities around the world. We have a large team in place where we can come up with win-win transactions with companies that are looking to, not only just look for the lowest cost of capital, but also for flexibility and expertise to work with and building companies. And today, I think where we see a lot of that and where we see a lot of opportunities is in the data sector, where we're working with a number of the telecom companies in either expanding our data center operations or a lot of new build investment opportunities, as well as fiber developments, particularly with the fiber to the home. So, I'm optimistic that we will find great opportunities, but I also don't want to minimize what is a fairly liquid environment with fairly high valuations.

Thank you very much.

Thank you. Next question comes from the line of Andrew Kuske with Credit Suisse.

Thank you. Good morning. Maybe a nitpicky question first just on the accounting, and that relates to the weather impacts that you saw, and I guess this really centers on the Rockport business, or Rockpoint, and gas storage. So that US $55 million of FFO impact in the quarter, how much would you view as being sort of normal storage gains in a quarter versus what you booked?

Hi Andrew, it's David here. I think, as you know that business well, it does have a little volatility, period to period, so normal storage levels is tough to say. I think that the number you referenced would be relative to last year, albeit last year was quite low. So, I think normally, it's probably about $10 million of FFO recorded, and we did outperform it there. So I think there's a bit of judgment in that, but that's how I'd say.

Okay, appreciate that color. And then a bigger, broader question. And I guess, if you look back over the last year, obviously, you've got one of your toeholds now very public in that process. So, maybe let's just put that one aside, but the other toehold positions that you took over the course of the year, and in some cases have exited, what's the post op on just the returns that you've made? And then, the rationale for you leaving wasn't strictly valuation based, or you couldn't foresee a probability of getting control, or you just saw better risk adjusted returns elsewhere? I know that's a lot sort of packed into that question, but if you could give us color, it would be much appreciated.

Yes, hi, Andrew. Look, I see the toeholds as really just one tool in our toolkit as far as creating transaction opportunities. Often we see situations where, based on our knowledge of the sector and our transactions that we've undertaken, where we see a mismatch between private and public valuations, and that will provide us an impetus to take a position really not knowing at that time, if we can convert that into a private transaction. And so, often that will result in a transaction as it has over the last 12 years on occasion, and sometimes it just results in a game. But it's an important part of our business development activity to monitor for mispriced securities, take positions and then see if we can create something out of it. And sometimes, it leads to something, sometimes it just turns out to be a good investment, and at the appropriate time when we think that we don't have ability to convert, we'll just sell it off.

Appreciate the color, and then, if I may, just an extension of that. Have you increased your dialogue with governments around whether they'd be Triple P arrangements which you've had in the past, although a long time ago or water infrastructure. And maybe this is more super core-focused or core plus, but have you increased your dialogue there just given government finances being strained?

Yes, I'd say today, every government around the world is seeking input from us on thoughts of how the private sector can be helpful and how the governments can be helpful to the private sector in investing further capital. So, they're looking for ideas around various tax credits or other incentives to spur that infrastructure development, and so that's feedback that we give on a pro bono basis, and I hope we leave to opportunities. Today, I'd say, we have not seen the level of investment opportunity from governments that we expected or hoped to see, but I still remain highly confident that over the next five to 10 years, there will be significant volume of opportunities from that sector.

That's great, thank you.

Thank you. And I'm showing no further questions at this time. So with that, I'll turn the call back over to CEO, Sam Pollock for any closing remarks.

Okay, thank you, operator, and thank you everyone who participated in our call today. We appreciate your interest in the company and I look forward to providing you with further updates in the next quarter. Thank you very much.

This concludes today's conference call and webcast. Thank you for participating and you may now disconnect.