Brookfield Infrastructure Partners LP (BIP) Q4 2022 Earnings Call Transcript

For the period ending December 31, 2022

February 2, 2023 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and thank you for standing by. Welcome to the Brookfield Infrastructure Partners Q4 Results Conference Call 2022 Results Conference Call and Webcast. [Operator Instructions]. It is now my pleasure to introduce Chief Financial Officer, David Krant.

David Krant

Thank you, Andrew, and Good morning, everyone. Welcome to Brookfield Infrastructure Partners' Fourth Quarter 2022 Earnings Conference Call. As introduced, my name is David Krant, and I'm the Chief Financial Officer of Brookfield Infrastructure Partners. I'm also joined today by our Chief Executive Officer, Sam Pollock. I'll begin with the discussion of our fourth quarter financial and operating results as well as touch on our balance sheet strength and robust liquidity position. I'll then turn the call over to Sam, who will reiterate the merits of owning infrastructure investments throughout market cycles and provide an outlook for the year ahead.

Following our commentary, we will be joined by Ben Vaughan, our Chief Operating Officer, for a question-and-answer period. 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. 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. With that, I'll now move on to a discussion of our record results. 2022 was another successful year for Brookfield Infrastructure. The essential nature of our assets showcased their attractiveness by continuing to generate predictable and growing cash flows. Funds from operations, or FFO, for the year was $2.71 per unit, representing a 12% increase over the prior year. We ended 2022 with our highest quarterly FFO to date of $0.72 per unit, which exceeded the prior year by 11% and resulted in a payout ratio for the fourth quarter of 64%.

We're entering the new year in a solid position to expand the company organically and through acquisitions, driven by the significant momentum in a number of our operating businesses. This momentum is further supported by our long-term debt maturity profile and significant liquidity. Taking into account the strong results for the year and a favorable outlook for the business, the Board of Directors have proposed a quarterly distribution increase of 6% to $1.53 per unit on an annualized basis. This marks the 14th consecutive year of distribution increases. I'll now go through the key drivers behind our strong financial and operating results for the year. FFO totaled $2.1 billion, reflecting a 20% increase compared to 2021. Results benefited from organic growth for the year of 10%, capturing elevated inflation in the countries where we operate and volume growth across the majority of our critical infrastructure networks. During the year, we commissioned over $1 billion of new capital projects that are now contributing to earnings as well as deployed a further $1 billion into new acquisitions that favorably impacted results.