Brookfield Infrastructure Partners Investor Meeting September 29, 2016
In an unpredictable world… Brookfield Infrastructure is an investment that provides Security and Growth 2
How have we done since last year? FFO/unit is up 12% ‘Same store’ FFO growth of 11% Distributions per unit increased by 11% ~$1 billion of capital deployed 3
Last year we highlighted why it was a good time to invest in Brookfield Infrastructure 1. High quality transportation assets 2. Our global business development initiatives with a focus on Brazil 3. Predictable and stable cash flows 4. Building value through diversification 4
1. Driving growth within our Transport segment Invested $350 million in Australian port business (Asciano) Deployed over $200 million to expand our toll roads, rail and ports New investment of $170 million , adding over 350 km of toll roads 5
2. Leading the charge into Brazil Building a large-scale electrical transmission utility Acquiring a leading natural gas transmission system Investing over $1 billion 6
3. Continuing to deliver predictable and growing cash flows $928 $808 15% $724 34% $682 CAGR $462 $392 $197 $117 2009 2010 2011 2012 2013 2014 2015 2016 1 FFO (in $US millions) R eflects annualized Q2’16 YTD results 1) 7
And exceeding distribution targets $1.55 12% $1.41 CAGR 11% 1 $1.28 $1.15 $1.00 $0.88 $0.73 $0.71 2 2009 2010 2011 2012 2013 2014 2015 2016 1) Represents total quarterly increase of distribution per unit, including the recently announced distribution increase 2) Annualized 2016 quarterly distribution per unit 8
4. We further diversified our geographic and sector footprint India Europe Comm Energy Infra Water Airports North Australia America Transport Utilities South America Peru 9
We also had a number of other wins Increased ownership in NGPL and repositioned for growth Increased our capital backlog by 54% Recycled $1 billion of capital Raised $10 billion of third party capital to invest alongside BIP 10
Further reasons to invest in Brookfield Infrastructure AGENDA • High Quality Assets – Spotlight on Energy and Communications Infrastructure Brian Baker, Managing Partner, Energy • Execution of Contrarian Investment Strategy Ben Vaughan, Chief Operating Officer • A Simple Business with High Quality Cash Flows Bahir Manios, Chief Financial Officer • Pulling it all together – Why BIP is an investment for ‘all seasons’ Sam Pollock, Chief Executive Officer 11
High Quality Assets: Spotlight on Energy and Communications Infrastructure Brian Baker, Managing Partner, Energy September 2016
We own a diverse portfolio of core infrastructure assets across five continents Ports ● Railroads ● Utilities ● Toll roads ● Natural gas transmission ● Telecom towers 13
Today we will focus on our Energy and Communications Infrastructure operating segments… • Provision of essential services Consistent customer demand profile • Strong barriers to entry Uniquely positioned and difficult to replicate • High customer retention • Long-term customer contracts • High quality cash flows Inflation escalation • Minimal maintenance capital • Significant organic growth potential Large, rapidly evolving sectors …and their attractive investment attributes 14
Energy: Diversified portfolio of high quality assets ~15,000 km of natural gas transmission lines > 600 bcf of natural gas storage 23 district energy plants servicing ~14,500 customers U.S., Canada and Australia Systems that provide energy transmission, distribution and storage services 15
Gas sector transformation underway… Northwest Pipeline Alliance Northern Border Marcellus / Utica DJ Basin Piceance REX San Juan Anadarko Illinois Arkoma Barnett & Bossier East U.S. Gas Storage Permian Texas Louisiana CDN Gas Storage South Texas Offshore NGPL Uniquely positioned assets to capture upside from evolving demand flows 16
…driving significant organic growth opportunities $80 million Chicago Market Expansion $210 million Gulf Coast Reversal Permian and South Texas opportunities Gulf Coast Storage Expansion 17
Our district energy business is a core utility-like asset … Operating in 10 N. American and Australian CBDs through 23 facilities Average contract duration of ~20 years Inflation indexation and full cost pass-through Irreplaceable assets with captive customers 18
…and our business is heating up Fragmented market with over 1,000 systems across our core markets Currently evaluating 12 opportunities representing ~$2 billion in capital Expanding outside N. America • Completed first Australian tuck-ins • Europe on the radar 19
Energy assets continue to trade at strong multiples Acquirer Asset Seller EV EV/EBITDA € 480 M Colonial Coriance KKR 15.2x District Energy € 500 M AMP/Infracapital Adven EQT 16.5x Wolf Infrastructure 50% Access Pipeline Devon $2.2 B 11.0x 50% Southern Southern Company Kinder Morgan $4.2 B 10.5x NG Pipeline Transmission, Columbia Pipeline Distribution Trans Canada Columbia Gas/Gulf $13.0 B 18.0x Group & Storage Consolidated Edison 50% NE Gas Storage Crestwood $2.0 B 13.4x CheungKong/ Power 65% Husky Midstream Husky Energy $1.3 B 13.0x Source: Company announcements, Press releases, Equity research 20
Our energy assets should be highly valued based on their strong investment characteristics and growth profile EBITDA 1 Characteristics Multiple • Long term contracts 15x – 17x District Energy 18% • Core utility-like asset with growth • Strong contracted cash flow 12x – 14x Transmission, 82% • Visibility to 35%+ EBITDA growth Distribution & Storage by 2020 100% 12.5x – 14.5x Total ($255 M) Enterprise value: $3.2 – $3.7 billion 1) Represents annualized YTD Q2 2016 results adjusted for the sale of our European gas distribution business and the recently completed acquisition of Niska Gas Storage 21
Communications Infrastructure: Leading portfolio of assets > 7,000 active tower sites > 26,000 points of presence 5,000 km high speed fibre network Largest independent operator in France Provides essential services and critical infrastructure to the broadcasting and telecom sectors 22
Recent developments continue to highlight the essential role of telecom infrastructure… Renewed customer contracts – average life of 9.5 years High customer retention in broadcast tenders Over 1,400 new points of presence since March 2014 MNO tower disposals and densification will drive growth 23
…with our Fibre -to-the-Home business under development Potential € 13-14 billion of investment required over next 10 years Focus on medium to low-density regions Neutral carrier operating model over a 25-year exclusive concession period Leveraging TDF’s operating expertise, MNO relationships and existing 5,000 km fibre backbone Significant opportunity to build out a fibre network in France 24
TowerCos have been transacting in a range of 16x – 18x EBITDA Acquirer Tower Asset EV EV/EBITDA 3i Wireless Infrastructure Group ~£300 M ~16.0x Spin Off Telesites ~$2,500 M 1 ~18.0x Macquarie (MIRA) Crown Castle Australia ~A$2,000 M ~16.0x € 2,200 M 1 Initial Public Offering INWIT 16.6x € 3,200 M 1 Initial Public Offering Cellnex 15.7x € 770 M Abertis Wind Towers (Galata) 16.0x Source: Company announcements, Press releases, Equity research, Infranews 1) Market Cap at IPO 25
Our telecom assets should be valued based on their high quality cash flows and growth potential EBITDA 1 Characteristics Multiple • Long-term contracts 16x – 18x Communications $88 M Infrastructure • Strong customer retention • High growth potential Enterprise value: $1.4 – $1.6 billion 1) Represents annualized YTD Q2 2016 results 26
We estimate a net asset value to BIP of ~$3 billion for our existing Energy and Communications Infrastructure assets ~$3.0B 2 ~$700 M ~$2.3B 1 ~$8.70 per unit ~$2.00 ~$6.70 per unit per unit Street consensus NAV Implied NAV Consensus street NAV for BIP’s energy and communications businesses is currently a combined $2.3 billion based on most recent reports 1) 2) Calculated with reference to the mid-point EVs on prior pages being $5.0 billion in aggregate ($3.5 billion and $1.5 billion for energy and communications, respectively) less combined debt of $2.0 billion 27
Where do we go from here? Communications Energy Infrastructure • N. American recapitalizations • European consolidation • Asset sales from mega-mergers • Looking abroad – India & LatAm • Carve-outs • Fibre-to-the-Home 28
Execution of a Contrarian Investment Strategy Ben Vaughan, Chief Operating Officer September 2016
We consistently look for opportunities to invest with a contrarian mindset Recognize that superior returns often require contrarian thinking Acquire on a value basis with a goal of maximizing results Does not mean just ‘doing the opposite’ Need to have conviction and well-informed , long-term views 30
Why is this important? Core element of our approach to value investing that helps us earn 12-15% returns on a lower risk basis Surfaces opportunities to transact on a bi-lateral basis Seek to recycle capital when valuations are high 31
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