Brookfield Infrastructure Corporation (BIPC) Earnings Call Transcript & Summary

Good morning, and welcome to the Brookfield Infrastructure Corporation 2026 Annual Meeting of Shareholders. I will now turn the meeting over to Michael Ryan, Corporate Secretary of the company. Michael, please go ahead.

Thank you, operator. Madam Chair, we are ready to commence the meeting.

Good morning, ladies and gentlemen. It is now 9 a.m. and time to begin the Annual Meeting of Shareholders of Brookfield Infrastructure Corporation. My name is Anne Schaumberg and as Chair of the Board, it is my pleasure to chair today's meeting. On behalf of the Board and its management team, I would like to extend a warm welcome to everyone joining us today. Voting during the meeting will take place on our virtual meeting platform. I will now explain this process. For each matter being voted upon every holder of Class A exchangeable subordinate voting shares, which we will refer to at this meeting as the Class A shares is entitled to 1 vote in respect of each share held as at the close of business on April 27, 2026. The Class A shares as a class collectively hold 25% of the outstanding votes and the Class B multiple voting shares which we will refer to at this meeting as the Class B shares, all of which are held by a subsidiary of Brookfield Infrastructure Partners, LP, hold 75% of the outstanding votes. Adoption of a proposed motion requires a majority of the votes cast at the meeting by the holders of the Class A shares and Class B shares, voting together as a single class. Voting will be open for all resolutions at the same time and throughout the formal portion of the meeting. This will allow you to choose to vote on each resolution immediately or wait until conclusion of discussion on each resolution prior to casting your vote. If you voted in advance of the meeting and do not wish to revoke your previously submitted proxies, the no action is needed. If you vote on any matter during the meeting, all of your previously submitted votes in respect of all matters to be voted upon at this meeting will be automatically revoked. Accordingly, if you do vote on any matter during this virtual meeting, please ensure you vote on all matters for which you are entitled to vote. We welcome questions from our shareholders, which may be submitted by typing the question into the virtual meeting platform using the messaging icon on the left side of your screen for desktop users or at the bottom of the page for mobile users. Please indicate whether your question is of a general nature or if it relates to a motion being considered as part of the meeting's formal business. please click the submit button once you have finished typing your question. Michael Ryan, our Corporate Secretary, who is serving as moderator of this virtual meeting will read out the question and ask a member of management to respond to it. If we receive many questions that are similar, we will read 1 of the questions and indicate that we have received many similar questions. If you connected to this meeting as a guest, you will not be able to submit a question at this meeting. We will endeavor to answer all questions submitted during the allotted time. We recommend that you submit your questions related to the motions being tabled as soon as possible as it may take time for the virtual meeting platform to process them. I will now call the meeting to order and ask Compushare Trust Company of Canada by its representative, Shirley Tom to act as scrutineer. I will also ask our General Counsel and Corporate Secretary, Michael Ryan, to act as Secretary of today's meeting. In the unlikely event of a technological failure that disconnects my audio from this meeting, I have designated Michael to step in as Chair of the meeting. and the unlikely event of a serious technological failure that prevents the meeting from continuing, the meeting will be rescheduled. In addition to Michael, it is now my pleasure to introduce the other member of management with us today. David Krant, our Chief Financial Officer. Following the conclusion of the formal part of the meeting, there will be a presentation from management. I will now take us through the agenda for the meeting. As outlined in our management information circular, there are 3 items of business to be considered today. First, to receive the consolidated financial statements of the corporation for the fiscal year ended December 31, 2025, including the external auditor's report. Second, to elect directors who will serve until the next annual meeting of shareholders; and third, to appoint the external auditor and authorize the directors to set its remuneration. As mentioned, in connection with the business to be dealt with today, all voting will be conducted by online ballot through the virtual meeting platform. Voting is now open on all resolutions. In order to expedite the formal part of today's meeting, I have asked a certain shareholder to move various resolutions. Although this procedure will assist in the handling of the formal matters, it is not intended to discourage anyone from submitting questions in reference to any resolution after it has been proposed. I'm advised that the notice calling this meeting and the Management Information Circular were disseminated to voting shareholders in accordance with all applicable laws. I have asked the Corporate Secretary to keep a copy of the notice and proof of mailing with the minutes of this meeting. Based upon the scrutineer's preliminary report on attendance, the Corporate Secretary has confirmed that there is a quorum. I therefore declare the meeting properly constituted for the transaction of the business for which it has been called. Turning to the first item of formal business, I will now table the corporation's consolidated financial statements for the fiscal year ended December 31, 2025, together with the external auditor's report. Our annual financial statements have been mailed to shareholders who have requested them and are also available on our website.

Madam Chair, we've not received any questions or comments submitted in connection with the financial statements.

Thank you. The second item of business at our meeting today is to elect directors who will serve until our next Annual Meeting of Shareholders. the 9 proposed nominees for election by holders of the corporation's Class A shares and Class B shares are myself, Jeffrey Binter, Malcolm Cockwell, William Cox, Rosslyn Kelly, John Mullen, Daniel Munoz Quintinia, Susanne Nemak, and Rasheev Vasudeva. Each of the 9 nominees were elected at our last annual meeting in June 2025, and are standing for reelection today. Information on all 9 director nominees is set out in our Management Information Circular, which was posted on our website and is available from the company upon request.

Madam Chair, we've not received any questions or comments with respect to the nomination of directors.

Thank you. We invite shareholders and proxy holders to submit their vote online if they have not already done so. As a reminder, if you have already voted or sent in your proxy, there is no need to do anything unless you wish to change your vote.

Madam Chair. I nominate for election the 9 nominees named in the Management Information Circular dated May 8, 2026, to serve as directors of the corporation until the next Annual Meeting of Shareholders or until their successors are elected or appointed.

Thank you, Vera. I declare the nominations closed. Management has received proxies representing a majority of the corporation's Class A shares and 100% of the Class B shares. These proxies direct management to vote a majority of the Class A shares and all of the Class B shares in favor of the resolution. As there are 9 directors to be elected and the same number of nominees, I now declare that those nominated have been duly elected as directors of the corporation. The third item of business today is the appointment of the corporation's external auditor and authorizing the directors to set its remuneration. As stated in the Management Information Circular, the Audit Committee of our Board of Directors has recommended that Deloitte LLP be reappointed as the corporation's external auditor.

Madam Chair. I move that Deloitte LLP be reappointed as the external auditor of the corporation to serve until the next Annual Meeting of Shareholders and that the directors be authorized to set its remuneration.

Thank you, Darin. The resolution has been moved and the motion is now before the meeting for discussion.

Madam Chair, we've not received any questions or comments submitted in connection with the appointment of auditors.

Thank you. Management has received proxies representing a majority of the corporation's Class A shares and 100% of the Class B shares. These proxies direct management to vote a majority of the Class A shares and all of the Class B shares in favor of the resolution. Voting is now closed on all resolutions. I am advised that we have the results of voting on the resolutions based on the tabulation of votes cast in advance of the meeting.

Thank you, Madam Chair. I'm pleased to report that as there are 9 directors to be elected and the same number of nominees, I now declare that those nominated have been duly elected as directors of the corporation. on the appointment of the corporation's external auditor and authorization of Directors to set their remuneration. I declare the motion carried. The final voting results will be available after the meeting and posted to SEDAR at www.sedar+.ca.

Ladies and gentlemen, that completes the formal business of today's meeting. There being no other business, I declare the meeting concluded. Now that the meeting has concluded, David Croft will make presentation on behalf of the management team.

Thank you, Madam Chair, and good morning, everyone. As introduced, my name is David Krant, and I'm the Chief Financial Officer of Brookfield Infrastructure Corporation, or BIPC. On behalf of the management team, we would like to thank all of our shareholders for their ongoing support. The content of today's presentation will focus on our recent accomplishments and financial performance as well as the growth outlook for our business. We intend to provide a more comprehensive business update at our upcoming Investor Day to be held on Tuesday, September 29, I encourage all shareholders to listen in. After my prepared remarks, we will hold a question-and-answer period. Please note that in responding to questions and talking about our new initiatives and our financial and operating performance, 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 the Risk Factors section of our annual report on Form 20F for the year ended December 31, 2025. Finally, we would like to ensure that all shareholders who are interested in asking a question have the opportunity to do so. We'll make every effort to address these and be allocated at do question-and-answer period. Now starting with the presentation, I'll begin with a review of our performance for the last year. 2025 was another solid year for Brookfield Infrastructure as we delivered many of our strategic priorities. Most notably, we reported strong financial results with overall FFO increasing 10% year-over-year, normalized for the impact of asset sales and foreign exchange. This performance led to a dividend increase of 6% to $1.82 per share annually. Secondly, we added approximately $1.4 billion of new projects to BIPC's capital backlog and attracted expected returns. We also achieved our capital recycling target, achieving over $3 billion of proceeds during the year. And lastly, we were active in deploying capital as well, investing approximately $2.2 billion of equity into growth initiatives. While 2025 was another strong year of demonstrated success, we are proud to deliver excellent risk-adjusted returns for our shareholders over the long term. This can be seen on Slide 8. where BIPC has provided shareholders with a total return of approximately 114% since inception. We are committed to delivering strong cash flow and income growth to shareholders that we believe will be reflected in our share price over time. Turning to Slide 9. Our ability to provide cash flow growth is centered around Brookfield Infrastructure's core investment highlights. These highlights include our highly contracted inflation-protected cash flows combined with a well-capitalized balance sheet that should perform well through all market cycles. Key highlights of our downside protection include approximately 85% of our FFO being contracted or regulated. Roughly 70% of our FFO indexed to inflation and a further 15% protected from inflation through pass-through mechanisms. And finally, approximately 90% of our debt is locked in for an average term of 7 years and fixed rate. These features are paired with strong upside growth potential as we are squarely positioned at the center of 3 powerful structural teams, digitalization, decarbonization, and deglobalization. Together, these forces have resulted in strong capital deployment over the past several years and continue to provide ample investment opportunities in both new investments and within our capital backlog. To elaborate on the 3Ds briefly, this being digitalization, decarbonization and decoobalization, these are thematic trends creating significant investment opportunities for our business. Starting with digitalization. This refers to investment opportunities that arise from a significant growth in data usage. Substantial financial resources are required for building or upgrading existing digital infrastructure. For Brookfield Infrastructure, these investments are focused on the fiber, telecom tower and data center sectors. Secondly, decarbonization. Our investment opportunities relate to investments in utility or residential energy infrastructure that help meet growing power demand or increase efficiencies. And finally, deglobalization, which supports the reshoring of essential and strategic manufacturing processes as well as the redefinition of supply chains, which have been under invested in for many decades. Now before we conclude our remarks this morning, we wanted to comment on the structure of our company. As our business and the broader capital markets continue to evolve, we continuously evaluate opportunities to enhance shareholder value. To that end, we announced with our Q1 2026 results that we are undertaking a formal evaluation of the potential simplification of our corporate structure. This can be done through the combination of BIP and BIPC into a single publicly traded corporate entity. Potential benefits can include improved trading liquidity, increased index demand and a simplified reported frame. I want to conclude my remarks today with Brookfield Infrastructure's outlook. We expect 2026 will be another strong year for our business. In addition to a resilience based business that continues to provide stable cash flows, we anticipate solid growth going forward driven by the 3Ds and our proven ability to grow the business through accretive new investments. So far this year, we have secured approximately $500 million of new investments and continue to advance a robust pipeline of opportunities as well as deliver on our record backlog of organic growth. Lastly, we have secured nearly $1 billion of sale proceeds to date, making meaningful progress on our 2026 target. As I mentioned in my introductory remarks, if you're interested in further updates on the broader business, we encourage you to participate in Brookfield Infrastructure's Investor Day, which will take place on Tuesday, September 29, 2026. More information on the spend will be made available through our website during the summer. And finally, that concludes our prepared remarks, and we would now like to answer any questions that have been received. Michael, would you please advise if there are any questions at this time.

Madam Chair and David, there are no further questions to be addressed.

Ladies and gentlemen, as there are no further questions or comments, I would like to thank you for taking the time to join us today.