Executive Summary / Key Takeaways

• Brookfield Infrastructure Partners (BIP-PB) stands as a diversified global infrastructure leader, strategically expanding its footprint in the high-growth decarbonization and digitalization sectors, which form the core of its investment thesis.
• The company delivered robust financial performance in Q3 2024, with Funds From Operations (FFO) increasing 7% to $599 million, propelled by new investments, accretive tuck-in acquisitions, and strong organic growth.
• A substantial $8 billion organic growth backlog, complemented by a successful $2 billion capital recycling program achieved in 2024, positions BIP-PB for sustained FFO per unit growth exceeding 12% over the next one to three years.
• BIP-PB leverages its unparalleled global scale, diversified asset base, and contrarian investment approach to acquire assets at attractive valuations, exemplified by its market leadership in Indian telecom towers and North American data centers.
• The company maintains a conservatively capitalized balance sheet with over 90% fixed-rate debt and a steadfast commitment to a stable, growing distribution within the 5% to 9% annual range, making it a compelling long-term compounder of wealth.

A Foundation of Resilience: Global Infrastructure and Strategic Evolution

Brookfield Infrastructure Partners L.P. (BIP-PB) has forged a formidable presence in the global infrastructure landscape since its incorporation in 2007. The company's core strategy revolves around owning and operating high-quality, long-life assets across utilities, transport, midstream, and data segments. This diversified portfolio generates stable, inflation-protected cash flows, a hallmark of its resilient business model. A foundational element of its growth strategy has been its "contrarian investment posture," enabling it to capitalize on market dislocations and acquire assets at attractive valuations, a playbook successfully executed during periods of capital scarcity, such as in Brazil between 2015 and 2017.

The company's historical journey underscores its adaptive and growth-oriented approach. An early example is the acquisition of Babcock & Brown's business in 2009, which included a UK residential connections operation. This business, initially focused on gas connections, has evolved significantly to provide five different in-home connections, including water, electricity, fiber, and heating pumps, demonstrating a proactive response to evolving infrastructure needs. This strategic expansion has fueled a remarkable approximately 20% annual growth rate for the business over the past decade, with a current backlog representing about 70 years of annual connections.

BIP-PB's overarching strategy is now sharply focused on two transformative global trends: decarbonization and digitalization. These themes are not merely buzzwords but represent the primary drivers of its accelerated growth profile and capital deployment. The company's existing platform spans many sectors directly benefiting from the tailwinds created by artificial intelligence (AI) and associated power demand, including its natural gas and midstream infrastructure and telecom platforms. This strategic alignment positions BIP-PB to capture significant opportunities arising from the massive infrastructure build-out required by these megatrends.

In the competitive landscape, BIP-PB distinguishes itself through its global diversification and multi-segment approach, which contrasts with the more specialized focus of some rivals. For instance, against North American energy infrastructure players like Enbridge Inc. and Kinder Morgan Inc. , BIP-PB's broader portfolio, integrating utilities and data services, offers a more comprehensive value proposition. While ENB and KMI may exhibit higher gross and net profit margins due to their specialized focus, BIP-PB's diversification provides greater resilience and adaptability across varying economic conditions. Similarly, in the data segment, while American Tower Corporation boasts higher margins from its concentrated telecom tower leasing, BIP-PB's ability to integrate data centers with its utilities segment for power supply offers a unique competitive edge. Dominion Energy Inc. (D), a major utilities provider, operates with a more domestic focus, whereas BIP-PB's global reach allows it to arbitrage economic conditions across different geographies.

Technological Edge and Operational Excellence

BIP-PB's operational effectiveness is deeply intertwined with its technological differentiators and strategic innovation across its diverse segments.

In the Residential Decarbonization segment, the evolution of its UK connections business from a single-service provider to offering five distinct in-home connections (gas, water, electricity, fiber, and heating pumps) represents a significant technological and service differentiation. This multi-service offering enhances customer stickiness and revenue per household, providing a robust, inflation-linked revenue stream. This business alone is valued at over £3.1 billion, or approximately $4 billion USD, by a major accounting firm.

The Data segment showcases significant technological advancements and strategic positioning. BIP-PB is actively developing hyperscale and retail colocation data centers, commissioning 70 megawatts (MW) in Q3 2024, bringing its total installed capacity to over 900 MW. Its European hyperscale platform is on track to deliver an additional 80 MW of capacity in 2025. In the U.S., the company has initiated a "densification program" at its retail colocation data centers to create incremental capacity at existing sites at a very low cost per megawatt. This program directly addresses the surging demand from hyperscalers, enterprises, and AI clients, providing a cost-effective and rapid deployment solution. The acquisition of a 200-acre site in Chicago, capable of accommodating 200 MW, further underscores its commitment to meeting future demand in Tier-1 markets. In Seoul, South Korea, a 15-year contract for 13 MW with a global hyperscaler includes built-in inflation escalation and pass-through of electricity costs, demonstrating a sophisticated approach to risk management and revenue stability.

In Telecom Towers, BIP-PB has solidified its position as the largest operator in India and the second largest globally, with over 250,000 sites under the rebranded Altius platform. This scale, achieved through the combination of three acquisitions, provides significant operating synergies and enhanced development capabilities. These synergies, particularly in operations and maintenance (O&M) and SG&A, allow BIP-PB to leverage its cost base more efficiently than competitors, providing a distinct advantage in a market where American Tower Corporation faced challenges.

The Midstream segment, while traditionally focused on natural gas transmission and storage, is also strategically aligned with evolving energy demands. North American gas storage operations are benefiting from the growth in LNG export capacity, the necessity of gas as a backup for intermittent generation sources, and extreme weather events, which collectively support higher storage rates and longer contract durations. The Heartland Petrochemical Complex (HPC), with its 525,000 tonnes of polypropylene production capacity, is ramping up, with its polypropylene (PP) end exceeding performance expectations and overall utilization around 80%. This asset diversifies BIP-PB's energy exposure and leverages its access to low-cost natural gas feedstock.

These technological and operational strengths contribute directly to BIP-PB's competitive moat, enhancing its financial performance through higher asset utilization, lower operating costs, and improved margins. The strategic focus on AI-driven demand, through its data and midstream assets, positions the company for long-term growth by addressing critical infrastructure needs in rapidly expanding sectors.

Financial Performance: A Story of Resilient Growth

Brookfield Infrastructure Partners continues to demonstrate robust financial performance, reflecting its strategic execution and the inherent resilience of its asset base. In Q3 2024, the company reported Funds From Operations (FFO) of $599 million, a 7% increase over the comparable period. This growth was primarily fueled by contributions from new investments, three accretive tuck-in acquisitions, and organic growth within the target range. Organic growth for the quarter was 7%, driven by annual rate increases from inflation, stronger transportation volumes, and the commissioning of over $1 billion from its capital backlog.

Looking at the segments, the Utilities business generated FFO of $188 million in Q3 2024, a 9% increase on a comparable basis, largely due to inflation indexation and the commissioning of approximately $450 million of capital into the rate base over the last twelve months. The Transport segment saw a significant 50% increase in FFO to $308 million in Q3 2024, primarily attributable to the acquisition of its global intermodal logistics operation, Triton, and an incremental 10% stake in its Brazilian integrated rail and port operation. Triton has performed "well above our plan," with fleet utilization exceeding 98% due benefiting from geopolitical events that lengthened shipping routes. Rail networks and toll roads within this segment achieved average rate increases of 7% and 5%, respectively, in Q3 2024, underscoring the benefits of inflation indexation. The Midstream segment's FFO decreased to $147 million in Q3 2024 from $163 million in the prior year, mainly due to capital recycling activities and higher interest costs. However, underlying businesses, particularly North American gas storage, are performing well, with FFO in this area growing at a compound annual growth rate of over 20% in the past five years. The Data segment recorded FFO of $85 million, a 29% increase over Q3 2023, driven by strong underlying performance and new investments, including a tuck-in acquisition of retail colocation data centers.

For the full year 2023, FFO totaled $2.3 billion, representing a 10% increase over 2022, with organic growth of 8%. The company's TTM financial ratios as of September 29, 2025, indicate a Gross Profit Margin of 26.41%, an Operating Profit Margin of 24.46%, and an EBITDA Margin of 41.34%. While its Net Profit Margin was 0.99%, this reflects significant non-cash charges and minority interests inherent in its partnership structure. The Debt/Equity ratio stands at 9.99, which, while higher than some traditional utility peers like Enbridge Inc. (ENB) or Kinder Morgan Inc. (KMI), is managed within a conservatively capitalized balance sheet framework.

BIP-PB maintains a strong liquidity position, ending Q3 2024 with $4.6 billion in total liquidity, including $1.6 billion at the corporate level and over $1.4 billion of cash across its businesses. The company has proactively managed its debt, with over 90% of its capital structure fixed rate and an average term of seven years. Crucially, there are no corporate maturities until 2027, and only 1% of its asset-level debt matures over the next twelve months. This disciplined financial management provides significant flexibility to pursue both organic and inorganic growth opportunities.

Strategic Initiatives and Capital Allocation: Fueling Future Expansion

BIP-PB's strategic initiatives are designed to accelerate its growth profile, with a clear focus on capital recycling and high-return investments. The company successfully achieved its $2 billion annual capital recycling target in 2024. Management anticipates generating an additional $5 billion to $6 billion in proceeds from capital recycling initiatives over the next two years, by monetizing mature and de-risked companies at returns "well above our targets". These proceeds will be redeployed into more accretive opportunities.

Recent strategic acquisitions highlight BIP-PB's ability to identify and execute value-accretive deals. In mid-September 2025, the company completed the acquisition of 76,000 Indian telecom tower sites, rebranding the combined entity as Altius. This transaction, acquired at a "value-based point below six times EBITDA," positions BIP-PB as the largest telecom tower operator in India and the second largest globally with over 250,000 sites. This move enhances tenancies from India's second and third largest mobile network operators and offers significant operating synergies. Similarly, the acquisition of 40 retail colocation data centers from Cyxtera in early 2024, combined with its existing Evoque business, created a leading North American retail colocation provider with over 330 megawatts of capacity. This $1.3 billion transaction was fully financed without requiring new equity capital, demonstrating astute capital management.

The company's organic growth pipeline is robust, with an $8 billion backlog of projects embedded within its business, which has increased by 20% in the last twelve months. An additional "shadow backlog" of over $4 billion in incremental organic growth opportunities further underscores its long-term growth potential. These projects, concentrated in decarbonization and digitalization, are expected to yield project-level returns at or above BIP-PB's target range.

BIP-PB remains committed to providing unitholders with a stable and growing distribution, having approved a 6% increase to $1.62 per unit on an annualized basis, marking the 15th consecutive year of increases. Management aims for distribution growth within the 5% to 9% annual range, maintaining a payout ratio between 60% and 70%. This commitment is supported by the business's resilient and growing cash flows, which are expected to "easily overtake any interest rate increases" over time.

Risks and Considerations: Sustaining Momentum in a Dynamic Environment

While BIP-PB's investment thesis is compelling, investors should consider several risks and challenges. The company's financial results in Q3 2024 were partially offset by higher borrowing costs and foreign exchange fluctuations, notably the depreciation of the Brazilian real. Although BIP-PB hedges its investments and does not take a view on currencies, prolonged currency weakness in key operating markets could impact reported FFO.

Geopolitical events and macroeconomic factors continue to introduce volatility. Management acknowledges the potential for "several additional quarters of volatility" as global economies settle into a new interest rate environment. However, BIP-PB believes it is "largely insulated from volatility due to the quality of the countries we invest in and our focus in areas of the economy that garner broad political support".

Operational challenges, such as the ongoing refinements at the Heartland Petrochemical Complex (HPC) on the PEH side and feedstock, could impact the full ramp-up to nameplate capacity, although the polypropylene (PP) end of the plant is exceeding expectations. Additionally, while the UK residential connections business has a substantial backlog, the broader UK housing market experienced an approximately 20% pullback in 2023. Despite this, BIP-PB's connection sales are projected to be higher, demonstrating the resilience of its specific business model.

Competitive pressures, particularly in the data segment, require continuous innovation and efficient execution. While BIP-PB has achieved significant scale, maintaining its technological edge and cost efficiency against specialized players like American Tower Corporation (AMT) will be crucial. The company's strategy of combining acquisitions, such as Cyxtera with Evoque, to achieve significant sales and cost synergies, directly addresses these competitive dynamics.

Conclusion

Brookfield Infrastructure Partners presents a compelling investment narrative, rooted in its diversified global portfolio and strategic focus on the secular tailwinds of decarbonization and digitalization. The company's history of contrarian investing, coupled with its disciplined capital recycling program and robust organic growth backlog, positions it for sustained financial expansion. With FFO per unit growth projected at over 12% in the coming years and a steadfast commitment to a growing distribution, BIP-PB offers a unique blend of downside protection and upside growth potential.

The company's technological advancements in residential decarbonization, data centers, and telecom towers, alongside its strategic competitive positioning, underscore its ability to generate outsized returns. While macroeconomic headwinds and operational refinements present ongoing considerations, BIP-PB's strong balance sheet, proactive capital management, and global footprint provide a resilient foundation. For discerning investors seeking a long-term compounder of wealth in essential infrastructure, BIP-PB's strategic clarity and operational excellence make it a noteworthy opportunity.