Brookfield Corporation (TSX:BN)

Investor Day 2018

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Sep 26, 2018

Good morning, everyone, and welcome to our 2018 Investor Day. I'm Suzanne Fleming and I Head of Branding and Communications for Brookfield. Just before we get started with the presentations, I thought I'd take a minute and explain to you the iPad technology. A lot of you will have seen this in years past, but for as a quick refresher and for those who may not have seen it. The first point is you should all have on your iPads, you'll have all the presentations. And if you want to take any notes, you can just click on this note icon, you can type in your notes, save them. And then at the end of the day, we will email the presentations to you. And those will have your notes in them. And if you want to go back to any previous slides, just click on the history button and at the bottom, you can click on the live button and it will take you back to the main presentation. For the Q and A, you can ask questions 1 of 2 ways. You can either just put up your hand in the room or you can type it into the Ask section. Again, it will give you a box, you can just type it in and then it will come through to us. And all of this is pretty self explanatory on the iPad. But if you need more information, just click on the resources button or you can always ask someone outside, there is a help desk for the iPads. And at the end of the day, as within previous years, if you wouldn't mind just giving the iPad back at 1 of the desks outside on your way out, that would be great. And finally, just a quick look at our agenda. The lunch will be at 12:30. It will be up out on 6 where you entered. And then at the end of the day 5:15, we'll have a cocktail reception that'll be down in the same place as last year, down on the 4th floor. And we'll see how the weather goes either inside or outside, but it'll be down in the same area. And with that, I will hand it over to Bruce. So good morning, everyone. And I just add to Suzanne's comments that thank you all for coming. We appreciate whatever time you have today to spend with us. Always try to tailor the presentations to get as much across to you and as little amount of time so that we can make your time effective, but make sure we get enough to you. So this year, we've jammed it all into one day with cocktail party afterwards. So if you can last the whole day, we'd love to have you. And with that, I'll talk a little bit about 3 of us are going to talk about Brookfield as an overall business and then the presentations on the day go through many of the business units. So there's 3 parts to the Brookfield presentation. The first one, I'm going to give you a strategic overview. Laurie Pearson, who's our Chief Operating Officer, will then talk about our people and the culture within the organization, which we often get asked about. And then Brian will finish off the Brookfield Asset Management presentation with a financial review. I guess just starting off and maybe to set the tone for our presentation is over the last 15, 20 years, our goal has been solely to use the capital that we started with and that we have within the business to build one of the larger asset managers in real asset products globally. And the goal is to obviously for the common shareholder fulfilled to earn a high return on capital. But our strategy has been to focus on a very select group of products. And what we're not trying to be is be the largest institutional investor in the world. We don't manage fixed income or equities on a large scale. And we've done that because the categories that we picked are very bespoke, take a lot of work, a lot of time and enable us to have a strategic ability to have a moat around the business. And that's really what the goal has been over the past 15 to 20 years and we'll tell you today on where we are in that strategy. The business today is just around $300,000,000,000 of assets. It's 80,000 employees. We have over 500 institutional clients. We're in 30 countries. And our total fee bearing capital is just under $130,000,000,000 today. And I would say, if you look at this math, we're virtually everywhere that we want to be. We're in most major economies in the world with enough presence that we can do business. We'll keep growing the ones where they're not as extensive as others. But we're not the other countries are either places we don't generally want to do business or too small to be meaningful to the global franchise that we have. So we're essentially established with the business in all the places we need to be. Over the last 12 months since we last sat here, I'll summarize it as follows. We raised $20,000,000,000 of capital. We deployed $33,000,000,000 of capital. And we realized in sales 13,000,000,000 dollars So if you sum up all the things that happened during the year, there's your 3 highlights of what happened during the year, which there's not that many firms that did those three things combined. The returns have been strong. And I guess we often get asked will that or can that continue for the future. And I guess the big things that people think about are interest rates. And we expect interest rates to stay, we use the word here and we've been saying this for a while, lowish. And lowish means maybe the 4 year or the 10 year treasury is at 4%, maybe it's at 4.5%, maybe it's at 3 point 5%, maybe it's at 3%, but it's in a lowish range. And all of those are fine for our business. And in fact, 2 things. 1, the business works really well at those rates. And secondly, means the economies in the world are actually continuing to grow. 2nd, international trade is highly topical and our assets and the things we do provide a lot of shelter to investors. And 3rd, currencies are extremely volatile today. And as a global investor, currencies really matter. And therefore, we pay a lot of attention to that. And in simple terms, we hedge where we can and we're not. We have to earn better returns than we would if you invested in a U. S. Dollar investment. It's as simple as that. Irrespective of the markets and on politics, there's really 4 things that we're doing today. 1, we're continuing to strengthen the balance sheets, which we've been doing for years and we will continue to do because of the part of the cycle that we're in. We're deploying capital for value, and I'll talk about some of those things afterwards. We're recycling money out of investments we've had that have done very well over the past 4, 5, 6 years, and returning capital to clients or putting cash on our balance sheet. And lastly, we're waiting and being patient for market breaks. It occurs in different countries at different times, but we continue to look for those breaks where we can find opportunities. Just looking back, the returns of Brookfield Asset Management in 19% over the last 20 years. So real return investing has been very good. And we continue to think that it will this type of investing will outperform for investors compared to many of the alternatives that are out there. Out this type of investing will outperform for investors compared to many of the alternatives that are out there. And there's really 4 parts of our growth strategy that we have. The first is, there are increasing allocations to real assets. And that's probably the first fundamental principle that you need to just lock in your head when you think about Brookfield. 2nd, we need to outperform others and provide best in class service. And I'll tell you a little bit about what we've been doing in that regard. 3rd, and probably as important as any or more important than any, we need to provide great returns for everybody. And people will obviously come back and you all know that. And lastly, to be able to do that, we need to focus on our people and culture. And Laurie is going to talk about that when I'm done. On the first point about institutional allocations, we think there is $3,000,000,000,000 of assets underweight to real assets globally, currently based on allocations today. So there's a very substantial amount of money that needs and wants to figure out how does it invest into real asset pools. In addition to that, so on top of that, the pools of capital are actually growing. And we continue to see that in 2,030, there'll be $100,000,000,000,000 in these pools. And that's just straight compound growth and inflows into these pools of capital. And it's really simple why that's occurring. And the number one reason is on the left part of this chart. The bond yields are 1% to 4%, equity yields generally are 6% to 8% in an ETF form, and we can earn 7% to 20% targeted yields depending on the type of strategy that we operate for our clients. So the first one and probably the most important is, by virtue of going into these type of assets, institutional clients earn excess return. On top of that, there's 3 other really important points. 1 is diversification. 2 is there's less volatility. They don't want to mark their portfolios to market. They want to look at them over a longer term basis. And the volatility of a public market for institutional clients affects what they think and what they have to do quarterly and they like having private assets in the portfolios. And third, the predictable cash flows give them great comfort within the asset pools. So I would pause here and just ask you on your iPads if you can figure out that technology that Suzanne just told you about. What percentage of institutional investors plan on increasing allocations to alternative assets over the next 12 months? A, 35% B, 20% to 30% and C, less than 20%. So if you can figure out that technology, please give us a number. Wow, we got 81%. I guess I sold the story well. That was my job, selling the story well. So I think we can basically say that you think that a big percentage, in fact, the number is 39%. In fact, this is an institutional survey that was done. And it's interesting, it's a cross section. It's 39% overall, but what's really interesting, it's probably the greatest underweight allocation to products merely because it only started 10 years ago when we and a few others started bringing infrastructure to institutions. 50% of institutions are still allocating increased amounts to infrastructure. So that's the biggest one and it makes sense because it's the most underweight. But still, real estate and private equity, which are much more mature, are allocating into infrastructure. Bottom line, our belief is, and this is, I guess, still the tailwind behind our business is that we started in 2,000 at 5%. Today, we're around 25% of institutional on average institutional accounts dedicated to alternatives. And we think that number is going to 40%. And we've shown that 40% number for years. I think people thought we were crazy when we first put it out. And I think we'll get there quicker than we ever imagined. And what that means is that if you go back to what I said earlier, which is there's 100,000,000,000,000 dollars we're getting to $100,000,000,000,000 in institutional money. If you allocate 40% of that, it means there's a capture size for real assets of approximately $40,000,000,000,000 Today, the allocations, if you did the math the opposite way, it's about $17,500,000,000,000 are invested into alternatives. So there's an enormous amount of money that if these play out will be invested into alternatives. So to sum up that opportunity, it's really three things. 1, institutions are increasing allocations to real assets. 2, plans are under allocated even at the current numbers. And 3, therefore, the capital to come to this business is very significant. And our belief is that the large global and very diverse managers are going to win in that situation. So just with that, a second polling question and I'd be interested your view on what percentage of total in year fundraising do the top 20 firms represent by size? And really what that's trying to get, I guess, is there you may know there's 8 1,000 funds today that are in fundraising in the world for alternatives. And what's happening is there are significant trends out there to the amount of managers, the money going to a very small number of managers. And you obviously, many of you know that, that a significant amount of people are going to there. So if we take 65%, said it's greater than 50%, the actual number that we dug up, whether it's the exact number or not, can we have that, is 38%. So 38% and I think it's actually probably higher, closer to what many of you thought. But 38% of fundraising in aggregate went to 20 firms. And what that really means is that the large firms are gaining significant money and it's hard for small managers to raise capital. And that's happening really for 4 simple reasons. We offer large global funds that big institutions can invest into and it enables them to put large sums of money out. Our track records are good and that's obviously a preface to all of that. We can offer them many multiple many asset classes. And therefore, when we see a Chief Investment Officer and we get to know an institution, we can offer them they may start in one product, but then they feed out into others. And lastly, we need to deliver best in class investor experience, which I'll talk about in a minute. And on that, if you think about those interactions we have with the clients, there's really and you know all this from your own business, but we need to have our investor interactions with them need to be best in class. We need to have communications which are transparent, clear and meet their needs. And lastly, our investor reporting has to be at the best level we can. To do that, we've continued to expand the investor service team. We added 22 people in the last couple of years. They're all across the world. And they work with all of our business units to deliver all of our numbers to our people. We have dedicated resources now to new channels to be able to expand the business and expand our breadth within the area. And we've added a number of wealth relationship managers looking after family offices, registered advisors as we continue to deepen the product that we sell in the market. On the institutional side, we've continued to grow the numbers that we have. And our goal is to have 1,000 clients. I don't probably think we need more than that, given that just what we're trying to do with the business over the next 10 years. So our goal is 1,000 to be able to look after 1,000 clients within our business. Today, it's at 5:30 as it's continued to grow. And just a couple of interesting facts are in 2013, the average investor obviously didn't make 1.6 commitments to us. But on average, if you took our investors, they committed to 1.6 funds. Today, they actually commit to 2 funds. So what that means is that every of the 5.30 investors, on average, they invest in 2 funds with us. So just an interesting fact that they continue to broaden the number of products that they invest with us. And secondly, the amount of money that they invest with us is going up. So even though we've been widening the base of the number of people that invest with us, the actual amount has been going up. And so it's just a much broader base with investors. Just to carry on with that, we're seeing more reinvestment within the businesses. 60% of the capital raised in the last 12 months is actually from existing investors. So when people invest with us, we sometimes give it back to them. They reinvest it back into other funds or they're re upping into products even if they haven't. But 60% is from investors. So we have 40% are new. And secondly, the crossover, just out of interest, 80% of our top 20 actually invest in multiple things with us, just as an interesting fact. Lastly, we're continuing to try to innovate and offer broader offerings to be able to tailor these products and the things we invest into for our clients. And what we're not doing is offering anything that they want. What it is, is if we can do it and we feel comfortable investing in the strategy, we will tailor a product for them. But it's all within the band of what we see as our distinct competitive advantage. Over the years, the product that product offering has grown significantly. And you can see on this slide as we've continued to add products over time in different areas and the most recent have been many of the credit, but very bespoke credit and the open ended funds, which are more core related, which are fixed income alternatives for investors. And really, if you sum it up, we're continuing to expand in 3 ways. The first is our flagship funds continue to grow in scale and get bigger and broader to be able to deliver the clients for clients. 2nd, we're adding new strategies from time to time adjacent to the products we have. So our open ended core infrastructure fund, core plus infrastructure fund, for example, is a product that some of our institutional clients want to invest, which is lower risk, longer term, perpetual in nature, and institutional clients want to have that product in their offering. And lastly, we're opening up new channels for distribution to be able to continue to grow the investor base. On the flagship funds, just to focus on this, they continue to get larger and each series of funds we continue to fundraise at larger amounts. The real estate series is now this funds up to $11,000,000,000 closed and will be bigger. Our private equity fund was launched at $7,000,000,000 And our infrastructure fund, the last fund was $14,000,000 And we're going to go out with a new fund shortly, which will be larger than that. So we continue to grow these flagship funds that we have. And if there's a compounding effect to all of that. 2nd, on the new strategy side, we've been launching a number of perpetual core funds. And secondly, doing credit. And those are both growing. Since the last time we met or in the last 18 months, we've launched 8 strategies within this category. And the perpetual core products are up to just under $2,500,000,000 credit is around 4,000,000,000 dollars and our longer term targets are much more significant than that. This will be meaningful to the business, but it will never be the whole business. We don't plan on being a massive credit manager or a massive manager of those types of products. They will be bespoke products for clients where we can earn very good returns for them. And lastly, we're opening up new channels, as I said, and that's both through private banks. We're selling some of our products through the private banking channels and through registered advisors. Our goal is to have about just to give you an indication, our goal is to have about 10% of the capital in the future in these type of products. And really the reason for that is this slide. There's over $100,000,000,000,000 in the future of money sitting in retail wealth channels and there's a portion of that that we'll be happy to invest into our products. So lastly, I'll just talk about investment strategy. And we need to be very we're a value investor and we continue to adhere to those principles. Therefore, we need to cast a very wide net to be able to find investment opportunities, especially in an environment where the stock markets are valued where they are and the bond markets are where they are. Our advantage is scale and we believe that's an enormous advantage in the very specific things we do because it gets rid of the competition on many of the things that we do. And we always try to find a home for attractive investments and we start with our private funds. We then do co investment with our clients and through our limited partnerships. Our listed issuers sometimes do things which are not otherwise done by those entities. And at last assistance to those entities or an investment place is our balance sheet of BAM, which is obviously quite significant and liquid. The assets we acquire vary, but the point I want to make to you is that everything we do are actually really simple. It's the same thing we do no matter where we do it within the business. We acquire high quality assets. We try to buy them on a value basis, and we try to work them and enhance the value by using our operating expertise. And it's really those three things. We try to repeat and wash, rinse, repeat each time and in all the businesses that we operate in. And we continue to find many opportunities globally to leverage the franchise and our operating expertise. And so if I go back to that original slide, we deployed $33,000,000,000 in the last 12 months. Interestingly, which was probably not what we expected, 86% of that went into North America. So a significant amount of money was because we found very specific value opportunities to be able to invest into. And a few of them are as follows. Sachin will talk about this I'm sure later, but we bought 2 of SunEdison's companies out of bankruptcy and added just over 3,000 megawatts of solar and wind facilities to the renewable business. We bought Westinghouse in the United States, in the economy that we're in and in the market we're in out of bankruptcy for $4,000,000,000 That is an unusual situation. We bought a company called Enercare for $3,300,000,000 which is a utility business in Canada. We paid $6,800,000,000 or we've committed to pay $6,800,000,000 for Citi, which will layer into the business we have in real estate in the United States. We paid $3,300,000,000 to buy a pipeline as a carve out from one of the pipeline businesses in North America. And to sum up, I would just say, I'd leave you with these five points really out of all this. Firstly, the franchise is growing rapidly. And despite the funds getting bigger, the compounding effect is significant. So the asset management franchise we have is growing significantly. We think given the market scale that we're positioned because of the size and because of the trends that are going on, we're positioned well within that growing market. 3, we think that we can continue to deploy the capital into opportunities like I just mentioned. And that's important because we need to earn proper returns on the money. 4th, we believe we have to make sure that we look after our clients and provide excellent service. So we continue to work on bolstering those resources. And lastly, that allows us to structure the business for growth and we continue to do that. So with that, I'm going to turn it over to Lori, who's going to talk about the 4th component of our business, which is really the people and the culture and how that fits with all of what I was just talking to you about. Thank you, Bruce. We often get asked how we've been able to manage the significant growth that we've had and why we think we are structured for growth. So I have the pleasure of addressing that by talking about our culture and how it informs our people strategy and the way we operate. So at its core, our culture is really underpinned by 3 principles. 1st, taking a long term view in everything we do. 2nd, really understanding the importance of alignment of interests, both with you, our shareholders, with our investors, but internally. And 3rd, a real belief that with collaboration across the broader group, we can achieve more and create more value. This culture defines how we attract and develop people and it's really reinforced by our operating philosophy. It existed long before we started building our asset management business, but because we felt it was such a strong foundation from which to grow, we really have made a concerted effort to maintain it as we continue to grow. So how does that translate into our people strategy? In line with our long term focus, we take a long term view of our human capital. And so the goal of our people strategy is really to provide an environment to allow people to achieve their potential. That requires a focus on who we attract, how we develop and how we align. So it starts with hiring people that we believe can grow with the business and become future leaders. It's about having a mindset that succession planning actually starts on day 1. It's about working really hard to maintain as flat a structure as possible in order to given our size, because we believe this creating space, if you will, allows people, our talented people to step into it. And it provides more opportunity, quite frankly, for senior leadership to see all of our people and interact with them. And this creates development opportunities, but it also provides a strong basis from which to assess who's ready for a stretch role and to take on more. And we tie all that together with our compensation philosophy, which is really focused on an alignment of interests. So we talked about attraction. I mentioned that it really is about hiring people who have potential to grow with the organization, but it's also about people who embrace our culture. And we call that having the attributes of a Brookfield leader. And the attributes really fall into 3 broad categories. 1st, collaborative. Having people who know how to build relationships and understand the value of being part of a broader organization reinforces collaboration and means that we can bring the breadth of the platform to whatever we do, the right resource, the right time, the right place in order to create value. Being entrepreneurial, having a team full of people who are commercial, know how to make money or save money, who are curious and have a passion about the business we are in. That fosters creativity. And creativity enhances our ability to create value. And 3rd, disciplined. Having people who understand risk, are able to make the complex simple, are comfortable being pushed outside their comfort zone and who we trust will put their hand up if they need help strengthens our ability to fast track development. And development is actually very important here at Brookfield because we have what we call a grow from within talent strategy. So rather than hiring seasoned executives, we would rather grow our own. That's our first preference. So what that really means is we recruit from within. So whenever we have a new role, we ask ourselves, is there someone who's ready for a change or ready for a stretch role? And so what that really means is we move people around a lot. We move them between business groups, we move them geographically, we move them between functions, we move them into the operating companies and back and forth. So our senior executive team is actually a good representation of that. Pretty much all of us have worked for either an operating company or in multiple business groups. If we look more broadly than that this past year, we have relocated geographically or between business groups or functions 70 people. Said differently, if we keep at that pace within 5 years, 25% of our population will have changed their roles significantly. This further reinforces the ability to build relationships internally and reinforces our culture. With respect to our compensation approach, as I said, it really is has a heavy emphasis on alignment because it's got a heavy emphasis on long term compensation element of total compensation. And it actually makes a lot of sense for us given a grow from within talent strategy. You're making investments in your people, having them having long term compensation, it's very aligned. The fact that all management has some form of their compensation in BAM based equity reinforces collaboration, again reinforcing our ability to bring the breadth of the platform to wherever we need it. And this compensation approach and our culture more broadly have been instrumental in management having a 20% interest ownership interest in Brookfield. Because of our culture, we believe we've been able to build an experienced and deep management team. The senior executive team has had an average tenure together of 18 years And we're very aligned on our the focus on our culture and we're very aligned on our people strategy. But beyond that, there's another significant number of seasoned executives across all of our business groups and globally. And it's actually with the talent and dedication of this group that we have been able to manage our growth to date and why we think we have the scale and the reach and the capability to continue to grow and create value. So summing it all up, our culture of a long term focus, of alignment of interests externally with you, our shareholders and internally and collaboration combined with hiring really talented people who have the potential to grow with us and giving them great development opportunities is why we believe we will continue to create value for you for years to come. And with that, I'm going to hand it over to Brian. Thanks, Laurie, and good morning, everybody. I am going to, as Bruce mentioned, cover a financial review. And there's 4 things I'd like to cover off in my remarks. First is just a reset on how we think about value creation and measured at Brookfield, at the band level. 2nd is to talk about the resiliency of the business and the balance sheet specifically. 3rd is to give you some thoughts that we have about carried interest. And then 4th, as is our custom to wrap up with a financial profile of the business and what we expect could be rolling out over the next 5, 10 years. So throughout this, there's four characteristics of the business that we'd like to leave you with 4 themes. And one is that it's a very straightforward business. It's very transparent. It's very resilient, And it's growing at a very rapid pace. So first on the value creation side, and as you know, we think about value creation really in 2 components at Brookfield. The first is what we refer to as the asset manager. And that's most people think about that in the context of a multiple applied to the fee related earnings and then some form of multiple or approach to carry interest. We'll come back on that one. And then with respect to the capital that we've deployed from our balance sheet, that's obviously about enhancing the value of that capital. Most of it's invested in our own funds. And then second is the cash distributions that's generated by that capital. And the 2 of them together lead to a value for BAM. And we believe there's a pretty clear linkage between the elements of our business cycle and those value drivers. So if you think about the first part as being raising the capital and then putting it to work, that obviously drives increases in fee bearing capital and that drives increases in the base fees and in term fee related earnings. The second part of it is through everything that Bruce talked about and that you hear throughout the day is enhancing the returns of that capital. And then at the appropriate time monetizing it and redeploying it. And what that gives rise to is either is performance income in the form of incentive distributions, which is our share of increases in the distributions paid to unitholders by the listed partnerships. And then the second is the carried interest that we earn our share of the profits generated by our managing the private funds. And then on top of all that, we get returns from the invested capital because we've invested alongside our investors in these assets. So just to put some numbers to that, and this is a typical format that we've given you each year, 20 times the annual fee related earnings is around 17,000,000,000, 10 times target carry, I'll refresh what that means, dollars 8,000,000,000 and then $31,000,000,000 for the invested capital. That's up about $6,000,000,000 over this time last year. And that's really driven by increases in fee related earnings and the amount of target carry. We haven't changed the multiples at all and then we had an uptick in the invested capital as well. That $56,000,000,000 translates into about $56 per share. The stock has been trading a little higher than what's shown on the slide here, but at a significant discount to that. And I'll come back and talk a bit about that as well. So it's increasingly important as well for organizations to talk about how they add value in non financial ways as well. And there's 3 things that we would point to in this regard. The first is, and again, you'll hear about this throughout the day and you've heard about this from Bruce, that $300,000,000,000 of assets that we own and operate are very high quality critical assets that are essential to the global economy. They're are power generation, renewable power generation, office buildings, retail, toll roads, things like that, that make a big difference in everybody's day to day lives. The second, to the extent that we provide very good financial returns to our investors, our clients that consist of pension funds, insurance companies, sovereign wealth funds. So our ability to help them deliver security for the financial future of many people as well. And then 3rd, we strive to provide a positive to be a positive contributor to the various and many communities that we operate across the planet and to our employee bases, as Lori talked about as well. And then there's 80,000 plus employees throughout the organization. We also put a high priority on ESG principles. And at its simplest level, this is entirely consistent with owning and operating long term sustainable assets. And it's also increasingly important to our investors, employees and other stakeholders. These are 4 just four elements of ESG in action within our firm. And we've got very good fundamentals in this regard. It obviously helps that we own one of the world's largest pure play renewable energy portfolios, but it goes far beyond that. And we're spending a lot of time working on how we can communicate that better because of its increasing importance. So now I wanted to talk a bit about resiliency. And resiliency in our business really does start with that $300,000,000,000 of assets and the high quality nature and the sustainability of those assets. But there's 4 more, I'll say, specific financial elements to our resiliency. 1 is we run with very strong liquidity. 2 is that we maintain a very strong discipline around our asset level debts, non recourse match funded, limited parental guarantees across collateralization. And at the BAM level, we continue to have a very stable capital structure and an increasingly strong cash flow generation. And much of that relates to the balance sheet. This is a depiction of it. It's a very simple balance sheet in its own regard. 85% of it is in the form of listed securities. Most of that's in the form our investment in the 4 listed partnerships. So that provides a lot of transparency and flexibility. But as you'll see, it's generating an increasingly and significant amount of cash flow, dollars 1,600,000,000 just based on the current dividend policies. And the capital structure is mostly in the form of common equity. We do have $10,000,000,000 of leverage to enhance returns, but that's in the form $4,000,000,000 of it is in perpetual preferred shares and $6,000,000,000 of it is in the form of investment grade debt with a very long term 10 years on average. And I mentioned the cash flow. We're now bringing in about $2,500,000,000 of cash from the fee related earnings and the distributions alone. No carried interest in that number. And those are very stable, very visible transparent cash flows. And that's $1,800,000,000 after you net out some corporate costs relating to financing and operating. And then we pay out about 30% of that to stockholders in the form of common share dividends and that leaves $1,200,000,000 Now, over the past number of years and currently, we're using that cash to enhance shareholder return in the following ways. First is, we do continue to participate in the equity issuances by our listed issuers. We see new investment strategies. For example, we've been building up portfolios of credit securities and further into the strategy of developing our credit business. 3rd, facilitates large fund transactions, primarily in the form of backstopping co investments while our clients and investors complete their due diligence or various approval requirements. And then lastly is BAM share repurchases, which has been a lower priority in recent years. But as you'll see, as we step up that cash flow, it should give us more flexibility in that regard over time. I'm going to come back to that. So, before that though, I did want to talk a bit about carried interest because it's something that is really becoming increasingly important to how we think about value at BAM and it's beginning to show up much more in the current financial results. So we talk about carry in 3 ways. First is target carry. And simply put, that is the total amount of carry that we would expect over to earn over the life of a fund, assuming it hits its target returns. And we simply take it and annualize it over the life of the fund, typically 10 years. The second is unrealized carried interest. And that is based on the amount of carry generated to date in a fund based on its actual performance. And we provide that number to you, not in our financial statements, but in our MD and A and in our supplemental information so you can get a sense for how we're tracking. And then the 3rd is realized carried interest. That's when it does get booked in our financial statements. But because we follow some very conservative accounting policies, we don't book it until there's no further risk of any clawback. So, it tends to happen very late in the lifecycle of a fund. And this slide should illustrate that point for you. So, that first gray bar or gray line, that's the target carry. So, it's just straight line annualized over the life of a fund. Carry will not start to get generated until we invest the money and start to generate investment returns, the so called J curve effect. So it really doesn't kick in until years 1, 2, 3. But then it ramps up pretty quickly. And then 4th, and this really happens more in the back half of a fund is when it actually gets realized because that's when you're monetizing the assets, you're locking in value and therefore taking away that risk of clawback. And that's when we actually book it in our financial statements. But we can give you good information on those first two as we go along. So you give an idea of the future potential, but also how we are tracking along the lines with our carry. So one of the things is that carry that we just like to emphasize is carry is based on the total profits of a fund. And it's not based on you're talking about the preferred return, it's not 20% of the excess return above 8. It's 20% of the total profit of the fund as long as you hit the preferred return for shareholders for investors, sorry. So let me just give you an example of that. So if for a typical opportunity fund, you'd have a 20% target return and back out a base fees of 2%. So there's an 18% return on the fund. 20% carries, 3.6%. So the investors are in 14.4%, which is well in excess of the preferred return, which means we get full carry. In fact, we'll get full carry at returns less than 20% as well. And the good news is that the majority of our funds are in fact tracking at or above their target returns. And so that sets us up well for earning that carry that we have the potential to do so. And that's showing up more in the numbers, not necessarily in our but in that metric that we provide you about generated carry and that was about $1,000,000,000 over the last 12 months. And importantly, out of that $47,000,000,000 of carry eligible capital, capital that we're eligible to earn carry on, 21,000,000,000 of it is still in the investment period. So that's still to come in terms of generating carry. And given the fundraising success that we've had over the past year, we've stepped up our expectations of what we would see ourselves generating over the next 10 years from $8,000,000,000 that we would have talked about last year to $10,000,000,000 And that would also give rise to cash realizations of that carry and booking it in FFO over the last over the next 10 years of also around $10,000,000,000 Now, as I mentioned, most of those realizations, the FFO and the cash does show up in the back half of the fund life. So it will come up increasingly over time. But there's two points I want to make about that with the next slide. And so, first of all, is that, that slide I just showed you relates only to existing funds. So, the amount of carry will be supplemented significantly by future funds that we'll be rolling out over the next number of years. And then the other part, this comes to the generated carry, which is the orange and I think that's sand or tan, we could do a poll on what color you think that is. But that's the generated carry. And that's a good leading indicator of how we are building out the potential to bring that to actually realize that carry in cash. So that's an important metric to keep tabs on with respect to our performance. Now how do we value the carry? That seems to be a big question for probably everybody in the room and the industry. We value it consistent with last year's at 10 times the target carry that translates into about $8,000,000,000 about $2,000,000,000 over the amount we talked about last year. Now, we also looked at it from a discounted cash flow perspective based on those slides and the potential trajectory over the next 10 years. And the DCF or the net present value of the existing cash flow streams on the existing funds is around half of that $8,000,000,000 And then the terminal value would be in the would represent the other half. And how you can think about that terminal value and how we thought about it was, again, consistent with our methodology, taking the amount of capital that we'd expect to have in place in 10 years' time and simply taking the target returns and so the fundamental assumptions, we hit our target returns. And then we apply a 5 times multiple to that 10 years handsome discounted back at 10%. That's a fair bit going on there. But I guess, simplistically, we take what we think is a relatively conservative approach to it, put a discount rate on it, and that comes up with the $4,000,000,000 So there's really 3 takeaways I'd like to leave you with respect to carry. First is, we earn carry on every dollar of profits as long as the preferred return is met. So it's safe to say as long as we're hitting near at above our target returns, then the amounts that we're talking about in terms of target carry should all come in. We value that carry at about $8,000,000,000 today and it's growing very rapidly. And we'll continue to provide you information on that regard as it rolls out. So last, I wanted to come to our financial profile. And before talking about the next 5 years, we thought it's always a good idea to go back and reflect on and then at least check what we would have sat here 5 years ago in 2013 and told you. And with some relief, we can say that we did nicely surpass the growth projections we put out at that time, both in terms of fee related earnings and target carried interest. Now, a lot of that is obviously the performance of the business, the investments and its simplest level expanding the amount of fee bearing capital, which drives the fee related earnings in a significant way. If you look at fee bearing capital in itself, it doesn't look like it increased that much over what we projected that it could be at. But within that, there's a couple of important things going on. We had very strong growth in the listed partnerships and in particular in the private funds. And those and then at the same time, we sold off some of the public securities businesses and that was a very conscious decision. To Bruce's point, they were lower margin credit businesses. That's not what we're putting our future into. So we simplified the business, but that did take some fee bearing capital away over that process. So looking ahead, we would expect this is the same format as last year, we would expect that we would more than double the fee bearing capital over the next 5 years. And again, a lot of that's in the form of the successor funds to the existing flagship private equity real estate and infrastructure funds. Last year, we talked about 2 raises of 26,000,000,000 in total and that's our capital sorry, that's the 3rd party capital excludes our capital. And given the strength of the fundraising market, we felt it was appropriate to move that from 26 to 28. The 23,000,000,000 of core credit and other, the change that would that's number is larger than last year, principally because we factored in more co invest. Again, that's consistent with the growth in the size of the funds and the activity in the transactions we've been looking at. And we did step up the level of outflows from 10 to 15 in large measure because it had some really strong investment returns, which has enabled us to monetize some investments within the portfolios sooner than perhaps anticipated, such as GrafTech or Gaisley, which also gives rise to strong carried interest performance as well. On the listed partnership side of things, again, strong increases there driven by and the fundamental assumptions there is that we hit the midpoint of distribution increases, but also that we see some market value growth and that's really the characteristic of BBU. It's less about investment IDRs. And then issuing about $16,000,000,000 of capital, dollars 6,000,000,000 of that would relate to the GGP transaction alone. The $10,000,000,000 is consistent with last year and that's really preferred shares and corporate debt issuances by the listed issuers as they expand their capitalization. Pulling those together leads to roughly $250,000,000,000 of fee bearing capital growth over the next 5 years growth to $250,000,000,000 and a strong increase in the amount of fee related earnings, driven principally by the contractual base fees on that capital, as well as the investment incentive distributions from the targeted increases in distributions by the listed issuers. So that yields a $1,900,000,000 of fee related earning potential 5 years hence. It also because of the increase in the private funds going back to the earlier section significantly increases our potential to earn carried interest. In the invested capital side of things, you'll see that the interesting thing here is that $10,000,000,000 $4,600,000,000 really comes from our share of the growth of the invested capital of our invested capital in the listed issuers. The other two parts, the 8 and the 13, that is simply the cash flow compounding on our balance sheet from fee related earnings and distributions from the invested capital. So we're looking at the very strong cash flow and compounding that within the business. So if you pull all that together, what that brings us to is 20 times a few related earnings around 38. And then we have the carried interest where we will move 5 years out to thinking about that in the form of generated carry as opposed to target we expect just based on the maturing of the business. And then we'll have accumulated about $7,000,000,000 of carry over that period of time as well. And then the invested capital, and that yields a total planned value of $119,000,000,000 or roughly $118 per share. That's a 24% return total return compared relative to the $42 of the $40 so it's a little less based on the $44 of the current share price. And that's really, again, breaking down the value drivers and thinking back to how we opened out here in my section this morning. So, fourteen of that is simply the discount between the stock price and that $56 plan value we showed you right at the beginning. Dollars 10,000,000,000 is that 4 and 6 of value creation on the balance sheet. Dollars 31,000,000,000 is the growth in the value of the manager based on applying those same multiples to the increased fee related earnings in Cary. And then there's $21,000,000,000 of cash getting generated within the business. So just again, before I close, I wanted to talk a bit about the cash available for distribution. So with the fee related earnings and the distributions from the listed issuers growing at that pace, we would expect to see roughly $4,000,000,000 of cash getting generated on an annualized basis before carry 5 years hence. Including carry realization, that number should exceed $5,000,000,000 Now, if you think about that in the context of a 10 year horizon, because a lot of the carriers you recall really didn't kick in until years 6 through 10, we would see ourselves having the potential to generate $60,000,000,000 of cash cumulatively over the next 10 years. We can see ourselves paying out 10,000,000,000 through dividends at the current, I'll say, profile of roughly a 7% increase per year. And then 10,000,000,000 we would expect to be investing in the listed issuers as part of their listed issuances. And that leaves $40,000,000,000 which and this is really this doesn't happen overnight, but this gives you some indication of the amount of cash generating potential within the business that we will have the ability to use to return to shareholders and create shareholder value. So in closing, I wanted to leave you with 4 points. First, the balance sheet is very resilient. 2nd, we're generating almost $2,000,000,000 of annualized cash flow today, growing to over $5,000,000,000 over the next 5 years. Carry is growing rapidly and is very meaningful and significantly important to the business. And then there's potential to generate $60,000,000,000 over the next 10 years and use that to further build the franchise and return to shareholders. So with that, I'm going to hand the podium back over to Bruce for a Q and A session. Thank you. Okay. We have 10 minutes for questions. If anybody has any questions or we can start BPY and I don't have to answer any questions. There's a question over here. Andrew Kuske, Credit Suisse. Bruce, you mentioned BPY, so maybe we'll just segue into a bit of a question on BPY. How do you think about buybacks at the BAM level or accreting yourself to some of the businesses you already own that are trading at meaningful discounts? We'll leave that to Brian Kingston next. No. So look, Andrew, as far as utilization of the cash, we have, as Brian noted, over the next 10 years, very significant amounts of cash that come into the business. We're at a new phase in the business and that's we spent the last 15, 20 years building the business. It's all built now. It has the structures. The private funds are very large. They will get bigger. It takes small amounts of capital to maintain that business. And unless there's something unique that comes along, we're just going to keep building the business and it's a very high margin, high growth business. Therefore, there's what you shouldn't do is ever dilute that franchise. So when we look at it, there's very substantial amounts of cash that get generated and increasingly as you go over the next 10 years. But as Brian noted, it accumulates up to $60,000,000,000 10 years from today if the business stays as it is. And that capital will either be and this is the trick in capital allocation, it will either be put on the balance sheet for rainy days, of which it gets the business gets fatter all the time. 2nd, it will be used to into our subsidiaries where there is value. And we've been as you may have noted, we've been buying BPY shares in BAM. I hope we filed those recently, Brian. I think we have to file within 3 days and it's been more than 3 days. So we've been buying BPY shares because there's a big discount in the market because of all the things that just went on with BPY and we're buying tangible value at fractions of what it should trade for. So, where we find opportunity, we'll do that. And in the absence of that, we're going to return it to our shareholders if we have and it'll either return in greater dividends or share repurchases. We have a greater feeling of share repurchases than greater amounts of dividends because it gives you the flexibility to do it when you choose to do it on behalf of all the other shareholders that stick around. And so that's our general nature, even though we'll just keep increasing the dividend as we have in the past at relatively modest amounts. So I'd say it's part of our business is about capital allocation. That's all we do. And our business, therefore, is making those decisions with the cash we have. And they're all opportunities. If I can, just a follow-up. And then the follow ups, management owns 20% of the company right now at the top of the house. With buybacks coming of BAM stock, what's the right level for management ownership of the overall float? Look, I'd just say the following. We never had a defined number. And as we transition individuals, like remember, this business has been around, as many of you know, it's been around a long time and there's been people before me and they still are part of that 20% and we transition them into the future. The number changes from time to time, but also there's younger executives coming along and maintaining and building ownership in the business. So, it could be 15, it could be 25. The numbers get very large. As you might imagine, 60,000,000,000 to 100,000,000,000 times 25 percent is a lot of money. So there's no real defined number. I guess what for the good of the franchise, we've always believed that to maintain the culture we have in the organization and the long term strategy that we have and the commitments we have to you and our clients that having a very meaningful ownership percentage in the stock, obviously, the percentage may increase. I think there's a microphone coming. If you just wait one second. I'm just curious, dollars 118 number that was put up there for kind of a target value. Can you tell us what that assumes in terms of share count? And when Brian went on to mention $40,000,000,000 potentially available for share repurchase, is that a number that could supercharge the $118 number or some of that implied in the $118? This is where I get to turn it over to Brian. Sure. Thanks. So, right now, that's based on 1,000,000,000 shares roughly outstanding, keeps the math simple, that's the current share count. What we've not done in projecting out that $118,000,000 is to factor in any share buybacks. That reflects that cash building up on our balance sheet. So obviously, that would change that relationship. If you purchase the shares on an effective basis over time, If you purchase it at the wrong price, it may destroy value. But the so it's just been left The model has been left. The cash piles up in the business is how that is the financial model has been run. Question down here in the front. Do we have a mic? Divya? Hi, Bruce. Thanks. It's Colin Decharm with Sterling Capital. I had a couple of questions. Early in your presentation, you talked about the wallet share, if you will, of your LPs in terms of the number of funds that each is exposed to. I'm curious if you would speak to the trend of co investments and how that has trended among your LPs and what that might signal for the franchise over time? And then secondarily, I had a question for Brian. Last week, we heard from one of your large competitors that they would be building some of the perpetual incentive revenues into their reported FRE given that that's ascribed a higher multiple by public markets. I'm curious as you raise increasing amounts of funds with that structure. It's kind of a hybrid incentive. It's not quite a fee, but it's more visible than legacy carry. I'm just curious, Brian, how you anticipate treating that revenue over time? Thank you. So, I'll start and then Brian can get a mic. On co investments, here's what I'd say what's happening in the world. And I think it's good news for us to start off with is there are 10, maybe 20 institutional clients in the world that can actually go out, invest in a transaction, do the diligence themselves and complete transactions. And it's not I'll call it maybe less than 10. There are another 10 or 15 or 20 that can participate alongside us and we can bring them into a transaction with us and they can make direct investments. The balance need us to do it for them in its entirety. We have relationships with all of those top 20 in various forms. So some of them invest beside us because the transactions are big and we want to bring them in. Some come into our funds and we invest with them. But what the most important point is, is that there are not that many institutional clients in the world that are set up to do what we do. So they were I guess the most important point is given what's going on in the world, given the size is getting bigger, our skills, which is really what we provide to them, we provide an outsourced investment management business for real assets. And that continues to be needed by most of the institutions in the world. And what we've tried to do is tailor a strategic plan for each one of the top 20, where we can work with them in some way that can be additive to them and additive to us. And it's not everyone, but most. And so I don't to the point of are all institutions going to do something and compete with us? And the answer is no. It's just not possible that it can. But many want to do direct investments and we're trying to do as much possible to provide that type of product to them so they can hold it on their balance sheet and be direct invested. Okay, that's better. Sorry. On performance income and inclusion in fee related earnings, we do have some performance income in our fee related earnings today. That's largely because there's no clawback on it. And so hence it's suitable and our investment distributions sit within fee related earnings because that's a very locked in stable stream. And so if the structure of that performance income is suitable in that regard, then we would include it in fee related earnings. The big reason why people keep carry outside of it is because of that clawback and so and the longer term nature of it. Good morning, Bruce. I think Slide 75 sort of highlighted the premium or discount to which each of the listed entities trades at relative to the IFRS valuations. I think you talked a little bit about in relation to Andrew's question, buying some of BPY stock recently because of some things that were going on in the marketplace. In my sense is BPY is never having attended these days over many years that it's never really traded to where management has felt the true asset value is. And so I'm curious as you think about the different listed entities, what is it about the others that make them trade at these premiums to your IFRS values, but property is stuck at this pretty sizable discount? And other than just buying stock, what are the action plans that you're taking as a management team to maybe address some of that discount in terms of maybe some of the reasons for it. If you think of what I don't know whether you believe that they're there. And then or maybe just property not in a listed format, maybe it doesn't work given the amount of private capital that's there that you that's on the other side. So, I'm going to try just a couple of comments to that question. BPY is going to speak momentarily. So, I may leave some of this to them. But I would just say the following. Firstly, one should note, even though they quote trade premiums to IFRS for our renewable and infrastructure business, most things or many things on their balance sheets don't get marked. So the IFRS number is not so relevant. It's really a cash flow multiple because the business is just different. In real estate, you mark everything to IFRS. So there's a true mark and value there. 2nd, I would say I would just say, we've listed BPY 5 years ago. In one sense, it's been an amazing success because it's allowed us to consolidate the whole business into one vehicle. And it's incredible what we've achieved in that 5 years. Because of that and because of the consolidation, we've had to issue a lot of shares. And that's never good to the compound math of stocks trading at value. I think what the exciting part now is, it's all done. That's all behind us. And we can now focus on the value of this, how do we make sure it trades at a premium. Now just for BAM, we're here at a BAM presentation as opposed to BPY. We own 62% of the assets. For us, it's not really relevant where the value trades at in the market. We care because our friends have shares and they own it and they like it to trade at NAV and we'll do our best always to try to have things trade at proper value in the market. But we can't often we can't have the total effect on that. We can try and we do try and we will and Brian and Brian I think next will talk about some of those things when they go through their presentation. And then just as a second question, you talked early on about the $3,000,000,000,000 of underweight in real asset strategies. Do you have a sense of how that breaks out between infrastructure, private equity and real estate and if it's any acute sort of geographical bent? Yes. So I would say private equity is the most mature and institutional clients in the United States. These institutional clients started getting into alternatives with the U. S. Private equity managers. Probably the most extensive within global plans is real estate. And but those numbers, it's an ideal product, so they continue to grow. And there's some there. The most under allocated globally because it's the least mature business is infrastructure. And so the I would say if you put 20 or 50 institutions in a room and ask them a question on infrastructure specifically, do you want to have more money in the next 20 years? Every one of them would say yes. And it's some aren't allocating because it's tough to find product. They don't know what to do. They don't know how to get into infrastructure. But that's the largest under allocation. And given the sector is going to be as all infrastructure transfers into private hands over the next 50 years, that will be an enormously significant business, a very significant business over that period of time. I think we're going to take one more question. We're not going to take any more questions. I got the hook. So with that, thank you. I will be around at the end of the day to take follow-up questions if anyone wanted to ask one to me. But in the absence of that, I'm going to introduce Brian Kingston, who's going to come up and talk about BPY. Okay. Good morning, everyone. As Bruce mentioned, I am Brian Kingston. I am the CEO of Brookfield Property Partners. What I thought I would start out on today is just similar to what Brian Lawson did with Brookfield, look back over the last 5 years and really what how BPY's business has evolved over that period of time. And given that we closed the GGP transaction just about a month ago, I thought I'd spend a bit of time on that investment in particular, our plans for the future and why we are so excited about it. Following that, Brian Davis, I will take you through a financial update, how all of that sort of translates into our earnings and our capital outlook over the next couple of years. Then finally, Rick Clark, who is our Chairman, will touch on our growing multifamily business. We spend a lot of time in these Investor Days over the last few years talking about our office business. Certainly, retail is topical, but multifamily has been another growing part of our business and he is going to talk about some of the reasons why and where we see the growth in that business going forward. So, as I think all of you would be aware, Brookfield Property Partners was launched in 2013. This is Brookfield's global flagship real estate vehicle. Everything that we do in real estate is in it. And at the time that it was launched, about 80% of our capital was invested in other public securities listed real estate companies. And as a result of that, in and amongst all of the other investment activities that we've been undertaking over the last 5 years, we completed 5 strategic transactions, about 1 a year, that really transformed us and it moved at the time of our launch our proportionate assets from about $30,000,000,000 and increased them to by a factor of 3 to about $90,000,000,000 today. But importantly, what it did was it transformed the balance sheet from being one that was primarily invested in securities of these public companies to a directly held all of our assets now are directly held on our balance sheet as of today. And so that's important because it gives us a greater degree of control over the operations and a better ability to frankly integrate our management teams and our approaches because these are the types of iconic assets we own around the world. Every one of them is mixed use in some form. There is very few of these complexes that are just one pure asset class. And so by having these multiple arrows in our quiver with different management teams and expertises and an ability to execute and operate in all of these, we think there is a lot more value that can be driven and I am going to talk a little bit more about that. Importantly, as well, the business is global. Like all of our businesses, we are on 5 continents. We are invested in 15 countries around the world. And in addition to those acquisitions, a large part of our growth over the last number of years has been a significant development pipeline. In the last 24 months, we've delivered over 4,000,000 square feet of office and 1200 residential apartment units and next year, we will deliver another 5,600,000 square feet of office and 3,500 apartments. So, really, our strategy and Bruce touched a little bit on this, I'd say from a global or an overall Brookfield approach and you are going to see the theme throughout the day today. The way we approach our real estate capital allocation is exactly the way we approach it in all of our other businesses. Have made a decision to be there, we have made a decision to be there, we build significant on the ground, boots on the ground operating teams that help us to inform our ultimately manage the investments when we have got them there. We then identify opportunities. We focus on mispriced assets or out of favor sectors or geographies and then we use those operating platforms to drive performance. And then ultimately, once we have executed our business plans, we look for ways to exit them either in whole or in part. We take that capital and we redeploy it into the next opportunity. It's very simple. It's very repeatable and it applies equally whether we are talking about infrastructure, power or real estate. Maybe to help highlight that in a little more, it's always helpful to have real examples. About 5 years ago, we looked at industrial logistics warehouses, felt that it was a great place to put capital to work. And so we set about assembling a global logistics business through the acquisition of 3 companies in Europe and the United States. We then spent the next 5 years building the management team, resetting the focus of the business, selling out of markets that we thought were slower growth and redeploying capital into higher growth markets. We increased rents by 16% over that period of time. We delivered over 20,000,000 square feet of new development. And then and over that same period of time, industrial went from being out of favor to being probably the most highly sought after real estate sector today. And as a consequence, the valuation of this portfolio increased dramatically. We took advantage of that last year and sold our European platform for about 5 times what we paid for it originally. And by the end of this year, we will also have disposed of the U. S. Portion of the business as well with a similar result. So in just 5 short years, we invested about $300,000,000 into this business and it will return close to a little over $1,000,000,000 to us, which can be redeployed into our other investment activities. 5 years is a relatively short timeframe. Sometimes it moves even quicker. So, a couple of years ago, we looked at self storage and decided this was an attractive sector for us to invest in. Similar to industrial, we assembled a 7,000,000 square foot portfolio through a series of very small acquisitions and grew the portfolio to about 200 assets. Highly sought after sector in high demand, but highly fragmented ownership. And so, institutional investors have a lot of interest in investing in self storage. There is relatively few portfolios out there for them to invest in scale. And so, what we did was we created this portfolio of 200 assets. We took the 100 assets that were in the markets that we felt offered the least upside. These were in the Midwest and Southeast and actually sold them for roughly double what we paid for them as we were assembling this portfolio. And so today, what we own is the remaining 100 assets in the higher growth markets with 0 capital invested in it. And so, obviously, that's going to generate a substantial amount of capital for us over the next couple of years as we continue to build that business out. And so, this is as I say, this is simple. It's repeatable. We often get asked about where we are in the real estate investment cycle. It doesn't matter in a lot of ways when these are the types of plans that you are undertaking. You need to know where you are. You adjust your strategy accordingly, but it doesn't mean that you stop investing when we are able to do these types of things. And just for context, those are obviously 2 good examples. But less you think we are just cherry picking it over the last 5 years, we've actually completed about $47,000,000,000 of gross asset sales. So, we're on average 4% premium to our IFRS carrying value and Bruce mentioned that gets mark to market every quarter. But relative to our cost base, these were a significant premium and generated a lot of cash flow for us to redeploy into new strategies. Our opportunistic track record speaks for itself. This has been over the last decade. It's been through, obviously, probably the worst real estate crash in 2,008, 2,009 and then recovery, but our performance has been very strong here. We have almost $6,000,000,000 of your capital invested in this strategy today. And so, these are it's a very unique feature of Brookfield Property Partners that you get access to these closed end funds where the largest institutional investors in the world are putting their capital to work and it's locked up for 10 years, you can invest in these strategies through BPY and have daily liquidity, which we think is really attractive. So, with that as context, over the last 5 years, we've fundamentally transformed the business to one that holds all of its assets on balance sheet. We have recycled 1,000,000,000 of dollars of capital at significant premiums. We've grown our earnings at a 9% annual compound rate. We've grown our distributions at 6%. So, this sort of brings us to our first polling question, which is this is for you, Michael, like what else can we do? So, the stock continues to trade at a discount. We get a lot of feedback from investors on different things that they think may be contributing to that and it's always it's useful to see how I'd say the first two on this list are capital allocation decisions where the other 2 are really more around strategy or communication. So, the good news is we the number of transactions or those 5 transactions that I spoke about earlier required significant amounts of capital to get them executed, privatizing Canary Wharf, Brookfield office properties, GGP. And as a result of that, in our own capital allocation decisions, we had to make decisions between doing things like buying back our units or reducing leverage versus doing these strategic transactions. They're all done. We're finished. We've completed all of those transactions. The business looks the way that we want it to look like. And Brian is going to touch a bit more on both of those first two points later on in his presentation about our plans for the future on both regarding leverage and buying back our own units. So our business today, just quickly running through how the business looks, our office core office portfolio is about 46,000,000 square feet at a proportionate interest. That would make it one of the largest office REITs in the United States on a standalone basis. It does about $1,400,000,000 a year of net annual net operating income. And on average, our rents are about 10% below market. So, our growth in this business over the next couple of years is going to be driven by 3 factors. 1 is a mark to market on those below market rents. 2 is a completion of our substantial development pipeline. And number 3 is improving our occupancy from 93% to our longer term average of about 95%. And so the combination of those are really what's going to drive growth in our office business. Our retail business, again, on a standalone basis, we are one of the largest owners of shopping centers in the United States, 122,000,000 square feet, 125 premier assets. This does about a $1,700,000,000 of annual operating net operating income at our share. And similar to our to the growth outlook and I'm going to spend a bit more time on GGP later on this, but similar to our growth profile on the office business, a lot of the growth in this business is coming from redevelopment, reimagining these assets and as well as mark to market on leasing. As I mentioned, the 3rd leg in our stool, if you will, is really our LP investments in Brookfield sponsored private real estate funds. We have just under $6,000,000,000 of capital invested in this. It's in a wide variety of asset classes and a wide variety of geographies around the world and it gives us a great exposure to very high returning strategies that generate a lot of cash flow. This business even on an annual net operating income basis, generates just under $800,000,000 of cash, but we think this is very unique in the public markets. So, maybe with that as context for our business where we have come to, I am going to pivot in a second to GGP, but given that we have a whole room full of real estate investors primarily, I would assume at this point in the day, we thought it would be helpful to poll the audience and just see which of the sectors you believe are going to perform the best over the next 5 years. Okay. So, it's interesting. Multifamily has been a little out of favor the last couple of years and I suspect that a lot of you are starting to feel like there is some value there. And obviously, we think across all four of these sectors, there are going to be good opportunities to put capital to work. Our feeling and I am going to take you through why that is, we do think that retail is what's going to provide the best returns, but I guess we will check-in 5 years see who is right. So starting with GGP and really just a bit of background on the transaction for those of you who haven't followed it as closely, but it was approved by GGP shareholders on the 26th July. We closed on the 28th August. The offer price was $23.50 per GGP shares. It was 60% cash and the other 40% was in the form of equity. And so so as a result of that, we issued about 160,000,000 shares of BPR REIT, which is a newly created REIT security that is economically equivalent to a BPY Bermuda LP Partnership. But importantly, it allows U. S. Investors who are either unable or unwilling to hold partnership units to invest in BPY. And so this was a critical part of the transaction and frankly a critical part of our strategy of addressing a broader investor universe here in the U. S. And we're very pleased to see that 160,000,000 shares were actually taken in that form. The stock has performed very well since the transaction closed. And so, this has been a success. And obviously, one of the big benefits is the transactions increased BPY's float by about $6,000,000,000 And so one of the other contributing factors we think to the share price has been trading liquidity, which has been dramatically improved over the last month or so as well. The acquisition of GGP falls squarely in the middle of our core investing principles. And Bruce touched on these and I'm sure you're going to hear about all of these throughout the day. But so, we could be talking about real estate or any other sector. These are really the 5 core principles that we try and follow whenever we are making investments regardless of the sector and so I am going to walk through why we think GGP fits perfectly. But we do think in all of our businesses acquiring high quality assets is important. They hold their value throughout the cycle and recover the best when you do have market disruption. We try and invest on a value basis when we are acquiring those assets because buying high quality assets but overpaying. So, make sure your return is challenging. Enhancing the value through operations, having a relentless focus on working the assets on redeveloping on putting capital into them and continuing to make them high quality assets that are relevant in their marketplace is a big part of it. Being contrarian and moving in large scale are really just ways for us to invest on a value basis. And we think those are 2 of our competitive big competitive advantages from an investment perspective is that we are able to marshal large amounts of capital and we do have a bit of a contrarian bent and obviously retail fits right into that strategy. So starting first with quality, And obviously, investing in real estate quality is always important, but I'd say in retail today in 2018, is more important than it's ever been before. And frankly, this is the statistic on this page is what a lot of people point to when they finish the sentence by saying and so that's why every mall in America is going to disappear, which is that we are over retail. We have 24 square feet of retail per capita and that is significantly above any other Western economy. What that statistic fails to take into account though is, of that 7,600,000,000 roughly 7,600,000,000 square feet of retail, only about 1,200,000,000 of it is considered high quality. And so, there is a lot of low quality poorly located retail out there that skews those numbers. I think it goes without saying, obviously, if you own the highest quality retail real estate, you are in a very different supply demand situation than on the lower quality. GGP owns about 100,000,000 square feet of that 1,200,000,000 square feet or about 8% of it. And so as a result, our malls run at 96% occupancy. When we have tenants that go bankrupt or they move out because of a change in their business strategy or otherwise market conditions, we have a lineup of tenants looking to take their place in the malls. And so, as a result, we do think this is a very high quality portfolio of assets, a very unique situation for us to take advantage of. On a value basis, again, I probably don't even need to put this chart up. I think most of you would realize that retail has probably been hit harder than most other real estate sectors over the last couple of years. The July 2016 was about the peak in valuations and it's been under pressure since then. We don't know if we've picked the absolute bottom in the cycle, but we do feel better about where we are today on valuations relative to where we have been over a fairly long period of time. On enhancing value through operations, this is probably the most critical part of this investment and the one we are most excited about because it does bring so many of our businesses together. So, we do think we are uniquely positioned to take advantage of what's happening in retail right now including doing things like completing redevelopment initiatives where we are taking back low productivity boxes from department stores and repositioning them into higher uses, other uses. Putting additional densification on the sites whether that's hotel or multifamily or hotels, leveraging GGP's scale as one of the largest landlords in America to optimize our tenant mix and really driving that operational performance through value add capital initiatives at each of our malls. Importantly, and this is really where the combination of BPY and GGP come together is, by having these multiple asset classes and best in class operating teams in these various sectors, we think that the 1 plus 1 that we bring here is more than 2 because of the speed and because of the pace at which we can actually capitalize on some of these value add initiatives, which many other single asset class players are either unable to or perhaps don't see the opportunity. So, when we look at our malls or when we look at all malls really in America, they fit into one of these four boxes. And so, if you sort of start on the top right, in that situation, these are high productivity malls that are in low land value markets. This is a great mall and the approach here is to increase your retail offering and further expand the retail offering and continue to make it a best in class shopping center. On the top right, this is a high productivity mall in a market where land values are very high. And so what that means is in addition to expanding the retail offering, there is opportunities for us to introduce other asset classes at very high rates of return. The bottom right, redevelopment or actually shrinking retail square footage and bringing other uses on to what are generally well located sites in supply constrained markets. And so, the only types of assets you really want to avoid are the ones that are in the bottom left. And so, we think that's why we think when people say, geez, retail is in trouble and you should just avoid all shopping centers, it's really an oversimplification. There are certainly some shopping centers out there that you should avoid, but they are really those ones that are low productivity malls in low land value markets. GGP doesn't own any of those. So, maybe a way to understand this is, again, to walk through a couple of case studies on what we've done or some plans for some of the malls that we have. So, Baybrook Mall is located in a suburb just outside of Houston, Texas. It does about $7.50 per square foot in annual sales. It's an A mall and it's in a market where land is relatively abundant and available. So, the plan here really is to expand the retail offering and continue to make this a dominant retail center. So, what did we do? Well, we acquired an adjacent piece of land for about $30,000,000 and then invested another $160,000,000 in building out a lifestyle center that includes 100 and 25,000 square feet of inline retail, movie theater, 40,000 square foot Dave and Buster's as well as 80,000 square feet of restaurants. And then we also added 200,000 square feet of big box format retail including a Dick's Sporting Goods and a Container Store, etcetera. So, in total, we invested about $190,000,000 and the incremental net operating income on that investment yields us about a 7.5% yield on our cost unlevered, which creates about $100,000,000 of value in this asset on a $190,000,000 spend and importantly positions this asset for the future so that it remains the dominant center in its market. Ala Moana Shopping Center, many of you would be familiar with in Honolulu. It is possibly one of the highest valued malls on earth. It does about $1300 per square foot. It is a Class AAA Mall. And even in this situation, even in malls like this, we think there are opportunities to deploy capital to make them better and continue to improve them, because it is located in an area where land values are very high. And so, it's a combination of both expanding the retail offering as well as adding additional uses or asset classes on to the site. And so, 2012, we acquired an underperforming Sears box back from them. We redeveloped it into about 660,000 square feet of luxury in line retail. We then redeveloped in Phase 2, we redeveloped in Nordstrom's and built 220 residential condo apartments. And so, on the first phase of that, it was almost a 10% yield on our cost. The second phase, which is a little smaller, was 7. We then sold a 40% interest in this mall at a 3% cap rate. And so those transactions alone, the gain on just those redevelopments was over $1,000,000,000 on this one asset. We built 2 50 apartments. We think there is an opportunity to build another 1200 on excess land that's here plus continue to expand the retail. So, even in our best malls, we see some tremendous opportunities to put them to work. The strategy is different depending on where the assets are located on this grid though. A third example is Newpark Mall in California. Unlike the first two malls that I spoke about, this one was actually included in the Rouse portfolio, not in GGP. It does about $3.50 a square foot. So, it's half as productive as Baybrook Mall in Houston. And it was built in the 1970s. It was a tired asset, but it's located in suburban San Francisco, which is chronically undersupplied for housing. And so as a result, land values are very, very high in that market. So, we've said about and we are in the midst of this project now which is a 2 phase project. The first one, we are redeveloping a target box into food and beverage, entertainment and some other alternate uses really in anticipation of Phase 2. And the Phase 2 redevelopment is up to 1200 residential apartments will be built an underperforming Sears box site, J. C. Penney and a Burlington Coat Factory. And so we think in total, the yield on these investments will be between 7.5% and 8.5%. The value creation from these two projects will be about $500,000,000 which is more than double what the mall is worth today. And so, when you have these combinations of an underperforming mall and you can see the picture on the left which is not attractive, It doesn't mean that there aren't opportunities to make a lot of money on it and it really is important to remember where you are. So, the next question obviously is that's great. That's 3 malls. How big is this opportunity set though? Well, over the last 5 years, we've completed about $1,100,000,000 of these types of initiatives but on average yield about 8.8% and we currently have 14 projects underway. We will spend about $1,600,000,000 at about 8% yield. So, the opportunity is enormous and we think this can continue for decades as we reposition and rebuild this. And that's why it's probably the most exciting part about GGP is that we have 125 development sites all over America. Contrarian investing, as we mentioned, is another big part of our focus. I think there is probably no sector that's more contrarian right now than retail. So, before I get into why we believe in contrarian investing, let's test whether that's true or not. So, today, e commerce makes up about 8% of total retail sales in the United States. What do you think that the percentage will be 5 years from now? Okay. So it looks like it's coming out around 10% to 20%, which is probably a pretty good guess. If you look at markets like China or even the U. K, which I think adopted a little bit earlier on e commerce and have been moving faster, they are generally in the sort of mid teens and the growth of that seems to have leveled off. So, I'd say we'd probably agree with that, but it was a trick question, because it actually doesn't matter. We don't care. And I say that it's not that we don't care, but we don't care in the way that you think we care because I think 5 years from now, we won't be talking about percentage of online sales versus percentage in bricks and mortar or talking about retailers that are purely online or purely bricks and mortars, because the reality is what retailers are finding right now is, it's critical that they have an online strategy to act as their storefront, the front window for their shops to address customers, to attract them, to allow them to do research. But it's equally important for them to have a physical store presence that allows them to interact directly. It allows them to showcase their goods. And importantly, it's conveniently located to their customers. And so, 5 years from now, what you will find is that the retailers who are still around will be the ones who figured out how to integrate those two things, because the storefront really is the last mile of distribution that we so often talk about in some other sectors. And so, if you've got assets like we have with GGP that are located in densely populated areas that are convenient, that are on the way home from work, they will continue to be in demand. And if anything, keeping those assets relevant and allowing our retailers to tailor their online strategy to help with this is a big part of our focus. And then finally, on the scale point, Bruce and Brian talked about a lot of very large numbers. And in particular, what we've seen over the last decade or so is the ability to marshal very large amounts of capital for real estate transactions has gone from being a wide universe of players to a relatively small number. And fortunately, as being one of those, it allows us to move in very large scale. And so, even by our standards, GGP was a pretty big deal. It required about $15,000,000,000 of total capital, including $10,000,000,000 of equity, which we sourced from a combination of both issuing our shares, but also from our institutional investment clients, many of whom are private fund investors with Brookfield, as well as our banking relationships. And so, again, there were not many people in the world that could have put together a transaction or a capital stack of this sort of size. And so, as a result, it limits the amount of competition that we have on these kinds of that we have on these kinds of transactions. So, with that is an overview on GGP and a lot of my focus really has been on the left side of the balance sheet and our growth. I'm going to turn it over to Brian Davis, our CFO, to talk a little bit about our capital management strategy as well as how all of this translates into our earnings over the next 5 years. Thank you very much, Brian. I do want to spend the next 15 minutes talking about a number of things. The first off is going to be what we've achieved and what we are focused on. But in particular, I wanted to focus on 2 things, really as a result of healthy discussions that we've had with a number of our investors over the last number of months. The first is our LP investing strategy and what this means to our earnings and ultimately what this means to our liquidity. And the second is our leverage targets. What are our path to those targets and what is the timing associated with achieving those targets? As Brian mentioned, we're now in our 5th full year as a public company. That to us is a track record. We had a successful 2017 where we earned $1.44 per unit and we steadily increased our FFO on about a 9% annual compound growth rate. We expect to further increase our FFO in 2018 as well. The growth since 2014 has really been driven by 3 things. 1 is executing these accretive strategic acquisitions that Brian talked about. 2, has been increasing our core occupancy, particularly in our office business. But I'd say most importantly has been recycling capital out of lower cap rate, high quality office and retail assets and redeploying that capital into our LP investment strategy and our redevelopment strategy, which generate far higher returns. In addition, during that time, we've also been able to steadily increase our distributions at about a pace of 6% per year and we're now at $1.26 per unit in 2018. Although past performance is of course no guarantee for our ability to contribute to the future. We do have a long tenured management team. We do have a disciplined approach to allocating capital and operating our capital. And we do have a deliberate and diversified investment strategy. So this should give you confidence in our ability to deliver those earnings into the future. Also since our launch in 2014, we've established a new and growing earnings stream. These earnings are unique to BPY relative to our peers in the real estate markets. And it really results from our ability to allocate capital into Brookfield's private real estate funds. These funds look to double our original capital over their investment lifecycle and they are a defined investment period. With only about 30% of the profits from these types of investments coming from current earnings, the majority of the results come from a realization event that typically takes place when we sell the assets and generate a gain. It's these realization events that do not get included in the typical definition of FFO. In aggregate, since 2014, we've generated about $900,000,000 in these types of profits. And as these funds mature and the investment business plans mature, the pace and size of these realizations are just going to increase. In 2017, we did realize a gain of $400,000,000 on the sale of a logistics business, which Brian highlighted. Already in 2018, again, as Brian talked about, we sold a self storage portfolio and are in the market to sell our U. S. Logistics business. On average, based on fund performance and projections, we expect to generate about $500,000,000 annually in realized gains between now 2022. In addition to that, we expect to be able to grow our FFO at a rate of between 7% 9%. This earnings growth and these realized gains will support an increase in our distribution. We've set targets of being able to achieve a 5% to 8% distribution growth. And we'll also be able to maintain our payout ratio, which is a target of 80% of company FFO. And as I will summarize in a later slide, this should provide a very attractive return for you as a shareholder in BPY. Driving our growth over the next few years are the same components that have resulted in growth in 2016 and in 2017. First off, we expect to be able to achieve same store growth at a pace of about 3%, possibly up to 44% over that same period. We've been successful in doing that over the last decade in our core businesses. We've averaged about 3.5% over that time period. And with over $3,000,000,000 in core earnings, achieving this will be able to contribute between $400,000,000 $450,000,000 in incremental NOI. Part of this increase will come from increasing occupancy, as Brian talked about, in our office business. It will come from maintaining occupancy, the high level of occupancy that we have in our retail portfolio. But I think most importantly, it will become from us being able to achieve new rents at levels higher than expiring rents. 2nd, we do have an advancing development pipeline, which we illustrate in this chart. Over the last few years, we've completed 6 office towers in Perth, Brazil, Toronto and London. We've also completed 2 urban residential developments, 1 in Manhattan West and 1 in Brooklyn. As Brian mentioned, we're close to completing the expansion of a number of retail malls, including the Staten Island Mall. We're close to completing the construction of 100 Bishopsgate and 1 Manhattan West. We have another handful of urban multifamily developments that are also close to completion. And in addition to that, we have 4 condominium projects that are in various stages of completion. They're advancing on time, on budget and they have strong advanced sales. In aggregate, when all of those start to contribute to our earnings, we expect to earn close to $600,000,000 in incremental NOI by 2022. I'd say it's same store growth in this development pipeline, which are the 2 major drivers of our forecasted 7% to 9% FFO growth. But as always, we will supplement that by recycling capital from mature assets and reinvesting that capital into higher yielding opportunities, whether that be incremental LP investments or redevelopments. Those higher returns from our past recycling of capital activities have really largely come from our opportunistic investing strategy. For the most part, opportunistic to us means an LP investment in an opportunity fund, an opportunity fund that has been sponsored by Brookfield. And as I have mentioned, it's these finite life funds that return all of the capital that you invest and the profits you earn over a defined investment period, which typically lasts about 10 years. We take BSREP 1 as our example. We launched BSREP 1 in 2012. Its investment period ended in 2016. We're a 30% LP investor in that fund, which means we committed about $1,500,000,000 of capital as you can see from the light blue area chart. 55% of the capital raised was invested into familiar asset classes, office and logistics properties. 75% of it was invested in familiar markets, including North America, Europe and Australia. Its 18 separate investments are all unique, but on average, they have a 5 year investment hold period and expect to earn about 80% of their profits from a realization event that you can see from the orange bar chart. Currently, this fund is tracking at an incredible 21% net IRR. This is net IRR to the investor and a multiple of capital of over 2 times. And to date, we've already earned $800,000,000 in profits from this investment strategy. We are now entering into the realization phase. We still have over $1,000,000,000 of our original capital invested. And by 2021, we expect all of our capital to be returned to us and to generate another $1,100,000,000 of profit. So all told, this $1,500,000,000 investment made by BPY back in 2012 will generate profits of $1,900,000,000 In 2015, we then committed to be a 25 percent LP investor in BSREP II. BSREP II was the 2nd and larger in a series of Brookfield Real Estate Opportunity Funds. BESREP II is tracking at a 17% IRR and a 1.8 times multiple of capital. When combined with BESREP 1, you can see that we reached our peak investment of capital of almost $3,000,000,000 in 2018. Between now and 2024, this capital will be returned to us along with an incremental $3,100,000,000 of profits. So all told, a $4,000,000,000 investment in these two funds will generate profits in excess of $4,000,000,000 Now, of course, there's work to be done. There is execution risk and timing may vary, but this is what we do and we do have a long track record of achieving these types of strong returns. So what does this mean in terms of liquidity? Well, as you can see from this table, until the end of 2017, we allocated a lot of our available liquidity to BSREP I and BSREP II. Between 2018 2022, we now expect these funds to generate a significant amount of cash, in aggregate almost $6,000,000,000 Half of it will come from capital just being returned to us and the other half of it is going to come from profit. A portion of that capital, of course, will be allocated to fund our distributions. It's an important part of BPY's return. The balance though is available to delever our balance sheet, to reinvest into new funds, to reinvest into some retail redevelopment opportunities that Brian had highlighted, or simply to buy back our units if they continue to trade at a discount. So not only is this investment strategy now self funding, this is a concept we brought up a few years ago at Investor Day, but in fact, it will generate excess cash that will need to be reinvested in the upcoming years. I think this is best illustrated by looking out over the next 15 years. After all, we are long term investors. During that time, we intend to invest capital in each new real estate opportunity fund that's launched by Brookfield. We expect 5 new funds during that period. And assuming that we commit to a similar level of LP investment and assuming these funds hit their target net returns, we expect to be able to generate $9,000,000,000 in incremental profit, still have over $4,000,000,000 invested in this strategy by the end of 2,032, and most importantly, have generated $11,000,000,000 of total liquidity during this period. This strategy is really self funding and then some. So let's take these realized gains, I think, which we just illustrated represent a significant component of our profits and are sustainable. And if you add them to our company FFO, our annual earnings are almost $3,000,000,000 a year. Our payout ratio on that basis is at a low 60% range. As a result, we do retain a significant portion of our annual income to maintain our existing assets, to reinvest into new assets or to repay debt or buy back shares. Speaking of debt, it wouldn't be a financial update if I didn't focus at least a little bit on the right side of our balance sheet. As a management team, we spend a lot of time focusing on our capital structure. We also spend a lot of time talking to investors and taking them through our consolidated leverage metrics. However, it is important to note that we do not use a lot of consolidated leverage. Our corporate balance sheet, which has about $37,000,000,000 invested in our operating businesses and our LP investing strategy, only has about $3,000,000,000 of corporate level debt. As a result, our credit metrics at the corporate level are very, very strong. Of course, our businesses do fund themselves by putting investment grade debt on almost every asset they own, but they do that to achieve the best risk adjusted return on your equity. I think this is indicative of the quality of the assets and the liquidity of the markets that we operate in. With 50% to 60% loan to value on every asset, our leverage targets are really set using a bottom up approach, not a top down approach. If you think about it, in aggregate, we have over 600 separate recourse loans that are bound to each other by nothing. We have 250 individual lending relationships. We focus on local debt markets to match currency and to achieve best execution. We have a disciplined approach to covenants and this is all executed with a team of over 30 focused capital market resources. We feel even with credit metrics that may be elevated relative to other public real estate companies, our equity is not riskier. In fact, it's arguably less risky and offers the ability for better returns. With all that said though, we have communicated our overall leverage targets that we feel most comfortable operating our business at over the longer term. That is a proportionate debt to capital of 50% and a debt to EBITDA of less than 11 times. As we focus the last 5 years on repositioning BPY and have had to operate at elevated leverage levels, as Brian mentioned, while we executed these initiatives, we are now in a position to improve these metrics. In the short term, this will come from selling incremental malls and repaying the acquisition debt that we put in place to acquire GGP. It has already come from converting some of our capital securities into units of BPY and allocating any available capital that may come from our recycling of capital activities to reduce corporate debt. In the near term, this will come from adding over $500,000,000 of earnings from the completion of our development pipeline. If you think about it, at 11 times debt to EBITDA, that supports almost $6,000,000,000 of debt, most of which is on our balance sheet already today without any associated earnings. We're also going to convert the $1,800,000,000 of capital securities that we issued in 2014 when we acquired Canary Wharf into units of BPY. And allocating the liquidity that we generate from our LP investments over the next few years, we'll allocate a good portion of that to incremental deleveraging. So if you combine that with an increase in equity as a result of our increased earnings outlook during that period, that will put us in a great position to meet or beat our targets by 2022, if not sooner. Now lastly, before I hand the presentation over to Rick, we did want to emphasize the opportunity that exists today to invest in BPY. We are very excited about our ability to execute our core office and retail leasing plans to deliver brand new office, retail and multifamily properties and to earn these attractive returns in our LP investing strategy. These initiatives, which are all well advanced and within our reach, will help us generate a strong 15% compound annual return on your investment. But if we are successful in shrinking our discount, which we think we will be, now that we've completed the last of the major repositioning transactions and can focus on executing to achieve our earnings and leverage targets, we should be able to deliver an amazing 25% compound annual return on an asset basis some of the best real estate properties in the world. So with that, I'm going to turn the podium over to Rick to shift the discussion back to the left side of our balance sheet. In particular, Rick is going to give an update on the multifamily sector, which is a business that we are now focused on as the 3rd leg of our core investment strategy. Rick? Thank you, Brian. Good afternoon, everyone. As both Brian said, Brookfield's multifamily business continues to grow as does our ambitions in this sector as well, frankly, as the opportunities. So in light of all that, we thought it'd be useful just to take a couple of minutes to talk about what we like about this sector, a little bit about our portfolio and pipeline and also to tell you where we are headed. So, at this event last year, I touched on the worldwide trend towards urbanization. So, you may have heard me quote some of these figures then, but they are important and help underscore what it is that we like about apartments. So, for context, I think they are repeating so quickly. In 1950, 29% of the world's population or 725,000,000 people lived in cities. By 2014, that number grew to just under 4,000,000,000 and the UN is forecasting that by 2,050, those numbers will increase to about 70% of the world's population or 6,000,000,000 people. So, the worldwide population is growing and at the same time, it's rapidly re urbanizing. But also, while all that is happening, homeownership is on the decline and people are now becoming more likely to rent than they had been in the past. After surpassing 69% in 2,005, home ownership rates in the U. S. Are now down to 64%. And on the surface, that change may not seem like a lot, but just to put it in context, that's 10,000,000 new renter households were added in the U. S. During that period of time. More dramatically, among those ages 35 and below, the 2,005 homeownership peak of 43% had fallen to under 36% today. Poor credit, record high student debt, lack of savings for a down payment and frankly the ability to save for a down payment and desires for flexibility and mobility are all reasons why millennials are choosing to rent versus buy today. An additional reason is home purchase prices have increased meaningfully across the U. S. During the past 16 years, on average, homeownership prices have increased by 65% nationwide, but much higher in the markets where we're targeting our investments. In fact, over 100% in many of those markets. So, affordability continues to put downward pressure on homeownership rates as well. And helping to keep multifamily occupancy strong, in the U. S, the current average apartment occupancy rate nationwide is about 95% and projections are indicating a stabilized market for the foreseeable future. I think it's worth pointing out a statistic that occurred during the 2,008 and 2,009 financial crisis. Those events led to an apartment occupancy rate fall of 300 basis points to 92%, but the recovery was very quick as was the rent growth. Apartment occupancy rates rose back to pre recession levels by the Q3 of 2012. And if you contrast that to the major sector average occupancy rate, which took an additional 2 years to the end of 2014 to hit pre recession levels or to the office occupancy rate, which still as of today has not risen back to where it was at the 2,008 and 2,009 period. So meanwhile, on the supply side, which we constantly monitor, it's fair to say that the pace of new apartment construction in the U. S. Today is above the long term average. But despite this, demand continues to outpace this new supply. And in fact, over the last 7 years, the supply of new apartments has been completely absorbed and a housing shortage continues to prevail, particularly in coastal markets and small geography markets as well. Favorable demographics, steady job growth and the reasons that I mentioned previously are all why projection showed demand outpacing supply for the foreseeable future. So multifamily sector fundamentals have been, currently are and are projected to continue to be healthy for the foreseeable future. So with that as background, let me spend a few minutes on our portfolio and also on some of our plans. Brookfield is now one of the larger owners of residential apartments in the U. S. I think not everybody knows that. The BPY portfolio consists of interest in 120 properties, comprising 35,000 units with an equity investment of $1,900,000,000 and a gross valuation of $3,600,000,000 Today, more than 8% of Brookfield's property workforce or 1500 people are active in the development, management, acquisition, asset management of our multifamily properties. I should say most of the slides here are sort of concentrated on the U. S. Do have some apartments that we are building in London, but the bulk of our business is U. S. Focused. So therefore, the slides are U. S. Focused. And of our U. S. Apartment investments, they are located in 20 states. But I think it's important to point out that almost half of these are located in New York, California and Florida high growth markets. As I think all of you here would know, we believe a large part of Brookfield's historical investment success is attributable to our strategic investment and operating capabilities, which give us a full understanding of an asset's value, its opportunities and also its challenges. Accordingly, the buildup of Brookfield's multifamily portfolio and operating capabilities corresponded with the 2010 acquisition of Fairfield Residential. Since then, Brookfield Property Partners has participated in 3 Brookfield sponsored U. S. Multifamily value add funds as well as in the acquisition of a number of portfolios through Brookfield's opportunity funds. As Brian mentioned, we've experienced meaningful valuation increases in all of these investments, while we've also built up our in house development capabilities. And also, as previously been mentioned, we've recently opened 2 apartment properties, 1 in Manhattan and 1 in Brooklyn, with more on the way. This slide shows some of the major milestone events which occurred during our 8 year buildup in our multifamily sector portfolio. On the development front, last April, we opened the Eugene, which is an 844 Unit Apartment Building in Manhattan West, our large mixed use development on Manhattan's Far West Side. With more than 50,000 square feet of state of the art amenities, including a full fitness center, I'd say as good as any Equinox fitness center that you would see, a full court basketball court, rock climbing wall, golf simulator, co working rooms, lounges, a game room, roof deck, you name it, the building has it, but all these things we think has contributed to the building's success. Already in less than 16 months, the market rate units are 96% leased, well in advance of the 24 month lease up period that we pro form a'd. This month, we also opened 1 Blue Slip, the first of 4 apartment towers that we're building at Greenpoint Landing on the Brooklyn waterfront facing the Manhattan skyline. Our 2nd tower, 2 Blue Slip, with 4 21 units is underway and will open in 2020. To the north of Manhattan, just across the river in Mott Haven, we're actively planning a 7 tower, 1300 unit waterfront development and groundbreaking for the first three of those towers as planned for next year. In total, our Manhattan Greenpoint Mott Haven projects will deliver nearly 4,200 units over the next 4 to 5 years. Additional multifamily developments that we have in the planning phase include 1300 Apartments at our Haley Rise development in Reston, Virginia, which is a 24 Acre and mixed use complex, a 64 story, 781 Unit High Rise in Downtown Los Angeles with construction to start early next year, 2,900 units in London and considerable additional owned development opportunities within our portfolio, especially within general growth properties, which I'll touch on in a minute. Now one development advantage that we have versus others, which I think is really worth noting, is that our Greenpoint and Mott Haven and at least 30 of the potential developments within general growth properties are all located within the opportunity zone as established last year by the federal tax bill. And for those of you not familiar with that, the Treasury Department has certified more than 8,700 census tracts across the U. S. As economically distressed communities where new investments under certain conditions, some of the details still being worked out, can be eligible for very substantial preferential tax treatment. And just sort of paraphrasing some of the benefits, you would get a deferred gain of any rolled over investment into these new investments through 2026. And those deferrals are not only real estate deferrals, meaning not only deferrals of gains that you experienced in real estate investments, but they could be equity investments or outside of real estate. So, basically, embedded gains in equity stocks. You also would get a step up to fair market value in your basis for investments made and held for more than 10 years. So those gains would be would not be subject to tax as well. This plan is a very good deal for investors wanting to roll over and shelter gains, as I said, including non real estate gains, and no doubt is intended to spur development in these so called distressed areas. Based on calls that we've been receiving, honestly, weekly, we're very optimistic that we'll be able to attract efficient capital to help fund many of these new developments that we have in mind. And just maybe moving on to the technology, innovation and amenity front, a couple of minutes ago, I talked about the extensive amenities that we have put in place at the Eugene and Manhattan West. Increasingly, the kinds of features you see here on this list, many of which were considered bonuses not long ago, are becoming the standard practice or must haves for new constructions. They are expected by tenants. And we're spending a lot of time trying to understand what amenities and spark building technology we should invest in today to drive leasing, as well as to future proof our new buildings to the extent that's possible. A lot of the ones that we're pursuing are focused on health, wellness and frankly convenience for our tenants. Finding cost effective features that add convenience for our renters, we believe is essential to keep pace with the market. And let me just touch on a couple of examples that we have worked into our 1 Blue Slip building in Greenpoint Landing that just opened. First, we've incorporated the latch smart lock system that enables residents to open their apartment doors with a smartphone or door code versus a key. It allows residents to create temporary access codes for guests or service providers. So in the old days and most of us are probably giving a key to someone or to a service worker to come in or rushing out of work to meet a plumber or to arrange for delivery, etcetera. These smartphones, you're able to give your plumber an access code that can come in and fix the problem and then leave. So, you don't have to worry about somebody handing your key off to the wrong person or leaving work or whatever. So, clearly convenient. So, it's still early, but it's proven to be an enormously compelling convenience for prospective residents and we're exploring installing it in our future developments as well. At One Blue Slip, we're also implementing something called Hello Alfred, which offers residents a wide range of digital in home and concierge services. So imagine a working individual or working couple with very little time on their hands, this service will help them buy groceries, stock their refrigerators and cabinets, pick up flowers, pick up your dry cleaning, all those kind of things. And we're also working on a partnership with a rideshare company called Via. In the olden days, landlords would provide a shuttle bus service in many of their apartments to provide connectivity to transportation and other amenities. Instead of a shuttle that runs on a time schedule and often is late, you can actually use your phone, call up an app and get immediate access to a ride to take you to these places versus waiting for a bus. So, just a sort of recap, as I said, we've been active in the multifamily space for 8 years and are excited about the future prospects in this sector. The fundamentals are strong and by all measures are expected to stay so. Our initial entry into multifamily came through our participation in Brookfield sponsored value add and opportunity funds. And these investments, as Brian mentioned, have performed very well. We've invested nearly $1,000,000,000 of equity in these funds in the multifamily direction to date. With some realizations experienced already, we expect to achieve IRRs in the 20% plus range and on average multiples of capital above 2x as well. We've also been active developing on balance sheet new projects as part of our mixed use placemaking activities and we've pulled together a talented group from our apartment, homebuilding and commercial development groups to lead this charge. In total, between our currently completed projects, projects under development and identified future projects, we expect to assemble about 12,000 unit portfolio. Now this number is before factoring in the additional development opportunities within the general growth properties portfolio and the potential addition of the Forest City Apartment business should we be successful with that transaction. It's too early to say exactly how many units could be added from the GGP portfolio, but this number is expected to be substantial. The addition of Forest City, should we be successful with that transaction is quantifiable and would add an additional 18,500 units to our multifamily portfolio. So, you will see that this slide also highlights couple of condo projects that are underway, mainly in London. And I'd point out that we are really focused on building rental apartments, but occasionally do build condos to lower our land basis or to expedite the creation of a critical mass around our development, which helps the apartment part of the business as well. The average yield on cost for our rented apartment developments are targeted at around 6% or more with targeted development with developer returns in the mid teens. So that's the quick update on what we're up to in the multifamily business, and I will now hand the podium back over to Brian to take questions. Okay. Thanks, Rick. So, I think we do have a couple of minutes for questions. I recognize we are standing between you and lunch. So, if there are no questions, all three of us will be here at lunch and feel free to grab one of us or if you are too shy, we do have I think the ability to put the questions through on the iPad. So I can pull one from there. So, maybe start and see, are there any questions? Yes, Brian, Sheila McGrath from Evercore. REIT investors do have a bias against outside managed structure. I was just wondering why you could explain why this is the right structure for Brookfield and just comment on alignment of interests? Sure. So, I do think and I think that the 2 are obviously related. I think oftentimes when you say investors have problems with outside structures, it's because there is a misalignment of interest. It's obviously not the case here. Brookfield owns 52% of BPY. And so that misalignment that sometimes happens where you are making, I will say, undisciplined investment decisions in an effort to grow fees isn't really an issue here, because if we make bad investment decisions, we only have $15,000,000,000 of our capital, Brookfield's capital invested in BPY. Bad investment decisions are going to hit us a lot more than a couple of extra dollars in management fees. We think we've structured this exactly the same way that we have structured our private funds business. And if you heard here earlier, Bruce and Brian talked a lot about how those funds are set up and the incentive structures are aligned. This is exactly how some of the largest most sophisticated investors in the world invest with us on a private market basis. It gives you a lot of benefits in terms of full access to the whole business and that's why we think it's this is different than I think what a lot of people often point to when they say they don't like external structures. Okay. And one follow-up. Rick mentioned Forest City, if you are successful with that transactions. Two questions. Could you just explain why that isn't an opportunity fund because they do have a lot of multifamily if you're trying to expand that on balance sheet, why it's not on balance sheet? And second question is, it was revealed in the proxy filed on Friday that it was very split vote on the Board. I'm just wondering if Rick's hedging about if you're successful, if there's anything to read into that there? I'll answer them in reverse order. So, I think we would have said the exact same thing about any other public company process that was still subject to shareholder vote. You won't know until the day of. Obviously, we have got the support of the Board. We think it's a good price. We are optimistic that it will be successful. As far as where the investment goes and whether it goes into the opportunity fund or whether it goes on to the balance sheet, as you know, we are a very large in the fund and a substantial portion of this investment will also likely be done on a co investment basis. So, we will don't worry, you all get access to the investment that returns that are coming from this. But the way we look really at our investment in the opportunity funds, it's like built in partners. So, on some of these projects that are directly on our balance sheet, we have partners on a specific project or we will bring them in at some stage to sort of lower our capital commitment to it. The fund is exactly the same way. We effectively have a 75 percent built in partner, which is all of these other institutional investors. So, I'd say everything that we do, whether it's in the fund or it's directly on the balance sheet, benefits the balance sheet. Thanks. So one of the things you talked about was privatizing a lot of the public securities and going from this 2,080 structure to being now 100% all private investments either on balance sheet or within the funds. When you think about monetizations, where would listing potential portfolios or companies that are within the Brookfield enterprise, how does that rank relative to private sales given the history that you've had? And I'm just wondering how you think about that sort of public exit strategy? Yes. So, it's possible that in some of our fund investments, some of the businesses that we bought in there are very large scale. And it's possible that a public exit might end up being the right exit and you see many other, I'll say, real estate private equity managers who have utilized public markets from time to time as an exit. I'd say it's not the preferred way. Obviously, it takes a long time to actually affect the full exit if that's what your objective is and you are subject to markets along the way. But I wouldn't rule it out. It's possible. Okay. I will take one from the iPad then. Okay. So first question, how do you think about cap rate assumptions when you make forward return projections? And I will sort of answer this question, but I will maybe broaden it a little bit too and because we do often get questions about where we think cap rates are going and how that might be impacting some of our investment decisions today. So, I think, as Bruce said earlier, our view on interest rates is that they will remain lowish, which means they might possibly get a little higher than they are today. And along with that, one would expect that the cap rates, they won't move in lockstep, but they could likely move up. Now I would I'll preface this by saying in our investments and our underwriting for the last 5 years and probably longer than that, we have been assuming cap rates are going up and they haven't really moved yet. So, to say that we are making an assumption that cap rates are going up is nothing new. That being said, because a lot of our strategies are really built around this operational enhancements and growing the cash flows and investing capital and fundamentally changing them, Our investment returns and outcomes are a lot less sensitive to 25 basis points, 50 basis points, 75 basis point movements in cap rates than a simple buy and hold strategy or core investor might be. So if we are buying a hotel and we are going to increase the net operating income of it by a factor of 3, 50 basis points on the cap rate one way or the other doesn't really drive the decision making. And so, I think it's one of the reasons why we think having this operational capability is so important because if your only tool is guessing cap rate movements, that's not really a sustainable long term investment strategy. If you've got a business that's capable of taking assets, fundamentally transforming them, growing the underlying cash flow, those are always going to go up in value. And frankly, if interest rates and cap rates are moving up, we are going to benefit from higher rental growth as well. Unless there's any other questions, I was going to turn it over then to Suzanne to dismiss you for lunch. Everyone's dismissed. Okay. So we're serving lunch up outside on the 6th floor and it's about just before 12:30 now. I think we'll come back at 1:15 and we'll start with infrastructure. And in the afternoon, we won't have an official break in between, but there should be a period of a few minutes And then we'll wrap up at 5:15. Sorry? Yes. Please find your seats. Ladies and gentlemen, the second half of Brookfield Investor Day is about to begin. Please take your seats. All right. Good afternoon, everyone, and thank you for joining us for the second half of Brookfield's Investor Day. And my colleagues and I will be speaking about Brookfield Infrastructure Partners. My name is Sam Pollock and the agenda today is going to be as follows. I'm going to provide a very quick recap of 2,008. My colleague, Hillary Higgins, will come up and do a bit of a spotlight on our midstream business. Here, we'll discuss our capital allocation model. And then I'll come back up and talk about our capital recycling initiatives and how we think about it. The format will be very similar to this morning. We'll take questions at the end of our presentation and there'll be a few interactive polling questions throughout our presentation. So, now I'll begin. So you recall that last year, we celebrated BIP's 10 year birthday And I'm glad to say that we finished 2017 with our best results ever. In 2018, we're off to our 2nd decade with a fantastic start and we've got a number of notable accomplishments so far this year. 1st and foremost has been the sale of our Chilean transmission business, Transalec, for $1,300,000,000 In addition to that, we've also invested in 6 new businesses where we'll invest up to $1,800,000,000 redeploying those proceeds. We've also continued to invest heavily into our existing portfolio of assets. We've invested $350,000,000 into various organic capital projects, including our Brazilian transmission development projects, our expansion and reversal projects in our U. S. Gas transmission business as well as new connections and new smart meters in BUK, our UK regulated distribution business. All that investment back in our business along with the inflation indexation and just GDP growth has resulted in same store growth across our business of about 9%. The great results that we had last year also allowed us to increase our distributions in 2018 by 8% and that's continued our great track record over the past 10 years where we've grown dividends on average by about 11%. And then from a unitholder perspective, this is all translated into very solid results over the long term. Our 10 year average return on the U. S. Stock market has been about 19% compounded. In 2018, there has been a little bit of a drop off. I think if you look at that in the context of what happened in 2016, 2017, where our unit price increased by about 80%, you can see that there was the potential for a bit of a pullback. But our view is that the stock will continue to grow well as we continue to increase dividends over time. So while we've accomplished many operating priorities, the main story for BIP in 2018 has been the asset rotation. As I mentioned earlier, the sale of our transmission business, which happened back in March, was a tremendous outcome and a great example of our full cycle investment strategy. In 2006, we led a consortium to buy the Chilean business for about $1,300,000,000 which was for 100% of the business and we retained 28% of it. At the time, Chile was regarded as an emerging market economy and foreign capital was quite scarce. We took a contrarian view and felt that with the strong rule of law in the country and its respect for capital, that would be a great place to invest for the future. We also executed a very strong business plan where we grew our rate base by about $2,000,000,000 increasing the number of kilometers of transmission lines in the country from about 8,000 to over 10,000. And the business just prospered substantially during that period of time. In 2017, we decided to exit the business and the main reasons was that it had matured substantially. And in addition to that, both the utilities and investments in Chile were highly sought after. And so we thought we could achieve a very exceptional price. And that was exactly the case. So we held the business for about 12 years. We generated $1,300,000,000 for our 28% interest and the compounded returns were 16% over that 12 year period, which were quite remarkable. So that leads me to our first polling question. So I'll ask you to go to Ipads now. Which of BIP's operating segments do you believe will experience the greatest growth in the next 5 years? Is it their utilities business, transport business, energy or data infrastructure? Okay. So it looks like it's overwhelmingly data And that probably follows on our discussion last year at this time when I spoke about data being the fastest growing commodity. So that doesn't surprise me that most of you feel that way. I would probably say that over the next 5 years, it's going to be an even battle between our energy teams and our telecom teams as to where we deploy the most capital. But I think over 10 years, I think more likely it will be data. So that brings me to how we've redeployed the capital. And when we sold TransAlact, we had a high degree of confidence in our ability to redeploy the capital and do it in a fairly timely manner. But we've probably exceeded our expectations. We have now secured or just about to secure 6 investments that will allow us to invest $1,800,000,000 and it's in the utility sector, the data sector and the energy sector. Now I'll touch on each of these briefly. So the first one I want to talk about was a marquee transaction that we did in Colombia. We acquired Gas Naturals, local regulated gas distribution company. It serves about 2,900,000 customers. And it's a business we really like because it has stable cash flows that are regulated and indexed to inflation. The business has significant barriers to entry. And it's in a country and a regulated framework that we know very well having invested there in the past. And in addition to that, we thought we bought it for great value at about 8 times EBITDA. The second one I wanted to touch on was data centers. And you may recall that last year, there was a little debate we had in the Investor Day about whether data centers were real estate, private equity or infrastructure. And this year, we firmly stayed the case that it's infrastructure. So going forward, you'll see hopefully a lot more data centers spoken about as part of the infrastructure platform. Joking aside, we are very excited about the transaction. We established a presence in the data center business through the acquisition of AT and T's large scale data center business, which we bought for about $1,100,000,000 Now, we also feel that we bought that business for good value of approximately 10 times EBITDA. And we believe we're able to do that because revenue. There's 31 well located data centers with 85% of revenues coming out of the United States and it's got a high quality customer base consisting of Fortune 500 customers and many government entities. Now, you also may have seen that as of this past Monday, there was an announcement made that we are expanding our presence in the data center business into South America. We have entered into a JV with Digital Realty to acquire a leading hyperscale data center company called Ascenty. We like this business because it gives us access to markets in South America that are at the early stages of cloud computing and thus we expect tremendous growth in the business. We're also excited because we're buying a South American business where the cash flows are predominantly in U. S. Dollars. So we don't have any foreign exchange issues at all. So now I'm going to touch on our energy investments and this is where we made our biggest investments in 2018. And you may recall that we had a thesis that we would see lots of energy opportunities because of the dislocation that happened in that sector over the last couple of years and the fact that many companies have been forced to sell assets. And this has borne out and we're still seeing it in many situations today. The first one that we've been successful on was the acquisition of a large scale Canadian midstream business that we bought from Enbridge. We like this business, not only because of its scale, but because it's well located in a very prolific gas basin called the Montney in Canada. Hilary is going to talk about that a little bit further. The other very unique aspect to it is the fact that it comes with a very strong contracted profile. The weighted average life of the contracts are about 10 years. And this is something for a gathering and processing system you rarely see, especially in the United States. So it's a very unique business, very stable, and we're very excited by it. Now, our next investment was to take private of a residential energy company called Enercare. And I'm going to spend a few minutes talking about this acquisition because many here may not be as familiar with the type of business. The first thing I'll say is that Enercare itself is a company that got spun out of a gas utility in Ontario called Consumers Gas probably about 20 years ago. So it actually was part of utility. It was the unregulated portion of it. We became exposed to it when its biggest competitor was sold about 2 to 3 years ago to a Hong Kong infrastructure company. And we looked at it and we're very intrigued by it. And so as a result of that, we've been following Enercare for quite some time. When an opportunity arose to buy it, we jumped at it. The business itself has really 3 components to it. It has the Canadian 50 year old business that's up top there Enercare. It's a series of annuities related to water heaters. Service experts is really the business they bought to expand in the United States, which is where we see lots of growth opportunities. And then Enercare Connections is the sub metering business in high rise buildings. Now, we like this business for a couple of reasons. The first one is we believe we can replicate the business model and expand it further in our other distribution companies, namely the ones in Colombia. In addition to that, as I mentioned earlier, it does have very attractive annuity like cash flows. And it's actually very similar in the way it runs to our U. K. Regulated business. When you think of our U. K. Regulated business, that also is a series of annuities. The main difference is that those annuities relate to last mile connections or basically infrastructure underneath the front lawn, whereas in this case, this relates to assets and infrastructure inside the home. But it's the same customer base, it's generally growth related to new home development and relationships with homebuilders is very important. So we felt it was very similar to a business that has performed extremely well for us. The other thing we like about it is the fact that we see many opportunities to leverage other Brookfield companies to drive this business. We have many homebuilders in the real estate group that we can leverage. We've got utilities in Texas and PJM that we can leverage their customer base. And then we have a very large multi residential business that you heard about this morning. And then the last acquisition, which is really in advanced discussion. So this one, I think many of you might have seen it in the papers, but it hasn't quite been signed yet, which is an opportunity to acquire a 1500 kilometer gas pipeline in India. We're excited about it because it comes with a 20 year take or pay contract. So obviously, very stable secured cash flows. As a result, it's a low risk way to enter the Indian energy market. And our plans really are to use this as a platform to grow in that region and take advantage of the dynamic nature of the energy markets there. So with that, I'm going to turn it over to Hillary. And I'll just maybe just give a quick introduction of Hillary, because many of you may not have met her in the past. She's been with us for about 9 years and her history is working in our energy and transportation teams on new investments. She just recently joined the corporate group and that's why she's here today. So, Hilary, I'll now turn it over to you. Thanks, Sam, and good afternoon, everyone. As Sam mentioned, my name is Hillary and I'm pleased to share with you the spotlight on our Brookfield Midstream business, which is a business that has transformed over the last 3 years. Since 2015, we have grown our energy business into a global platform of high quality irreplaceable assets. And today, I'll share with you the story of how we created our current portfolio and then also expound on opportunities where we see to further deploy capital in the energy space. Looking first at our business today, over the last 3 years, we have quadrupled the cash flow generated from our midstream business. And when I speak about the midstream assets, we talk about those assets that help a commodity get from a supply to a demand basin. And really at Brookfield, that encompasses processing, gathering, storage and long haul pipelines. In 2015, we owned 1 midstream business in the U. S. And today we have a portfolio of assets in 4 different countries with 600 Bcf of gas storage and almost 20,000 kilometers of pipeline. To give you a sense of size and scale, this is enough natural gas in our storage basins to power the state of New York for 6 months. And if I was to lay our pipelines end to end to end, that would equate to the driving distance east to west of the continental U. S. 6 times. We've also enhanced the cash flow nature of this business. In 2015, our contracts were average duration of 3 years. Today, they're an average of 15 years. And also 80% of our customer base is rated investment grade. Now, we've built this business based on capitalizing on our contrarian views and also our independent thinking. When we see short term dislocations or market volatility, we really see these as opportunities to acquire great assets for value. And this is how this portfolio has come to life. Starting in 2,009, we acquired our first gas transmission business in the U. S. This was part of a a fundamentally oversupplied position placing downward pressure on natural gas. We chose to take a position and we increased our ownership in our U. S. Transmission pipeline and we also acquired a number of natural gas assets. Now we used 2015 as the marker in the sand for when we look at a comparison of where we are today from then because that's when we took our co controlling position in that U. S. Gas transmission asset. At this time of the asset, we recapitalized and refinanced the debt. We then repositioned the asset to be part of the U. S. Solution of drawing natural gas down to the Gulf Coast for exports. So in addition to our gas transmission asset drawing natural gas up to the Chicago area, it also draws gas down to the Gulf Coast for LNG export and for export to Mexico. Since we've reworked this asset, we've increased cash flows by 20% and we've increased our debt rating during our bond issuance by an unprecedented 9 notches rather and we're now investment grade. And with all the growth projects we have on the go and we anticipate in the next couple of years, we have a pathway to grow EBITDA to $500,000,000 which is a 50% increase from 2015. Happening at the same time, Brazil was experiencing a crisis of confidence and investors were wary of deploying capital into a country that had lost its unprecedented amount of assets came to market, high quality assets that wouldn't normally trade under normal market conditions. As was well chronicled in 2016, we acquired our Brazil Gas Transmission asset. This is a backbone network that draws natural gas into the high demand area of Rio de Janeiro and Sao Paulo. It's also one of the most industrialized and populated areas in the country. It represents 55% of the natural gas demand as well as 50% of the GDP in Brazil. More recently, we've been looking at a number of gathering and processing assets in North America. We focused on the U. S. As Canada was held very tightly by a number of midstream companies. However, the market sentiment in the Canadian Energy business changed and we were able to acquire a gathering and processing asset that was non core to a large energy company. This represented a rare opportunity to acquire a business of size and scale in a basin we know well with plenty of growth opportunities. And lastly, that brings me to India. India is a country we've been in for the better part of the last decade. We've been patiently sitting, waiting, growing our team and looking for the right opportunity to deploy capital. As Sam mentioned, that time has come and we're in advanced discussions to acquire long haul transmission pipeline in the country and I'll speak more to that in a couple of slides. Coming together, all these assets have created a broadly diversified portfolio of assets in North America, Brazil and in India, and each play a critical role in connecting a prolific supply basin with a demand area. Each of these assets also deliver a highly contracted profile that's not exposed to commodity risk. Each of these assets also play a key role in gathering, processing, storing and delivering one of the most essential commodities to our everyday lives. Natural gas plays a key role in powering our homes and our businesses and it's the critical energy component for manufacturing and industrial clients. Essentially, natural gas is part of our everyday lives and we require the infrastructure to deliver it when and where we need it to live, work and play. So I'd like to touch on 2 of our more recent transactions, the first being our Canadian gathering and processing assets. This represents that critical link between a supply and a demand basin. Here, our gathering lines overlay the prolific Montney Basin. In the presentation on the slide, there are the red lines that overlay the basin itself. These collect the natural gas and draw it into one of our 19 processing plants. By virtue of the location and the economics of this basin, our customers seek out long term contracts to ensure their natural gas is getting to the end market. This is atypical from what we normally see in our gathering and processing assets in North America and Sam alluded to it. It's normally under an acreage dedication framework, meaning that in the area where your pipelines exist, if natural gas is produced, it's going to go into your pipe. Conversely, if no commodities are produced, your pipeline is empty and there's no revenues earned. We're not seeing that with this asset. And evidence of that is in 20 18, 85% of our revenues are backed by long term contracts with an operating cost pass through. Now, when we due diligence this asset earlier in the year, we did an extra layer of analysis. Using our in house production forecast and it gave us knowledge of 2 things. 1st, this is an untapped basin with tremendous potential. And second, we have a basin that will produce natural gas for us for over 40 years. Moving to India, we're in advanced discussions to acquire a long haul gas pipeline. You can see it on the slide in the south and west part of the country as the black line there. And this represents one of the largest infrastructure investments in the country to date. It's also the first time a pipeline has transacted in the country. We were able to bilaterally negotiate this deal with one of the most successful families in India and we look forward to building a trusted partnership with this family as they'll become our main customer. India is a gas it requires a tremendous amount of gas and there's only 2 ways that India can bring in this gas. The first is from LNG import, which is your more expensive option. The second is from the KG Basin. The KG Basin is on the offshore East Coast of India and it represents 50% of India's in place gas reserves. This pipeline collects the gas from that East Coast Basin and draws it across the country to the West Coast for petrochemical, residential and commercial use. This asset represents our entry into Brookfield's entry into India's growing natural gas market and we look forward to keeping you up to date as we look to close this asset in the coming months. We particularly like the midstream sector and it really comes down to 3 key reasons. The first is the core infrastructure nature of these assets. Based on topography, the cost to build or the time to build, often these assets are the only connections between supply and demand. Secondly, most of these assets have a strong contracted profile, but there's significant opportunities above and beyond that baseline cash flow. When we acquired our gathering and processing assets in Canada earlier in the year, only a couple of weeks later, significant developments of LNG off the coast of British Columbia were also announced. Based on the location of the Montney Basin, this area will supply natural gas to LNG export facilities in British Columbia and our gathering and processing assets will be part of that solution to deliver natural gas to Tidewater. And then lastly, we've been investing in natural gas for almost 40 years. It's in our DNA at Brookfield to invest in natural gas and through our sister companies, we own exploration and production assets and ancillary service businesses. It's through this varied interest throughout the energy value chain that we're able to get market intelligence that allows us to identify discrete opportunities. Put all together, that's really our Brookfield advantage. All right, so now you can get out your iPads and I have another question in this set. Which North American energy basin do you think provides the most attractive opportunity in the next 5 years? We have 5 choices, the Permian, Marcellus, Gulf Coast, Montney and the Canadian Oil Sands. So we have a race here between the Permian and the Montney. Oh, it's very close. That's actually kind of exciting. Well, the Permian has seen unprecedented growth in the last several years and exceptional growth is going forward. And in the Montney, we probably agree with you as we've made one of our recent acquisitions in that area as well. So you can go back to the slide deck, please. Now really, if you've chosen any of the natural gas basins in North America in our polling question, you could very well have been right, so well done. The market is unparalleled and we're seeing a massive transformation that's happened in the last 10 years. Due to fracking and drilling technologies, supply is at an all time high. North America is awash with abundant inexpensive natural gas. Demand is also at an all time high and this is not just from the continental U. S. And Canada, it's also from LNG exports and exports to Mexico. And as we see the U. S. Evolve from a natural gas importer to a natural gas exporter, as we continue to see supply and demand increase, a significant amount of infrastructure is going to be required to help this commodity get to where it needs to go. So the real question is how big is this universe and we think it's large. We believe $150,000,000,000 is going to be required to build out the necessary infrastructure in the U. S. And we see this happening in 2 different buckets. The first is for CapEx, CapEx to build out new pipelines, twin zones that already exist to increase storage and processing capacity. And the second is for MLPs who are looking to structurally simplify. There's been a dislocation in the MLP market in the last number of years and some of these companies don't have access to capital. We believe this is an opportunity for private capital to help with those infrastructure needs. And while I spent a lot of time focusing on North America, as a global owner and operator, we're able to look at other areas in the globe and we see opportunities. At this time last year at Investor Day, we spoke about the tremendous need for infrastructure in India and with robust demand for natural gas and with the country looking to privatize some assets, we should see opportunities surface. In Mexico, the infrastructure is inadequate for both supply and demand And with the country open to private capital, we should see opportunities here as well. And then lastly, in Australia, as the LNG export market matures, import infrastructure is going to be required. We're also seeing tolling agreements coming forth on some of these LNG infrastructure plays and that will allow current owners of these assets to eventually monetize. So where do we go from here? We'll look to use our same playbook to acquire great assets, whether in North America or other areas around the globe. We're very focused on a number of large scale entities that have embedded infrastructure within their portfolio. We see this infrastructure as being able to be extracted and the incumbent can use that capital for debt repayment or for other areas of their business. Also as the U. S. Transitions to a net exporter, sufficient capital will be required for those infrastructure needs to help extract and transport and process the commodities that are needed in the country. And we see a transaction occurring as a corporate carve out, a partnership opportunity, or some sort of a privatization. And we are in a number of discussions with large energy companies and we're optimistic about the discussions we're having. At Brookfield, we feel we're well placed to transact based on our solid balance sheet, our operational track record and our ability to act as a single counterparty for a large scale transaction. So with that, I'll conclude that we've built a great energy business and we see further opportunities to deploy capital in this space. It's a great sector to be in. It's underpinned by great baseline cash flows and also plenty of upside opportunities. So with that, I'll welcome Bahir to the stage. Great. Well, thanks, Hillary, and good afternoon, everyone. So I'm here today to go through our thought process with respect to capital allocation. But before I do that, and as I typically do in this event, I just wanted to go through a bit of a report card on how we've done over the past year, just from a financial performance perspective. So first, just in our results, our year to date performance has been solid thus far. Our current run rate FFO per unit is $3 per share, which is 4% lower than the prior year. Fundamentally, our businesses continue to perform very well. We've delivered robust organic growth of over 8% on a constant currency basis. However, these good results were more than offset primarily the result of foreign exchange, the fact that we had lower hedge rates relating to our Australian dollar and pound sterling contracts compared to the prior year impacted our results quite a bit in addition to a weakening Brazilian real. Sam alluded to the Transalect sale earlier in his remarks. And while a fantastic accomplishment for our business, the loss of income associated with that sale and just the timing and the time it required to redeploy those significant proceeds into newer investments has acted as a bit of a drag to our current results. But as far as our outlook goes, we're forecasting strong growth in our results from a run rate perspective compared to our current levels that I outlined in the previous slide. We see our FFO per unit increasing to $3.60 on a run rate basis, which represents a 20% increase from our current levels. The key drivers of that being, 1st, the contribution from the newly acquired businesses or at least the ones that we've secured that Sam touched on earlier in his remarks. These investments all have a staggered closing dates associated with them. And so what this run rate incorporates is having all these businesses being fully online and contributing to our results, which we to happen in the back end of 2019. We also expect our existing business to perform very well. We're going to have some pluses and minuses across the portfolio, but still expect to deliver anywhere between our target range of 6% to 9% organic growth for the business holistically. And finally, with respect to foreign exchange, our hedge rates next year are on average about 5% higher than 2018 levels, which should benefit our results quite a bit. And so on our financial metrics, last year, I spent quite a bit of time discussing 2 pretty important ones. First being the margins that we earn on our businesses and the second, the return on invested capital or ROIC that we earn. In 2018, both of these metrics remained strong. First, we grew our EBITDA by 11% to almost $2,000,000,000 and maintained a very healthy margin of 55% across the business. And as far as our return on invested capital goes, we achieved an ROIC of 14% for the 1st 6 months of the year, which is very strong and up compared to the prior year. As far as our financial position goes, our balance sheet is in really great shape. 3 key highlights really support this assessment. First, we continue to have ample liquidity in the system with €3,500,000,000 of that sitting at the corporate level that's ready to be put to work. 2nd, less than 5% of our debt is due in the next 2 years, and we currently don't have a single significant maturity in the next 5 years that we have to deal with. And lastly, we have fixed 90% of our debt outside of Brazil and insulates us from fears of rising rates in some of the developed markets that we operate in. And finally, with some of the secured deals that we touched on, we've significantly diversified our cash flow profile. Going forward, almost 25% of our FFO will come out of North America, which adds a really nice balance to our overall portfolio mix from a composition perspective. As we've communicated in the past, substantially all our FFO outside of South America and India has been hedged for at least 2 years. We recently made a decision to hedge near term cash flows coming out of Peru, Colombia and Chile, just as interest rate differentials between those currencies visavis the U. S. Dollar have narrowed down significantly over the years. I lay out here in this slide, just in order of priority or our various priorities that we have in the business in order of their importance. So for each dollar of FFO that we generate, we typically spend about 20% of that to satisfy maintenance CapEx obligations that we have. We then choose to reinvest another 15% to 20% of those cash flows in 100 of smaller, very low risk recurring projects that our business is able to predictably source year in, year out. And then finally, we typically distribute about 65% of each dollar that we generate to our unitholders each year. In order to explain to you how capital allocation infrastructure work, I think I just want to take a few minutes to go through why we use proportionate results when we're analyzing information internally and making those capital allocation decisions. We think proportionate results best reflect the underlying cash flows that we generate and most importantly, the cash flows that are attributable to BIP. Looking at proportionate results, 1st, allow you to eliminate earnings or cash flows that are attributable to others. So these would be consolidated entities that we don't wholly own. And it also incorporates earnings and cash flows associated with entities that we don't control and hence are not consolidated on our statements, but ones where we have very strong governance rights in our course and significant influence. For instance, we have 4 very large businesses that I lay out here in this slide. Common denominator between all of those and they comprise in total about 30% of our current FFO. Common denominator is the fact that we're either the largest investor in these businesses or we co control them. For instance, in the case of TDF or our French Telecom business, we're the largest investor in that business and we also control the operating committee that effectively runs the company day in, day out. And the 3 others would be all co controlled entities that we own through unconsolidated subsidiaries. If you didn't look at our results on a proportionate basis, you wouldn't be fully picking up the cash flows from these business that these businesses generate each year as they're one lined in our financial statements. And so what does this mean from a financial statement presentation perspective? Our consolidated numbers, as I mentioned before, pick up cash flows from equity accounted investments, being the ones I just outlined, on a one line basis. And they're effectively netted together in a single line within our operating cash flow section of our cash flow statement. And so if you're really trying to understand how it is that we invest or allocate capital, you couldn't get it by just looking at our cash flow statement. So the easiest way to explain this, I thought would be just to go through hopefully a simple illustrative example. So here's what I'm talking about. So first, you've got a business here where we own a 51% controlling interest in that we consolidate on our financial statements. If you look at our IFRS financials, you would pick up 100% of all the various activities that are going on in that business. And then you come down to that last line item, which is the distribution to non controlling interests or minority interests. And in one line, net out the portion of those cash flows above that are not attributable to us. To get down to a net cash flow number. Now let's go through the exact same business, say exact same cash flow profile there. But instead of owning 51 equity account for that business. And as a result of that, all the activities that are shown here are just netted in that one line item within operating cash flows for that $45 So that's not ideal. And I should have just mentioned, both are not ideal because in the first instance for the consolidated entity, if you want to just pick up what it is that BIP is actually doing on a line by line basis, you couldn't get that. And on the second example, So it's just very important to always recut the analysis and look at our cash flows on a proportionate basis. This is all material we provide every quarter in our financial statements and we ensure that it reconciles back to our audited financial statements. So now I'll speak to our historical track record of how we've been allocating our capital over the years. As a reminder, I show here on the slide the waterfall that I touched on, which I'll use to base my various remarks on going forward. So again, in order of importance with respect to our priorities when making capital allocation decisions at our firm, the first priority is to maintain our asset base appropriately, just given how important that is to our business. As you can see from the slide, over the past 5 years, on average, we've allocated 18% of our FFO in the business towards fulfilling those obligations. We feel very comfortable with our maintenance CapEx levels. Each year, we perform a robust review as part of our annual budgeting process for all the planned and proposed maintenance CapEx plans that we have. This review takes into account considerations around health and safety, environmental and regulatory compliance, system reliability and overall network integrity. We also engage with a reputable globally recognized engineering firm who then independently reviews our plans and opines on them. To add to this further, we then engage a big 4 accounting firm to review the findings of that engineer's report and to assess the controls on our disclosure of how we present all this in our financial statements. So, and our findings with respect to this work are included in our annual report should you wish to review it. 2nd priority in our waterfall relates to the capital that we invest into accretive growth projects. Given that our growth capital spend tends to be lumpy on a year in, year out basis, we break it down here into 2 buckets for you just to give you a little bit of clarity on our activities. We first show on the top table the recurring projects that I noted earlier in my remarks. On average, we're able to fund those recurring projects with cash that we generate and retain in the business each year. Over the past 5 years, as you can see in the slide, that's comprised of 15% of our total FFO generated in that period. And then we show at the bottom the large scale expansion projects that we undertake from time to time in our business, which I'll talk about in more detail. In aggregate, currently, we have about $2,000,000,000 capital backlog of projects that we're looking to or we expect to deliver on in the next 2 to 3 years. This backlog is typically funded on average by 50 using 50% debt that's done on a non recourse basis and sized investment grade metrics. With the 1st bucket being those recurring projects, this currently totals $800,000,000 These projects are very predictable in nature. As I mentioned before, our annual spend relating to those projects is generally 2% to 3% of our overall or our total asset base. Examples of that would be connections that we do each year in our UK regulated distribution business or certain network expansions that we do just to debottleneck our various systems to add capacity to them. And as far as the large scale expansions go today, those sum up to $1,200,000,000 of projects that we've committed to. These would include things such as the big electricity transmission build out that we're doing in Brazil, smart meter acquisitions, we're doing in the UK or the fiber to the home rollout in France that we've been successful in doing over the last 2 to 3 years. These larger scale expansions businesses to fund those projects. Some years they're going to be larger and some years they're going to be smaller in nature. So given the discussion earlier on proportionate versus consolidated cash flows, what I've done on this slide is recut our cash flows just as an example over the past 3 years, which is then used to pay for all the various priorities that I laid out. As you can see from the table, we generate a significant amount of operating cash flow in the business each year after we fulfill our maintenance CapEx obligations. And so for instance, in 2017, we generated over $1,000,000,000 of free cash flow that's then available to use to fund accretive growth projects should we wish to do so and also to fund our distributions to our unitholders. Now with respect to how we fund our new investment activities and large scale expansions that I referred to earlier, I've added some tables here that you can also find in our quarterly materials to show you how that all works. What the table showing is the various or all the capital that we've raised over the past 5 years, either through capital market issuances. So this would include equity, preferred shares and debt that we raise at the corporate level. In addition to proceeds from asset sales, which sums up in total to the $6,900,000,000 We then compare that to the amount of capital that we've deployed into M and A or new investments in addition to those larger scale expansions that I just spoke about. And as you can see over the past 5 years, we've raised almost $7,000,000,000 from that. We performed this analysis for the last 10 years as well in our materials and the overall story doesn't change by much from what I just laid out here. This slide deals with our distributions over the last 5 years. And as you can see, that summed up to 65% of our total FFO, which is consistent with our long term target of paying out 60% to 70% of our FFO in the form of our distribution. And just finally, just to summarize, we have a very sustainable funding model that's been that we've been consistently using over the past decade and that we expect to stay true to in the future. We generate a significant amount of operating cash flow after funding our maintenance CapEx obligations, which we then use to reinvest back into our business. And then finally, as far as new investment activities or larger scale expansions go, these are funded by capital that we raise either from asset sales and through capital raises. And so hopefully that was helpful insight into our capital allocation process at Brookfield Infrastructure. And I'll now turn it over to Sam. So now we're going to change gears a little bit and go to capital recycling and talk about our thoughts in relation to that topic. So we've spoken about our full cycle investment strategy in the past. And last year, the focus of my comments was really on circle number 1, which was where we saw opportunities in the next decade. Today, I'm going to speak about the final element of our investment strategy, which is capital recycling, which is in circle number 3 there. We felt the timing was appropriate given the fact that we had a large sale this year with TransElec and because we intend to increase the amount of capital recycling over the next couple of years. So first, let me begin with why capital recycling is important and why we feel it's important and it's really three things. First, we think it's a key value creation lever. 2, it's an alternative source of capital other than using equity or debt. And 3, we think it's very important to institute capital discipline in the business. I'm going to touch on each of these separately. So, to explain the value creation opportunity, we need to start with the typical lifecycle of the investments, which is illustrated by this curve here. We make an investment, we target a 12% to 15% IRR and to achieve that return, we typically have 3 elements to our strategy or business plan. The first is, we have a number of operational improvements that we feel we can implement to the business to drive value. 2nd, we usually have a view regarding additional ramp up in volumes and capacity utilization, often that relates to GDP and other factors. And then 3, we look for various capital projects that we can invest in the business that will either debottleneck, expand the network or satisfy some sort of customer initiative. And all these initiatives will drive same store growth, which in turn drives capital appreciation. However, once we get to the top of that curve, we no longer have a multitude of projects to drive same store growth and things flatten out a bit and they become what we described as bond like. And what we find is that many institutional investors don't have the operational expertise that we have in order to acquire businesses where you can drive that same store growth and they really look for more mature businesses that have those bond like attributes and they match into the liabilities. So, when you think about it, we focus on buying businesses where we can deploy operational activities and then we sell the mature ones. And maybe said another way, we sell mature income streams that we believe will earn 6% to 10% and we redeploy them into income streams that we believe will earn 12% to 15%. And so that's the value arbitrage that we're often looking for. So I thought I'd come back to TransAlac and the example there. So, we sold TransAlec, we generated proceeds of $1,300,000,000 and net of taxes that was about $1,100,000,000 We took that capital and redeployed it and with 3 of the acquisitions I spoke about, they're roughly the same dollar amount, they're about $1,300,000,000 That's Enercare, the Enbridge Midstream Business and AT and T. And the math is quite compelling. So when we sold Transilac at the price I mentioned, dollars 1,100,000,000 after tax proceeds, we have generated a 7% FFO yield for us. When we reinvest that into those three businesses, right out of the gate, we're increasing our FFO yield to 11%. Now, that's great. That's a 4% accretion and we're excited by that. But what's really good is the growth. So TransLink was a mature business and based off the underwriting that we had done when we sold it, we felt that at the price we sold it at, future growth was about 2% or 3% per annum. On the business that we just bought, we're highly confident that we can grow those businesses at 5% to 7% per annum. So, the same store growth is quite significant. And when you put the 2 together, it creates a lot of value in the future. So next benefit of asset recycling is its use as a corporate finance tool. So we often issue equity to fund growth. But as you know, markets aren't always open. And as a result, having asset recycling as an alternative is very important. But I think what's even more compelling is that in addition to that, when we issue stock, we are selling a piece of basically all our assets, whether they're high growth and lots of cap appreciation potential and some that are lower growth. When we use asset sales, this allows us to be more strategic and just focus on selling those bond like businesses at a very low discount rate. So I've in fact, some of you may recall this from 20 14 and not to be too cheesy, but I've recycled it. And if you look at the numbers here, the first line basically shows what happens with we generate essentially 5% unit growth per unit growth if we invest $1,500,000,000 of capital that we fund by raising equity to market in the markets at about today's share price. If however, we can raise $1,500,000,000 from selling assets and 8% IRR, we can improve our per unit growth by about 3% up to 8%. And if you think about that over a long period of time and how that compounds, this is another big driver of value. The last reason, and I mentioned earlier was capital discipline. And we believe that capital recycling is important as it brings capital discipline into the organization. And I think the main takeaway here is that we feel that you need to sell businesses when the time is right and when you maximize value and not when you need the cash. We find that whenever someone goes out and is desperate for cash and is selling assets with that mindset, they never optimize the amount of cash they can generate from the business. So don't sell it when you need it, sell it when's the right time. So this slide kind of summarizes our track record in selling assets. I'll come to the results in a second. But I think what's interesting here is it gives you a sense of the lifecycle of our businesses and how long we've held them. As you can see, we've had an average hold period of about 8 years across our businesses, some a little bit shorter, some a little bit longer. And what you can see is that all the assets we held at spin off have now been sold. The assets we bought in 2,008, the PPPs have all been sold. And then we did a big acquisition in 2,009 2010 with BBI and almost a third of those assets have now been sold. So you can see that we're actually executing the plan that I laid out for you. As far as the results, we've generated $3,300,000,000 of proceeds and the cumulative IRR for these businesses have been 25%. Not sure we can replicate that always going forward, but that's the target we're setting for ourselves. Okay. So then shifting gears a little bit. We get feedback from investors from time to time. And I'd say feedback concerns about our recycling strategy and most often they touch on 3 elements. The first one is our sale process is too uncertain to rely on for capital 2, will you be able to redeploy the capital in a timely manner And 3, has the risk profile of the business changed following sales? So we discussed concern number 1. And I would say that it is true that asset sales can be unpredictable. And the reason is you may not get the price you feel is the right price and often they do get delayed. And so, the most important thing here is that you can't just rely on asset sales, you have to have a multifaceted corporate finance plan. In our case, we have a $2,000,000,000 line of credit that we can tap into for liquidity. We have access to the preferred share market. We have access to MTNs and of course we have access to the equity markets. But also means that even if we have asset sales underway, it may mean that we could tap the debt markets or the equity markets optionistically just to make sure that we always have a lot of liquidity and don't get too reliant on asset sales. In relation to the second concern about redeployment of capital, this is one I'm highly confident that we can deal with. We have a great track record of securing attractive new investments. And if you look at what we've done since 2006, we've sourced $27,000,000,000 of opportunities and the vast majority of those have been in the last couple of years when it's been more challenging than say 2,009 and 2010 when you could buy a lot of stuff. Okay. And in response to the 3rd concern, I'm going to come back to that goofy curve I showed you earlier, which is the maturity profile curve. And I apologize if it's a little simplistic, but we wanted to illustrate the dynamic nature of our business. And the purpose of these two diagrams is really to convey that all our businesses are moving up the curve as time goes by. So even as we sell assets, we have other assets that are maturing and we're buying new businesses that are high growth and in earlier stages. So it is a circle and you have to think of it that way. And it's important because we don't feel that when we sell assets or execute our asset recycling strategy, that we're actually changing the risk profile because there's always new mature businesses that are being generated. And in addition to that, because we have such a highly diversified business, it's in fact very rare that in a single year that we're selling a business that would generate more than 5% of our FFO. So, the benefits of diversification really matter when it comes to that. So where do we go from here? We have set a target for ourselves of generating $500,000,000 to $1,000,000,000 in the next 6 to 12 months for capital recycling and we expect to generate over $5,000,000,000 over the next 3 to 5 years for master sales as well. Now, I'm looking around, I see a lot of familiar faces and I know there's a few investment bankers hoping I'm going to give you a list of the companies we're going to sell. But I'm not going to do that. But what I will say is we'll continue focusing on those businesses that are either mature, de risked or ones that we think will attract a tremendous value and one that's maybe worth more to someone else than it's worth to us. So that brings us to our last polling question. And it kind of ties into the last one, last comment. So which asset should BIP never sell? So our U. K. Regulated distribution business, our Australian regulated terminal, our Australian railroad, our U. S. Gas transmission business or do you feel that every asset has its price? Wow. So, I guess the jury has spoken. I think at Brookville, we would agree 100% with this. So every asset has its price. But what I would say is that if there was a business I would least likely want to sell, it's our UK regulated distribution business. And that is because there is no other business that we have probably had that every single year outperforms our expectations and it's a special company. So that one, it will take a lot to pry that one from my hands. But there is a price. Okay, so we're just about done. In conclusion, there are 4 takeaways. First one is, we are entering an exciting period of growth for the business as we close on the 6 new investments we spoke about. We have many further opportunities to invest, particularly in the data and energy sectors. Our business generates substantial free cash flow and we retain about 15% to 20% of it every year to reinvest back into our business. And that the last point is we will maintain a disciplined approach to capital recycling. And you should expect that over the next 3 to 5 years, we will generate about $5,000,000,000 of proceeds from those activities. So with that, I'd like to thank you for your patience and we'd be happy to entertain some questions. So, Andrew? Andrew Kuske, Credit Suisse. Sam, maybe a little bit tongue in cheek, but the $5,000,000,000 of targeted capital recycling, is that enough given the scaling of the private funds on the infrastructure side? Is it BIF4, say, hits a 20 number and then BIF5 winds up being bigger, is the $5,000,000,000 enough over 3 to 5 year timeframe? So, our view is that we're probably not looking to finance 100% of all our new growth through asset sales. I think the lion's share of it going forward will be through asset sales. But even if we're 25% of say a $5,000,000,000 fund, we're typically 65% of that $5,000,000,000 And so it's a little bit less. So even if there's several funds or 2 funds raised in that time period, the $5,000,000,000 will cover off a big chunk of it. So but I would say our view is we will still access the equity markets opportunistically and use both the capital markets and asset sales for growth. So then the major difference, if we look at the here slide where I think the numbers were 4,400,000,000 ish of capital market issuance, 2,200,000,000 of recycling, do you expect the numbers to effectively flip a little bit more reliance on capital recycling, less reliance on equity capital to drive to drive our business. And yes, what the percentage is, I can't tell you, but it will be more with the asset sales. That's right. Hi, Rob Catelli, CIBC Capital Markets. I have two questions. I just want to make sure I understand the message on LNG. Is it possible that Brookfield Infrastructure would make an investment in LNG export or import terminal? And in addition to your regular investment criteria, what would you have to see on the contracting side or on the development of the market, the maturity of the market before you'd have confidence in making that type of investment? Okay. Good question. And I think what you're alluding to is the fact that not all LNG facilities are comparable. A lot of them have exposure to upstream activities. I think if we were going to look at an LNG facility, maybe we'd be more interested into the Cheniere model, which is much more of a tolling business, where we are taking that upstream risk and really are offering a business much like we operate DBCT, which even though it's an export terminal for coal, doesn't really take a resource risk for that commodity. The second question has to do with gas over oil. So both your investment history in Brookfield Infrastructure as well as what I picked up from your comments seem to favor investments in natural gas as opposed to oil or other liquids. Is it conceivable that in the future you evolve the portfolio to include investments in oil based midstream assets? So the short answer is yes. We haven't by design excluded oil. I think we think there's merit in a number of liquid pipelines. I think our underwriting will be different. We probably have more confidence in the long term sustainability of natural gas because of its smaller carbon footprint. But I think taking into account the long term our long term views on oil demand and oil prices, those are probably factored in and we would definitely look at an oil pipeline. Thank you. Just hold on one second, we'll get you microphone. Since you brought up Australian Rail, I thought it was on the polling question, I thought it might be nice to ask a question there. Historically, it has been a terrific investment for Brookfield, which you've mentioned in past presentations. I certainly understand why that's the case. However, over the last few years, the top line has been pressured with issues with Carrara and then with Cliffs. So I have a couple of questions. One is, is Brookfield receiving any sort of subsidy or other cash inflows on that asset and from whom and how much would that be? Okay. So assurance, there is no subsidy from government or any other businesses for that. The business itself has been a very steady provider of cash flow for us. It's been a great investment for us. In the last year or 2, 1 or 2 of our customers have had their minds deplete. And there's been a bit of a lag in new developments, particularly iron ore as the price has been a bit lower. Having said that, Carrara, which was one of those customers we were concerned about, in fact, have done a great job turning around their operation. It now makes money and are looking to expand that mine and maybe double the size of it. That would be a huge driver for us for future cash flow if they go ahead and do that and we expect to hear more on that probably later this year or next year. And what's the sort of sustainable FFO on an annual basis at this point from for ARC? What's the FFO of the business? Yes, sort of on a sustainable basis with the current business as it is. It is I mean, I think all the cash flows today are for the most part steady for the next couple of years. I think the only one there is a customer that took over the Cliffs operation that mine life has about 4 to 6 years left. So that's a little bit less than the rest of the business. The rest of them are either agriculture products, freight, which are perpetual in nature, The box site operations, those are low cost effectively perpetual businesses as well. And the Carrara operation will go on for 20, 30 years or more. So it's really that one customer that might come off. Other than that, I'd say they're all sustainable. I don't have the number off the top of my head. But I meant sustainable FFO for It's pretty sustainable. Yes. Sorry, what was that? I meant the sustainable FFO number. So, is it 150, is it 200? 150. Thank you. Okay. So we might have time for one more question and then I'll have to turn it over to Sachin. Hi, Colin Dechon with Sterling Capital. Just two questions, Sam, both one on data and one on energy, given that those are both two segments that are going to be a big focus for growth in the medium term here. On data, just curious, you guys are new to the business, growing quickly, but professed value buyers. And I'm just curious if you can use Monday's case study as an example. I mean, it appears at a mid-fifteen times multiple on an assumed kind of stabilized basis. That's still a dilutive deal for a larger, better scaled player in Digital Realty. So new to the business, still has value buyers as unitholders, how can we gain comfort that the IRRs make sense. If you're showing a 25% assumption for BIP as a whole, you can indeed generate with a multiple like that. And then secondarily, I don't know if this is a better question for Hillary or Bahir, but on the energy side of things, also growing yet still subscale, but you're JV ing with a Kinder or carving out from an Enbridge assets from franchises who know lack of capital access firsthand. They both collapsed their PTP structures. And so as a growing, but still subscale PTP yourself, how can we be sure that it's going to be different for BIP versus some of the case studies we've seen elsewhere in public markets that capital markets will still be open for you all and the structure can survive? Thanks. Okay. So that was quite the questions for I had 1 minute. So I will I'll try to answer it as quickly as I can. But if I don't do it, we can always catch it later on. So the first question was on Ascenty, the data center business. And look, we underwrote that business and based off of the contracts in place, the development projects that do have contracts that support those developments, as well as some view on growth. Feel that in a U. S. Dollar return basis, we'll be right in that 12% to 15% range. So, we're confident about that. And we think there's lots of optionality upside above that. Now, the issue with some REIT investors is that there is a ramp up to the cash flows because there is a bit of a development thing. And so for some companies, they struggle with the dilution in those first 1 to 2 or 3 years. Now for us, this is a relatively modest investment. For BIP, it will be $150,000,000 to $200,000,000 on a $20,000,000,000 company. So it's actually relatively small. But when we think about from a total return perspective, those returns and the quality of that return is the great middle of the fairway. And it gives us a platform that we think we can grow across South America, which we haven't factored in. And we may look at opportunities to build a similar business in India. So that's why strategically makes sense, fits our returns, even if this one business does have a 2 or 3 year lag to when we get the results. The second question was on the sustainability of our business versus what Enbridge has done and Kinder. And I guess, I think the analogies are a little bit different because both those companies had companies beneath them. We don't have any sort of competing vehicles beneath FIP. But as it relates to the sustainability of us as a publicly traded partnership, I think it all comes down to whether or not we can continue to generate attractive dividend growth and find those opportunities to invest attractive returns that will contribute to that growth. And we feel highly confident that we can do it. I think our business is different. They're all wedged in one single industry and just focused on investing in a place where there's too much capital. They were all in North America Midstream and they ran out of good investment opportunities and probably they're both great companies, but they may have had to invest at returns less than what they would normally like to. We don't have that problem. We can invest around the world. We're a global business. We have many different sectors to invest in and we can invest at returns that meet our thresholds. So I think that's a big difference. So I will now turn it over to Sachin for Brett. Thank you, Sam. I'm going to go through our renewable power business at Brookfield. I'll give you a quick overview of the business, what some of the trends from a macro perspective are in Renewable Power. And then I'm going to hand it over to our Global Chief Operating Officer, Ruth Kent, who is here today. And Ruth will walk through how we create value through operational focus, which is an area that we talk about a lot. But feedback we've received over a number of years is if could we provide more tangible examples of that. So we're hoping to today provide you with an in-depth analysis of what we focus on when we make an acquisition and how we envision our expertise driving value through the various acquisitions we make. Wyatt Hartley, who is our Chief Financial Officer, will talk about our balance sheet, our liquidity and our funding position. And then I'll come back a little bit and talk about just growth in the business and what we plan to be focused on over the next 5 years. Very quickly from an overview perspective, what we have today at Brookfield from a Renewable Power perspective is a global business with over $40,000,000,000 of assets that we manage. We are a multi technology business. We have bulk scale in hydro, wind, solar, storage and distributed generation. We cover off almost all of the main categories of renewables around the world that have really only emerged in the last decade. We are globally diversified and that transition has really occurred in the last 5 to 7 years where we've gone from largely in America's business into one that's globally diversified in all of the major markets around the world. And for many of you, you would recall that this was one of the first businesses that we floated out of Brookfield back in 1999. And if you were a shareholder then and you held the stock to today, you would have generated a 15% compounded annual return. So we feel we have a strong track record and that we're continuing to focus on delivering within our 12% to 15% compounded return targets on a per share basis. As you would all know, the power sector in particular, but I'd say over time, other sectors will get entrenched into this in particular transportation and other industrial businesses are going through a significant restructuring where traditional thermal fuel sources, which we're powering, either our electricity or our transportation fleet are all getting slowly replaced by electricity and really carbon free electricity. And this transformation will take many, many decades. And we feel that we're still in the very early stage of this. So what we've really set out to do is build a business that can capture that leverage of that global growth and be able to acquire great businesses and great assets all around the world at our target returns. This transformation, as you would know, has been led by climate change, obviously, and the desire for communities and populations around the world and really then governments to put policies in place that will help decarbonize the planet. That can come in the form of subsidies. It's come in the form of government policy, local level targets and policies, and all of that's really providing a supportive backdrop to the investment environment. More importantly, in the last 10 years, what we've seen in the developed markets in the United States and in Europe is a very low cost of capital and very low bond rates, especially on the long bond has meant that investors who are searching for a little bit more yield than a 10 year treasury would give you or effectively 0 in Europe, have plowed into this asset class in particular in light of the government subsidies and the support that stands behind this asset class because they view it as a proxy to bond yields and a way to generate excess returns. And that's driven returns very low in this sector. And one of the things we want to articulate to you today is how we position ourselves in that environment. Just to put some of the growth in perspective, in the last 5 years, dollars 1,500,000,000,000 has been invested in renewables around the world. Much of that has been led by wind and solar, but hydro has played a really important part in that as well. And that 1.5 trillion has led to over 1,000,000 megawatts of new renewable power installed in grids around the world. To put that in perspective, a 1000000 megawatts of renewables around the world is equivalent to replacing the entire U. S. Electrical grid simply with wind, solar and hydro. So it's a staggering amount of investment that's gone on in this sector. It's been spread out throughout the world. And this doesn't factor in the 1,500,000,000,000 or the 1,000,000,000 doesn't factor in any need in the future to replace existing thermal generation and potentially electrification of transportation. And as I said earlier, returns in our sector have been very low. Generally, if you look at Europe and North America, they've been the lowest in that sort of mid single digit range. Asia slightly higher, LATAM slightly higher still. And what we found is the development premium has also shrunk significantly. And as a result, what we've seen is many organizations in particular in our sector are using financial structures or other types of financial engineering to drive the return they want to achieve over the long term. We saw with the Yieldco space, we see it with the drop down developer model. And what we're hoping to demonstrate to you today is that we actually take a very prudent capital structure, a very conservative financing approach, but we drive value by being a smart buyer, by operating the assets well and making sure that we can drive margin through our operations and then having that very sound secure financing structure in place. As all of this was happening in the last 5, 7, 10 years, our focus was really on transforming this business, which many years ago was really just an America's business with a large hydro footprint. So we set out to obviously leverage what we are good at and build our hydro business around the world and make sure we could leverage that scale and that expertise. We also wanted to invest in wind and solar in a bulk context. We had some nice discrete wind portfolios. We didn't really have any solar because of the low returns, But we wanted to make sure we had bulk capabilities in this area. And we wanted to make sure that those abilities and those capabilities were really global in nature. And the reason is, when you run a very large organization and you have expertise in different asset classes, you can then drive operational scale through your business. So for us, learning what we did on the hydro side, and the operational leverage we could bring to our businesses, it was really important that we could replicate that in wind and solar. And over time, the bulk technologies that will make up renewables. And lastly, obviously, and then I guess one of the cornerstones of our organization is financial discipline, capital discipline, making sure that we maintain an investment grade balance sheet and ensure that we are protecting our capital, your capital for the long term. So, obviously, and through it all, our returns have not changed. We still target 12% to 15%. So, in past years, we spent a lot of time talking about being a contrarian investor, investing on a value basis. Today, we're going to spend a little bit more time on box number 2 here. And that's why I'm going to call upon Ruth Kent, who's our Global Chief Operating Officer to walk through some case studies on transactions that we secured in the last few years and how they've not only transformed the business, but how we intend to surface value from them. Ruth? Thank you very much Sachin. Good afternoon, everybody. It's a pleasure to be here with you today to talk you through how our strategy plays out in practice. As we were thinking about how to present that to you, we thought the most interesting way possibly at this slot in the afternoon particularly would be to do so through some real life examples. We've chosen 3. They're significant to us. There are many others, of course, but these are significant to us as an organization. So number 1, I'm going to take you through the Board Gas acquisition we made in 2014. This was significant because it was our first acquisition in Europe and would be a toehold for Europe. It's also significant to me as I joined the Brookfield organization through that acquisition in 2014. So I'm relatively new around here. The second one is Isagen, our hydro business in Colombia. We purchased this in 2016. It was really a very unique transaction from a hydro perspective, which made it very interesting for us. Last but certainly not least, I'll talk about the TerraForm Companies, both TerraForm Power and which is our listed entity and TerraForm Global, a private entity, which gave us a significant position in solar. So firstly, to talk about Borr Gosh, this was the opportunity to buy an operating wind business in Ireland. It had over 300 megawatts of operating wind, a commensurate pipeline and also a team that had been building out wind and operating wind since the 1990s. So quite an experienced bunch, if I do say so myself. The context there was a well publicized Eurozone financial crisis. Ireland was very much at the center of that and the euro had devalued as a consequence also, which made it a good time for Brookfield to purchase. It was a complex privatization that the Irish government were forced into. And so they were trying to sell a number of assets, this one included. This business they were selling had multiple limbs. There was a renewable arm, of course, which was very interesting for Brookfield. They also had a retail business, electricity and gas, over 1,000,000 customers and also 2 gas businesses, a small pipes business in the north of Ireland and also some gas generation. The result of that was there weren't many buyers that were interested in buying the whole thing. I can tell you the government were interested in it being one transaction. And so Brookfield were very credible in their approach here. Not only did they demonstrate their operating track record across the globe, but as well, they came to the government with a consortium position. They had brought in 2 other UK companies with complementary interests and on bid date presented one bid to the government. And I can tell you that was very well received at the time. As part of the management team in that business, the Brookfield business plan was very attractive to us. We were pretty excited about it. They wanted to advance the development pipeline sharply. This development pipeline in broader context had been starved of cash, so we were keen to action that one. They also wanted to invest in the area of power marketing in the business. That's not something we had done and we were interested to see what that would mean. Brookfield's business more broadly, Brookfield Renewable has a lot of experience in this area. Here in North America, they trade 20 fourseven wholesale markets on the energy side across multiple jurisdictions. So they brought a lot of expertise here and they thought there would be value to be had. And last but not least, it was very clear from day 1, this was about securing a foothold and growing in Europe. So on the development side, I'm pleased to say, in terms of execution, we have since built out over 200 megawatts of wind farms from that original proprietary wind pipeline. We also when we are developing in jurisdiction and this happens in other jurisdictions also, naturally come across smaller acquisitions, which we characterize as tuck in acquisitions. And so over the period we were developing here, we came across a few of these. Sometimes very good repeat developers just need to monetize at a point in time. Our teams, whether it was wind here or a solar or hydro somewhere else, we can step into a development in any stage and bring it to the finishing line. We did that three times here and that's the 55 megawatts. We continue to prospect and build today in Europe. In fact, the slide that had the beautiful wind farm on it earlier, that's Slieve Cowan wind farm in Ireland. We are commissioning that in the last month, 27 megawatts. Moving on to the area of power marketing. As I mentioned, the North American team here guided us as we entered into the Brookfield business to set up our own trading desks. So we started to trade some of the merchant power in Ireland into the UK for premium pricing. We also in parallel started to take a look at our existing contract base and make some optimizations, which gave us extra revenue to the bottom line in and of itself, small stuff, but it all adds up. And also on the corporate customer base, I guess most notably, we started to originate new contracts. And the team in Ireland supply Facebook for renewable power to their data centers today as a result of this activity. We continue to invest in power marketing in all our jurisdictions. And I would note that a lot of our competitors don't maintain this level of expertise in house and in fact often outsource this area, which they miss out on a lot of these opportunities. So we also started to grow in Europe during this period of time. And we did indeed leverage the team in Ireland to look at many megawatts across Europe. We're very selective, of course. So today, we did close on a number and we are now standing at over 3,700 megawatts in Europe following investments we've made in First Hydro, Saeta and other businesses. We also have expanded from wind. We have solar and storage in the stable node too. We also indeed have a development pipeline in Europe, not just in Ireland. We have some in the UK and other jurisdictions also, and we're advancing that as well. So moving on to Isagen. The picture here is of Sogamosa. It's the largest hydro plant in Colombia, which is part of the business that we bought there in 2016. So the opportunity at the time was to buy a business that was very well run, 3rd largest operator in Colombia at over 3,000 megawatts of operating fleet and a deep development pipeline. The context wasn't too dissimilar. It was a privatization by the government. They needed funds to reinvest in their roads infrastructure. There was a devaluation of the currency, so a good time to buy. But also, I would say, when we are investing in Brookfield Renewable, we're always asking ourselves and when we're going to enter into a process on the M and A side, we're always asking ourselves, why are we here? What or how would we make a difference? There were 2 things here that made us feel somewhat confident in this space. The ticket size was €5,000,000,000 Not everybody can write that check. And also, government themselves in Colombia had mandated that to even partake, you would have to have hydro operating and development experience. So we were feeling good about these two factors. And also, there was a lot of noise in the market at the time that this being a government privatization would take a long time and probably be extended, difficult process. That was correct. It was on again, off again, on again, off again. By the time we got to send in our bid, the 3rd time the process was on, we were the last bidder standing. So the business plan here for execution, again, surrounded areas of power marketing and development. So we were lined up and ready to go there. We knew what we wanted. And also there was an interesting cost dynamic in the business. We could see that there were some costs to be taken out. But what I would say is that was not going to be a rationalization. It was a run well run business, but we could see organically that we could take some costs out over time. In the power marketing area, as we acquired the business, all of the contracts on the book had 1 to 2 year durations. Of course, our plant is perpetual. We can go out the curve. We like to do so. And we have guided and encouraged the team in Colombia to start extending the terms of the contracts as they fall due or for renegotiation. As we stand here today, over 15% of the contracts are now 5 to 10 year terms. That's interesting in and of itself because we do seek value on the curve. However, the real value kicker is when we refinance those facilities, which is a somewhat staged link into the next point. So in terms of improving margins and reducing the cost outflow, we have refinanced a number of those facilities, which has yielded savings on the cost line in interest terms. Also coming back to the cost in the business, we often come across this as in different businesses we run around the globe. Sometimes it becomes almost a cultural norm to be dependent on consultants for decisions you can make in house and that becomes part of your fabric. That was the case here and it's not unusual in government run businesses. So over time, we've encouraged and trusted That has been unobtrusive in its nature, but it has had the impact of reducing costs. The other area that has improved margins enormously for us is with the help of our hydro teams in different jurisdictions around the world, we've moved the maintenance model here from one that was time based to one that's condition based. So in real terms, if you were talking about a part in your car, don't swap it out until it needs to be swapped out or where it showed signs that will need to be swapped out. Just be more efficient in it. Last but not least here, in Colombia, the market is dominated by coal and hydro. There is an acknowledgment that we need to move or they need to move rather to a more diverse power gen base. And so wind and solar represent an opportunity there. We have a very deep pipeline of development down there, 3,800 megawatts. But as Sachin mentioned, we're very selective about what we develop and when we develop it. We're advancing and screening the pipeline. We've brought forward 300 megawatts there that we're going to advance. So last but certainly not least, the Terraform Companies. In the middle of 2017, Sachin rang me up to start working on the business plan for these. And certainly, this was going to, I think, showcase the depth and breadth of our organization from both a BEP perspective and a BAM perspective. It was giving us global reach in Asia and areas that we wanted to get into for a long time and also would bring us into the solar area. Behind all of the noise of the bankruptcy, fundamentally, there was 3,600 megawatts of good plant here. And we were looking forward on the upside to getting our hands on that. So the transaction context here is well documented. I'm sure you're all familiar with it. A very large scale bankruptcy, Sun Edison, a very complex stakeholder group. And ultimately, the decision makers in the stakeholder group were going to be the independent board and, of course, the creditors. What they wanted was one transaction, a clean transaction and they wanted to keep TARP listed. So in order to achieve that, they would need a very credible sponsor with deep financial ability and also somebody that could manage 3,600 megawatts of quite diverse fleet, 1,000 of which that was in EM. So it's a pretty tall order. We in Brookfield spotted the opportunity here early on. And frankly, our M and A teams were coming up against SunEdison at different processes and we were always the loser. So we started to watch them and to watch the yield cost base generally. And we were wondering whether it was sustainable. So we took a toehold that gave us a seat at the table and we were able to talk to the stakeholder group, understand their needs and collectively come up with this, a tailored solution as is outlined here. And again, we could confidently do that because we knew we had the breadth of the Brookfield organization. And everywhere I went around the world, as we started to roll into this business, there was a Brookfield office that Brookfield faced, whether it was BEP or BAM. And of course, we also were very confident that we could provide that immediate stability that they needed. So coming back to the business plan, we were working on this for a long time pre close. So on day 1, we really were ready to go. We wanted to stabilize the business first off, that was most important and just get back to running those operations. We could see the opportunity to reduce costs by contrast to the other businesses I've spoken about. This would be a rationalization on day 1 and we wanted to do it quickly. And last but not least, the most exciting part, once we had the building blocks in place, of course, we were ready for growth in new regions as well, which is great. So very quickly, on close, we inserted our own leadership and also started to move employees to our core centers. But most importantly, we reached out to all the stakeholders involved to say, look, there's a new sponsor here and it's business as usual. On the cost side, on day 1, I guess it's not an exaggeration to call it triage. We had multiple teams from different parts of our Brookfield organization ready to roll in here, whether it was IT or finance. We were replacing systems. We were reducing headcount and taking ownership of some of the processes that had been outsourced. We were also working the corporate finance team in our Toronto office. We're working very closely with all of the finance teams and the leadership in both businesses to refinance both vehicles in parallel to all of this other work. And of course, we produce enormous savings in doing so. But for me, as somebody who helps to run all of these businesses, there's a good foundation now. We reengineered these businesses and they are ready for growth and that's the most exciting part. The other thing I'd make reference to is TerraForm Power in North America are currently outsourcing their wind portfolio, which again is producing efficiencies. As a business, we often in source. As we're outsourcing here in North America, we're actually in sourcing in India for the same reasons. When we see quality and risk and price in the right kind of combination, then we'll take that opportunity. So where are we today here? Well, we're now ready to start growing and indeed, we started that with TerraForm Power securing a gigawatt of renewable power in Western Europe through Saeta. We have growth teams now in India and China and we're advancing our recycling through most recently through the announcement of our disposal in the South African portfolio. There's more to go in all of 3 of these businesses and indeed in the others as well. As we look forward to the next 5 years, whilst we don't have a one size fits all philosophy or strategy, we certainly are focused in key areas. So you've heard about some of the cost initiatives. There are more. So we're targeting ourselves to deliver over £60,000,000 of cost initiatives in the next 5 year period. We're also very focused on commercial contracting. We're conscious that we have 4 terawatt hours coming out in North America and similar amounts in some of our other jurisdictions. So we're very focused on that. And last but not least, we have a deep development pipeline in our business, 8,000 megawatts. I'm not going to tell you that we'll build that all out. We're very selective. And so we're course. So that's it for me. I hope that my brief So that's it for me. I hope that my brief few minutes here have given you a good sense of how we as a collective deliver in Brookfield Renewable. I'll hand you over to Wyatt now, who's going to talk you through the numbers. Thanks, Ruth, and good afternoon, everyone. And as Sachin mentioned, my name is Wyatt Hartley and I'm the Chief Financial Officer of the Renewable Energy Group here at Brookfield. And I'm going to start my presentation today with a polling question. So the question is, what is the primary measure you look at to assess the sustainability of distributions? Is it A, visibility of growth? B, payout ratio? C, balance sheet strength? Or D, quality of cash flows? Right, quality of cash flows is clearly strongest. Okay. So clearly the winner here is quality of cash flows. And maybe going back to the slides. And for us, that was a bit of a trick question. The way we think about it is they're all equally important in assessing the sustainability of the distribution and that's what I'm here to talk to you about today. First, I'll spend some time talking about how we've used our investing and operating capabilities to embed our business with operating levers that drive cash flow growth and how we think about that setting our and setting our distribution over the long term. And I'll spend some time looking at the strength of our balance sheet. And then I'll finally touch on why we believe we offer the lowest risk distribution in the sector. So you would have just heard from Ruth who walked me through our operating priorities, how we approach our operations to drive value, how some of the practical examples of how we do that and operating priorities over the next 5 years. You also would have heard from Sachin discuss how when we invest in when we look for investments, we look for opportunities that allow us to showcase our operating expertise and use that to drive operating levers and cash flow growth from our operating levers on a go forward basis. What I will intend to do today is to take a step back and look how that translates on our business on an overall basis and how we think about that cash flow growth and the visibility we have over our cash flow growth in terms of how we set our distribution. So I'll take you through the building blocks of our operating levers. But first, I'll note 2 things. 1, on an overall basis, we expect to generate FFO per unit growth of 6% to 11%. And secondly, while I will take you through each of these levers in some detail shortly, this was a topic that we discussed at length last year. And so to the extent you want more detail, I would point you to the materials that are available on our website. So our first lever is our embedded inflation escalation, which we expect to generate 1% to 2% FFO per unit growth. The easiest way to think about this is in Brazil and Colombia, we have 100% inflation pass through of our revenues. And in North America, it's a variety. We have some contracts that have inflation pass through. We have some that are fixed price. On an overall basis, it's around 30%. These three jurisdictions together with the benefit of the inflation indexation supplemented with the operating leverage we have in our business will generate 10,000,000 to 15,000,000 of annual FFO growth per year. The second lever is expected margin expansions, which we expect to drive 2% to 4% FFO per unit growth over the long term. Over the period, that translates to 125,000,000 of FFO growth. And this is coming about 50% from cost saving initiatives and 50% from revenue growth. On the cost saving initiative side, you would have heard from Ruth talk about how we're using our operating expertise to drive significant savings in the acquisitions we made of the TerraForm companies as well as our Colombian business. We're also achieving cost savings in our base business, our legacy North American business as an example, where given the scale we've given the growth we've had over the 5 years, we relooked at things and re examined and we've been able to identify cost savings by benefiting from technology, by benefiting from streamlining processes or from just benefiting from the operating scale we have. On the revenue growth side, the easiest way to think about this is we have 8 terawatt hours of generation that is coming off contract over the next 5 years. Some of those contracts are above market. Some of them are below market. But on a net total basis, they're net under market. And so when it comes to re contracting time, we expect that to generate FFO growth. Easy breakdown for that is about half of that 8 terawatt hours, 4 terawatt hours is in Colombian and Brazil, where all those contracts are under market. So we expect to achieve a majority of our growth on that front. In North America, we have some contracts that are above market, some contracts that are below market, but on a net basis, we expect it to be neutral to our revenue. I would note that all of the numbers I walked you through today are based on an assumption that we re contract at current market prices. But whenever we undertake contracting initiatives, we're always looking to earn premium prices to the market levels. So to the extent we're successful in that, that would only mean incremental tailwinds to these numbers here. And then the final lever is our development pipeline. What we're focused on here is earning the right risk adjusted return for doing development, meaning we would earn a development premium over what we would otherwise be able to buy operating assets at. We have an advanced development pipeline of 1300 megawatts. Over the last 5 to 6 years, we've done 800 megawatts of development. So what we're targeting here is 1,000 megawatts of development generating 125,000,000 of FFO. And we have a proven track record of delivering strong FFO per unit growth. As you can see from here, 7% growth since 2012, which gives us a high degree of confidence that we can achieve our 6% to 11% over the next 5 years. So how does this translate to our distribution and how we think about it as sustainable over the long term? We'd have 2 comments here. 1, due to the nature of our business being still 80% of our cash flows from hydro, there's minimal annual investment required to maintain our cash flows over the long term. Only 5% of our cash flows are return off capital. So that puts a lot less pressure on us to reinvest our capital to maintain an earning power over the long term. Secondly, as you would have seen, through operating levers alone, we can grow our FFO per unit at 6% to 11%. We target 5% to 9% distribution growth over the long term. So just the math of that, it's going at 6% to 11%, or targeting 5 to 9, we'll take what is already a sustainable distribution in our mind and optimizing it over that period. So looking at the numbers here, what we have here is our current run rate of our business. So the year to date numbers at June annualized plus the benefit of all the acquisitions we've done during that period. And as you can see, that translates to an FFO payout ratio in the mid-80s. If we grow our cash flows at 6.5 or 8.5%, which is the midpoint of our 6% to 11% and grow our distribution at 5%, you can see we're getting into the 70s from an FFO payout ratio perspective. And once we deduct sustaining CapEx and return of capital, we're in the low 90s, which relieves a lot of cash flow to reinvest in our business and grow. So moving on to our balance sheet. Simply put, our balance sheet is in great shape and core to this is our investment grade rating. We're BBB positive from S and P, which is the highest rating in the sector. And for us, this means that throughout our capital structure, we use investment we finance our debt on at investment grade or the investment grade metrics because this appropriately safeguards our business. It provides downside protection. It provides access to capital through the cycle or access to cash flow through the cycle, it doesn't burden our organization with undue cash drops and as importantly, it provides a good base upon for which to grow. And from a maturity perspective, we're in a good position with greater than 10 years average project debt maturity remaining and no material maturities over the next 5 years. We also have significant access to liquidity with 1,700,000,000 available at June 30. And we have our multiple funding levers provides a deep access to a deep pool of capital. So first, just on the capital markets front, we've raised $3,000,000,000 in 2015, primarily in the corporate debt and preferred share market, which includes our most recent inaugural corporate green bond, which we issued a couple of weeks ago, where we raised $300,000,000 of 10 year paper at very attractive rates. We're also starting to use our capital recycling as a more important part of our funding strategy, raising over 300,000,000 of capital in the last 18 months. For us, selling assets at single digit returns and redeploying that at 12% to 15% is a very accretive way to grow the business. So we're focused on finding those assets that are mature, de risk and are no longer generating the operating cash flow growth that are critical to our business, as I would have previously mentioned. As we went through, the majority of our business still is generating significant cash flow growth, but we do have a number of de risk assets. And so you should expect us to use this as a more significant part of our funding strategy going forward. And finally, as with any Brookfield vehicle, we have access to significant partnership capital, not only through the private funds, but also with respect to renewables. We have access to the public markets through our investment in TerraForm Power. And the final stool to the sustainability of our distribution would be and this was the one that was picked by the majority of you is the high quality nature of our cash flows. And so this would comes from our highly diversified cash flows, both by technology and by region. And also comes from the highly contracted nature of our cash flows being greater than 90% contracted with an average contract term of 15 years and means conservatively financed and as well as not overly reliant on subsidies. And finally, which we think is probably the biggest differentiator for us is largely from a perpetual asset base. So we have the longest duration asset profile in the sector with greater than 75 years remaining in our asset life. And this is the backbone of this is our hydro business, which I mentioned earlier, makes up 80% of our cash flows. As a result, 95% of our cash flows are return on capital, which means we have significant less pressure to redeploy capital into our business to maintain the earning base over the long term. Secondly, we actively manage our exposures to financial risk from an interest rate perspective, greater than 90% of our debt is financed as it's financed on a fixed rate basis. And as I mentioned, we have no meaningful near term maturities, meaning we're well insulated from the impact of rising rates. As you can see here, 100 basis point increase would result in a greater than or less than 2% impact on our FFO. And equally from an FX perspective, we're well protected. We fully hedge our developed market currencies, which means the correlation, the impact of correlation to rising strength in U. S. Dollar is less than 50%, meaning a 10% increase in the U. S. Dollar impacts our FFO by less than 5%. And then finally, we have a risk and reward profile that is lined, meaning we target the highest sectors in the return, but we use the most conservative financing structures. As we've noted at length today, we don't our mentality isn't that we extract our returns from leverage. We earn our returns from our operating and investing capabilities. And we overlay this with a conservative financing structure that's focused on being investment grade throughout and doesn't and relies only on structures that are sustainable over the long term. This means we use non amortizing debt at the project or the corporate level only to the extent they're backed by our perpetual hydro business. And we don't use deferred financing structures like converts or tax equity that may benefit us in the near term, but have a significant deferred financing costs that we don't believe is beneficial over the long term. So maybe now bringing it back altogether. At the outset, I mentioned that we believe we offer the lowest risk distribution in the sector. And really this comes from the visibility we have over our cash flow growth at 6% to 11% using operational levers alone. It is a payout ratio that's in a good position now, but is only improving over the next 5 years. It comes from our strong investment grade balance sheet. And finally, it comes from high quality cash flows, most important of which is the largely perpetual asset base, our hydro base that we have. So with that, I'll pass it on to Sachin. Thank you, Wyatt. So I'm going to try to bring all of this back together a little bit to maybe just connect some of the dots on the things that we were talking about and then look to the future. And as a reminder, 5 years ago or maybe at the early part of this decade, we were largely in America's business, quite small in Latin America with a small footprint in Brazil and mostly in the United States and Canada with a sizable hydro business. And we had a really good sense of the benefits of scale. And we had a very good sense that we could drive significant cash flow growth from our operating capabilities. But we also recognize that if low rates persist for a very long period of time, and if this asset class and this industry grows at the pace we think it will grow, then too much capital will plow into this market, which is still a great market, but it will drive returns down significantly. And it will mean that we could only do one thing and one thing well, and we'll have to do it in a tremendously competitive environment. So we wanted to make sure that we diversify the business, created a global franchise and made sure that we could move our capital around the world and also upscale the organization across multiple technologies. So if you fast forward to today, our business in South America, which was quite small at that point in 5 years, is now one of our largest and close to 5,000 megawatts. In Europe, if you add the development pipeline, we exceed 5,000 megawatts coming from 0 back at that point. We've continued to grow in North America. And I'd say today in Asia Pacific, we're at the same stage we were at 5 years ago in LatAm. And we think that that's a really exciting market for us to grow into the future. And what we hope to have is bulk scale in every single major market in the world. We think we're pretty close there. Obviously, we have some work to do in Asia Pacific. And what that will allow us to then again is to move our capital freely around the world, not only based on geographic considerations, but technological considerations as well, have a strong operating capability and to be able to do both M and A and development depending on the risk reward of each of those different types of investment opportunities. To maybe reiterate a little bit of what Ruth talked about is we got from there in 2013 to here in 2018 through deploying over $3,500,000,000 roughly $3,500,000,000 of renewable equity, debt equity, almost $2,000,000,000 of that. So almost 2 thirds of that really is these 3 transactions. And if you look at the underwriting returns, which at the time we thought were quite good and in line with our targets, they've only been enhanced as a result of the operational levers that Ruth spent time on, our financial acumen and the ability to drive cash flow growth. And if you look at where our returns are on almost $2,000,000,000 of capital that we've deployed in prep, relative to an earlier slide I put up of where the market is, you could see a realistic path of why we're so confident in not only the cash flow growth over the next 5 years, but the value appreciation in the business, we think that we've taken that $2,000,000,000 of capital that we've put to work and almost doubled its value, which is not reflected in the underlying stock today. And we feel that will represent not only strong cash flow visibility into the future, but will also mean that you have capital appreciation in the share price, all driving to the total return that we target. And again, that's why we feel confident that if we continue to build out the global franchise, we'll be able to carry on this track record of delivering 12% to 15% returns to our unitholders. So with that behind us, now it's really about the future. And we this is one of our plants in the United States in the Tennessee Valley called Smoky Mountain. This is a large hydro, but what you'll notice is it's a sunny day and there's a breeze in the back. So we're making money on all three fronts. So looking forward, I mentioned the 1.5 trillion of investment, I mentioned the 1,000,000 megawatts of installed capacity. And what's staggering about that is that although that is significant scale, solar and wind still only account for less 10% of global power supply, which means we have a really long way to go in this sector. And that should be exciting for anybody who wants to invest in this asset and who's looking forward to many, many decades of growth, because this does not reflect any growth in demand. It does not reflect the retirement of existing facilities or the electrification of transportation, which will be a huge tailwind to demand from an energy generation perspective. This just simply represents replacing what's there today. And maybe that then leads itself to a polling question, which in hindsight seems like an easy answer. How much investment is estimated to be required to replace existing non renewable capacity globally? So I'll ask people to put the answer into their iPads. As I said, it was pretty easy. I wouldn't be up here if it was less than a choice. We'll go back to the prior slide. But I think there's consensus. And the reality is, I don't think we'll ever get to a place where the entire world is 100% renewables. But as I said before, this is just factoring the current generation stack in the major markets around the world. This does not reflect electrification. This does not reflect asset retirement. But what you can see is that through the continued policy initiatives, the landscape in front of us is enormous, the investment opportunity is enormous and having a global franchise across the multiple technologies will become critically important. And being able to surface value through operational capabilities will be the great advantage for our organization. To remind people of how much capital we've deployed in the past and why we think that we are setting ourselves up well, we've generally deployed anywhere between 500,000,000 800,000,000 per year out of this business, really across the world. And what you can see here is there was no pattern to it other than we were going where there was opportunity to earn those outsized returns. And more importantly, we were also able to move around to different technologies where we felt that we could drive the most value combined with the best investment opportunity. And so as a result, we think it's very realistic for us to continue to deploy $700,000,000 $800,000,000 per year of BEP equity into growth in this business and we've been doing it for a number of years. Now, I want to just take a minute on this slide, because many of you who follow the power space would see in our peer group, most of our competitors or most of our peers would target megawatt growth. We're going to develop 1,000 megawatts a year or we're going to drop down 2,000 megawatts a year. And we've always stayed away from that as an organization, because we felt that just chasing megawatts was really not a focus on profitability or total return. And we focused on how much capital could we deploy and do we have the franchise to be able to do that well. And so we wanted to highlight here that although we don't target megawatts, what we often feel is missing in our story is really our track record of capital deployment. So we're not going to tell you that we're going to do 1,000 megawatts a year or 2,000 megawatts. And candidly, we on purpose set up TerraForm to not really have it predicated on a dropdown strategy. What we are telling you here though is in light of the growth around the world and our franchise, which we think is quite unique and the capability to put money to work around the world and run our plants, we think 700,000,000 of BEV capital per year is a run rate pace of capital deployment that we should be thinking about and we should all collectively as shareholders be thinking about as a normalized run rate growth rate in the future. With that, I'm going to talk a little bit about the market dynamic in each market that we're in. So, just what's going on in each part of the world. So, you have a little bit of context as to where some of those opportunities might come and the backdrop to the investment environment in each area. I'll start with North America, where we have the most diversified fleet, the largest bulk capabilities, and really across all the major technologies today that are bulk power other than probably offshore wind. That's probably the one area where we don't have a presence in. But today in North America, in spite of, I'd say the federal tone around in the U. S. Around climate change and around carbon reduction initiatives. At the state level, it's just as active, if not more active than it's been in the last decade. Vermont, Rhode Island, all of them have come out with RFPs that are seeking to Vermont, Rhode Island, all of them have come out with RFPs that are seeking to increase their exposure to wind and solar and hydro as a balancing product, which sets us up very well to be able to participate longer term in those markets. And so what we're seeing is very strong state level action. And maybe the most important thing we're not seeing in the U. S. Is investment in coal. In spite of again, the political rhetoric, it's clear that U. S. Coal executives and U. S. Utility executives recognize that making a 40 to 50 year bet on a coal plant is a challenging way to create value over the long term. And so we're not seeing new coal being invested in. And we think that that will mean continued coal retirement to bring the U. S. Where it's about 30% to 35% today further down as renewable power standards at the state level increase. If we go into South America, again, we're in Brazil and Colombia, but I would say this generally applies to most of the countries we would invest in. Chile is now in country we would invest in. In fact, we have a small solar plant in Chile, which I don't think we highlighted here. But in South America, we would view that market as really driven by demand growth. We continue to see 3% to 4% demand growth in the country, which is driving already a short natural short position in power and further exacerbating that short position. So as a result, you see significant price volatility, you see significant pressure on power prices. And we have a very, very large scale power marketing capability, both in Brazil and Colombia. In Brazil alone, we would have in the range of 150 clients around the country that buy power from us between 8 20 years in duration and that doesn't include the government, which gives us a really nice hedge to be able to move our power to different customers and different client relationships. And in Colombia, as Ruth mentioned, we went from all 1 to 2 year contracts to today 15 percent of our contractual base is 5 to 10 years in duration and we think we can grow that immensely over the next 5 years. If we look at Europe, Europe has continued to lead the world on renewable policy. Today, the latest EU standards would require all generation in Europe to be renewable by 2,050. So that's a significant undertaking. And that means that for EU states to maintain their status in the Eurozone, they will continue to chip away at their thermal generation and continue to provide supportive policy around renewable wind, solar, offshore wind, hydro, pump storage and batteries. Looking to Asia Pacific, I'll start with China. In China, we have a small business there that we acquired through the TerraForm transaction. Today, 50% of all distributed generation in the world happens in China on rooftop solar. And that's largely because it's the manufacturing hub of the world. And many of you will recall, and if you don't know, about a year ago, we set up a JV with GLP Global Logistics Properties to put solar on the rooftops of their properties and third party properties. So we're setting ourselves up in China to be able to participate in that renewable electrification of the country, drive pollution levels down. But most importantly is we're trying to set up a niche business there, not compete with the SOEs and not get into the bulk power, but really on the distributed generation side, taking advantage of the fact that a significant amount of manufacturing occurs there. And you can get economics that are in line with our target returns on manufacturing properties with international customers that help you understand the credit and ensure that we can manage the risk profile of those cash flows. And then in India, sorry, in India, just to finish off that part of the world, India has made a huge effort to electrify the country. So just in the last 5 years in India, they have built out transmission, infrastructure, substation infrastructure to provide electricity to every village in the country, which means that 300,000,000 people in the last 5 years are now able to have access to electricity when 5 years ago they had 0 electricity. So although it might be small today, that is a huge boost to demand. And we think that India will be obviously a very, very strong market in the long term. There's federal level support, there's state level support, the federal government there has targets around solar and has also targeted the local utilities through recapitalization programs and balance sheet stabilization programs to help ensure that those utilities can continue to provide tariffs and be creditworthy counterparties to investors like ourselves. We often get asked about capital allocation as you globalize and you're in these different parts of the world, how do you see the risk profile of the business? And today, we've largely been a North American business or a developed market business. And I think that will continue to hold for the foreseeable future in spite of the fact that we see significant growth in Asia Pacific and Latin America. And generally, if you think about how we can get to 12% to 15%, the question we always get is how can you deliver these returns when the market delivers 6 to 8. And what we say to people is, if you look at our going in target returns, they are slightly higher and you have to be a good investor on the way in. We think that we get a lot of margin of safety through our operational capabilities. So we make a mistake on underwriting, we can catch some up on operations. If we get it right on investing, but we don't get the operations, we're still in good shape. The best is when you can get all of it to work together. But if you think about 60% of our capital goes into developed markets today, 25% into emerging markets, We do about 15% development. We're not a large scale developer. We are in terms of aggregate megawatts, because we're just a large organization. But we are not a development shop just in the U. S. That's not the risk profile that we intend to deliver to investors. But if you blend all of that together, you get to 12% to 15%. And we think that that's a model that continues to work for us into the foreseeable future. So maybe to wrap it up and before I get to questions, I just want to remind you of some of the key themes from today. I'd say first with our strategy around value investing, operational capabilities and financial discipline. We think that we have a very proven repeatable strategy as an organization and one that works in every market around the world. And as long as we continue to globalize the business and have a multi technology approach, it leads us, it lends itself for us to be able to be a very strong capital allocator, look for unique opportunities. They're not always going to be distressed. They're not always going to be TerraForm or Sun Edison type bankruptcies, but we can find those niche areas where we can bring a unique blend of investment, financial discipline, access to capital and operational capabilities that many others lack. And if we can do that around the world, it will then lend itself to a tremendous track record and we can carry on from the 20 years that we've been doing this. So maybe with that, I will open it up to questions. How much of your business is reliant on subsidies from various forms of government or reallocation like cap and trade or things like that? Yes. So the question in case anybody did not hear is, how much of the business today is reliant on subsidies or reallocation from cap and trade schemes around the world? I'll start with subsidies. I'd say, we've generally been averse to chasing subsidies, in part because many financial investors around the world were really seeking out subsidies, a way to enhance yield. And it was a difficult market for us to compete in. And in particular, then you had to take a sovereign view around the risk profile of that cash flow and could that subsidy be cut. That being said, there are subsidies through the system. And in particular, when we make acquisitions, we often make acquisitions of businesses that obviously have a significant component of subsidies in them. The Cen Edison business was the poster child of that. It had subsidies through from a tax equity perspective through every asset and we would underwrite a risk premium to that. Investors with a long memory would remember that Spain cut its tariff back in 2011 or 2012 around there. And obviously that subsidy was not right sized properly. I'd say we bring it down to a few fundamental things is, can that government afford the subsidy? Are they running a tariff deficit? Are they running a surplus? Do they have the balance sheet to be able to sustain that subsidy? And is that subsidy there because the plant is fundamentally uneconomic? Or is it there as a way to induce investment and drive cost of capital down? We've stayed away from the markets where the governments can't afford the subsidy, they're in a subsidy or a tariff deficit and where the location of that site or that plant just fundamentally doesn't make economic sense. We're able to pursue subsidies when we have the other features, but we don't target subsidies as part of our core business and most of the business because it's a hydro business for the most part has no subsidy at all. So if 80% of our cash flows are hydro, I would guess that I would say that none of that has any subsidies And of the balance that's wind and solar, I'd say it's probably half and half. So it's pretty modest from a total business perspective. On cap and trade, cap and trade regimes have not generated meaningful value for the power companies. There's not it's not a lucrative part of our trading business. I would say where we make real money from a trading perspective is the ability to take the products that we have, whether that's energy, capacity, ancillary products, spinning reserve, the various products that come off of our plants, bundle them together and sell them as a unique combined product to offtakes, who are either industrial applications, utilities, governments and they want somebody who can deliver those various products at the time they want it and they'll pay us a premium for that. Very few organizations have that skill set or that capability. We don't today in our business, we don't make any money from cap and trade. It's not something that generates any meaningful value. Okay. There's a question over here. It's Nelson Ng from RBC Capital Markets. In your last slide, you had the capital allocation among various geographies, 60% developed markets. Could you talk about that in relation to TerraForm Power, given that TerraForm Power's, I guess, target geography is mainly in that developed market? So, does that imply that Brookfield Renewable would allocate more capital towards the emerging markets towards higher returns? Sure. So, we get this question a lot is how does TerraForm Power fit into Brookfield Renewables business. And I'll start from really our access to capital as an organization. You've heard a number of my colleagues out here talk about our ability to bring our private funds to bear on transactions with our public listed vehicle money and we invest together in those transactions. Often we're investing on any deal $0.25 to $0.35 coming from the public listed vehicle and the balance, call it $0.65 to $0.75 on the dollar coming from our various fund investors. TerraForm Power is no different than that. Today, Brookfield Renewable owns 30% of TerraForm Power. We intend to maintain our pro rata interest in the company. And as we grow and use that cost of capital to grow and develop markets in the U. S. And Western Europe, in wind and solar, we will fund into those deals through TerraForm Power, but Brookdale Renewable will contribute its $0.30 of a dollar into Terraform Power as opposed to what it was previously doing was contributing its $0.30 on the dollar through a private fund strategy. So I'd say really it doesn't change the dynamic. It just gives us another vehicle to be able to do this with a more focused lower cost of capital. Mark Jarvi from CIBC Capital Markets. It seemed like some of your targets around operating efficiencies and cost reductions as well as margin expansion have gone up maybe in the last year or so. Just wondering what you guys think in terms of the confidence around that to maybe take it higher or if that's really, I guess maybe and also the timing of your FFO growth drivers, whether or not those cost reductions margin expansions are more front end loaded and developments in the back half of the 5 year period? There was a little bit I missed there, but I think what you're asking is, it looks like we're getting more confident on our FFO growth from operational levers and are we going to increase our targets? Not so much that, I'm thinking more how the balance of that whether or not that's just more front end loaded, the first one to 3 years of the 5 year window and then development is more back end loaded, I guess? Oh, I see, I see. It depends market by market. I would say in some of our businesses, for example, our Colombian business, I would say it's a gradual pace that's pretty even year over year. We continue to peel the onion back, we continue to find opportunities And we're being thoughtful about how we do that, because it was already a very well running organization and we don't want to change that dynamic in the business. We just want to make it more productive and bring some of our learnings from the U. S. Into that business. On the other hand, if I look at a business like the TerraForm Companies, there I would say, it really was a triage scenario and one where we had to make immediate cuts and do things that really put our stamp on those businesses that would be more front end loaded. So I think it just depends on the situation. Some of it's front loaded, some of it's pretty gradual. Development, we're targeting 1,000 megawatts in the next 5 years. If you actually look back at the last 5 years where we did about 850 megawatts and 900, it was pretty even. Today, it's largely coming from 3 regions, LatAm, both Brazil and Colombia and then parts of Europe. And we're seeing that the pipelines in those countries, it's going to be gradual, I would say it's not back ended or front end. And the reason it's gradual is, as an organization, we try not to take on too much development all at once. And we do stagger our developments. Now naturally, if we see a strong bid in any market, and you see power prices that are attractive, then we'll accelerate some of those projects. But we generally think 200 to 300 megawatts per year is about the size that we can manage from a risk profile perspective. Jonathan Arnold from Deutsche Bank. I have a question on that you're showing the same FFO growth rate target that you had before and talking about growing the distribution at the 5% level. But I think the slides on the 2nd quarter call showed getting payout ratio down to 70% of FFO and now it's kind of up in the very high 70s still by 2022. So what's changed if none of those other pieces seem to have changed? Yes. So this question is more about payout ratio and where will it be in the long term? And if our targets are 60% to 70% long term, then why are we not pushing harder to get there quicker? And today's slide talked about 5 years really gradually getting into the 70s. I think that dovetails a little bit with what Wyatt was saying, which is we believe and what we are trying to articulate today is that there's a balance of factors in determining out dividend payout dividend distribution rates over the long term. It's not just payout ratio, it's also looking at balance sheet quality, cash flow quality, your return on versus your return of capital. We're in the beneficial spot where so much of our income is a return on investment that we're not building an equity hole in the business And we don't have the pressure to deploy as much capital. So we can take a longer period of time. And if we find cash flow growth coming out of the business, and we can pay out a reasonable distribution growth rate, while chipping away at that payout ratio, we think that that balanced approach is one that just lends itself to a reasonable run rate of dividend growth for investors. We could turn off the dividend, for example, and just get the payout ratio right down. But we don't feel that need. We're not under any pressure in light of the balance sheet and liquidity we have. And as long as we have cash flow visibility in the business, for us, that's more important than simply the payout ratio. So having the transactions that we've made in the last 5 years, giving us a high degree of cash flow visibility and being able to utilize some of that cash flow to grow our distribution, we think makes sense. Can you also talk about your you talked about your sensitivity to developed market FX. Could you talk about your emerging market FX exposure and obviously particularly in light of Brazil and the move in the exchange? Sure. I'd say first, Brazil today would represent about 25% of our 15% of our FFO. So it's quite small for our business and that 15% remains largely unhedged because we've generally had the view that it was an expensive insurance product to undertake. So we do have exposure there, but as one of our slides showed that a 10% depreciation in the U. S. Dollar relative to all the other currencies in our business would have less than a 5% impact to our FFO. So we have a pretty low concentration to Brazil and the emerging markets in general. And then where we do have currencies that are hedgeable at a low cost where we view the risk award as being reasonable, we hedge them all out. So I'd say it's not a huge factor in the business today. Jeremy Rosenfield from Industrial Alliance Securities. Two questions on the technology. If you could comment very briefly on nuclear, its technology is a little bit in a precarious situation right now in a lot of the markets because of collapsing, I guess, merchant pricing. It's not up there. It hasn't been up there in the past. What is the interest of Brookfield in nuclear? To what degree is there an interest? Well, we're positive on nuclear. We just bought a big business that you're going to hear about in the next presentation. Look, I'd say, here's the broad strokes on nuclear is, first of all, you're right, the collapsing merchant market has really put nuclear in the U. S. Under tremendous pressure. The bulk owners of these, the utilities have really been lobbying and advocating for what are called ZECs, these 0 emission carpet credits, and have been winning and have been getting that favorable government support. I think if you just step back long term, until you can build scale enough batteries and until you can build power that can be stored for many, many hours, not just a 4 hour small scale battery, Then technologies like nuclear and even hydro, although hydro is very different from a risk profile perspective, are absolutely going to be needed around the world, because there's no baseload power that you can put in place other than going back to coal and maybe some natural gas, but you take on significant commodity risk if you do that. So, I think our view is that nuclear will have an important part and remain an important part of the supply stack. There's always going to be NIMBYism and there's always going to be issues around building new nuclear. It doesn't help that some of the recent collapses and failures around nuclear have hurt the perception of the industry. But it's going to be an important part, it's going to be an important part in all parts around the world until you get to that place where you can build large scale storage and baseload power. And we're not even close to that, not from a technology perspective, not from a manufacturing perspective. Batteries are still in their infancy and they're not necessarily following the cost trajectory that solar and wind went through, because storing power is far more complicated than generating power simply off of a free resource. So our view is that nuclear is here for the long haul. It will need to get supported. In the U. S, it's getting supported largely because of jobs, thousands of people work at these nuclear sites. And if you displaced all of these because of low merchant power prices, you're going to have thousands and thousands of people working in utilities and the offshoot businesses out of work. And that's just not politically appealing to anybody at both the state level and the federal level. So there's a lot of factors that support nuclear long term. But from the Brookfield perspective in terms of investments, not necessarily something that's on the radar? Would we invest in a nuclear power generation entity? I would say definitely not in our renewable group. And generally, we've stayed away from investing in the generation of it. I think, as you can see on the private equity side, servicing the plants and having long term servicing agreements can really leverage the capabilities we have in the other groups like our power business. And that's something we could do and we can service all different types of plants. We could service coal plants, gas plants, nuclear plants, but investing in the generation side of it just has an entirely different risk profile, probably not one that lends itself to our cost of capital. Okay. And then just following up on technology, last year you were up here and you did talk about offshore wind and you mentioned it again in your presentation today, but Brookfield Renewable has not yet taken the plunge, pardon the pun, into offshore wind. Is there a big hurdle? What is it that is preventing Brookfield from actually making that first investment? So the question this is the last question and then I'll have to hand it over. The question is really on offshore wind. What I would say is it relates a little bit to what the gentleman next to you said, which is the level of subsidies in offshore wind have been so significantly above market that your risk reward profile of offshore wind in our view was very, very skewed on either end, meaning that you would just do okay if the tariff held and nothing went wrong operationally for 25 years. So everything had to be perfect. The tariffs stayed intact, the technology didn't have any major flaws in it, the supply chain was intact, the operational risk was well understood. And all of that, if all of that happened perfectly, you would do all right. And at the current returns that we're seeing people invest in this sector, probably below our target returns. And then if any of those things went wrong, you could lose your capital. And we just don't think that for us, that's a good entry point at this point in time to invest in that type of scenario. We will one day be invested in offshore wind, but we'll do it in a way where we feel that we have the right protections in place. And with that, I'll hand it over to Cyrus. Thank you, Sachin. And we should talk after because I'm sure we can arrange a payment plan if you want some nuclear technology, give you a good deal. It looks like you can afford it. So welcome to our investor presentation for Brookfield Business Partners or BBU. If I could just get a show of hands to see who is a BBU shareholder or who's thinking about becoming 1, that'd be interesting for me. Thank you. Bruce, you are. That's great. Okay. Thank you. Presenting to me with me today is Dennis Turcotte. Dennis is a senior member of our management team. He's a managing partner in our operations group, which is a team that we've set up to run our businesses. And you've heard a lot about operating expertise and what it means, but Dennis and his team are the ones that really have the special sauce that make it happen. And he's going to speak to you specifically about what we do and I think you'll find it very interesting. Also presenting with me today is Jaspreet Dale and I'm really pleased to be introducing Jaspreet for the first time as our Chief Financial Officer. Jaspreet has been with us for many years. She's a very talented financial executive and she's going to be an excellent CFO. And if you haven't met her, I'd encourage you to do that today if you get the chance afterwards. Craig Lohrey is also here, I think. Craig, are you here? There you are, Craig. Hi, Craig. Craig, for those of you many of you have met Craig. He was our CFO at the time we launched BBU. He's going to be he is moving into an operations role in our business and we'll add a lot of value there. And Craig, although you're gone, I'm still watching you, so no slacking off. So our agenda today is threefold. 1st, I'd like to give you an overview of our recent achievements and really talk to you about how our business has been reshaped over the last couple of years because it's changed a lot. 2nd, to give you a much deeper And that at Westinghouse. And that's an acquisition we recently completed. Finally, we'll give you an overview of our operating and financial performance and our approach to value for BBU. Now for those of you that have not been to one of our presentations, Brookfield Business Partners is a business services and industrials company. We launched BBU just over 2 years ago with the objective to generate long term capital appreciation for our unitholders. Trade on the New York and Toronto Stock Exchanges and we pay a distribution of 0.25 dollars per unit. We have an investment and operations team of 100 people and they're dedicated to making investments and managing companies for BBU. And our operations, which are global, have 45,000 operating employees within them. We target returns of 15% to 20% on our investments and we earn those returns very in a similar manner to what you've heard today from our other businesses. We buy high quality businesses with barriers to entry. We buy them on a value basis. We enhance the cash flow capabilities of those businesses, primarily with better strategy and better execution. And we try to allocate capital to the best opportunities. We think we have some meaningful advantages to help us execute our strategy. 1st, we're a global organization, which means we can take our skills and capital to regions in the world where it's needed. 2nd, most of what we do is related to real assets. And after hearing the presentations today, I hope you'll agree with me that few, if any, organizations would have the expertise in real assets that Brookfield does. We like complicated and drawn out situations and that tends to limit what I'd refer to as more typical LBO type interests and it limits competition when we're looking at new opportunities. And we can invest our capital in many ways. We can buy businesses outright, we can buy minority interest in companies, we can buy public securities and we make loans to businesses. So our investable universe is very, very large. And finally, management teams view us as having patient capital because from time to time we hold companies for a very long time and that often makes us a preferred partner to management teams. We think we're really well positioned to generate long term growth. We have a global presence and a growing investment team turning over more ideas. The creation of Brookfield Business Partners itself has increased our profile and enhanced our deal flow. And we have a significant and growing capital availability, both within BBU, which Jaspreet is going to take you through, and also through Brookfield's institutional funds. And as Bruce said, Brookfield is in the process of raising its next private equity fund and BBU has committed $3,000,000,000 to that fund, which gives you some indication of what we think the scale of investments we'll be making are over the next few years. And if we're able to continue executing as we have been, we think the intrinsic value of our units will continue to increase and hopefully that will be reflected in the unit price in the future. Now since we launched Brookfield Business Partners, as I said just over 2 years ago, we made a lot of progress in growing and reshaping this business. And I just wanted to spend a little bit of time on that. We bought 7 different companies. We've completed a number of tuck in acquisitions for a total of $4,400,000,000 This includes the largest water distribution, private water distribution sewage treatment company in Brazil, the largest fuel distributor in the UK, more than 200 gas stations in Canada, a specialty midstream oil services company, which has global operations, the largest casino concession ever awarded in Canada, the leading returnable packaging company in Europe and the global leader in nuclear services. BBU's share of the total invested capital to support those activities was about $1,700,000,000 and we've been careful throughout that period to maintain significant balance sheet flexibility. Through a combination of capital recycling, we raised $1,700,000,000 by selling 3 of our businesses and some public securities. We also raised $1,000,000,000 in equity. In addition, the cash flow generated from our operating companies provides us with distributions from time to time. So that brings us to our first question for you. Which of our businesses do you like the most? Our water distribution company, the fuel distributor, gas stations, the marine services company, the gaming concession, the packaging business or the nuclear services company? I'd be curious to see your answer on your iPad. Well, it looks like Westinghouse is the winner, which means Dennis, you can't let our investors down. Okay. Well, we like all of the companies, but that is a great one. So with all of that activity that I just summarized, you can see here that the scale of our business has grown pretty substantially. Our assets and FFO have more than doubled. Our EBITDA has increased from 240,000,000 to 570,000,000 dollars And on a go forward run rate basis, our EBITDA should be approaching $1,000,000,000 so pretty significant growth for our company. And apart from much larger scale, we have a much more diversified business regionally. In particular, we've grown in Europe and we've grown in South America. And from time to time, we may be more focused on one region or another if it falls out of favor, but that's where we've grown over the last 2 years. In Europe, we've made 2 acquisitions since we launched BBU and I just wanted to talk about one of them in particular, Schoeller Aliber, we acquired it quite recently. This is the largest European manufacturer of returnable plastic containers. It has 13 manufacturing sites, 2,000 employees and it produces 170,000 tons of plastic containers every year. The business makes handheld and large bulk containers to service a variety of industries including retail, logistics, food and beverage, automotive and industrial markets. And the company has a highly diversified and global customer base. About a quarter of the company's revenue are derived from something called pooling services. So that really means sharing of standard sized containers by multiple customers where Schoeller or another logistic provider ensures that pallets are maintained and made available to companies customers as needed. It operates primarily in Europe, Germany, France, Spain, Netherlands and UK, and we see really strong growth prospects in the U. S. We saw an opportunity to materially improve operational efficiencies and grow this business into new markets and the family, the Schoeller family staying in as a 30% partner with us. 1 of Brookfield's senior operations executives, Pierre MacNeil, is in there today as a CEO and focusing on improving revenue, reducing costs, improving capital allocation around factories and new equipment. And we think we should earn our targeted return range of 15% to 20%. And with some outperformance in our business, we could earn a significantly higher return than that. Now this is a smaller business than we would typically buy. The total purchase price was $230,000,000 for 70%, But nonetheless, we made this investment because we see a lot of potential M and A opportunities. And the end markets for this business are growing at 6% to 7% a year because one way packaging is being substituted and e commerce and logistics are driving volumes for this business. And some of you may remember, we've had a really good experience with packaging in the past. We used to own a company called Longview Packaging. We bought it for about $100,000,000 and ended up selling it for $1,000,000,000 some years later. So apart from growing into new regions, the composition of our EBITDA and cash flow has changed. It's becoming more diversified and more predictable. In particular, at the time we created BBU, energy and construction made up 2 thirds of our EBITDA. Today, after adjusting for the acquisitions we've made and the sales we made, the vast majority of our EBITDA comes from industrial operations, business services and infrastructure services with energy and construction being a smaller proportion of our total EBITDA and cash flow. And if we translate that into value, what you can see on this slide is that the composition of our overall value is more diversified than when we launched our company. And looking forward, we're going to continue to add new businesses within our existing segments, but we're also going to add new businesses, new business segments as we continue to grow the scale and scope of our business and that should be a key driver for future value creation. As you can imagine, we spend a lot of time thinking about new opportunities, but we also put a lot of effort into what new sectors would be great for BBU. And we think the best opportunities would be those sectors where we can apply our operational and financial skills and that includes things like process enhancement, commercial organization strategy and other things that Dennis is going to talk about. Ideally, the new sector would benefit from our real assets expertise. And finally, the industry or sector itself should have some positive characteristics like barrier stantry or strong growth prospects. If we can find something that meets all these criteria, we'll seriously consider it. So my next question for you is, where do you think private equity generally in the United States has been most active in the last couple of years? And what we list is IT, Materials and Resources, services, energy, healthcare and financial services. Well, you guys must have seen the answer because you're pretty well spot on. So the answer is services and we combine business services and some consumer services here. But services by and large the biggest private, biggest part of where transactions are getting done followed by IT and health care. And that's relevant because those are the 2 areas, healthcare and technology services that we've been spending a lot of time on. And the first being healthcare. Why do we like healthcare? Well, there's a very large investable universe. There are literally tens of thousands of companies in the U. S. Alone with a variety of different subsectors in healthcare. Demand for healthcare is being fueled by some very strong long term trends including aging population, lengthening life expectancy and increasing wealth. And the reality is that healthcare expenditures increase very substantially when people hit the age of 65 and that demographic is growing, particularly in the Western world. In addition, there are trends that are disrupting the healthcare landscape and creating new investment opportunities. And this primarily includes a transition from a fee for service model to a value based delivery model, which really means that reimbursement of health care costs is tied more to patient health outcomes and rewarding providers for efficiency and effectiveness. And this is contributing to growth in health care settings outside of the more traditional hospital sector, which is generally less efficient. And these new sectors are they're essential services, they have very low volatility, they're generally asset light and delivery is generally highly fragmented, which means there's generally consolidation opportunities. And finally, the sector itself is extremely large. It's a $3,000,000,000,000 industry in the United States. Spending is growing 4.5 percent a year and the increased spending is leading to an increased drive for efficiency, which is where we think our skills can be deployed. And within healthcare, we'll look for subsectors that can play to our strengths and reduce risk. So it means they need to be essential services, ideally with predictable cash flows. There should be operational intensity as within that complexity, we can usually find ways to make money out of that. And we'll look for opportunities that are more service like and carry less headline risk. What we don't want to focus on are areas like areas with a high amount of regulatory risk, areas that are heavily dependent on research and development and subsectors that have evolving technology like biotech. So that excludes the payer industry and the life sciences part of the sector, but it includes the bulk of healthcare services, which has a variety of subsectors. It would include things like seniors housing where we're not dependent on government reimbursement, which benefits from an aging population. It could also include the urgent care business, which is really walk in and extended our outpatient care clinics for non life threatening conditions. That business is highly fragmented. It has material benefits to scale. There's significant market growth and operational improvement opportunities. And in each of those subsectors, we can leverage our expertise in facilities management and building platform businesses. Similarly, we're thinking about opportunities in technology services and that's a sector where we're finding more and more potential opportunities that meet our investment criteria. Businesses providing an essential service or large productivity benefits for their customers. If they have recurring defensible cash flows, good organic growth prospects and high returns on reinvested capital. Technology is becoming much more of a core focus within our own portfolio companies and it has actually been the change over 5 or 10 years has been remarkable. We can measure with a lot of certainty the value creation from greater automation, data analytics and specialty software that we apply to our own businesses and the scale of opportunity and improvement is enormous. So what are we looking for in technology? Well, it's the same thing that we're looking for in all of our business, barriers to entry, strong value proposition, defensible cash flow and businesses we can scale. Where we would not expect to make investments are early stage R and D, commodity type services where you need to compete with the technology giants or you're exposed to an industry with very rapidly changing consumer tastes. We have been looking at businesses in areas such as telecom related services, data center related services such as hosting. Sam still hasn't put a stamp on that one. So we're keeping that one. Specialty software, device or hardware products with increasingly integrated systems and software solutions and business other businesses adjacent to real assets. And as an example, in the real estate sorry, to go back here, as an example, in the real estate industry, we've been looking at building automation, mechanical lighting and climate conditions companies. We're seeing companies that are very, very large and also smaller that are participating in these areas. And investing in building automation is about $8,000,000,000 a year today growing at 25% per year. So that would be a really interesting type of investment for us. And finally, I want to touch on a small investment that we recently made in a company called Imagine Communications. It uses a wireless spectrum to roll out a national high speed broadband solution in rural Ireland. And in Ireland, there's a significant infrastructure deficit in the high speed broadband due to the very high fiber deployment costs on the last mile. This company uses a fixed wireless access. It's a proven technology. It entails having base stations connected to the national fiber network of the country. Signals are sent to customer sighted receivers rather than a fixed line connection and this enables the broadband to be rolled out very efficiently and at a low cost. So we like that this company was using a proven technology. It benefit from a spectrum barrier to entry and it provides an essential infrastructure like service. Now, Imagine needs to complete a rollout and it needs to secure customers and we will be funding that rollout. We think its technology gives it a pretty unique competitive advantage. We were able to underwrite and understand this business, thanks to getting some help from our infrastructure telecoms group and also because of our general presence in Ireland today. So with that, that gives you an example of what we've been working on. I'm going to hand it over to Dennis now at this stage. Thanks, Cyrus. While in preparing for this session, Cyrus asked me to just spend 10, 15 minutes talking about Business Operations Group and to go over a few case studies. I've got a few slides that talks about who we are and what we do and then specifically through these case studies, talk to you a little bit about the details of how we go about what we do. We're a group of operating professionals with a range of backgrounds that includes operations management, market development, sales as well as functionality expertise, everything that ranges from supply chain management, IT, major project management and of course, finance, accounting and business planning. We operate out of a variety of locations, Toronto, New York, London. We also have people in Australia, Asia and South America. So our basic approach, the what we do, is really focused at looking at businesses through 4 basic lenses. There's nothing complicated about what we do, but we find it surprising with how many situations, how many companies we get involved with where these basic approaches to running a business well, whether it be an industrial or whether it be a service business, are just not really tended to the way they should be. So the first lens we look through is around business strategy and with a particular focus on how actionable is the strategy the company has. It's not about putting some type of MBA analysis together. It's about just trying to understand where does the company make money, where is it active that it doesn't make money and then what do we do to reposition that product market strategy in a more appropriate way. 2nd lens, implementing operational excellence, which in effect is simply good old fashioned performance improvement approaches, focusing on productivity, quality, cost structure, benchmarking against best in class and trying to get management to take a step back, size up its situation where it's in and acknowledge where it's good, where it's not so good then how to refocus to drive improvement across the business. Commercial strategy, as Cyrus touched on this, is an area that continues to never cease to amaze me, how so many companies with tremendous experience bringing products to market, lots of relationships, deep relationships with customers. But it seems over the years they tend to lose focus on the basic raison d'etre of a sales team, which is how do we make money? Are we positioned in a market appropriately? And are we selling in the right way? Are we taking a tenacious profitability based approach? Do we understand the margins by product, by customer, regionally? And are we adjusting continuously in a tenacious way to try to continue to maximize returns? The final lens is around the balance sheet. And again, here, it's a very block and tackle approach. We look at how the net working capital is deployed in the business in parallel to looking at how the supply chain runs and again whether it be manufacturing oriented or service oriented business, what are the links in the supply chain? And as we focus on each link, how much cash do we have deployed? And of course, as we squeeze down working capital, we liberate cash, but it's also around looking at the processes deployed, things like complex treasury processes that result in occasionally 100 of 1,000,000 of dollars of trapped cash simply because people have let things get too complicated. On the longer term credit side of the balance sheet, of course, it's all around trying to look at opportunities to reposition debt, increase flexibility that then in effects typically liberates option value. So the 2 case studies I'd like to talk about, the first GrafTech, which is a company we've owned for a little over 3 years. We purchased in particular, big industrial businesses, why do we like the business? Well, GrafTech was and is a market leader of a critical consumable product in the electric arc furnace steelmaking process. And it's important to differentiate because the devil is in the details on most things that steel is a business many people would think of is not the kind of business you want to be in. Having run a steel company, I can tell you, 6 years out of 8, you're probably right. But at the end of the day, it is a critical material. It tracks its consumption tracks with GDP, so there's always growth. And what's more important and provided us with the kind of insight to give us the confidence to make this decision is, as we have deep knowledge of that steel supply chain, we recognize that there is a structural advantage to mini mill technology over integrated steelmaking technology. But for a variety of short run reasons, EAF producers had lost their competitive advantage. I think it was mentioned earlier in Sam's presentation that the price of iron ore had collapsed that gave the integrated manufacturers an advantage for a short period of time. The operating rates of mini mills went down. Then that effect is that GrafTech, which produces these graphite electrodes, found that its consumption had dropped significantly. So the world was awash in incremental capacity, Prices for electrodes dropped. This company ended up in a situation where a fairly large chunk of debt had become current. So it found itself in a difficult situation. And because of the flexibility that we have, as Cyrus outlined, we were able to step in and frankly be a white knight in a situation where a management team felt they were being squeezed. We also like the fact that this company had invested quite well in its assets, and it was one of 6 suppliers in an industry that represented about 90% of the capacity globally ex China. And because of the difficult times the industry was in, we saw a lot of improvements to the structure of the industry underway, which gave us more confidence. Also high barriers to entry, there are no known substitutes for these products, very technically challenging. This was a former division of Union Carbide, a world class carbon based material science division that had been spun out earlier, and it was the only producer. This was a real differentiator for that was vertically integrated to a needle coke production facility, a Seadrift facility that ironically was probably part of the root cause of why the company was in a little bit of trouble. Years earlier, I think we think it made the right strategic move, but didn't execute it properly. But the good news for us is it had this asset, which gave us tremendous flexibility, which you'll be able to see in a few slides what that's meant to us. Opportunistic acquisition, as I've mentioned, we acquired this at a significant discount to replacement cost for the reasons I've mentioned. It had tremendous improvement opportunities In spite of some good work the management team had done before we took over the company, we still saw a lot of room to improve. So 2 years into it, we're now 3, but at the point of about 2 years into it, we'd work with management very closely. And again, we have a very hands on approach. We work through organizations because in spite of what we think are very strong generic skills as far as how we think about improving businesses, you do need to marry that with domain knowledge. So if you have the right approach and you work with teams and you provide the right constructive tension in the situation, you can marry both and end up driving significant improvements. And as you can see here, and I want to highlight that in this 1st couple of year period, there was very, very little capital deployed to achieve what's indicated in the graph, almost a doubling of capacity on a per mill basis. And this was as a result of consolidating all of our production in the 3 largest global facilities and frankly driving performance improvement in a way that the company had never seen before. We also divested non core assets. The company had been spending a fair amount of its cash flow on what we call science experiments. I mean, the engineer and the entrepreneur in me was very curious about some of the things the company was doing. They were working with Samsung. They were working with Tesla. They were doing all kinds of things that, unfortunately, they had given away the commercial upside in many of these technologies they have developed and we're distracting some of the best minds in the organization. So selling these non core assets allowed us to liberate cash. We redeployed it back in the core business. But I would say even more importantly, it allowed us to focus management's time and attention on that core business. That's what allowed us to drive this optimization of the system. We refocused R and D, as we say, little r and big D because we don't believe in this kind of company being a core driver of research. We want to take the research that had been done in the past and deploy it. And again, back in the core business, this company's asset base had the ability to deliver extremely high quality product for a variety of reasons. As the business got difficult, they decided to lower their quality before we bought them as a way to try to compete instead of levering all this technology they had, finding a way to increase quality at the same cost and differentiate themselves that way in the market. So we refocused the group in that way. Then we introduced what we call the strategic customer initiative, which was a commercial initiative that I'll go over I'll go through in a little bit of detail here. And many people in the audience probably are aware of GrafTech. It's a great story for us, and I think a lot of people were surprised at what's been accomplished financially. And a critical turning point here in spite of all the good operational work we had done was on this commercial side where around what typically happens in this business or before we showed up in this company and the entire industry worked this way where around August of any particular year, the commercial teams would start to commit their entire capacity for the next year forward starting with January of the following year through the end of the year, where they would provide fixed commitments on volumes to customers at fixed prices. And the habit had become unfortunately where customers, when the time showed up to deliver and accept these products, they were happy to take the products at those costs at that price if the markets had increased in price. But of course, when the prices fell for whatever reason, they expected you to match. So the companies had, in effect, developed a habit of giving free options to their customers. Well, as we felt the business and sometimes you can't to our team. When you get close to the business and sometimes you can't always explain why, but your experience tells you things are changing, markets are tightening, the way your customers behave, the way your competitors behave. And by watching the industry structure change, we got to a point where and it was late one day, Cyrus and I were just chatting in the office. And I said, I can just feel the markets returning. And he kind of threw out, as he does from time to time, his stretch goals and he said, so why don't we contract all the tonnes we have and let's contract it out 5, 7 years? My first reaction, of course, was, well, Cyrus, the industry doesn't work that way and etcetera. But I have to admit, I went home and I thought about it. And in other cyclical businesses I had been in, we had done things like that. So the more I thought about it, I thought throughout my 33 year career, if there was ever a time this might work, it's now. And it was really that kind of collaborative nature of the way Brookfield works and that convincing back and forth that got us really thinking about if we were to do this, how would we do it? We needed more information. And one of the younger professionals out of our New York office here devised a scheme of trying to understand what's the real value of these products to our customers. And at the end of the day, we decided we would launch the 1st ever in this industry auction. And we decided last August, September, we were going to auction off a fixed amount of tonnes in the Q1 of 2018, and we were going to explore what the value that the customer really was. And I don't mind confessing, at that time, our sales team was looking at taking spot orders at $2,500 a tonne. The short story is when the bids came back, they were in the range of $22,000 to $33,000 a tonne. For these products. The industry was happy to sell the $2,500 to $2,800 a tonne. So taking that information, marrying it with this creative idea of trying to introduce something that would provide more stability and having been on the other side of a trade like that throughout my whole career, whether it be in steel or chemicals or paper and pulp, it's often the case where it's advantageous to start to layer in contracts on certain critical consumables. If it's a paper mill, a steel mill, it might be natural gas. If you're a mini mill producer with 3% of your cost to manufacture in this mission critical product, We just took it to market that this was an absolutely great thing for our customers. And in spite of these high spot prices, we were prepared to discuss 3 5 year contracts nominally in the $95,000 to $10,000 a tonne range. The net effect is it took a bit of time, took a bit of convincing, but we were able to layer in twothree of our entire capacity in these 3 5 year contracts, as you can see by the historic comparison of EBITDA versus where we are halfway through the year and where we're forecasted to be through this year, we fundamentally have transformed the value of this business. And again, touching back to those 4 basic lenses we approached, From a strategy point of view, we shut down 3 non core shut down or sold 3 non core businesses, focused management on operational improvement and then took a step back and reinvented how this industry might function. Now we're only a year, 1.5 years into this. Things are going well, and we see the dynamics continuing to change in a positive way. So we remain very optimistic about this investment. And in that regard, since through basic performance improvement without spending capital, we're now at the point where these 3 world class facilities in Mexico, Spain and France. We're now able to, with marginal capital investments, get significant increases in the capacity of these plants. To give you a rough idea, for approximately $1,000 per tonne of capacity, we can grow the business by about 35,000 tonnes, a little over $35,000,000 compared to greenfield capacity estimated at over $10,000 a tonne. And of course, without any incremental daily or fixed costs, the margin expansion on that tonnage is massive relative to a greenfield plant. We're also now looking at potentially modifying and starting up a 4th facility we have, St. Mary's, as we call it. In parallel, we're increasing our needle coke capacity in Seadrift so that we can integrate some of that needle coke. And now we're testing the market on 5 7 year contracts on an incremental 20,000 tonnes. Now the jury is still out. It's early in the process, but our whole point is to try to expand this strategy and work with our customers so that they can understand the true economic value of entering into these contracts. So that's now 3 years into it, and I think gives you a pretty granular sense of how we go about this, the way we actually operationalize this approach. So just briefly, because it's early on, talk about Westinghouse and how we think about moving forward in this situation. We closed on Westinghouse in August of this year. I think most people who follow the situation knew that Westinghouse had been in Chapter 11 as a result of its former owners getting into the turnkey new project build space. And unfortunately, when you take on those kind of projects, when nobody had built a plant like that in 30 years in North America, you're taking on a lot of risk. They got themselves in trouble. And because of Brookfield's reputation, frankly, what was amongst a very small group of people asked to participate in the acquisition competition. Brookfield ended out on top, frankly, because of our reputation and our long history in actually operating plants like this. So putting ourselves in a position where we could then become a service provider to the nuclear fleet became something very attractive to all stakeholders, including government, frankly. This gives you a very quick snapshot to get a sense of where our current earnings come from. Approximately 90% of our EBITDA comes from the existing operating fleet. Over half of the 450, approximately 450 reactors around the world have Westinghouse technology embedded in them. We service those. We also serve in an incremental 15%, 16% of the other plants as Westinghouse has learned to lever its expertise. So we now have provided services in one form or another to 2 thirds of the global fleet. Westinghouse is an iconic company that frankly has more brand recognition in a B2B environment than I think any company I've ever experienced, ever interacted with, ran or looked to purchase. It has 5 basic core businesses, provides nuclear fuels and associated support technology it provides field services, which 20 to 30 day shutdown to refuel. And while 20 to 30 day shutdown to refuel. And while being shut down, of course, they do a host of other repairs. So we have a very strong repair and maintenance business. While doing that, you often have to replace mechanical and process technology. So we have a group that does that. We also have instrumentation and control technology that we produce predominantly for the new power plants that are being built globally, but we also do retrofits. And then we also have a very sophisticated engineering service group. As you can imagine, as these plants that are out there are trying to drive their own continuous improvement, maintaining their own competitive nature, they need a deep nuclear engineering technology capability. And as the founders of this industry really over the last 50 years, we can bring a lot of value to bear to help extend the lives of fleets and we can help lower their costs. So why we like this business? It is, again, similar to GrafTech, a lot of the characteristics. It's a market leader in global infrastructure like products and services, significant barriers to entry that in addition to technology wise are regulatory linked to regulatory constraints It's a preferred service provider. And I think Westinghouse is known as not necessarily where you're going to get the cheapest product or service, but it's absolutely crystal clear you're going to get the best technology and the best service provisioning of any nuclear services company in the world. And we have a very skilled workforce, and I can't overstate this. When you understand the nature of the work people do, in particular, on shutdowns in these high risk environments, these are not trivial things. And you don't just grab your typical trade person off the street or your typical engineer, frankly. Takes a lifetime to gain the kind of experience you need to do the work that these people do. And significant and intellectual property, which with tremendous protection around it. Again, our battle cry is about getting close to the business. We closed 6 weeks ago and already I and 7 other operating professionals that are being brought to bear in this situation have been around the world visiting facilities, meeting with management teams in particular. We've met I've met with over 70 of the senior managers, the vast majority of which I've had both 1 on 1 meetings with, along with small group sessions drilling into their businesses, understanding what they do, why they do what they do, the way they do it. And of course, through that process, you get a really good sense of how they're structured and whether or not they need to be reorganized and it's clear in this situation, there's a need to get some realignment. But you also, of course, are assessing the leadership team from the top to the bottom. And Peter Gordon, a partner of mine and the guy that runs the operation, Peter Gordon, a partner of mine and the guy that runs the operation group, who's also a long and a tooth old wolf kind of operator, We always joke about how and we both happen to be engineers that business is never really about technology. When you get right into it, it's all about people and it's about understanding how to organize them, how to make the right choices in leadership and really how to set the right tone at the top and focusing leadership on the kinds of things that matter, the primary drivers of the business. In this case, we've also taken a little bit of a different approach to how we organize from a governance perspective instead of the traditional board and CEO type of structure and reporting relationship. We've also decided to what we called to the Board, I just came from 2 days of Board meetings in Cranberry and to introduce the new directors to the leadership team and to get to know these directors. Of an 8 man board 8 person board, we have 4 independents that bring deep knowledge to the sector. And as I've said to all of them in their indoctrination, we want to build a culture of a working board. This is not about showing up quarterly and opining on issues around control and governance. Those are table states, frankly. In a situation like this, we want people that are prepared to roll up their sleeves, get engaged and help management, lever their expertise. And most of the right kind of directors, in my opinion, are people that typically have to hold themselves back on the typical public company board given the passive nature of most of them. So we've picked the right kind of people that can really bring value. Also, we decided in this case, we're going to create this what we call an executive oversight committee. And it's very overtly a tool to try to induce the Brookfield executives and operating professionals into the business here and engage this management team. We still have aligned clear accountability with the CEO and his team. They understand, they are accountable, but they also understand we will get close to this business and we will be involved as we need be. And as Cyrus always reminds me because I get a little bit excited from time to time about these situations that it's not our job to run these businesses, but it is absolutely our job to make sure these businesses are run well. And if that means we need to take over certain positions for periods of time as Per is doing now in Europe with the plastics business, We do that while in parallel trying to find the right kind of leadership team and put the right people in place. But the point is we're not going to wait for things to get better. We're going to make sure they get better. This committee is also designed because in spite of Westinghouse really not being that big a business for about a $4,000,000,000 a year business, 10,000 employees, it's really though more complex than its size would indicate. So we wanted to make sure we are shining a light on the key drivers at any point in time. So this EOC, as we call it, which will probably be in place for 18 months, maybe 24 months, is really about maintaining focus for the leadership team on whatever the 3 to 5 most critical work streams might be at a point in time. So in this case, as we've summarized those five work streams, I'll just quickly go through each of them. So the transformation plan is what we've come to call this broad based approach to drive improvement across the business at Westinghouse. In particular, it's very block and tackle: focus on margins understand risk, which is something this company was fairly weak in and we've been very open with management about that and they're acknowledging it and that's kind of the first step to getting them to a different place mentally. And also efficiencies, effectiveness and in particular, the culture. This is a company as a result of its 2 previous owners, Toshiba, that took a very hands off approach, which is, I think, uncharacteristic, but whatever. And the previous owner, which was British Nuclear, was very bureaucratic. The net effect is we've got a tremendous talent pool. We've got great people. We've got people that care a lot, that have tremendous domain knowledge, but frankly don't operate in a way that we would expect and they definitely don't meet our standards of responsiveness. And again, the good news is we've been very transparent in what we see, what we expect. And 6 weeks into it, we're already starting to see a new cadence across the organization. Commercial process improvement, very similar to what we did at GrafTech. Again, we've got a lot of engineers. And being an engineer, I feel I can be a bit critical that sometimes we get too focused on the technology, in particular, in a highly technical environment. Again, in this kind of situation, you absolutely need to be technical, but you also need to know how to sell. You need to understand how to make money and how to move your priorities, your attention to where you're making money and to have the discipline to understand that if a customer doesn't value what you're providing because they're not paying you for it, maybe you shouldn't be doing that kind of work anymore. So again, very basic block and tackle, and it's all about setting that tone to focus on profitability. Supply chain, this is extremely this is where the complexity of this business comes in. And it's got a historical sense of always wanting to make everything that it provides because it's so focused on quality. And what we're now trying to get the psychology re centered around is understanding you can build a world class capability in quality assurance and then become a very globally minded provider of products and services. And whether that be using engineering services in Spain at a third the cost of what it might be in another part of the world or producing core fabricants in places that you wouldn't normally think of, like India, like China, but based on the quality standards that have made Westinghouse the leader in this technology, it's very doable. It might not have been doable 20 years ago, but it's very doable now. And it's more a state of mind and a tenacity to make it happen as opposed to sitting back and thinking it's just not possible. The operating model is just generic catchall for this broad based organizational structural review as well as leadership talent assessment, which has been going on frankly for the 4 months it took to close the deal, but because we were kept at bay a little bit by the bankers involved since closing, the day after closing, we launched a massive initiative with the 8 of us deeply involved in the organization and that assessment has been ongoing. And over the months ahead, we see we already see our confidence rising on adjustments we can make that are not big and dramatic and risk the frankly, the pace that we've already created. And a strategy review will go on in parallel. And again, very quick, over the next 3, 4, 5 months, an eighty-twenty review, taking 20% of the time that McKinsey might take and maybe not doing as accurate a job, but we're going to get 80% of this right and we're going to start adjusting how we focus this business, while taking the time to learn the business through the eyes of the management team, through our customers, by watching our competitors, and then we'll make mid- and longer term adjustments year 2, year 3 as we go. So conclusion, this is just to give you a stake in the ground. On a trailing 12 month basis ended March 31, the company generated about €440,000,000 of EBITDA. Again, we keep saying this is a situation of good to great. This isn't a turnaround like you would normally think, the Chapter 11. I think to people who've just been superficial and their assessment has clouded what the situation really is. This is a business with a lot of good things going on. Having said that, we see huge opportunity here. And we've already established a cadence where I can say with a fairly high level of confidence to Cyrus that over the midterm, 24 months, plus or minus 6, we think we can get to our interim target exceeding €550,000,000 a year of EBITDA. And as we started to introduce what we call our stretch framework, which is kind of a constructive tension, constructive environment with the leadership team where we encourage people to put their biggest, boldest ambitions on the table. Again, trust that we're not going to try to catch them failing. We really want to catch them succeeding, help them succeed. And where we share the results that or we share the feeling of success that comes from achieving these results, put big bold ambitious plans in place because that's the only way you'll achieve them. And again, I'm happy to say that we've got just tremendous take up of this new approach, this new way of running the business. We've put 70 of these top leaders through 2.5 each through 2.5 days of kind of an indoctrination into a new way of running a business. It's been well accepted. And we now have a management team that's in their recent 5 year plan submission, which Brookfield Brookfield does require from all of our portfolio companies. We've got a base plan that's on track to meet this midterm run rate. And we've got a stretch framework that frankly will we believe will allow us to exceed this significantly. Good afternoon, everyone. I'm excited to be here today representing my new role as the CFO of BBU. I've had the opportunity to partner with Craig and Cyrus over the last few years since the spin off of BBU, and I'm excited now to meet all of our investors. I also have the dubious pleasure today of standing between you and a glass of wine as I'm the last speaker. So I'm going to try to be succinct in my comments, and I think a lot of what I'm going to tell you will resonate with what you've heard already. But first, I'm going to start with the polling question, and I promise this is the last one for the day. And if you could just type in a response, a word or a couple of words. And what we're looking for is some input from you on what additional information you'd like to see in our financial disclosures for BBU and probably setting myself up for more work day 1. NAV, so we'll talk about our approach to value today. EBITDA by portfolio company, okay. NAV seems to be kind of the clear winner here. Disclosure around CapEx for portfolio companies, okay. So AFFO is on our mind as well, Okay. So we'll touch on both of these things, the NAV and our approach to value is one of the things that I'm going to talk about today. But there's really kind of 3 things that I wanted to cover. The first is to provide you with an overview of our financial position. The second is to give a brief update on some of our underlying operations. And finally, to talk about our approach to value for BBU today. Our focus over the last few years since we've spun out hasn't really changed. We're focused on maintaining a strong balance sheet and ensuring that we have ample liquidity at Brookfield Business Partners so that we can execute on our growth strategy and deploy capital into high performing, high quality assets. We're also very focused on improving our underlying operations, and Dennis has walked through that in quite a bit of detail today. And then all of this should lead to maximizing value for our unitholders. Part of our disciplined financial risk management includes maintaining the right capital structure and ensuring that we're protecting that capital structure. Our goal is to have sufficient liquidity at the corporate level to support the growth of our business as well as to maintain a strong balance sheet at BBU. So in this regard, I really wanted to highlight a couple of things to you. First, we have no debt at the corporate level. And again, I think this is a theme that we've heard through the day in a number of our businesses. 2nd, we finance our businesses at the operating asset level with a level of debt that we believe is sustainable for that business and has no recourse back up to BBU. And third, we maintain a level of debt for each of the businesses that can be sustained and is appropriate in any market cycle. Next thing I wanted to talk about is our liquidity profile. Our goal is always to maintain sufficient liquidity so that we can be nimble in all market conditions. Today, at the BBU corporate level, we have about $2,000,000,000 of liquidity and this is composed of cash as well as our credit facilities at the corporate level. More broadly, there's really 4 sources of capital for BBU. The first is cash and a portfolio of public securities that we could liquidate if we thought we had a better use of that capital. The second is our undrawn facilities. So earlier this year, we increased the size of our facilities from 250,000,000 to 825,000,000 and we did this because we thought this was a more appropriate size and scale given the activities that we were doing today. The third, one of our primary sources of capital is distributions and monetizations from our underlying operations, and I'm going to talk about this in a little bit more detail in the next slide. And finally, the Capital Markets. We have access to the Capital Markets, which we will leverage as it's appropriate where it's accretive to our underlying operations. So just to touch on our distributions. A lot of investors do ask us, at what point do you think you're going to be sustainable and that you're generating enough cash flows from the business to deploy and not tapping into outside resources? So this year, we were able to do that. We generated about $1,500,000,000 of distributions from our businesses, and we use that to make acquisitions like Westinghouse that Dennis just talked about. I'll now walk you through some of our more significant monetization activities and maybe spend a couple of minutes on GrafTech in particular because it's a great case study of all of the different ways that we can release capital from our business and bring it back up to BBU and use it in other more accretive activities. So what we did at GrafTech, as Dennis just walked through, is we put in place these long term contracts. And what that did was essentially derisk cash flows for 3 to 5 years. So it gave a lot of visibility into what level of cash flows the business is going to be generating. So on the back of that, at the beginning of this year, we put debt refinancing. And then we upsized that debt refinancing a little bit later in the year. So both of those initiatives generated about $640,000,000 of capital for VBU. After we did that, in April, we did an IPO of the company. And on the back of a strong share performance, in August, we did a secondary sale of shares. And collectively, both of those things generated an additional $340,000,000 for us. And in the meanwhile, GrafTech is has been performing very well and has been generating cash flows within the business. So, in conjunction with the secondary shares sale that we did, they were able to do a share buyback and gave us an additional $80,000,000 So in total, from GrafTech alone, we've generated $1,100,000,000 this year for BBU stake. And we continue to own about 27 percent of the company. Next, I'm going to just touch on a U. S. Brokerage joint venture. So we generated about $130,000,000 of cash for BBU from the sale of a joint venture a onethree joint venture interest that we had in a U. S. Brokerage business. We sold this business to our joint venture partner. This is a business that we've been in for a very long time, and it's generated very strong returns for us over the years. Next, just quickly on our Australian Energy Operations. So earlier this month, we announced that we had signed a transaction to sell our Australian oil and gas assets, and this is a company called Quadrant. We bought this business in June 2015, and it was a carve out of the Australian assets of a large global organization. And when we bought this business, what we did was put in place a long term contract for substantially all of the natural gas production in the business as well as financial hedges for substantially all of the oil production. So what this ended up doing is basically derisking a lot of the cash flows from commodity risk and commodity price volatility. And the business has done very well. We've taken out a lot of costs from the business and they generated really strong cash flows for us. We've held the business for 3 years and in the 3 years, they've already returned almost all of the capital that we invested. In addition, the sale, we'll generate another $125,000,000 of proceeds for BBU. And overall, on this investment, over a 3 year period, we'll generate a 3 times return on our invested capital and a 40% IRR. Plus we're going to keep a little bit of the upside in select exploration interest, so there might be more to come. So realization of these assets provides BBU the liquidity to execute transactions like Schohler and Westinghouse that we talked about. When you think about it, it's a really simple rinse and repeat model. So we take our mature assets, monetize cash flows from those assets and invest them into higher returning new opportunities or potentially opportunities within our existing businesses. Again, this is a theme you've heard through the day, but the other advantage that we have is our access to institutional partner capital. Alongside our own balance sheet, we've been able to invest institutional partner capital. And what this has allowed Brookfield Business Partners, which is fairly young company, what it's allowed us to do is buy world class businesses that we might not have been able to on a stand alone basis. So over the last 2 years, as Cyrus talked about, we've completed a number of acquisitions and invested over $4,000,000,000 about $1,700,000,000 from Brookfield Business Partners balance sheet. And the reason we've been able to do this is because of the institutional partners that we have alongside us. So as an example, last year in April, when BBU's market cap was about RMB 2,000,000,000, we completed the acquisition of BRK Ambiental, the largest private waste water sewage treatment business in Brazil. In April sorry, after that, we acquired Teekay Offshore, a controlling interest in Teekay Offshore, which is a leading provider of critical transportation and production services to the offshore oil industry. And in August this year, we closed the acquisition of Westinghouse. As we look ahead, we have a really strong balance sheet. We have significant liquidity and a broader Brookfield network of institutional capital that should allow us to continue to acquire high quality businesses of significant size and scale. I'm going to now move on to our operations and give you a quick update on some of our businesses. So the entertainment business, I think when Cyrus put his polling question, that was probably second on the list of things something that people in conjunction with our operating partner, a in conjunction with our operating partner a concession to operate 3 Toronto area casino facilities or gaming facilities. We've since then obtained city approvals and $1,000,000,000 of secured financing to redevelop these casinos into premier entertainment destinations. This is a small investment for BBU, but we do think that we're going to generate really strong returns on it and we'll be able to use those returns and that capital and deploy it into other activities. Next, our fuel distribution and marketing business. So we really started the build out of this platform with the acquisition of Greenergy last year. Greenergy is the largest fuel distributor in the UK. And the investment thesis going in was really that we'd be able to develop a global large scale fuel distribution and marketing network. And we've been able to execute that. So, so far, what we've done is we've completed 2 very accretive bolt on acquisitions on the fuel distribution side, one in Canada and the other one in Ireland. The other thing that we did last year was we bought the largest network of gas stations in Canada from Loblaws. And what we've done there so far is rebranded and renovated all of those gas stations to the mobile brand. And we're now looking at the other aspects of the business. And the next stage is really building out this business for more profitability. And then our Construction business. So our Construction business had a few hiccups last year, but we've substantially completed all of the projects that caused us issues. And our U. K. Business as well as the Australia business is back to more normalized operations. We have scaled back our activities in the Middle East and we'll be very selective in what new projects we take on there. Today, we're more focused on profitably completing the projects that we have. As we look forward on the construction business, Canada is where we see additional opportunities. Moving on to our Marine Energy Services business, which is Teekay Offshore. So since our acquisition of Teekay Offshore, we've supported the completion of a number of growth projects and extended the contract on a number of their vessels. And what we think this will do is enhance the long term EBITDA that the business will generate. Also in towards the end of June this year, we supported a bond offering to substantially extend the debt maturities in this business. And last year. And since the acquisition, what we've done is we've been focused on internal operations, on governance and capital allocation decision making. One of the initial operational focuses that we have in most of our businesses is to stabilize and improve safety performance. We found in many of our businesses that excellent safety performance is critical to developing an environment of broader excellence, and we've been very focused and successful in doing that at BRK Ambiental. We are facing some headwinds from currency depreciation as well as the political situation in Brazil today. We've seen government changes in Brazil before and the country has a very strong rule of law. So we are still confident and remain optimistic that as the country stabilizes, it should accelerate the development of our concessions as well as getting access to new concessions. In fact, most recently, we did close on one concession. We were awarded 1 concession. It's small, but it's a very positive signal for future growth for BRK Ambiental. And then finally, Graphtec, our graphite electrode manufacturing business, I think Dennis has covered that in quite a bit of detail today. So what does all of this mean? These initiatives and the execution of ongoing improvements within our operations have allowed us to outperform the EBITDA target that we had set for ourselves last year. So what we had said last year is that we were targeting about RMB350 1,000,000 of incremental EBITDA from our businesses. And what we were able to deliver was closer to $400,000,000 Most of this was on the back of exceptional performance at GrafTech. With the new acquisitions and the continuous improvement in our operations, we anticipate the opportunity for further EBITDA improvement in the $300,000,000 to $400,000,000 range, with the potential on average to generate run rate EBITDA of and the reinvestment of capital in current operations and potentially the new sectors that Cyrus talks about will continue to evolve our business. 2 years ago, when we spun off, we had 4 operating segments: Business Services, Construction, Industrials and Energy. And as we look forward, we're introducing a new segment and that's Infrastructure Services. So what we're trying to capture with Infrastructure Services is businesses like Westinghouse, basically businesses that provide services to infrastructure assets, in this particular case, power plants. We believe that this approach provides a more balanced view of our business today, but it doesn't change our approach to how we look at value for BBU. So investors always ask us about how we think about value for BBU, and we detailed here our approach to value and the representative NAV based on trailing results. This does not take into account all the potential embedded value in our operations. It does have some normalization of some of our results, and it doesn't consider any of our future acquisitions. So just to kind of walk through each of the segments compared to last year. Our estimated value range for BBU today is between $41 to $46 per unit. On a segment basis, the Business Services segment has remained substantially unchanged. The value of our Construction business is consistent with last year and within our other business services, the loss from the U. S. Brokerage business sale has been partially offset by acquisitions completed during the year, including our Entertainment Business, 1 Toronto, as well as the growth in our Facilities Management business. Infrastructure Services, which is our new segment, we've captured that here at cost since we only closed the transaction on 1st August. The Industrial segment has grown substantially and this is primarily reflective of GrafTech and the turnaround in price improvement measures that we've taken there. It also captures the acquisition of Schoeller. Our energy value is fairly consistent with last year, a little bit higher at the high end because of the new investments that we've done in Teekay Offshore and it's offset by the loss of Quadrant, which will sell by the end of the year. Our corporate cash is really just a roll from June 30, adjusted for inflows and outflows since then. So overall, compared to last year, our per unit value is higher and we have grown the business. We continue to be optimistic of the initiatives that we've identified in all of our operations and the potential for new growth opportunities for Bouvier. With that, I'll hand it back to Cyrus. Thanks very much, Jaspreet. As we're running late, I think we'll limit it just to a couple of questions. And then if there are more questions, we can do it at the bar, if that's okay. Question there in the middle? Thank you. Alan Fleming from Citi. Cyrus, can you touch on maybe potential future monetization opportunities within the portfolio? I think in the past, you've talked about looking at strategic alternatives for your North American Palladium business. I didn't hear that brought up in the prepared remarks. So curious, any update there and how you're thinking about that in the portfolio and the optionality within the portfolio? Yes. So look, we have a lot of things we can sell. First of all, we own public securities in a number of companies, including GrafTech, TK and some other things. We have businesses that are much more matured now like North American Palladium. It's doing exceptionally well. I think we're having a record year this year and that's a business at the right price. We'd be happy to monetize it at the wrong price. We'd rather keep it and harvest the cash flows for ourselves. But and there are a number, I'd say, a few smaller companies that we could monetize today if we want to. So there's lots of opportunity for future proceeds. Michael Slaughter with Capital Group for Westinghouse. Could you touch upon your deleveraging target? And then for your uranium inventory, what you think you'll use the proceeds for? Well, I'll leave the uranium inventory question for Dennis, because I don't know much about our uranium inventory specifically. But look, our target for Westinghouse, we could delever it, but we have extremely favorable debt on the company. It has no covenants. It's low cost debt. It's very long term debt. And as you heard today, our EBITDA is actually going to increase. So, we are in effect deleveraging on a debt to EBITDA basis as time goes on. So there's no need to deleverage. We're very comfortable with the debt that's on that business. And Dennis, there's a question around uranium. Sure. On the I think we need a microphone here. On the uranium, we have some in storage that the company had inherited over the years that had taken it in exchange for services and whatnot in the past. And our plan is simple. We're going to sell it down when it makes sense to do so and free up the cash and plow the cash back into the business and drive improvement. One more question. On the valuation chart that was shown just now, how do you account for the based on your share price, what you pay for BAM? I mean, what you could potentially pay back to BAM for performance fees? What we pay to BAM? You will pay, assuming your share price goes from 29 to 4? So our share price is actually in that range today. So it's a simple formula. It's 20% of the increase in the unit price off of a base and the current base is $38 $38 And so at the end of the quarter, we'll do a weighted average share price assuming it's something like $0.41 or something like that, that's $3 20 percent of that uplift gets paid to BAM. And then that sets the new high watermark for the performance fee. I think with that, I'll hand it over to Bruce. Thank you. So I'm going to be very brief, call inaudible, not take any questions, not because I don't want your questions, but you've been sitting here for 8 hours and people on the phone have been on the phone for 8 hours. I don't know if you're still there, but if you are, that's incredible. So but despite that, we're all going to be here afterwards. Anyone wants to talk to us either here or at cocktails, we'd all be thrilled to talk to you. I'll just say a couple of things. 1, thank you for coming. 2, thank you for your interest in our business and for following us, being partners with us and being invested in the company. If there's anything that we can ever do to explain the business, talk about our business, give you information, we'd be thrilled to do that. This is a very long term game. We've been at it a long time. I would just say that at this point in the business cycle, the company is generating and will generate significant amounts of cash. We will we commit to you to be as prudent with that cash going forward as we have been in past, I think, and deploy it in the correct way. And that may be buying up units of our subsidiaries. If they trade off at points in time, it may be buying our own stock back or may be doing other things within the business. But we I guess, fundamentally, we're here to ensure that we grow the value on a per share basis of the company. And that's really the sole goal of the management group of the company. So with all that, I just say, again, thank you for being here. Thank you for all your participation and interest. Cocktails are on the 4th floor. If you walk out the back, there'll be somebody pointing you that direction or there are signs. If you can stay, we'd love to talk to you. If you can't, we understand and thank you for your participation today.

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