Q2 2026 Brookfield Infrastructure Partners LP Earnings Call

July 30, 2026

Operator: Good day. Thank you for standing by. Welcome to the Brookfield Infrastructure Partners L.P. Second Quarter 2026 Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Krant, Chief Financial Officer. Please go ahead.

Speaker #1: Krant, Chief Financial Officer. Please go ahead.

David Krant: Thank you, Crystal. Good morning, everyone. Welcome to Brookfield Infrastructure Partners' Q2 2026 earnings conference call. As introduced, my name is David Krant, and I'm the Chief Financial Officer of Brookfield Infrastructure. I'm joined today by our Chief Executive Officer, Sam Pollock, our Chief Operating Officer, Ben Vaughan, as well as Dave Joynt, a Managing Partner on our investments team, and Lief Williams, a Managing Director focused on AI infrastructure investments. I'll begin the call today with a discussion of our Q2 2026 financial and operating results, followed by an update on our asset sale initiatives. I'll turn the call over to Sam, who will discuss our new investments and provide an outlook for the business. At this time, I would like to remind you that in our remarks today, we may make forward-looking statements.

Speaker #2: Infrastructure Partners Q2, call. As introduced, my name is David Krant, and I am the Chief Financial Officer of Brookfield Infrastructure. I'm joined today by our Chief Executive Officer, Sam Pollock, our Chief Operating Officer, Ben Vaughn, as well as Dave Joint, a managing partner on our investments team, and Leif Williams, a managing director focused on AI infrastructure investments. I'll begin the call today with a discussion of our Q2, 2026 financial and operating results, followed by an update on our asset sale initiatives.

Speaker #2: As introduced, my name is David Krant, and I am the Chief Financial Officer of Brookfield Infrastructure. I'm joined today by our Chief Executive Officer, Sam Pollock; our Chief Operating Officer, Ben Vaughn; as well as Dave Joint, a managing partner on our investments team; and Leif Williams, a managing director focused on AI infrastructure investments. I'll begin the call today with a discussion of our Q2 2026 financial and operating results, followed by an update on our asset sale initiatives. Then I'll turn it over to Sam, who will discuss our new investments and provide an outlook for the business. Thank you, Crystal, and good morning, everyone, to the Q2 2026 earnings conference.

Speaker #2: business. At this time, I would like to remind you that in our remarks today, we may make forward-looking statements. These statements are subject to known and unknown risk, and future results may differ materially.

David Krant: These statements are subject to known and unknown risks. Future results may differ materially. For further information on known risk factors, I would encourage you all to review our latest annual report on Form 20-F, which is available on our website. We're pleased to report that in addition to Brookfield Infrastructure delivering strong financial results this quarter, we have also made meaningful progress across our strategic initiatives. Beginning with our financial and operating results in the Q2, we generated FFO of $702 million, or $0.89 per unit. This represents a 10% increase compared to the prior year on both a quarterly and year-to-date basis, which is in line with our long-term growth target.

David Krant: The increase reflects organic growth within our 6% to 9% target range, driven by inflation-linked rate increases in our Utility segment, strong activity levels across our Transport and Midstream businesses, and the commissioning of new capital projects in our Data segment. Results also benefited from the strong cash contribution from new investments, which are generating returns meaningfully above the yield on our completed asset sales. I will now go through our results by segment in more detail. Starting with our Utility segment, we generated FFO of $196 million, an increase of 5% versus the prior year. The increase was driven by inflation indexation, the contribution from capital commissions into our rate base, and the acquisition of a South Korean industrial gas business completed last year.

David Krant: This growth was partially offset by foregone earnings from asset sales, including the largest of four concessions within our Brazilian electricity transmission operation and our Mexican regulated natural gas transmission business, both of which contributed results in the comparable period. Moving on to our Transport segment, FFO was $311 million, representing a 7% increase over the prior year after normalizing for capital recycling activity. The increase was driven by broad-based strength across our operations, with volumes across our rail, port, and toll road operations increasing between 3% and 7% year over year. In addition, results benefited from the contribution from our North American railcar leasing platform, which closed on 1 January.

David Krant: These contributions were partially offset by the foregone earnings associated with the sale of a 49% interest in our Australian export terminal, the sale of our Australian container terminal business, and a partial sale of our UK port operation, all of which closed last year. Our Midstream segment generated FFO of $183 million, up 17% compared to the same period last year. The increase reflected strong organic growth across the portfolio, particularly at our Canadian diversified Midstream business, which benefited from strong asset utilization as well as elevated commodity pricing. Results also benefited from the contribution of our recently acquired US refined products pipeline system, which more than offset the lost earnings with the sale of our US gas pipeline last year. Lastly, FFO from our Data segment was $154 million, representing an increase of 36% compared to the prior year.

David Krant: Results also benefited from the contribution of our recently acquired US refined products pipeline system, which more than offset the lost earnings with the sale of our US gas pipeline last year. Lastly, FFO from our Data segment was $154 million, representing an increase of 36% compared to the prior year.

David Krant: The increase was driven by the contribution from our US bulk fiber network acquired last September, as well as income generated by our data center developers and the initial contribution from our partnership with Intel to construct semiconductor foundries in Arizona. Turning to our balance sheet and capital recycling program. Public markets have been an increasingly effective exit channel for us. Far in 2026, we have generated meaningful proceeds from public market transactions, reflecting both the quality of the businesses we have built and the depth of investor demand for scaled high-quality infrastructure platforms. IPOs and follow-on public market monetizations provide us with an attractive path to crystallize value, broaden the buyer universe, and retain flexibility to participate in future upside. They also give us optionality alongside private sale alternatives, supporting value maximization across multiple potential exit paths.

The increase was driven by the contribution from our us. Bulk fiber Network acquired last September as well as income generated by our data center developers and the initial contribution from our partnership with Intel to construct semiconductor Founders in Arizona.

Turning to our balance sheet and capital recycling program.

Public markets, have been increasingly effective exit channel for us.

So far in 2026, we have generated meaningful proceeds from public market transactions, for reflecting, both the quality of the businesses, we have built and the depth of investor demand for scaled high-quality infrastructure platforms.

IPOs and follow on public market monetization, provide us with an attractive path to crystallize value. Broaden, the buyer universe and retain flexibility to participate in future upside.

They also give us optionality alongside private sale Alternatives supporting value maximization across multiple potential exit paths.

David Krant: The most recent example was the IPO of our US colocation data center operation on the New York Stock Exchange. Since our initial investment in 2018, we have transformed the business into a scaled platform with large presence across major US markets, serving more than 1,700 customers. A key value driver in this transformation was the acquisition of over 40 sites through a bankruptcy process, which scaled the platform, optimized the portfolio, and accelerated its growth. During our ownership, we have increased EBITDA by more than four times and expanded capacity from 115 megawatts to approximately 390 megawatts. The IPO represents the next step in our value creation plan. The transaction generated gross proceeds of approximately $1.2 billion at an attractive valuation.

The most recent example, was the IPO of our us colocation data center operation on the New York Stock Exchange.

Since our initial investment in 2018, we have transformed the business into a scaled platform with large presence in across, major US markets, serving more than 1700 customers.

A key value driver in this transformation was the acquisition of over 40 sites through a bankruptcy process.

Which scaled the platform optimize the portfolio and accelerated? Its growth

During our ownership, we have increased EBITDA by more than four times and expanded capacity from 115 megawatts to approximately 390 megawatts.

The IPO represents the next step in our value creation plan.

David Krant: Brookfield retains a 64% ownership interest in the business and will continue to participate in future value creation, including the potential to grow the platform to approximately one gigawatt of capacity through equipment optimization and under roof expansion. In the quarter, we also advanced monetizations across two listed businesses in India. At our Indian telecom tower portfolio, we sold a 7% interest through the capital markets. Similarly, at our Indian gas transmission operation, we completed several smaller sell downs to public market investors following our inaugural sale last year, exiting a further 14% of the business. Combined, these transactions generated nearly $100 million of proceeds net to BIP. Adding to our asset sale progress, we executed a second transaction under our established framework for monetizing de-risked and contracted container portfolios at our global intermodal logistics operations.

The transaction generated growth, uh, growth proceeds of approximately 1.2 billion dollars at an attractive valuation.

Brookfield retains a 64% ownership interest in the business, and will continue to participate in future value creation. Including the potential to grow the platform to approximately 1 gigawatt of capacity, through E Equipment, optimization and under roof expansion.

In the quarter, we also advanced monetization across two listed businesses in India.

At our Indian telecom tower portfolio, we sold a 7% interest through the capital markets.

Similarly, at our Indian gas transition operation, we completed several smaller sell-downs to public market investors. Following our inaugural sale last year, we exited a further 14% of the business.

Combine these trans transactions generated nearly 100 million dollars of proceeds. Net to bip.

David Krant: On 1 July, we completed a sale of a majority interest in a portfolio of contracted containers, generating approximately $60 million to BIP. Finally, at our North American railcar leasing platform, we generated approximately $20 million in proceeds at our share. These proceeds were primarily generated through our structured investment framework, which provides for the transfer of ownership to our partner over time. Now, together, these transactions further support our ability to self-fund growth while recycling capital at attractive valuations. So far in 2026, we have generated nearly $1.2 billion of proceeds from our asset sales, with several sale processes well underway that give us confidence in achieving our capital recycling objective for this year. That concludes my remarks this morning, and I'll now turn the call over to Sam.

Adding to our asset, Phil progress. We executed a second transaction, under our established framework for monetizing de-risked and contracted container portfolios at our Global Intermodal Logistics operations.

On July 1st, we completed a sale of a majority interest in a portfolio of contracted containers generating approximately 60 million dollars to bid.

Finally, at our North American rail car leasing platform, we generated approximately $20 million in proceeds that are our share. These proceeds were primarily generated through our structured investment framework, which provides for the transfer of ownership to our partner over time.

Now together, these transactions further support, our ability to self-fund growth while recycling Capital at attractive valuations.

So far in 2026, we have generated nearly 1.2 billion dollars of proceeds from our asset sales with several sale processes. Well, underway that give us con confidence in achieving our Capital recycling objective for this year.

That concludes my remarks this morning, and I'll now turn the call over to Sam.

Sam Pollock: All right. Thank you, David, and good morning, everyone. The H1 of the year was active on both sides of our asset rotation strategy. In addition to the asset sales David just discussed, we have secured or deployed over $800 million into new investments. This includes the acquisition of Clarus, New Zealand's leading gas infrastructure utility, with closing expected in the coming weeks, and an increased equity commitment to the Bloom Energy framework to support an additional CapEx project. Looking beyond the projects already secured, momentum in AI infrastructure is accelerating, with our AI factory strategy gaining traction globally and expanding our pipeline of investment opportunities. In the US, Brookfield was selected by the Department of Energy to develop an AI data center campus in Kentucky designed to support over 1.2 gigawatts of compute capacity. We have formed a consortium to advance the project through a bring-your-own power model.

All right. Thank you, David, and good morning, everyone.

The first half of the year was active on both sides of our asset rotation strategy.

In addition to the asset sales David just discussed, we have secured or deployed over $800 million into new investments.

This includes the acquisition of Claris New Zealand's leading, gas infrastructure, utility with closed and expecting the coming weeks.

And an increase Equity, commitment to the Bloom Energy framework to support an additional capex project.

Sam Pollock: Looking beyond the projects already secured, momentum in AI infrastructure is accelerating, with our AI factory strategy gaining traction globally and expanding our pipeline of investment opportunities. In the US, Brookfield was selected by the Department of Energy to develop an AI data center campus in Kentucky designed to support over 1.2 gigawatts of compute capacity. We have formed a consortium to advance the project through a bring-your-own power model.

Looking beyond the projects already secured, momentum and AI infrastructure is accelerating with their AI Factory strategy, getting traction globally, and expanding our pipeline of investment opportunities.

In the US.

Brooklyn was selected by the department of energy, to develop an AI data center campus in Kentucky designed to support over, 1.2 gigawatts of compute capacity.

We have formed a consortium to advance the project through a bring-your-own-power model.

Sam Pollock: In South Korea, Brookfield, Naver, and Nvidia announced plans to develop 200 MW of sovereign compute capacity. Under the proposed arrangements, Brookfield would act as the exclusive capital partner to finance the deployment of GPUs at the campus, supporting one of South Korea's largest planned sovereign compute developments. We also expanded our framework with Bloom 5-fold, from $5 billion to $25 billion of total CapEx, creating a significant pipeline of future deployment opportunities for behind-the-meter power solutions for leading hyperscale customers. Together, these initiatives demonstrate the breadth of our AI infrastructure opportunity set and our ability to originate large-scale projects on a bilateral basis by combining our digital infrastructure and power expertise with flexible capital at scale to support leading energy and technology partners globally. As these opportunities progress, we will only commit material capital once appropriate commercial arrangements are secured and our risk-adjusted return objectives are met.

And South Korea Brookfield neighbor, and Nvidia, announced plans to develop 200, megawatts of sovereign compute capacity.

Under the proposed, Arrangement Brookville would act as the exclusive Capital Partner to finance the deployment of gpus at the campus.

And Sovereign computer development.

We also expanded our framework with Bloom 5 Bull from 5 billion to 25 billion of total capex.

Creating a significant pipeline of future deployment opportunities for behind-the-meter power solutions for leading hyperscale customers.

Sam Pollock: Together, these initiatives demonstrate the breadth of our AI infrastructure opportunity set and our ability to originate large-scale projects on a bilateral basis by combining our digital infrastructure and power expertise with flexible capital at scale to support leading energy and technology partners globally. As these opportunities progress, we will only commit material capital once appropriate commercial arrangements are secured and our risk-adjusted return objectives are met.

Together these initiatives demonstrate the breadth of our AI infrastructure opportunity, set, and our ability to originate large-scale projects on a bilateral basis, by combining our digital infrastructure and power expertise.

With flexible Capital at scale to support leading energy and Technology Partners globally.

As these opportunities progress, we will only commit material capital as appropriate, once commercial arrangements are secured and our risk-adjusted return objectives are met.

Sam Pollock: With a broader opportunity set in front of us, converting our growing pipeline to capital deployment is a key focus for the balance of the year. We are advancing opportunities across sectors and geographies through traditional M&A and strategic capital partnerships where leading companies are seeking long-duration capital at scale and an aligned operating partner. Together, these channels provide multiple avenues to deploy capital into high-quality opportunities at attractive risk-adjusted returns. One of our strategic initiatives for the year is to complete the recently announced corporate simplification to convert BIP and BIPC into a single publicly traded corporation, Brookfield Infrastructure Partners Inc. We believe the simplified structure will provide improved trade liquidity, increased demand from index funds and ETFs, and broader access to investors who prefer a traditional corporate structure, among other benefits.

With a broader opportunity set in front of us, converting our growing pipeline to Capital deployment is a key Focus for the balance of the year.

We are advancing opportunities across sectors and geographies through traditional M&A and strategic capital partnerships.

We're leading companies are seeking long duration, Capital, at scale, and the aligned operating partner.

Together, these channels provide multiple avenues to deploy capital into high-quality opportunities at attractive risk-adjusted returns.

One of our strategic investments for the year is to complete the recently announced corporate simplification to convert BIP and BIPC into a single publicly traded corporation, Brookfield Infrastructure Partners Inc.

We believe the simplified structure will provide improved trading liquidity.

Increase demand from index funds and ETFs.

Sam Pollock: We expect the simplification to be tax-deferred for Canadian US investors and completed without any meaningful cost to the business. Special meetings of BIP unitholders and BIPC shareholders will be held on 14 October, and we anticipate completing the simplification in Q4 2026. Ultimately, we expect this simplification to drive long-term value for all security holders. In closing, we enter the H2 2026 from a position of strength. Resilient operating performance, a healthy balance sheet, and meaningful proceeds from recent asset sales provide significant flexibility to pursue attractive growth opportunities. This concludes my remarks. Then I'll pass it back over to the operator, Crystal, to open the line for Q&A.

And broader access to investors, who prefer a traditional corporate structure among other benefits.

We expect the simplification to be tax. Deferred for Canadian US. Investors and completed without any meaningful cost to the business.

Special meetings of BIP unitholders and BIPC shareholders will be held on October 14.

And we anticipate completing the simplification in the fourth quarter of 2026.

Ultimately, we expect this simplification to drive long-term value for all security holders.

In closing, we enter the second half of 2026 from a position of strength.

Resilient operating performance, a healthy, balance sheet, and meaningful proceeds. From recent asset sales provide significant flexibility to pursue attractive growth opportunities.

This concludes my remarks and I'll pass it back over to the operator, Crystal to open the line for Q&A.

Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question will come from Cherilyn Radbourne from TD Cowen. Your line is open.

Thank you. At this time. We will conduct a question and answer session as a reminder, to ask a question, you will need to press star 1 on your telephone and wait for your name to be announced to withdraw your question. Please, press star 1 1, again, please stand by we compile the Q&A roster.

And our first question will come from cherylyn radborne from PD Cohen. Your line is open.

Cherilyn Radbourne: Thanks very much, and good morning. Clearly, the market has become more anxious about the CapEx going into AI and data centers and the timing of the payoff. I was hoping you could speak to the opportunity set and just how BIP is able to maintain its investment guardrails against that backdrop. Maybe you could touch on whether you're seeing degradation in contract terms more broadly across that space.

Thanks very much and good morning. Um so clearly the market has become more anxious about the capex, going into Ai and data centers and the timing of the payoff. So I was hoping you could speak to the opportunity set and just how fit is able to maintain its investment guard rails, against that backdrop. Um, and maybe you could touch on whether you're seeing, uh, degradation in contract, terms more, broadly across that space.

Sam Pollock: Hi, Cherilyn. I'll start off, and then I can ask Leif Williams, who's with our AI infrastructure group, to add further color. As far as the momentum in the sector and the demand signals that we're seeing, we've definitely seen no reduction in the developments underway or the speed to which our clients are looking to bring forward projects. While capital markets have obviously pulled back in the last couple of weeks, customers, and our customers are the largest hyperscales in the world, are obviously thinking about longer term trends as opposed to short-term gyrations. I would say your question regarding degradation of contracts, we've always told our investors that we will only deal with the highest quality customers and invest in those projects where we have, as I mentioned earlier, proper risk-adjusted returns.

hi cherylyn, maybe I'll start off and then um,

Uh, I can ask, uh, Leaf Williams, who's with our AI Infrastructure group, to, uh, add further color, um,

Maybe maybe just to, uh, begin with, um, as far as the, uh, momentum in the sector and uh, and the demand signals that we're seeing. We we've definitely seen uh no reduction in uh the developments underway or um, you know, this the speed to which uh our clients are looking to uh, bring forward projects. So, uh, while Capital markets, you know, have have obviously pulled back and the last couple of weeks, um, uh, customers, um, and, and our customers are the largest, hypers scales in the world. Um, you know, our obviously, you know, thinking about longer term Trends as opposed to short-term Generations.

um,

I would say the, um,

Question regarding, you know, degradation of of contracts.

Sam Pollock: The main guardrail, to be honest, is the fact that all these projects require a significant amount of debt capital. In order to source that debt capital, you need to have high quality counterparties. If you don't, then you're not going to be able to raise the equity capital, to be honest. While there might be some smaller projects that others might be pursuing where they're taking on lesser quality counterparties, in our case, we're only dealing with the best, and we're not seeing any degradation in terms. Since we have Leif on the line, Leif, do you want to talk about any trends that you're seeing as far as new developments?

Um, you know, we we've always uh, you know, told our investors that, you know, we will, you know, only deal with, um, the highest quality customers and, uh, invest in those projects where, uh, we have, as I mentioned earlier, um, proper risk, adjusted returns and, you know, the main guard rail. Uh, to be honest is the fact that, um,

uh all these projects require significant amount of debt capital and in order to source that debt Capital you need to have, you know, highly, um,

High quality, uh, counterparties. Um, and uh, if you don't then you're not going to be able to raise the equity Capital, to be honest. And so while there might be some smaller projects that others might be pursuing where they're taking on lesser quality. Um, counterparties in our case, we're only dealing with the best and uh we're not seeing any degradation in terms.

Um, you know, maybe since we have Leaf on the line.

Uh, Leev, do you want to talk about any, uh, trends that you're seeing as far as, uh, new developments?

Lief Williams: Thanks, Sam, and thanks for the question, Cherilyn. From a commercial terms perspective, I think as Sam said, we continue to see strong contracts from our customers. In terms of development yields, I would say it's still kind of high single digits, low double digits. You see that move a little bit with interest rates. We are in a slightly higher interest rate environment than maybe in the past. You see that ultimately flows into development yields, as well as the annual escalator. Whereas historically that's fluctuated between 2% to 3%, I think right now you're seeing that really at the higher end of that range. Really more 2.5% to 3%. The last key commercial term I would highlight is on lease term.

Yeah, thanks Sam. And thanks for the question. Uh, cherylyn I think um, from a commercial terms perspective, I I think as Sam said, we continue to see um strong uh strong strong contracts from our customers. I think in terms of development yields, I would say it's it's still kind of high single digits low, double digits, I think that you see that move a little bit with uh with interest rates. And so uh we are in a slightly higher interest, rate environment and then maybe in the past and I think you see that that uh, that ultimately flows into development yields,

Lief Williams: Again, typically the focus for greenfield projects is 15 years plus. We are starting to see customers who are open to a 20-year initial lease term. Again, from our perspective, that's a crucial input to develop our returns. Overall, I would just characterize it as a strong market on the private side. We see very good demand, and we think that it's a great opportunity to deploy capital at attractive risk-adjusted returns.

Uh, and as well as uh, the annual escalator. And so again, whereas historically that's fluctuated between 2 to 3%, I think right now you're seeing that really at the higher end of that range. So it's a really more 2 and a half to 3%. Uh, and then the last key commercial term, I would highlight is on lease term. And so again, typically the focus for, for Greenfield projects is is 15 years plus. Uh, and we are starting to see, uh, customers who are open to a 20 year initial lease term. And again, from our perspective that is, uh, that's a crucial input, uh, to developer returns. And so, uh, overall. I I would, um, just characterize it as, uh, a strong Market on, on, on the private side. We see very good demand, uh, and we think that it's, it's a great opportunity to deploy capital and attractive risk adjusted returns.

Cherilyn Radbourne: Thank you for that detail. Just to make this call not all about data, I thought I would ask about where else you're seeing opportunities outside of data. One area where we're seeing some sort of news and potential activity is industrial carve-outs with resource companies looking to focus on core operations and carve out utilities and things of that nature. Are you seeing that in your pipeline as well?

Thank you for that detail. Um, just to make this call, not all about data. Um, I thought I would ask about where else you're seeing opportunities outside of data. Um, 1 area where we're seeing, you know, some sort of news and potential activity is industrial carve outs uh with resource companies. Looking to sort of focus on core operations and carve out uh utilities and things of that nature. Um, are you seeing that in your pipeline as well?

Sam Pollock: Yeah. Maybe just to touch on the first part of your question, I could come back to maybe carve-outs, but you're asking where are we seeing knock-on effects in other parts of our business. One area where you might not expect there to be a lot of impact is in our transportation business, where we're seeing a lot of what we always refer to as a domino effect of all these developments are requiring products and assets from different parts of the world. We're seeing that reflected in trade flows. Maybe Dave Joynt, who runs our transportation business. We have him on the line here. He can talk a bit about what we're seeing through Triton from a transportation perspective.

Yeah.

Just to touch on the the first part of your question and I could come back to maybe carve out, but you're asking, you know, where are we seeing? Um, you know, knock on effects in other parts of our business and um you know, 1 area where you, you might not expect there to be a lot of, uh, impact is in our transportation business. Where, uh, we're seeing a lot of, um,

Uh, you know what? We always refer to as the domino effect of all. These developments are requiring, uh, products. And and um,

um,

Dave Joynt: Yeah. Thanks, Sam, and thanks, Cherilyn, for the question. Overall, I think you've seen a very strong quarter for us on transportation. What might be a little bit hidden by that is that a lot of that strong demand is actually coming from the big buildup of data centers themselves. If you look at Chinese exports on a year-to-date basis, it's up nearly 20%. What is underneath that is machinery and motors and transformers and pumps and valves and tubing that goes into lots of the machinery that goes into the complex itself. That is flowing through certainly a very strong demand environment for our container leasing business, but also for our ports and our rails on a global basis.

assets from different parts of the world. And so we're seeing that reflected in trade flows and and so you know, maybe uh Dave uh joined who runs our translation business, we have them online here, you can talk a bit about what we're seeing through Triton uh from a translation perspective.

Sam Pollock: Yeah. Maybe just to answer your last question. Maybe we'll keep it short. We are definitely focused on strategic partnerships and carve-outs in a number of sectors. That's something that worked well on the railcar leasing side that we recently did. We're seeing a number of industrial companies looking to take advantage of capital available from the infrastructure players like ourselves to source low-cost capital to grow their operations. That is a focus. Hopefully, some of the transactions we'll announce in the coming quarters will demonstrate that.

That is flowing through. Certainly, a very strong demand environment for our container leasing business, but also for our ports and our rails on a global basis.

yeah, and and maybe just to answer your last question, uh, and and maybe we'll keep it short but uh,

We are definitely focused on strategic Partnerships and carve outs and a number of sectors. Uh, that's something that um you know, worked well uh

You know, on the, uh, rail car leasing side that we recently did, um, and uh, you know, we're seeing a number of industrial companies looking to take advantage, um, um, you know, of capital available, you know, from the infrastructure players like ourselves, you know to uh to Source low-cost Capital, grow their operations. And so that is a focus. Um and uh, hopefully um you know, some of the transactions will announce in the in the common quarters. Uh we'll we'll demonstrate that.

Cherilyn Radbourne: Thank you for the time.

Sam Pollock: Thank you, Cheryl.

Thank you for the time.

Thank you for Cheryl.

Operator: Thank you. One moment for our next question. Our next question will come from Devin Dodge from BMO Capital Markets. Your line is open.

Thank you. 1 moment for our next question.

Our next question will come from Devon Dodge from BMO Capital markets. Your line is open.

Devin Dodge: Yeah, thanks. Good morning. It seems like the AI factory strategy is really starting to gain traction here. It's obviously great to see. It seems like there, based on your comments, Sam, there's still a lot of irons in the fire. Wondering if you can frame how large of an opportunity the AI factory strategy could be over time. Maybe just for the projects and frameworks that you've secured to date, any thoughts on potential equity commitments or deployment timing from a BIP perspective?

Yes, thanks. Good morning. Um, uh, it seems like the AI Factory strategy is really starting to gain traction here. It's obviously great to see, uh, and it seems like they're based on your comments and there there's still a lot of irons in the fire.

Just wondering if you can frame how large of an opportunity, the AI Factory strategy could be over over time and and maybe just for the projects and Frameworks that you've secured to date just any thoughts on potential.

Um, you know, equity commitments or deployment, and deployment timing from a perspective.

Sam Pollock: Okay. Well, again, I might ask Leith in a second to just comment on some of the initiatives we have globally. Some are still in the early stage, we can't get into too much specifics on them. I'd say we've been busy developing a number of them for the past year. To the extent that they are sovereign AI factories, those tend to take a bit of time, just because of the nature of dealing with governments. On the potential deployment, I think if we look out over a longer term time frame, in a three- to five-year time frame, I think we see the potential for BIP to be significant and a major component of our investment. What I would say is because many of these opportunities are development related, there is a delayed draw component to them.

You know, again I might ask, uh, Leaf in a second to just comment on, you know, some of the initiatives, we have globally. Uh, some are still in the early stage and and so we can't, um, get into, too much specifics on them. But, uh, you know, I'd say we've been, you know, busy developing a number of them for the past year, um, and to the extent that they are, you know, Sovereign, uh, uh, AI factories, those tend to take a bit of time, uh, just because of the nature of dealing with governments,

um,

Sam Pollock: The capital gets deployed over a period of time. I think the significant dollars for the AI factories will come in a couple of years as opposed to the next year or two. I think I would just caution you from that perspective, even though we're discussing large dollars here, I think they're somewhat back-end loaded.

I I think the on, on the, the potential deployment, I think, if we look out over, um, you know, a longer term time frame, you know, in a 3 to 5 year time frame, I think, um, you know, we see the potential for bip to be significant uh, and and a major component of of our uh, investment. Um, but what I would say is, uh, because you know, many of these uh opportunities um are development related. There is a delayed draw component to them. You know, the capital gets deployed over a period of time. So I think, um, you know, the significant dollars for the AI factories, uh, will come, you know, in a couple of years as opposed to the next year or 2. So I think I would just cost you from that perspective even though you know we're you know, we're we're discussing large dollars here. I think uh, there's somewhat back-end loaded.

Sam Pollock: Maybe now just to get into some of the projects we're working on. Leith, do you want to just give a quick update?

Um to use that, uh, terminology but but maybe now just to get into some of the projects we're working on, uh, leave. Do you want to just give a quick update?

Lief Williams: Absolutely. Thanks for the question, Devin. I think as Sam articulated, we see a massive opportunity in the space. We think that in excess of 100 gigawatts of incremental load will be required over the next decade. I guess when you think about that, really hyperscalers are looking for partners who can engage at scale and can really help move the needle from that perspective. When you think about building out a gigawatt plus scale campus, that's a huge undertaking. We announced a project yesterday in West Kentucky, that is located on a Department of Energy site, that will ultimately serve a data center with in excess of 1.2 gigawatts of IT load. I know that type of project will require up to $100 billion in private capital.

Lief Williams: That will support both the data center itself as well as the compute inside and the power generation that will support it. We think that that last piece is a really crucial component to building out these AI factories. Being able to indicate that there will not be an adverse impact to local ratepayers and that these AI factories are bringing their own generation. We think that that's crucial both for the data center itself from a practical perspective in terms of having the electrons available, but also from a social license perspective and ensuring that there's strong local support and that these sites are bearing the cost of the grid that is ultimately required. From Brookfield's perspective, we've been looking for sites like this around the world, given our global footprint.

Yeah, absolutely. Uh, thanks. Thanks for the question, Devin. Um, so I think as, as Sam articulated, we see a massive opportunity in the space. Uh, we think that in excess of a 100 gigawatts of incremental load will be required over the next decade. Uh, and I, I guess when you think about that really hyperscalers are looking for um Partners who can engage at scale and can really help, move the needle from that perspective. And so when you think about building out a gigawatt plus scale campus, uh, that's a huge, huge undertaking. Um, and and we announced a project yesterday in in, in West Kentucky, uh, that is located on a department of energy site, uh, that will ultimately serve a data center with, uh, in excess of 1.2 gigawatt of it load. I know that type of project will require, uh, up to 100 billion in private Capital. Uh, that will, uh, support both the data center itself as well as the compute inside and, uh, the power generation that

Lief Williams: As mentioned, we announced a large-scale project yesterday in the US, but we also have large-scale sites in Canada, in Europe. We recently announced one in South Korea. We think that we're very well positioned to be a partner of choice for these large technology companies and sovereign governments around the world.

So to indicate that there will not be an adverse impact to to local rate payers and and that these uh, AI factories are are bringing their own generation. Uh, we think that that's crucial both, um, for the data center itself from a practical perspective, in terms of having the electrons, uh, available but also from a social license perspective and ensuring that there's a strong local support. And then, uh, these, these sites are, uh, bearing the the cost of the grid, uh, that that is ultimately required. Uh, and so from, From brookfield's perspective, we've been looking for sites like this, uh, around the world, uh, given our our Global footprint. Uh, as as mentioned, we announced a large scale project yesterday in the US. Uh, but we also have, uh, large scale sites in Canada in Europe. Uh, we, uh, recently announced 1 in in, uh, in South Korea. Uh, and so we think that we're very well positioned to be a partner of choice, uh, for these large technology companies and Sovereign governments around the world.

Devin Dodge: Okay. Thanks for that. Just the follow-up to that is just for your data center businesses, there seems to be growing pushback around the build of these facilities. Definitely seen that more recently in the US. Just how do you think this plays out over time? Do you build where there's less resistance or are there different approaches being pursued that could address at least some of the concerns from governments and local communities?

Okay, thanks. Thanks for that. And then just the the follow-up, uh, to that is, you know, just for your data center businesses. There there seems to be growing push back around the build out of these facilities. Um, definitely seen that more uh recently in the US. Just how do you think this plays out over time? You know, do you build where there's less resistance or their different approaches being pursued that could address at least some of the concerns from governments and local communities

Ben Vaughan: Yeah. Thanks, Devin. It's Ben here. I think as you noted, there definitely is an increased nimbyism or pushback against certain data center developments. There are also, I just make the observation, there's lots of sort of false narratives and perceptions out there about the industry itself. Our experience is that many local communities do welcome data center investments. From a geography perspective, I think as you noted, the nimbyism is probably most prevalent in the US right now. We are noting that it's growing, I would say, in the European market, and we are starting to see some of this type of pushback in smaller markets like Canada as well. It's definitely a dynamic. In terms of the false perceptions themselves, they mostly relate to things like water consumption, rising electricity rates, and noise. A perception that data centers create a lot of local noise.

Ben Vaughan: We are noting that it's growing, I would say, in the European market, and we are starting to see some of this type of pushback in smaller markets like Canada as well. It's definitely a dynamic. In terms of the false perceptions themselves, they mostly relate to things like water consumption, rising electricity rates, and noise. A perception that data centers create a lot of local noise.

Yeah, thanks Devin. Um it's been here and and I think as you noted that there definitely is, um, an increased nimbyism or push back uh against certain data center, uh, developments. And uh, there are also I, I just make the observation, there's lots of sort of false narratives and perceptions out there, uh, about the industry itself. You know, our experiences that, uh, many local communities do, welcome data center Investments. And from a geography perspective, I I think as you noted, it's probably the nimbyism is probably most prevalent in the US right now. We are noting that uh it it's growing. I would say in the European market and we are starting to see uh some of this type of push back in smaller markets, like Canada as well. So it's definitely a, a dynamic.

um in terms of the false perceptions themselves, you know, if they mostly relate to things like um water consumption, uh, Rising electricity rates,

Ben Vaughan: What the industry broadly is focusing on are very fulsome solutions to those types of issues, because there are examples where those issues do manifest themselves. Although by and large, the industry is good at these things. The specific things are closed loop water cooling, as an example, where the consumption of water is de minimis. Being neutral to actually positive on electricity rates and in supporting local utilities, in supporting their local grids and minimizing noise. With that, I just say, our businesses that we're focused on and our operating companies, we're leaders on all of these fronts in the industry. We are seeing support from many local communities.

And, uh, noise perception that data centers, create a lot of local noise. And so what the industry, uh, broadly is focusing on are, um, very wholesome solutions to those types of issues, because there are examples where those issues do manifest themselves. Although by and large um, by and large, the industry. Um, you know, is good at these things.

But the the specific things are closed loop water cooling. As an example, where the consumption of water is diminished um being neutral to actually positive on electricity rates and in supporting local Utilities in supporting their local grids. And um, and and minimizing noise

Ben Vaughan: In terms of your question of where data centers get developed, I do think that the industry itself, there are lots of false perceptions, the industry is actively working on ensuring that it has solutions to all the concerns. We're just focusing on the geographies where developments are welcome.

Uh, so with that, I I just say, you know, our businesses that we're focused on and our operating companies, we're leaders on all of these fronts in the industry. And uh, we are seeing support from many local communities. So I I in terms of your question of where data centers get developed, I I I do think that the industry itself. Um there are lots of false Perceptions in the industry is actively working on um ensuring that it has solutions to all the concerns. And um, you know, we're just focusing on the geographies where developments are welcome.

Devin Dodge: Okay. Thanks for that, Ben. I'll turn it over.

Okay, thanks for that then. I'll turn it over.

Ben Vaughan: Okay. Thank you.

Operator: Thank you. Our next question will come from Maurice Choy from RBC Capital Markets. Your line is now open.

Okay, thank you.

Thank you.

Our next question will come from Maurice Choi from RBC Capital markets. Your line is now open.

Maurice Choy: Thanks. Good morning, everyone. Good afternoon. Good morning. Just a quick question on AI for a moment. Notwithstanding all the comments that you just made about nimbyism and an earlier response about timing of payoff for the CapEx in AI, you've obviously been quite successful in signing a number of AI-related deals in Kentucky and South Korea. Maybe we are front-running the Investor Day a little bit, but I'm curious whether you see these AI opportunities as progressing in line with your prior projections, or are there pockets of the AI infrastructure value chain that you think may be accelerating?

Thank you. Good morning, everyone. Um, good afternoon—uh, good morning. Just a quick question on AI for a moment. Um, I'm considering all the comments that you just made about nimbyism and your earlier response about the timing of payoff for the capex and AI. You've obviously been quite successful in signing a number of AI-related deals.

In Kentucky and South Korea. Uh, maybe we are front running the investor day a little bit but I'm curious whether you see these are opportunities as progressing in line with your prior projections or are there pockets of the AI infrastructure value chain that you think may be accelerating.

Sam Pollock: Well, maybe Dave can talk about just from our business plan perspective, how it's playing out. Sorry, and your second question was. Can you repeat that?

uh, well, maybe

Dave can talk about just, um,

Maurice Choy: Whether or not you felt all these AI opportunities were progressing in line with your prior projections, or were there pockets of the value chain that you think may be accelerating?

um, and then, uh, sorry and your second question was um,

Sam Pollock: Gotcha.

Can you repeat that?

David Krant: Well, I'll start. Good morning, Maurice. Look, I think from a business plan perspective, I'd say it's fairly in line with what we had expected from a deployment perspective. I think maybe the pace of the announcements and the initial frameworks agreed to maybe have accelerated a little faster than we would've thought. Otherwise, from a pure investing perspective, I think we're right on track. You will recall at Investor Day last year, we said, Look, if the AI infrastructure strategy kind of unfolds the way we thought it would, we would be deploying $500 million of equity a year into this strategy. Look, I think with Bloom Energy to date, the contracts we have in place would probably put us close to $100 million year to date.

Whether or not you felt all these opportunities were progressing in line with your prior projections, or were there pockets of the value chain that you think may be accelerating?

Yeah, well, I'll start um, and and good morning, Maurice. Um, look, I think from a business plan perspective.

Uh, I would say it's fairly in line with what we had expected from a deployment perspective. I think maybe the pace of the announcements and the, and the initial Frameworks agree to maybe have accelerated a little faster than we would have thought. But otherwise, from a pure,

David Krant: If we do upsize the framework and participate, that'll certainly get us closer to the mid point of the high end of that range we gave. As we look ahead to the following years to come, I think as we progress the commercial fronts on the AI factories in the various regions that Leif referred to, I think that'll help achieve that three to $500 million of equity invested in AI infrastructure on an annual basis. I think we're kind of in line with where we thought we'd be.

Sam Pollock: Maybe just on your second part of your question about, are we seeing all the various pockets of the value chain generating opportunities for us and our AI group commonly refers to $7 trillion of potential opportunities, which obviously is a big number. You can already see with the magnitude of the projects that we've signed, the market is massive. We generally talk about four areas where we see opportunities. One would be AI factories, two would be compute, three would be behind-the-meter power opportunities. We kind of have a catchall area of adjacencies related to AI. In terms of the first three, I think you can see that we are actually advancing the strategy quite well.

Investing perspective. I think we're right on track. You will recall an investor Day last year. We said look if if the AI infrastructure strategy kind of unfolds uh the way we thought it would we would be deploying 500 million dollars of equity a year into this strategy. And look, I think with Bloom today. We've probably done, you know, the the contracts we have in place would probably put us close to a 100 million uh year to date. And if we do upsize the framework and participate that will certainly get us closer to, you know, the midpoint of the high end of that range, we gained and then so, you know, as we look ahead to the following years to come, I think as we progress the commercial fronts on on the AI factories and the various regions at least refer to, I think that'll help you know, achieve that 3 to 500 million dollars of equity invested in AI infrastructure on an annual basis. So I think we're kind of in line.

Where we thought it would be, and maybe just on your second.

part of your question about, um, you know, are we seeing

uh, all the various pockets of the value chain, um, generating opportunities for us,

and um,

You know, our our AI group, you know, you know, comedy refers to, you know, 7 trillion dollars of, of potential opportunities which obviously, the big number, uh, but you can already see with the, you know, the magnitude of the projects that we've signed. Uh, um,

Sam Pollock: In terms of compute, we've established Radient, which is our in-house Neo cloud, and we've already signed agreements with customers to provide compute and the most recent one would be, with Naver obviously, which will scale that up dramatically. Behind-the-meter power opportunities, Bloom is a poster child for that and, I don't think we could have asked for anything better than that relationship. In terms of the AI factory, Leif just described all the different ones that we're pursuing. We expect those to be shelf-ready hopefully in the next number of quarters. In terms of the first three components, I think absolutely, we've demonstrated the opportunities. On the adjacencies, that's really in all parts of our business, seeing opportunities come out of AI and as Dave mentioned, we're seeing trickle on effects into our transportation business.

You know that the market is massive. Um, we generally talk before areas, um, where we see opportunities, you know, 1 would be AI factories. Uh, 2 would be, uh, compute, uh, 3 would be behind the meter power, uh, opportunities. And then we kind of have a catchall area of, you know, adjacencies related to, uh, Ai. And so, in terms of the first 3, uh, yeah, I I think you can see that we are actually, uh, advancing the strategy quite well. So in terms of compute, you know, we've established radiant which is our, you know, in-house nio cloud. And we've already signed agreements, uh, with uh, customers, uh, to provide compute and the most recent 1 would, you know, would be, uh, with neighbor obviously, which, uh, will scale that up dramatically.

Uh, you know, behind the meter power opportunities. Um, you know, Bloom is, you know, is a poster child for that. And uh, yeah, I don't think we could have asked for anything, uh, better, uh, than that relationship. And then, in terms of the AI Factory, you know, uh,

Uh, leave just described all the different ones that you know, we're pursuing. Um,

And, uh, you know, we expect those to be, uh, you know, shove a ready. Hopefully, in the next uh, number of quarters. So, uh, in terms of the first 3 components, I think absolutely. You know, we've demonstrated the the opportunities, um, and on the adjacencies, you know, that's really

Sam Pollock: I think the opportunity set is absolutely developing as we expected and, I think, as you alluded to our upcoming Investor Day presentation, we'll probably touch on this a lot more.

Uh, you know, an all parts are a business, you know, seeing opportunities come out of, uh, Ai and and, and, you know, as, as Dave mentioned, you know, we're seeing, you know, trickle on effects into our translation business. So, um, I think the, uh, the opportunity set is absolutely developing, uh, as we expected. And, uh, I think, uh, as you alluded to our upcoming, um, investor Day presentation, we'll probably touch on this a lot more.

Maurice Choy: Yeah. Looking forward to that. If I could finish off with a comment that you've made, I think quoting you on a press release, "The public markets have been increasingly effective exit channels to maximize value in your capital recycling program." Can you unpack that a little bit for us, especially relative to the private channels that you've utilized more in the past, or perhaps how the private channels may have changed?

You know, looking forward to that. Um, if I could finish off with um, a comment that you've made, um, I think quoting you on a press release. The public markets have been increasingly, uh, effective exit channel, to maximize value in your Capital recycling program. Um, can you unpack that a little bit, uh, for us, especially relative to the private channels that you utilize more in the past or perhaps, how the private channels have they have changed?

Sam Pollock: Yeah. Maybe I'll answer that question. In short, nothing's changed on the private channels. The private channels remain open and all the various, we refer to our tools in our toolkit to exit, remain very relevant and we're executing them as we speak. What has changed in the last, let's call it 9 to 12 months, is just the fact that the equity capital markets opened up and were very receptive to new IPOs, which we hadn't really seen for a couple of years. I think, prior to doing the Rockpoint IPO, I think the previous one was probably DBI, which was, like 2020 or something like that. Going back 3, I guess maybe longer, 5 years. We're just taking advantage of the market as it exists as really just a competing source of capital to the private markets.

Yeah, maybe I'll—I'll end.

so,

Accounts remain open and all the various, you know, we refer to our, you know, Tools in our toolkit to, uh, to exit, um, you know, remain, uh, very, uh relevant and and we're, you know, executing them, uh, as we speak. Um, you know, what has you know, changed in the last, you know?

You know, it's called 9 to 12 months is just the fact that, um, you know, the equity Capital markets opened up and we're very receptive to new IPOs which we hadn't really seen for a couple of years. Um, you know, I think, you know, prior to doing the Rock Point IPO. I think the previous 1 was probably uh DBI which was, you know, like 2020 or something like that. So going back, you know, 3 I guess maybe longer 5 years um

Sam Pollock: In some industries, it's competitive, in other industries it's less so. The window opens and closes. It's probably closed for the next little bit, but I suspect it will reopen, just given some of the exciting companies that we know are coming to market in the fall. We definitely don't think this market has shut for sure. It's going to reopen. We'll continue to consider it on other opportunities.

And so, um, you know, we're just taking advantage of the market, you know, as it exists, uh, as really, just a competing source of of capital to the private markets and in some Industries, it's a competitive and other Industries, it's less so, um, and um, and the market, you know, uh, the window opens and closes, you know, it's probably closed for the next, uh, little bit. But I suspect, uh, it will reopen just given some of the exciting companies that we know are coming to the market, uh, in the fall.

So uh we we definitely don't think this Market is uh has shut for sure. It's it's going to reopen um, and um, you know, we'll continue to consider it uh, on other opportunities.

Maurice Choy: Thanks for the color. Thank you very much.

Thanks s. Thank you very much.

Sam Pollock: Great.

All right.

Operator: Thank you. As a reminder, to ask a question, please press star one one. Thank you. I am showing no further questions from our phone lines. I'd now like to pass the conference back to Sam Pollock for any closing remarks.

Thank you. And as a reminder to ask a question. Please press star 1 1.

Sam Pollock: All right. Well, thank you, Crystal. Thank you to everyone for joining the call this morning. We hope everyone's enjoying their summer so far, for those in the Northern Hemisphere, and look forward to hosting all of you for our Investor Day in Toronto on 29 September. We look forward to providing you an update on all our strategic priorities and our growth outlook. In the meantime, thank you again, and I hope you have a great day.

Thank you. And I am showing no further questions from our phone lines and I like to pass the conference back to Sam Pollock for any closing remarks.

All right. Well thank you. Crystal. And thank you to everyone for joining the call this morning.

Uh, we hope everyone's joining their summer so far for those in the Northern Hemisphere and uh, look forward to hosting, uh, all of you for our investor day in Toronto, on September 29th.

We look forward to providing you with an update on all our strategic priorities and our growth outlook in the meantime. Thank you again, and I hope you have a great day.

Operator: Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect.

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