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. Q2 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 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: recorded. I would now like to hand the ahead.

David Krant: Thank you, Crystal, and 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: Brookfield Infrastructure Partners conference 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. a discussion of our Q2, 2026 financial and operating results, followed by an update on our asset sale initiatives. then turn the call over to Sam, who will discuss our new investments and provide an outlook for the business. to remind you that in our remarks today, we may make forward-looking statements. Thank you, Crystal, and good Q4, 2026 earnings morning, everyone.

Speaker #2: business. At this time, I would like investments. I'll begin the call today with make forward-looking statements. These statements are subject to known and unknown risks, and future results may differ materially.

David Krant: These statements are subject to known and unknown risks, and future results may differ materially. For further information on known risk factors, I would encourage you 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 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.

Speaker #2: For further information on known risk factors, I would encourage you all to review our latest annual report on Form 20F, which is available on website.

Speaker #2: 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.

Speaker #2: Beginning with our financial and operating results in the Q2, we generated FFO of $702 million, or 89 cents per unit. This represents a 10% increase compared to the prior year, on both a quarterly and year-to-date basis.

Speaker #2: Which is in line with our long-term growth target. 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.

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.

Speaker #2: 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'll now go through our results by segment in more detail.

Speaker #2: 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 commissioned into our rate base, and the acquisition of a South Korean industrial gas business completed last year.

Speaker #2: 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.

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.

Speaker #2: 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 route operations increasing between 3 and 7 percent year over year.

Speaker #2: In addition, results benefited from the contribution from our North American rail car leasing platform, which closed on January 1. 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.

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.

Speaker #2: 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.

Speaker #2: Results also benefited from the contribution of our recently acquired US refined products pipeline system, which more than offset the lost earnings with our sale of our US gas pipeline last year.

Speaker #2: Lastly, FFO from our data segment was $154 million, representing an increase of 36% compared to the prior year. 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.

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. So 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.

Speaker #2: 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, reflecting both the quality of the businesses we have built and the depth of investor demand for scaled, high-quality infrastructure platforms.

Speaker #2: 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.

Speaker #2: They also give us optionality alongside private sale alternatives, supporting value maximization across multiple potential exit paths. The most recent example was the IPO of our U.S. co-location data center operation on the New York Stock Exchange.

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 MW to approximately 390 MW. 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.

Speaker #2: 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 1,700 customers.

Speaker #2: 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.

Speaker #2: During our ownership, we have increased EBITDA by more than 4 times and expanded capacity from 115 megawatts to approximately 390 megawatts. The IPO represents the next step in our value creation plan.

Speaker #2: The transaction-generated gross proceeds of approximately $1.2 billion add 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 equipment optimization and under-roof expansion.

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 1 GW 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: Combine 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.

Speaker #2: On July 1, 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 rail car leasing platform, we generated approximately $20 million in proceeds at our share.

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. 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: That concludes my remarks this morning, and I'll now turn the call over to Sam.

Speaker #1: 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.

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

Speaker #1: 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 closing expected in the coming weeks, and an increased equity commitment to the Bloom Energy Framework to support an additional capex project.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: We have formed a consortium to advance the project through a bring-your-own-power model. In South Korea, Brookfield Neighbor and NVIDIA announced plans to develop 200 megawatts of sovereign compute capacity.

Sam Pollock: In South Korea, Brookfield, NAVER, and NVIDIA announced plans to develop 200 MW of sovereign compute capacity. Under the proposed arrangement, 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 fivefold, 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.

Speaker #1: Under the proposed arrangement, 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.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: As these opportunities progress, we will only commit material capital once appropriate commercial arrangements are secured and our risk-adjusted return objectives are met. 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.

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.

Speaker #1: 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.

Speaker #1: Together, these challenges 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 trading liquidity, increased demand from index funds and ETFs, and broader access to investors who prefer a traditional corporate structure, among other benefits.

Speaker #1: We expect the simplification to be tax-deferred for Canadian and US investors, and completed without any meaningful cost to the business. Special meetings of BIP unit holders and BIPC shareholders will be held on October 14, and we anticipate completing the simplification in the fourth quarter of 2026.

Sam Pollock: We expect the simplification to be tax-deferred for Canadian and 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 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, I'll pass it back over to the operator, Crystal, to open the line for Q&A.

Speaker #1: 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.

Speaker #1: 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 Q&A 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, we compile the Q&A roster. Our first question will come from Cherilyn Radbourne from TD Cowen. Your line is open.

Speaker #3: Thank you. At this time, we will conduct the question-and-answer session. As a reminder to ask a question, you will need to press star when one of your telephone and wait for your name to be announced.

Speaker #3: To withdraw your question, please press star when one again. Please stand by. We compile the Q&A roster. In our first question will come from Cherilyn Radborn from PD Cowan, 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 are seeing degradation in contract terms more broadly across that space.

Speaker #4: Thanks very much, and good morning. So clearly, the market has become more anxious about the capex going into AI and data centers, and the timing of the payoff.

Speaker #4: So I was hoping you could speak to the opportunity set and just how BIP is able to maintain its investment guardrails against that backdrop.

Speaker #4: And maybe you could touch on whether you're seeing degradation in contract terms more broadly across that space.

Sam Pollock: Hi, Sherylinn. Maybe I will start off, and then I can ask Lief Williams, who's with our AI infrastructure group, to add further color. Maybe just to begin with, as far as the momentum in the sector and the demand signals that we are seeing, we have 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. Regarding degradation of contracts, we have 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.

Sam Pollock: Hi, Cherilyn. Maybe I will start off, and then I can ask Lief Williams, who's with our AI infrastructure group, to add further color. Maybe just to begin with, as far as the momentum in the sector and the demand signals that we are seeing, we have 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. Regarding degradation of contracts, we have 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.

Speaker #1: Hi, Cherilyn. Maybe I'll start off, and then I can ask Leif Williams, who's with our AI infrastructure group, to add further color. Maybe just to begin with, as far as 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.

Speaker #1: So, while capital markets have obviously pulled back in the last couple of weeks, customers—and our customers are the largest hyperscalers in the world—are obviously thinking about longer-term trends as opposed to short-term durations.

Speaker #1: I would say the 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.

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, you are 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 are taking on lesser quality counterparties, in our case, we are only dealing with the best, and we are not seeing any degradation in terms. Maybe since we have Lief on the line, Lief, do you want to talk about any trends that you are seeing as far as new developments?

Speaker #1: And the main guardrail, to be honest, is the fact that all these projects require a significant amount of debt capital, and in order to source that debt capital, you need to have highly high-quality counterparties. And if you don't, then you're not going to be able to raise the equity capital, to be honest.

Speaker #1: And so 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.

Speaker #1: Maybe 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?

Speaker #2: Yeah. Thanks, Sam, and thanks for the question. Cherilyn, I think from a commercial terms perspective, I think, as Sam said, we continue to see strong contracts from our customers.

Lief Williams: Yeah. Thanks, Sam, and thanks for the question, Sherylinn. From a commercial terms perspective, 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. I think that you see that move a little bit with interest rates. We are in a slightly higher interest rate environment than maybe in the past. I think you see that ultimately flows into development yields, as well as the annual escalator. Again, whereas historically, that's fluctuated between 2% to 3%, I think right now you are 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.

Speaker #2: I think in terms of development yields, I would say it's still kind of high single-digit, low double-digits. I think that you see that move a little bit with interest rates, and so we are in a slightly higher interest rate environment than maybe in the past, and I think you see that that ultimately flows into development yields.

Speaker #2: And as well, as the annual escalator. And so again, we're historically that's fluctuated between 2 to 3 percent. I think right now you're seeing that really at the higher end of that range.

Speaker #2: So it's really more 2 and a half to 3 percent. And then the last key commercial term I would highlight is on lease term.

Speaker #2: And so again, typically the focus for Greenfield Projects is 15 years plus, and we are starting to see customers who are open to a 20-year initial lease term.

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 developer 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.

Speaker #2: And again, from our perspective, that is a crucial input to develop our returns. And so overall, I would just characterize it as a strong market on the private side.

Speaker #2: We see very good demand, and we think that it's a great opportunity to deploy capital at 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 sort of focus on core operations and carve out utilities and things of that nature. Are you seeing that in your pipeline as well?

Speaker #4: 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?

Speaker #4: One area where we're seeing some 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.

Speaker #4: Are you seeing that in your pipeline as well?

Speaker #1: Yeah. Maybe just to touch on the first part of your question, and I can come back to maybe carve-outs. But you're asking where are we seeing knock-on effects in other parts of our business?

Sam Pollock: Maybe just to touch on the first part of your question, and I can 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 the 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.

Speaker #1: And 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 the domino effect. All these developments are requiring products and assets from different parts of the world.

Speaker #1: And so we're seeing that reflected in trade flows. Maybe Dave, who runs our transportation business, could join. We have him on the line here.

Speaker #1: He can talk a bit about what we're seeing through Triton. From a transportation perspective.

Speaker #3: Yeah. Thanks, Sam, and thanks, Cherilyn, for the question. The overall, I think you've seen a very strong quarter for us on transportation, but what might be a little bit hidden by that is that a lot of that strong demand is actually coming from the big build-ups of data centers themselves.

Dave Joynt: Yeah. Thanks, Sam, and thanks, Cheryl, for the question. Overall, I think you've seen a very strong quarter for us on transportation, but what might be a little bit hidden by that is that a lot of that strong demand is actually coming from the big build up 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.

Speaker #3: And so if you look at Chinese exports on a year-to-date basis, it's up nearly 20%. And 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.

Speaker #3: And 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.

Sam Pollock: Yeah. Maybe just to answer your last question, maybe we will keep it short, we are definitely focused on strategic partnerships and carve-outs in a number of sectors. That is something that worked well on the railcar leasing side that we recently did. We are 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. So that is a focus. Hopefully, some of the transactions we will announce in the coming quarters will demonstrate that.

Speaker #1: Yeah. And maybe just to answer your last question, and maybe we'll keep it short, but we are definitely focused on strategic partnerships and carve-outs in a number of sectors.

Speaker #1: That's something that worked well on the rail car leasing side that we recently did. And 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.

Speaker #1: And so that is a focus and hopefully some of the transactions will announce in the coming quarters. We'll demonstrate that.

Speaker #4: Thank you for the time.

Cherilyn Radbourne: Thank you for the time.

Speaker #1: Thank you, Cherilyn.

Sam Pollock: Thank you, Cherilyn.

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.

Speaker #5: Thank you. One moment for our next question. Our next question will come from Devin Dodge from BMO Capital Markets. Your line is open.

Speaker #6: Yeah. Thanks, Sarah. Good morning. It seems like the AI factory strategy is really starting to gain traction here. It's obviously great to see. And it seems like there's based on your comments, Sam, there's still a lot of irons in the fire.

Devin Dodge: Yeah, thanks. Good morning. It seems like the AI factory strategy is really starting to gain traction here. It is obviously great to see. It seems like there, based on your comments, Sam, there is 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 time and maybe just for the projects and frameworks that you have secured to date, just any thoughts on potential equity commitments or deployment timing from a BIP perspective?

Speaker #6: Just wondering if you can frame how large of an opportunity the AI factory strategy could be over time. And maybe, just for the projects and frameworks that you've secured to date, any thoughts on potential equity commitments or deployment timing from a guidance perspective?

Sam Pollock: Okay. Well, again, I might ask Leif in a second to just comment on some of the initiatives we have globally. Some are still in the early stage, so we cannot get into too much specifics on them. I would say we have 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 timeframe, in a three to five-year timeframe, 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.

Speaker #1: 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, and so we can't get into too much specifics on them.

Speaker #1: But I'd say we've been busy developing a number of them for the past year. And 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 governance.

Speaker #1: I think on the potential deployment, if we look out over a longer-term timeframe—in a three- to five-year timeframe—I think we see the potential for BIP to be significant.

Speaker #1: And a major component of our investment. But what I would say is because many of these opportunities are development-related, there is a delayed draw component to them.

Speaker #1: The capital gets deployed over a period of time. So I think the significant dollars for the AI factories will come in a couple of years as opposed to the next year or two.

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 are discussing large dollars here, I think they are somewhat back-end loaded, to use that terminology. Maybe now just to get into some of the projects we are working on. Leif, do you want to just give a quick update?

Speaker #1: So 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, to use that terminology.

Speaker #1: But maybe now just to get into some of the projects we're working on, Leith, do you want to just give a quick update?

Speaker #2: Yeah. Absolutely. Thanks for the question, Devin. So I think as Sam articulated, we see a massive opportunity in the space. We think that it's in excess of 100 gigawatts of incremental load will be required over the next decade.

Lief Williams: Yeah, 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 GW 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 GW-plus scale campus, that is a huge undertaking. We announced a project yesterday in West Kentucky, that is located on a Department of Energy site, that will ultimately serve as a data center with in excess of 1.2 GW of IT load. I know that type of project will require up to $100 billion in private capital.

Speaker #2: And 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.

Speaker #2: And so, when you think about building out a gigawatt-plus scale campus, that's a huge, huge undertaking. And we announced a project yesterday in West Kentucky that is located on a Department of Energy site.

Speaker #2: 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.

Speaker #2: That will support both the data center itself, as well as the compute inside and the power generation that will support it. And we think that that last piece is a really crucial component to building out these AI factories.

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.

Speaker #2: Being able to indicate that there will not be an adverse impact to local rate payers and that these AI factories are bringing their own generation we think that that's crucial both from a 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.

Speaker #2: And so from Brookfield's perspective, we've been looking for sites like this around the world, given our global footprint. As mentioned, we announced a large-scale project yesterday in the US, but we also have large-scale sites in Canada and Europe.

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.

Speaker #2: We recently announced one in South Korea. And so 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.

Speaker #6: Okay. Thanks for that. And then 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.

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 out 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?

Speaker #6: We've 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 there are different approaches being pursued that could address at least some of the concerns from governments and local communities?

Speaker #1: Yeah. Thanks, Devin. It's been here and I think as you noted, there definitely is an increased NIMBYism or pushback against certain data center developments.

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. 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.

Speaker #1: And 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.

Speaker #1: And from a geography perspective, I think as you noted, it's probably 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.

Speaker #1: And we are starting to see some of this type of pushback in smaller markets like Canada as well. So 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, perception that data centers create a lot of local noise.

Speaker #1: And so 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, but 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 and supporting their local grids.

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, and we are seeing support from many local communities.

Speaker #1: And minimizing noise. So, with that, I'd just say our businesses that we're focused on, and our operating companies, we're leaders on all of these fronts in the industry.

Speaker #1: And we are seeing support from many local communities. So in terms of your question of where data centers get developed, I do think that the industry itself, there are lots of false perceptions in the industry is actively working on ensuring that it has solutions to all the concerns.

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, and 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.

Speaker #1: And we're just focusing on the geographies where developments are welcome.

Speaker #6: Okay. Thanks for that, Ben. I'll turn it over.

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

Ben Vaughan: Okay. Thank you.

Speaker #1: Okay. Thank you.

Speaker #4: Thank you. Our next question will come from Maurice Choi from RBC Capital Markets. Your line is now open.

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

Speaker #5: Thanks, Dan. Good morning, everyone. Oh, good afternoon. Good morning. Just a quick discussion on AI for a moment. Notwithstanding all the comments that you just made about NIMBYism and earlier response about timing of payoff for a CapEx in AI, you've obviously been quite successful in signing a number of AI-related deals in Kentucky and South Korea.

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 am 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?

Speaker #5: Maybe we're 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?

Ben Vaughan: Well, maybe Dave can talk about just from our business plan perspective, how it is playing out. Sorry, your second question was? Can you repeat that?

Speaker #1: Well, maybe Dave can talk about just from our business plan perspective, how it's playing out. And then your second question was, can you repeat that?

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?

Speaker #5: 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?

Ben Vaughan: Gotcha.

Speaker #1: Yeah. Well, I'll start. And 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.

Lief Williams: 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 have thought. Otherwise, from a pure investing perspective, I think we're right on track. You will recall at Investor Day last year, we said

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 have thought. Otherwise, from a pure investing perspective, I think we're right on track. You will recall at Investor Day last year, we said

Speaker #1: I think maybe the pace of the announcements and the initial frameworks agreed to maybe have accelerated a little faster than we would have thought.

Speaker #1: But 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 dollars of equity a year into this strategy.

David Krant: 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 to date, the contracts we have in place would probably put us close to $100 million year to date. If we do upsize the framework and participate, that'll certainly get us closer to the midpoint or 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 $300 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.

Speaker #1: And look, I think with Bloom to date, we've probably done the contracts we have in place would probably put us close to 100 million a year to date.

Speaker #1: And if we do upsize the framework and participate, that'll certainly get us closer to the midpoint or the high end of that range we gave.

Speaker #1: And then, as we look ahead to the following years to come, I think as we progress the commercial fronts on the AI factories and the various regions at least referred to, I think that'll help achieve that $300 to $500 million of equity invested in AI infrastructure on an annual basis.

Speaker #1: So 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? 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, and then 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.

Speaker #3: And maybe just on your second part of your question about whether we are seeing all the various pockets of the value chain generating opportunities for us.

Speaker #3: And our AI group commonly refers to $7 trillion of potential opportunities, which obviously is a big number. But you can already see with the magnitude of the projects that we've signed, the market is massive.

Speaker #3: 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.

Speaker #3: And then we kind of have a catch-all area of adjacencies related to AI. And so in terms of the first three, yeah, I think you can see that we are actually advancing the strategy quite well.

Sam Pollock: In terms of compute, we've established Radiant, which is our in-house Neo cloud. We've already signed agreements with customers to provide compute. 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. 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 shop-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.

Speaker #3: So in terms of compute, we've established Radiant, which is our in-house NeoCloud. 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.

Speaker #3: Behind-the-meter power opportunities—Bloom is a poster child for that. And yeah, I don't think we could have asked for anything better than that relationship.

Speaker #3: And then in terms of the AI factory, leave just described all the different ones that we're pursuing. And we expect those to be shovel ready, hopefully, in the next number of quarters.

Speaker #3: So in terms of the first three components, I think absolutely, we've demonstrated the opportunities. And 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.

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.

Speaker #3: So I think the opportunity set is absolutely developing as we expected. And I think as you alluded to, our upcoming investor day presentation will probably touch on this a lot more.

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.

Maurice Choy: Yeah, looking forward to that. If I could finish off with a comment that you've made. I think quoting you in 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?

Speaker #5: Yeah, looking forward to that. If I could finish off with a comment that you've made—I think quoting you from a press release—the public markets have been an increasingly effective exit channel to maximize value in your capital recycling program.

Speaker #5: 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 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. In some industries, it's competitive.

Speaker #1: Yeah. Maybe I'll answer that question. So in short, nothing's changed on the private channels. So the private channels remain open and all the various we refer to are tools in our toolkit to exit remain very relevant.

Speaker #1: 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 we're very receptive to new IPOs.

Speaker #1: Which we hadn't really seen for a couple of years. I think prior to doing the Rock Point IPO, I think the previous one was probably DBI, which was like 2020 or something like that.

Speaker #1: So going back three, I guess, maybe longer, five years. And so we're just taking advantage of the market as it exists as really just a competing source of capital to the private markets.

Speaker #1: And in some industries, it's competitive. In other industries, it's less so. And the market—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 the market in the fall.

Sam Pollock: 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.

Speaker #1: So, we definitely don't think this market is shut for sure. It's going to reopen, and we'll continue to consider it for other opportunities.

Speaker #5: Thanks. That a color. Thank you very much.

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

Speaker #1: All right.

Sam Pollock: Great.

Speaker #2: Thank you. And as a reminder, to ask a question, please press star one one. Thank you. And I am showing no further questions from our phone lines.

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.

Speaker #2: So now, I'd like to pass the conference back to Sam Pollock for any closing remarks.

Speaker #1: All right. Well, thank you, Crystal. And thank you to everyone for joining the call this morning. We hope everyone is enjoying their summer so far, for those in the Northern Hemisphere.

Sam Pollock: 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, 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, I hope you have a great day.

Speaker #1: And look forward to hosting all of you for our investor day in Toronto on September 29th. And we look forward to providing you an update on all our strategic priorities and our growth outlook.

Speaker #1: 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.

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