Brookfield Infrastructure Partners L.P. Stock

Good day, and thank you for standing by. Welcome to the Brookfield Infrastructure Partners L.P. Third Quarter 2026 Results Conference Call and Webcast. [Operator Instructions] 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.

Thank you, Shannon, and good morning, everyone. Welcome to Brookfield Infrastructure Partners Third Quarter 2026 Earnings 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; and our Chief Operating Officer, Ben Vaughan. Also joining us today is Dave Joynt, a managing partner in 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 financial and operating results, followed by a discussion of our asset sale initiatives and balance sheet strength. I'll turn the call over to Sam then to -- who will discuss our capital deployment activity and provide an outlook for the business.

Now at this time, I'd like to remind you that in our remarks today, we may make forward-looking statements. These statements are subject to known and unknown risks, and the future results may differ materially. For further information on known risk factors, I'd encourage you to review our latest annual report on Form 20-F, which is available on our website.

Now beginning with our financial and operating results, we're pleased to report that we generated FFO of $717 million or $0.91 per unit. This marks the third consecutive quarter in which we've achieved our 10% FFO per unit growth target. The increase was driven by strong organic growth at the high end of our target range, supported by inflationary price increases, strong asset utilizations and the commissioning of approximately $1.4 billion of capital projects from our backlog. Results also benefited from contributions from new investments completed over the last 12 months. which continues to generate returns above the lost yield from asset sales completed over the same period.

I'll now go through our results by segment in a little more detail. Starting with our Utilities, where we generated FFO of $200 million, an increase of 5% over the prior year. The increase was driven by inflation indexation and the contribution of approximately $600 million of capital commissioned into rate base. Results also benefited from recent acquisitions including our South Korean industrial gas business and our New Zealand energy infrastructure platform. These contributions were partially offset by foregone earnings from asset sales completed over the last 12 months.

Moving to Transport, where FFO was $315 million, representing a 10% increase over the prior year. The increase was driven by volume strength in our port operations, increased volumes and tariffs on our toll roads and the contribution from the acquisition of our North American railcar leasing platform. Results were impacted by foregone earnings from asset sales completed in the prior year, including the sale of our Australian container terminal and a partial sale of our U.K. port operation.

In Midstream, our FFO was $178 million, up 14% compared to the prior year. The increase reflects strong organic growth across the portfolio, particularly at our Canadian diversified midstream business, which benefited from strong asset utilization and elevated commodity prices. Results also reflected a full quarter contribution from our U.S. refined products pipeline, which we acquired in the third quarter of 2025 compared with the partial closure of this year.

Lastly, FFO from our Data segment was $172 million, representing a 25% increase over the prior year. The increase was driven by strong organic growth across the segment, including contributions from our partnership with Intel to develop semiconductor foundries in Arizona, following the completion of our equity funding during the quarter. Results also included a full quarter contribution from our U.S. bulk fiber network, which we acquired in the third quarter of 2025.

I'll now turn to an update on our asset sales. And on a year-to-date basis, you note we have secured nearly $1.5 billion of proceeds. We are also nearing binding offers on several advanced sale processes that could generate over $1 billion of incremental proceeds next to the partnership before year-end. In parallel, we continue to advance additional monetization opportunities, which position us for a strong start in 2027 for our capital recycling plan.

In terms of our balance sheet, our approach to financing remains straightforward: Maintain conservative leverage, extend maturities when opportunities arise and ensure our businesses have the financial flexibility to perform through market cycles. Today, more than 90% of our debt, excluding Brazil, is fixed rate, and our debt maturities are well staggered. This provides meaningful protection against movements in interest rates and allows us to focus on operating and growing our operations. At the corporate level, we have approximately $3.2 billion of liquidity together with our access to a broad range of capital markets and limited near-term refinancing requirements, this puts us in an excellent position. We have the flexibility to fund our existing growth initiatives and the capacity to pursue new investments when attractive opportunities arise.

And with that, that concludes my remarks for this morning. I'll now turn the call over to Sam.

Thank you, David, and good morning, everyone. Building on the progress David just outlined, we've also been active in deploying capital. Year-to-date, we deployed approximately $1.8 billion of equity across new investments and organic growth projects, and we remain on track to deploy over $2 billion in 2026. One of the most compelling aspects of our business today is the growing scale and breadth of organic investment opportunities within our portfolio. Across our 4 segments, we are deploying capital to expand utility systems, increase capacity in our transport networks, enhance our midstream capabilities and develop data infrastructure to support accelerating demand for digital connectivity. So far in 2026, we have invested approximately $700 million of equity into organic growth projects. These projects leverage our existing asset base, establish customer relationships and operating expertise, allowing us to deploy capital at attractive risk-adjusted returns with greater visibility and lower execution risk.

Alongside this organic activity, investment across AI infrastructure continues to accelerate, adding to our established pipeline of M&A in traditional sectors. The significant capital required to develop AI factories, deploy compute capacity and secure associated energy infrastructure is creating new avenues for us to deploy capital, particularly through strategic partnerships with leading global corporations. This momentum is reflected in our recently signed agreement formalizing a strategic partnership with NAVER to develop sovereign AI capabilities, including over 200 megawatts of compute capacity for of the largest AI factories in Asia Pacific. As part of the partnership, we will finance and own the compute capacity through a dedicated leasing company with contracted cash flows providing a return on and full recovery of our invested capital over the initial contract term. The first GPU deployment is expected in the first half of 2027 with full deployment by the end of 2028. This expected equity commitment is approximately $100 million.

Now beyond NAVER, our growing pipeline of actual investment opportunities gives us confidence in achieving our forward-looking objective of deploying approximately $500 million of capital on average annually in AI infrastructure. Most recently, we entered into a strategic partnership with Drax to potentially develop a large-scale AI factory in the United Kingdom.

So with that, let me now turn to the outlook. We remain confident in our ability to close out the year with strong financial performance and achieve our 10% FFO per unit growth target. A key focus is converting our expanding investment pipeline into new capital deployment. We're advancing opportunities across sectors and geographies through both traditional M&A and strategic capital partnerships, providing multiple avenues to deploy capital at attractive risk-adjusted returns. Our scale, operating expertise and track record have established Brookfield as a partner of choice for leading global corporations seeking long-duration capital and an aligned operating partner. This position provides access to differentiated investment opportunities that often arise from relationships developed over many years rather than competitive options.

Another key priority is completing the announced corporate simplification. Following the successful BIP unitholder and BIP C shareholder votes, we have now received all required approvals and expect the simplification to close on November 19. Following closing and subject to approval by its Board of Directors, BIP Bank intends to declare and pay a fourth quarter dividend on its Class A shares in an amount consistent with BIP's current quarterly distribution of $0.455 per unit. We believe the simplified structure will make Brookfield Infrastructure easier to own, improve consolidated trading liquidity, broaden our investor base and support increased index demand.

This concludes my remarks, and I'll pass it now back to the operator, and we'd be happy to take some questions.

[Operator Instructions] Our first question comes from the line of Cherilyn Radbourne with TD Cowen.

Thanks very much, and good morning. I was hoping to get some perspective on what the U.S. midterms mean, if anything, for the value of your in-place DC capacity and the development pipeline.

Cherilyn, I guess we expected that question. Maybe I'll just make a couple of quick comments, and we have Lief Williams from our AI strategy group here as well. And maybe I'll ask him just to give a general sense of what's happening these days in that sector. But I think the 2 obvious things to say is that it's far too early to speculate on changes that might occur to regulation and other impacts to the sector because we're still in the heightened political environment.

But obviously, to the extent that development slows down, which, frankly, we expected it to slow down in any event because of constraints to supplies as well as capital. So I think a slowdown was expected in any event. But to the extent that there is a lower supply in the coming years, that's going to make existing assets more valuable. And so for businesses like C-Square, where we have it in place, set of data centers and customers providing compute. We expect rates to get higher, and it should be good for the business.

In terms of development, I think for developers who have a strong track record, access to capital and strong local support and that means having projects in the right jurisdictions, I think they will continue to be successful. And in our case, we've been running our business extremely prudently. And maybe just to add to that, that's where I'll turn it over to Lief, just to describe how we've been running the business to position ourselves for this particular environment.

Yes. Thank you, Sam. I think what I would add is from a bipartisan perspective, A big area of focus has been great payer protection and really trying to ensure that from a grid perspective, the ratepayer is protected and from a power perspective, there is additionality. That's a theme we've been looking forward to for the last 18 months. I would say if you look at the large 3 AI factory projects we've been [indiscernible] so the Edmonton site, the Paduca site and the [indiscernible] in the U.K. All 3 of those hit all of those attributes. And so we think that development will continue for the right projects to develop the right way. And that's really been the priority from our perspective.

Great. And for my second question, maybe flipping to a jurisdiction that's a bit more friendly, opened. Can you talk about what you think Build Canada Strong and the mega productivity deduction imply for your Canadian midstream business?

Okay. Well, maybe I'll start there. And if any of my colleagues want to add to it, they can jump in as well. Look, I think as we've probably said on previous calls, the tone from the various governments over the last year has been trending positive. And we've seen both federally and provincially a number of governments much more supportive of new projects, particularly projects out West. We think that there's a lot of momentum in the energy sector, in particular, to expand egress both to Asia and south. And I think while we can't point to a number of projects yet the direction of travel is positive. And so we remain optimistic that things will get done and that our pipeline today of energy projects has probably never been larger and continues to be -- our view -- our favorable view on the sector has not changed.

Our next question comes from the line of Maurice Choy with RBC Capital Markets.

Maybe to take even bigger picture as we talk about the changing policy and political landscapes around the world that seems to be quite rapid, not at least being the U.S. Just keen to hear where you think you see the greatest opportunities in this location in any of the 4 pillars of business that you have.

Maurice, so today, if we look from a geographic perspective the for the last couple of years, most of the opportunities have arisen out of the U.S. and a lot of that was driven by the explosion in data center activity, which led to behind the meter power opportunities, utility opportunities as well as midstream. So a lot of that took place. And as we just said, I think we expect that to continue even if it's moderated somewhat.

The other theme that has been very prevalent has been energy security. And we just touched on that a little bit, I guess, with Cherilyn's question regarding projects in Canada, which really, I think, are being developed in response to energy security issues around the world. We have participated in investments in New Zealand, where energy security was part of our Clarus thesis. And we're pursuing a number of opportunities in Europe related to that theme as well. So I would say energy is still a big component. There are opportunities in New York, in particular, related to utilities, not dissimilar to what we see here in North America. They have issues there as well with raising capital to invest in utilities so that they can expand transmission and distribution in particular, and so investments into rate base opportunities are quite prevalent.

And then on the transportation side, maybe I've got Dave joined here with me, who runs our transportation business. do you want to comment on where we see transportation opportunities.

Yes, I would probably just make 2 comments on that. I think, number one, despite what you might think, Global trade continues to be really strong. And it's not just as direct as it was in the past or would go directly from factories in Asia and go directly into demand markets in Europe and North America, but it's actually making many steps kind of along the way. And so I think that overall demand for global trade just increases overall investment requirements in everything from ports to rail and other sort of like inland infrastructure assets. So I think overall, that is probably very strong.

And then I think the second thing that I would comment is another large theme continues to be around supply chain security. So beyond Sam's comment about energy security, people are also concerned about the security of their supply chain, and there are significant investments being made around the world in order to -- whether it's resort or simply to create captive supply chains in order to get their goods from their supply destinations to the end markets, a lot of investment in that market as well.

Understood. And if I could just finish off with a question on the corporate simplification. My congratulations to your team for the hard work and getting this across the line. And I just wanted to hear your sense as to when the benefits that you've outlined for the simplification may materialize timing-wise, over the coming weeks, months or quarters?

Maurice, it's David. Look, I think in terms of the benefit, it's going to be -- and to remind everyone, we think there's a number of them. Obviously, the combined company is going to have a much larger market cap, a bigger free float and therefore, better trading liquidity. And so I would expect those benefits to come in from day 1 in terms of liquidity. People have access to trade the shares, as we noted in our release yesterday, from the 23rd onwards. And so I think that, that's probably more imminent.

Some of the other maybe medium- to longer-term benefits in terms of index demand and flows will be harder to predict and will happen at various times over the next 3 to 9 months based on our estimates. But we think that the initial benefits will be soon. And so that we're really excited to have that chapter behind us.

Our next question comes from the line of Devin Dodge with BMO Capital Markets.

So I'm going to start with a question on Radiant. We started to see more of these arrangements with third parties to fund compute capacity including Brookfield's agreement with NAVER's, I know the total addressable market is really large. But just wondering how much of that is currently in discussion with technology companies? And how do you differentiate versus your competitors?

Yes, sure. Thanks for the question, Devin. Look, I think you're right. The addressable market is significantly size. I would say from a sheer dollars per megawatt perspective, the compute market is about 3x larger than the data center market. So we see a tremendous addressable market, but I would say we're very focused on the Brookfield side and on the Radiant side. at sticking to our knitting. And so this is take-or-pay contracts, full return on and of capital over the contract period. No technology risk and investment grade counterparties. The NAVER transaction is a great example of that focus. And I would say you'll see more transactions like that from us over the coming quarters.

From a differentiation perspective, I think you're starting to see that in the market right now. I think having access to capital in periods of volatility will be a difference maker. Capital is becoming more scarce. And I think that strong sponsor like Brookfield with deep access to capital, will be able to take advantage of the volatility.

Okay. Second question is on Arc infrastructure. There were some legislation that came forward in Western Australia involving the renationalization of the freight network, at least to the extent that you're able. Can you speak to where you are in those discussions with the government? And what's the range of outcomes that are being considered?

Devin, I don't think we can really talk about that at the moment. I think the government has put forward legislation that allows them to have the opportunity to buy back. And those are conversations that we're having today, and we'll see where they end up.

[Operator Instructions] Our next question comes from the line of Frederic Bastien with Raymond James..

Question on the NAVER partnership. Your $100 million equity commitment looks relatively modest against the $9 billion project size. Given that you typically invest alongside Brookfield and some institutional partners. Can you give us a sense of the total equity commitment at the group level and perhaps clarify whether the $9 billion represents total project costs, including debt financing or equity alone?

I can start. Frederic, it's David. Yes. So the $9 billion -- I'll start backwards. The $9 billion is the total capital spend for the GPUs. And so that's the CapEx component. From an equity funding perspective, typical for these structures, you would have a loan to cost in the 80% range, maybe slightly lower than that. So you're probably around $1.75 billion of equity. And so we're estimating here BIP's share of that will be somewhere in the 5% to 10%. We do expect to offer equity investments here to potential fund investors. And given we're in the fundraising process, it's hard to speculate on where that shakes out. But I'd say the investment we wanted to put a number just so people had a sense of what to expect. So $100 million, maybe upwards to $200 million would be where we'd expect it to be once it's settled.

And can you clarify what sort of investments you'd be looking at the group level, including Brookfield and your partners?

It's plus or minus $1.7 billion to $1.8 billion total equity into the deal.

And that's yours. Like that's the group level investment.

At a group level, and as Dave mentioned, a portion of that will go into the fund, the AI fund, and then a portion will go to co-investors who are partners in the fund, and BIP will participate through the fund.

Okay. Super. Okay. My other question around, I guess, you've been super active in data and certainly feels like investment opportunities are heating up in midstream. How is the opportunity set evolving across your 2 other segments, utilities and transport.

I would say if we had to rank sort of pace of deployment, data would still be the most active followed by midstream. I think those are the 2 areas where we're seeing the most deal flow at the moment. And then probably transportation would be next and then utilities, I'd say, they can be lumpy. So the utility transactions tend to be larger, just less frequent. And so it's possible in any given year, we could have a large utility transaction, and there's some that we're pursuing at the moment, but they tend to be a little bit more sporadic. So whereas the transportation side tend to be smaller deals, but more often.

So that's kind of the lay the land. It's always hard to speculate because we have, as you can appreciate, a large number of transactions underway at any one particular time. And it's hard to predict which ones will become actionable and which ones might fall away for various reasons.

And I'm currently showing no further questions at this time. I'd now like to hand the call back over to Sam Pollock, Chief Executive Officer, for closing remarks.

All right. Thank you, operator, for helping us out today, and thank you to everyone who joined the call. I think we'd like to wish everyone a happy upcoming holiday season. and we look forward to providing you our fourth quarter and year-end results early in the new year. Thank you, and have a great weekend.

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

Good morning, everyone, and welcome to the Special Meeting of Unitholders of Brookfield Infrastructure Partners L.P. My name is Anne Schaumburg, and I am the Chair of the Board of Directors of the General Partner of Brookfield Infrastructure Partners L.P., which we will refer to during this meeting as the Partnership. In accordance with the terms of the Partnership's Limited Partnership Agreement, I have been designated to chair the special meeting of unitholders, and it is my pleasure to do so. It is now 9:00 a.m. and time to begin the special meeting.

On behalf of the Board and its Management Team, I would like to extend a warm welcome to everyone joining us today. This meeting is being held in conjunction with the proposed simplification of the structure of Brookfield Infrastructure by way of a plan of arrangement involving the Partnership and Brookfield Infrastructure Corporation. The transaction is designed to simplify our corporate structure by reorganizing the Partnership and Brookfield Infrastructure Corporation into subsidiaries of one publicly traded Canadian corporation named Brookfield Infrastructure Partners Inc.

Among other benefits, the simplified structure is expected to improve trading liquidity, broaden our investor base and support increased index demand. Pursuant to the transaction, other than the preferred units, all of the outstanding Limited Partnership units of the Partnership, which we will refer to at this meeting as the units will be exchanged for newly issued Class A subordinate voting shares of Brookfield Infrastructure Partners Inc. Further information about the transaction is detailed in the Management Information Circular that was issued in connection with this meeting. These materials can be found on our website.

As a first order of business, I would like to ask Michael Ryan, Corporate Secretary of Brookfield Infrastructure Corporation, to serve as today's moderator and to set out the meeting procedure for the meeting and the process to submit questions.

Thank you, Madam Chair. Voting during the meeting will take place on our virtual meeting platform. I'll now explain the process. Adoption of each resolution requires the favorable vote of holders of a simple majority of the outstanding units and a simple majority of the votes cast by minority unitholders, being unitholders other than Brookfield Corporation, its direct and indirect subsidiaries and affiliates and any other person whose votes are required to be excluded under Section 8.1(2) of Multilateral Instrument 61-101. Each unitholder is entitled to 1 vote in respect of each unit held at the close of business on August 21, 2026.

Voting will be open for all resolutions at the same time and throughout the meeting. This will allow you to choose to vote on each resolution immediately or wait until the conclusion of discussion on each resolution prior to casting your vote. If you voted in advance of the meeting and do not wish to change your vote, then no action is needed. By voting at the virtual meeting on any matter, your previously submitted votes in respect of such matter will be automatically revoked. To vote on a resolution, click the voting tab on the left side of your screen. For those using a mobile device, the tabs are located at the bottom of your screen. The item to be voted on will appear in a column and you can make your selection. A confirmation message will appear directly above the item once the vote is cast.

We welcome questions from our unitholders, which may be submitted by typing the question into the virtual meeting platform using the questions icon on the top of the page. For those using a mobile device, the tabs are located at the bottom of your screen. Please click the submit button once you have finished typing your question. I will read out the question and ask a member of management to respond to it. If we receive many questions that are similar, we'll read one of the questions and indicate that we've received many similar questions. Only registered unitholders or proxy holders are able to submit questions at this meeting.

If you're connected to this meeting as a guest, you will not be able to submit a question. We will endeavor to answer all questions submitted during the allotted time. We recommend that you submit your questions as soon as possible as it may take time for the virtual meeting platform to process them.

Thank you, Michael. I now call the meeting to order and ask Computershare Investor Services Inc. by its representative, Shirley Tom, to act as the scrutineer. I also ask Michael to act as Secretary of the meeting. In the unlikely event of a technological failure that disconnects my audio from the meeting, Michael is appointed on behalf of the Board to step in as Chair of the meeting. In the unlikely event of a serious technological failure that prevents the meeting from continuing, the meeting will be rescheduled and you will be appropriately notified.

As described in our Management Information Circular, there are 2 items of business to be considered today, and I will ask Michael to outline them for you.

The first item of business today is a resolution of the Limited Partners, the full text of which is set forth in Appendix B of the circular, approving the transaction to be carried out by way of a statutory plan of arrangement, which I'll refer to as the arrangement resolution. The second item of business is a resolution of the Limited Partners, the full text of which is also set forth in Appendix B of the circular, to approve certain amendments to the amended and restated Limited Partnership Agreement of the Partnership, which I'll refer to as the amendment resolution. The arrangement resolution and the amendment resolution are conditional upon each other, and the transaction will not proceed unless both the arrangement resolution and the amendment resolution are approved.

As mentioned, in connection with the business to be addressed today, all voting will be conducted online through the virtual meeting platform. Voting is now open on all resolutions. In order to expedite today's meeting, the meeting Chair has asked David Krant, as a management representative to move the resolutions. Although this procedure will assist in the handling of formal matters, it is not intended to discourage anyone from submitting questions with respect to either resolution after each resolution has been proposed.

Madam Chair, please be advised that the notice calling this meeting and the Management Information Circular were disseminated to unitholders in accordance with all applicable laws and the amended and restated Limited Partnership Agreement of the Partnership. As Secretary of the meeting, I'll keep a copy of the notice and proof of mailing with the minutes of this meeting. Based upon the scrutineer's preliminary report on attendance, I confirm that there is a quorum.

I therefore declare the meeting properly constituted for the transaction of the business for which it has been called. This meeting is being held pursuant to the Limited Partnership Agreement of the Partnership and an order of the Supreme Court of British Columbia, the full text of which is set forth in Appendix G to the Management Information Circular.

If the transaction resolutions are approved, the final hearing of the court to approve the transaction is scheduled to take place on October 19, 2026, at 9:45 a.m. Pacific Time. The first item of business today is the approval of the arrangement resolution. As stated in the circular, on the recommendation of the Special Committee, the Board of Directors of the General Partner of the Partnership, excluding Jeff Blidner and Malcolm Cockwell, due to their recusal from voting, has recommended that unitholders vote in favor of the arrangement resolution.

Madam Chair, I move that the arrangement resolution set forth in Appendix B of the Management Information Circular be approved.

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

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

Thank you, Michael. Management has received proxies representing 60.13% of the units. These proxies direct management to vote over 99.51% of the units in favor of the arrangement resolution. I will now call for unitholders and proxy holders to submit their vote if they have not already done so.

The second item of business today is the approval of the amendment resolution. As stated in the circular, on the recommendation of the Special Committee, the Board of Directors of the General Partner of the Partnership, excluding Jeff Blidner and Malcolm Cockwell, due to their recusal from voting, has recommended that unitholders vote in favor of the amendment resolution.

Madam Chair, I move that the amendment resolution set forth in Appendix B of the Management Information Circular be approved.

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

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

Thank you, Michael. Management has received proxies representing 60.13% of the units. These proxies direct management to vote over 99.53% of the units in favor of the amendment resolution.

I will now call for unitholders and proxy holders to submit their vote on both of the resolutions if they have not already done so.

[Voting]

Voting is now closed. I am advised that we have the results of the voting on the resolutions.

Thank you, Madam Chair. On the approval of the arrangement resolution, I'm pleased to declare the motion carried. On the approval of the amendment resolution, I'm pleased to declare the motion carried. The final voting results will be available after the meeting and posted to SEDAR+ at www.sedarplus.ca.

As previously announced, the related Special Meeting of Shareholders of Brookfield Infrastructure Corporation has been postponed to October 29, 2026, to give shareholders additional time to submit their votes. For more information, please see Brookfield Infrastructure Corporation's press release dated October 9, 2026.

Thank you all for your participation. This concludes today's meeting.

Good day, and thank you for standing by. Welcome to the Brookfield Infrastructure Partners L.P. Second Quarter 2026 Results Conference Call and webcast. [Operator Instructions] 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.

Thank you, Kristal, and good morning, everyone. Welcome to Brookfield Infrastructure Partners Second Quarter 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, the Managing Director focused on AI infrastructure investments.

I'll begin the call today with a discussion of our second quarter 2026 financial and operating results, followed by an update on our asset sale initiatives. I'll then 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. 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 the second quarter, 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.

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'll now go through our results by segment in more detail. Starting with our Utilities 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. This growth was partially offset by foregone earnings from asset sales, including the largest of 4 concessions within our Brazilian electricity transmission operation and our Mexican regulated natural gas transmission business, both of which contributed to 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 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 U.K. 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 U.S. refined products pipeline system, which more than offset the lost earnings with the sale of our U.S. gas pipeline last year.

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 U.S. 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 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.

The most recent example was the IPO of our U.S. 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 U.S. 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 4x 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. 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.

In the quarter, we also advanced monetizations across 2 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 derisked and contracted container portfolios at our global intermodal logistics operations. On July 1, we completed the 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.

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 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 U.S., 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.

In South Korea, Brookfield, NAVER and NVIDIA announced plans to develop 200 megawatts 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. 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 trading liquidity, increased demand from index funds and ETFs and broader access to investors who prefer a traditional corporate structure, among other benefits.

We expect the simplification to be tax-deferred for Canadian and U.S. 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 entered 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, Kristal, to open the line for Q&A.

[Operator Instructions] And our first question will come from Cherilyn Radbourne from TD Cowen.

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 BIP is able to maintain its investment guardrails against that backdrop? And maybe you could touch on whether you're seeing degradation in contract terms more broadly across that space.

Cherilyn, maybe I'll 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'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.

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 gyrations. 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.

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.

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. Maybe since we have Lief on the line, Lief, do you want to talk about any trends that you're seeing as far as new developments?

Yes. 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. I think 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.

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 and, as well as, 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 really more 2.5% to 3%.

And then the last key commercial term I would highlight is on lease term. 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. And again, from our perspective, that is -- that's a crucial input to developer returns. And so 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.

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?

Yes. 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 we're seeing knock-on effects in other parts of our business. 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 of all these developments are requiring products and assets from different parts of the world. And so we're seeing that reflected in trade flows. And so maybe Dave Joynt, who runs our transportation business, we have them on the line here. He can talk a bit about what we're seeing through Triton from a transportation perspective.

Yes. 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-out of data centers themselves. 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. 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.

Yes. 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. That's something that worked well on the railcar 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. And so that is a focus. And hopefully, some of the transactions we'll announce in the coming quarters will demonstrate that.

Our next question will come from Devin Dodge from BMO Capital Markets.

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 -- based on your comments, Sam, 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 time? And maybe just for the projects and frameworks that you've secured to date, just any thoughts on potential equity commitments or deployment timing from a BIP perspective?

Okay. Well, again, I might ask Lief 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. 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 governments.

I think the -- on the potential deployment, I think if we look out over a longer-term time frame on a 3- to 5-year time frame, I think we see the potential for BIP to be significant and a major component of our investments. But what I would say is because many of these opportunities are development related, there is a delayed draw component to them. 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 2. 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. But maybe now just to get into some of the projects we're working on. Lief, do you want to just give a quick update?

Yes, absolutely. Thanks for the question, Devin. So 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. 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.

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 that will ultimately serve a data center with in excess of 1.2 gigawatts of IT load. And that type of project will require up to $100 billion in private capital 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.

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 is strong local support and that these sites are bearing the cost of the grid that is ultimately required.

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 U.S. But we also have large-scale sites in Canada, in Europe. 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.

Okay. And then 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. We've definitely seen that more recently in the U.S. 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 have address at least some of the concerns from governments and local communities?

Yes. Thanks, Devin. It's Ben here. And I think as you noted, there definitely is an increased nimbyism or pushback against certain data center developments. And there are also -- I'd 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.

And from a geography perspective, I think as you noted, it's probably -- the nimbyism is probably most prevalent in the U.S. 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. 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, a perception that data centers create a lot of local noise. 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 in supporting their local grids 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, 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 and the industry is actively working on ensuring that it has solutions to all the concerns. And we're just focusing on the geographies where developments are welcome.

Our next question will come from Maurice Choy from RBC Capital Markets.

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 is progressing in line with your prior projections? Or are there pockets of the AI infrastructure value chain that you think may be accelerating?

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

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?

Yes. I'll start. 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. 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 of equity a year into this strategy. 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 year-to-date. And if we do upsize the framework and participate, that will certainly get us closer to the midpoint or the high end of that range we gave.

And then so 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 Lief referred to, I think that will help achieve that $300 million to $500 million of equity invested in AI infrastructure on an annual basis. So I think we're kind of in line with where we thought we'd be.

And 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. But you can already see with the magnitude of the projects that we've signed, the market is massive.

We generally talk about 4 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 catch-all area of adjacencies related to AI. And so in terms of the first 3, I think you can see that we are actually advancing the strategy quite well. So in terms of compute, we've established Radiant, 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. And then in terms of the AI factory, Lief 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. So in terms of the first 3 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. So 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.

Looking forward to that. If I could finish off with a comment that you've made. I think quoting you in the 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 that they have changed?

Yes. 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 referred 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 we're very receptive to new IPOs, which we hadn't really seen for a couple of years. I think prior to doing the Rockpoint at IPO, I think the previous one was probably DBI, which was like 2020 or something like that.

So going back 3 before, I guess maybe, longer, 5 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. 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 market in the fall. So we definitely don't think this market has shut for sure. It's going to reopen. And we'll continue to consider it on other opportunities.

[Operator Instructions] And 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.

All right. Well, thank you, Kristal, 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 and look forward to hosting all of you for our Investor Day in Toronto on September 29, and 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. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Good day, and welcome to the Brookfield Infrastructure Partners 2026 Results Conference Call and Webcast.

[Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. David Krant, Chief Financial Officer. Please go ahead.

Thank you, Sherry, and good morning, everyone. Welcome to Brookfield Infrastructure Partners First Quarter 2026 Earnings 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; and our Chief Operating Officer, Ben Vaughan. Also joining us today is Dave Joynt, a managing partner on our investments team.

I'll begin the call today with a discussion of our first quarter 2026 financial and operating results, followed by an update on our capital recycling initiatives. I'll then turn the call over to Sam, who will provide an update on our recent strategic initiatives before concluding with an outlook for the business.

At this time, I'd like to remind you that in our remarks today, we may make forward-looking statements. These statements are subject to known and unknown risk factors and future results may differ materially. For further information on known risk factors, I would encourage you to review our latest annual report on Form 20-F, which is available on our website.

So with that, Brookfield Infrastructure had a strong start to the year, delivering record results while continuing to advance a number of strategic initiatives across the business. We generated funds from operations, or FFO, of $709 million or $0.90 per unit in the first quarter. This is a 10% increase compared to the prior year. This performance was driven by strong base business results, highlighted by FFO from our data and Midstream segments increasing 46% and 12%, respectively, compared to the prior year. Results in our Utilities and Transport segments reflected resilient underlying performance with the current period impacted by higher levels of capital recycling activity achieved during 2025.

I'll now go through our results by segment in more detail. Our Utilities segment generated FFO of $201 million, up 5% year-over-year. The increase was primarily driven by inflation indexation and the benefit of over $500 million of capital commissioned into rate base, along with the contribution from our recently acquired South Korean industrial gas business.

Moving on to our Transport segment. FFO was $283 million, slightly below the same period last year. The decrease was primarily attributable to loss contributions from our successful asset sales. As a reminder, this included our Australian export and container terminal operations, the partial sale of a U.K. port operation and the majority interest in a portfolio of fully contracted containers at our global intermodal logistics business.

This was partially offset by the acquisition of our North American railcar leasing platform that closed on the 1st of January. After adjusting for all these factors, FFO was ahead of the prior year, reflecting higher volumes and tariffs generally across our rail and road operations. Our Midstream segment generated FFO of $190 million, up 12% compared to the same period last year. The increase reflects attractive commodity pricing, strong asset utilization and robust customer activity levels across our portfolio. Lastly, FFO from our data segment was $149 million, representing a step change increase of 46% compared to the prior year. The increase was driven by the contribution from our U.S. bulk fiber network, which we acquired in the third quarter of last year as well as organic growth across our data storage businesses, which included the commissioning of over 200 megawatts of operating data centers into earnings over the last year.

In addition to the strong financial and operating results we have delivered, we also made meaningful progress towards our 2026 capital recycling goal with proceeds secured of $1 billion to date. This includes closing the initial tranche of our partnership on a portfolio of stabilized and under construction data centers in North America and the closing of the sale of the largest of 4 concessions within our Brazilian electricity transmission business. We also completed a secondary sale of a 12% interest in our North American gas storage business. And finally, in April, we signed an agreement to sell our bulk liquid storage business, the largest independent storage provider in Scandinavia.

These asset sales improved our strong corporate liquidity position, which was $2.5 billion at the end of the first quarter. Our balance sheet remains well capitalized and our proactive approach to managing debt maturities has allowed us to remain opportunistic in the capital markets. During the quarter, we refinanced approximately $1.5 billion of nonrecourse debt on a net to bid basis, with no incremental borrowing costs for the business.

Before turning the call over to Sam, I would like to briefly note that we have recently begun exploring whether a single combined corporate structure would be the best path forward for the business. The goal is to determine if on a tax-free basis, we can create a single corporate security that would enhance liquidity, increase index inclusion and create value for investors. We are in the early stages of this evaluation, and we'll provide an update when appropriate.

So that concludes my remarks for this morning. I'll now turn the call over to Sam.

Okay. Thank you, David, and good morning, everyone. For my remarks today, I'm going to discuss our strategic initiatives before concluding with an outlook for the year ahead.

We have had an active start to the year with business development activity resulting in new strategic capital partnerships and continued progress under established frameworks. These partnerships are bilaterally sourced with high-quality counterparties and gives us exclusive access to investment opportunities that require long duration capital at scale. Increasingly, these frameworks are becoming a more meaningful avenue for growth, reinforcing our position as a partner of choice and expanding our opportunity set to deploy large-scale capital at attractive risk-adjusted returns. During the quarter, we established a new framework with a leading global investment-grade OEM, and launching an exclusive leasing platform for industrial equipment.

Through this platform, we will provide long-term leasing solutions that are expected to generate predictable cash flows without residual value interest rate or refinancing risk. We will have the sole discretion to enter leases under the framework with BIP's share of the equity investment expected to be upwards of $375 million.

Our $5 billion strategic partnership to install up to 1 gigawatts behind-the-meter power generation advanced further this quarter as well. We secured an additional $430 million CapEx project, bringing the total capital committed under the framework to approximately $1.6 billion. BIP's total equity commitment associated with the framework to date is approximately $60 million. Given the success of the behind-the-meter solution and strong customer demand based on speed to market, we may have the ability to expand the platform in the coming months.

We also remain on track to close Clarus. This is New Zealand's leading gas infrastructure utility in the second quarter. For an equity purchase price of approximately $70 million at our share.

Now moving to our outlook. We are progressing through 2026 from a position of strength, and remain very constructive on the backdrop for infrastructure. While recent geopolitical developments have contributed to greater market volatility, the essential nature of our businesses and the regulated or contractual profile of our cash flows continue to provide resilience and growth.

More broadly, demand for additional power, connectivity and logistics capacity continues to expand. This is being driven by digitalization, accelerating power demand, the rapid build-out of AI infrastructure and the ongoing reconfiguration of global supply chains. These tailwinds are expanding our opportunity set and providing attractive avenues to deploy capital at compelling risk-adjusted returns. Coupled with strong operating performance and a visible pipeline of organic growth projects, these factors position us well to deliver 10% plus per unit FFO growth in 2026.

As David mentioned, our capital recycling program and balance sheet continues to provide the flexibility to fully self-fund the growth ahead. With multiple sale processes underway across our business and continued access to capital markets during windows of opportunity, we are well positioned to fund our investment pipeline while maintaining financial discipline. Taken together, this supports our confidence in the outlook for 2026 and our ability to continue compounding value for our unitholders over the long term.

That concludes our remarks, and I'm going to pass it back to Sherry for -- to open the line for Q&A.

[Operator Instructions]

And our first question will come from the line of Devin Dodge with BMO Capital Markets.

Wanted to start on the recently launched equipment leasing business. I'm just trying to get a sense if this is part of the strategy for investing inside data centers, what kind of time frame you'd expect to deploy that $1.5 billion of capital and what do you view as the main risks associated with that investment?

Devin, this is Sam. I'll tackle that one. So the opportunity, I think, will likely be broader than just data centers, but initially, a good portion of the investment will be equipment for data centers. The -- we get a lot of comfort over the transaction itself because we're able to provide capital to essentially high-quality counterparties with investment-grade profiles with fully self-amortizing cash flow streams. So it's very attractive from that perspective.

We think we can scale this up as far as timing and deployment of capital. I think our hope is that on a gross basis, we'll deploy $1 billion to $2 billion of equity capital. So BIP share would be 25% of that. And we expect -- it's hard to predict flow, but I think we would hope to do that within a 24-month period.

Okay. I appreciate that. Second question, I was going to ask about that Intel JV. I didn't see any mention of it in your release, but I think Intel disclosures suggested the payments to the JV may have started in Q1. I guess, first, was that the case? And how quickly can return on investment ramp up in the coming quarters as both those fabs come online?

Devin, it's Dave here. I'll take that one. Look, I think in the past, we generally won't provide many updates specifically on the project. I think those generally come, as you said, from the Intel side. I think largely, the project has gone well. It's coming online, in line with our targets in terms of scheduling. They did make their first small wafer payments in the quarter. I would expect the initial -- the final capital contributions to go in over the next 6 months. And as those go in, I would expect the earnings to start to ramp up. And so I would expect to start seeing that come through our transmission and distribution segment of our data business in Q3 and then full run rate will be in 2027.

And that will come from the line of Maurice Choy with RBC Capital Markets.

I wanted to start with this concept of a single combined corporate structure. I have to assume that when the BIPC shares were first created back in 2020, something like this was contemplated. And if so, what were some of the obstacles back then and how those may or may not no longer be as big of an obstacle or even at all this time round.

Maurice, it's David again. But I think -- as we talked about this morning, we are in the early stages of considering this with the Board direction. And so it's probably hard to say what the obstacles are today. That's the word we'd like to complete over the next little while. As you know, the 2 companies for the last 6 years have served us well, but we're always looking at ways to improve our access to capital. And we think following a few things, obviously, the completion of our sister company BBU's process. We can now have some insights into how 1 simplified corporate structure will trade in the market. An early indication to that that's been positive, that this is the right time to reassess. And so I think that's probably all we can say at the moment in light of that, and I'll leave it that.

Fair enough. Maybe if I could just finish off more on your energy portfolio. Obviously, we've seen a series of support of federal and provincial government changes in Alberta and broader Canada. And also, there's been the conflict in the Middle East. Just your thoughts on the outlook for your business in the province notably into pipeline and NorthRiver?

Yes. And it's Ben here. I'll take that question. And look, all those developments are very positive for our Midstream business in Canada. We're seeing really strong demand from all of our clients for more access to our facilities and our pipelines. We completed about $400 million worth of growth projects in the past several months that are now starting to ramp up in terms of the revenue profile and delivering results.

And probably most importantly, we have a really tangible, meaningful pipeline of pretty bite size, relatively straightforward to execute and very low build multiple and highly accretive growth projects right in front of us. So I would expect the backlog -- our pipeline to grow. The backlog in Midstream is really attractive right now, and we expect to bring a number of those projects to FID in the coming quarters.

And maybe just to put in perspective, the magnitude of the projects that we're looking at the opco level would be roughly in the $8 billion range from a pipeline perspective. So it's a fairly meaningful size number of projects we have to look at.

One moment for our next question. And that will come from the line of Robert Catellier with CIBC Capital Markets.

I'd like to follow up on the potential corporate conversion that the Board is exploring, understanding it's quite early days. I wondered if you had any time lines for us in terms of what's reasonable to expect in terms of when a decision might be made?

Rob, as I said, unfortunately, there's probably not a ton we can share on the time line as of yet. As I said, we're just kicking off the process now.

Okay. No, that's reasonable. I just wanted to just dig into the Csquare IPO, which I understand they filed a confidential registration statement. I'm just curious as to how you chose the IPO route versus private sale and maybe you're dual tracking it, but maybe you could comment on that and how much you're expecting to sell by way of IPO.

Robert, I'll tackle that one. Look, I think in discussions with our advisers, the capital markets for IPOs are quite open at the moment. And obviously, there's a lot of anticipation for the upcoming SpaceX IPO. The one thing that public investors are looking for businesses that generate high cash flow, have still strong growth prospects and have great tailwinds related to the AI sector. And our business Csquare basically ticks all those boxes. We think it has the potential to be one of the leading IPOs of the year. And we're really excited about bringing that forward. And so just stay tuned.

One moment for our next question, and that will come from the line of Cherilyn Radbourne with TD Cowen.

I wanted to ask a couple of questions on the data segment. And I appreciate the data centers and Intel are the major growth drivers at the moment. Just curious how you think about the balance of your data portfolio in towers, fiber and so forth? And what value that provides in terms of diversity but also what you see in terms of inorganic opportunities there?

Cherilyn, maybe I'll start. But then I think you've given us a good segue to maybe talk about what's going on in the AI infrastructure sector, in particular, and we have Lief Williams here. who I think can expand on some of the things going on. But maybe just talking about some of our other businesses, we're seeing continued strong growth across the sector. One of the situations. And our colleague, Scott Peak mentioned it a number of months ago at our Investor Day. There's this domino effect. And the huge growth in data centers and AI is having impacts across basic utilities, power, Midstream and our other data businesses, including fiber -- our towers.

And the types of things that we're seeing is all our customers are looking to expand density across their networks. And so on the tower side, we have a number of build-to-suit opportunities that we continue to execute in all our businesses across Europe and Asia.

On our fiber businesses, there's still a huge amount of the U.S. in particular, but other parts of the world that have not been fiberized that are still operating on copper. And so that remains a lot of white space for us to continue to build out those networks and allow people to run all these new devices and programs more effectively.

So we see this as a continued 5- to 10-year build-out. And so all our businesses are well positioned. But maybe turning to some of the more, I'd call it even more exciting stuff going on in the AI infrastructure space. Peak, maybe just give us a little update on that.

Yes. Thanks, Sam. And good morning, Cherilyn. So the large users of AI factories and data sectors are highly, highly active in the market. There's effectively no data center inventory remaining for 2026. And even 2027 is quite scarce. What's interesting as well is that the demand profile has broadened from just data center capacity into also looking for compute. So leasing GPU as a service as well as behind-the-meter power opportunities. And so we see a large opportunity for groups like Brookfield, who have tremendous access to capital and an asset base to participate across all of those different asset classes.

Great. And then maybe just a quick follow-up on the data center side. I imagine that site selection and acquisition is particularly competitive and secretive. And so I'm not going to ask you to reveal anything proprietary. But to what extent is having a sister real estate business help in that regard?

I would say it certainly helps. And certainly, the scale of Brookfield is helpful in that regard. Just to give a sense, I would say there is a kind of dual track search for powered land. There's front of the meter options and then there's behind-the-meter options. Front of the meter options are challenging in the sense that the number of load applications going to utilities. It just kind of massively overwhelms the grid. And so utilities are now increasingly requesting large levels of credit or financial deposits, which is a huge disincentive to many of the parties out there looking for those front of the meter power solutions.

Behind the Meter also has its challenges in terms of delivering baseload power. At speed, the low emissions and highly modular. And so that's a place where, again, we think our Bloom partnership will be tremendously effective. I would say more broadly, we're starting to see some pushback in some locations in terms of the scale of these AI factories and then the risk of it pushing up rates for local ratepayers. And so again, I think Brookfield has been doing large-scale projects across a number of asset classes for many years. And so we think that we're very well positioned to help identify credible powered land sites. And help bring them to fruition.

One moment for our next question. That will come from the line of Robert Hope with Scotiabank.

Hoping to dive a little bit deeper on the AI factory and digital hub strategy. How are we progressing on those discussions with counterparties. And should we be in a position in 2026 to see some notable or sizable project announcements?

Robert, it's Peak again. I'll take this one as well. Yes, look, I think you do see, as I mentioned, tremendous demand from the large technology companies. The demand profile has broadened a little bit as well. There used to be a handful of large hyperscalers. We now have a wave of foundation model companies and inference operators who are also looking to secure the capacity.

So I would say there's a tremendous amount of noise in the market in terms of number of sites available and when does the power ramp. But what we're increasingly seeing is these users are looking for credible partners who have placed long-lead equipment orders and you have true dates for when the power is available. And we think that, that will benefit groups but Brookfield who are institutional and who have tangible sites that have a real ramp.

And so I would say the demand profile is very strong. I think you will see and we have seen strong leasing activity on the Brookfield portfolio over the last couple of quarters. And I think you'll continue to see strong demand through '26 and certainly through '27.

All right. Appreciate that. And then maybe moving over to kind of to the 10% organic growth rate or to the 10%-plus FFO growth rate for 2026. Can you comment how you're tracking on that? The organic growth at 8% seems strong, and the commodity price environment seems to be helping. Though it does appear that asset sales are coming a little quicker than M&A activity on the other side. So can you maybe talk about what the headwinds and tailwinds that you're seeing there are.

Yes, Rob, it's Dave here. And look, I think you did a great job summarizing my answer probably, but I think the -- I'll start by saying the first quarter was an excellent start. We delivered on our 10% target. And so with that behind us, I think we feel good with how the year is progressing. It's always hard to predict the timing of new investments and asset sales. But to your point, we have had some good initial success on the capital recycling. Front, I think from an all-in cost of capital is very attractive. The yield we'll see on that $1 billion, somewhere in the mid-single digits probably. And so I think from an accretion perspective, I don't expect that to be a meaningful drag on the business as we look ahead.

So all in all, I think we started the year off well. I think we feel confident with our 10% for the year still, and we'll continue to provide an update as we progress through the year.

[Operator Instructions]

our next question will come from the line of Frederic Bastien with Raymond James.

Good morning. You've historically leaned into periods of uncertainty in this location to pursue large acquisitions. How are you thinking about your ability to deploy capital into a sizable transaction this year?

Fred, I'll talk -- take that one. Yes, I think you're right. We've been historically successful in I think, taking advantage of dislocations. And when others have paused, we've seized the moment. At the moment, I'd say the market remains relatively calm and constructive, given all the volatility. There's still a fair amount of buyers out there. So I wouldn't describe this as an opportunistic market environment.

Nonetheless, I do think we're always on the lookout for large value opportunities. We -- what we're seeing is, today, the opportunity set around our AI infrastructure strategy is extremely strong. And so I'm very optimistic about us being able to do some exciting transactions there. We're also seeing an uptick in activity across Europe. And I think there's some larger value opportunities there that I think we can take advantage of.

And then we keep on monitoring the capital markets. Often some of our best acquisitions are when the public market will pull back, and we can take advantage of a take private opportunity. So those are the things that we're up to I can't give you like a time line on when we'll do our next large deal, but we're always out there. We have tremendous partnerships so that we can execute on those things and optimistic there will be some exciting deals in front of us.

That's helpful. I just wanted to tack on a Midstream related question as well, thinking switching gears on monetization. Are you -- how are you thinking about NorthRiver and a potential monetization there?

Sorry, that was about monetizing NorthRiver.

Yes.

Well, look, I could turn it over to Ben in a second if he wants to add anything. But what I would just say is the business has had tremendous commercial success in the past couple of years. We've extended our contract term, I think, to close to 12 years now. And we think it's really well positioned. Our debate internally is whether or not we continue to build out the business and take advantage of some of the additional growth that's there or whether we bring it to market and sees what is probably a pretty constructive environment for Midstream businesses.

So we're weighing those considerations. It's performing really well, and we just don't have an answer for it at this point in time.

I'm showing no further questions in the queue at this time. I would now like to turn the call over to Mr. Sam Pollock for any closing remarks.

Great. Thank you, everyone, and thank you, Sherry, for hosting this call. We appreciate you joining us today to hear about our results. And we look forward to the warmer weather that's in front of us and the hockey playoff season. I hope all you Habs fans are cheering for my team. And we look forward to providing an update in the quarter ahead.

Thank you. This concludes today's program. Thank you all for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Brookfield Infrastructure Partners Fourth Quarter 2025 Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

I'd now like to hand the conference over to your speaker today, David Krant, Chief Financial Officer. Please go ahead.

Thank you, Liz, and good morning, everyone. Welcome to Brookfield Infrastructure Partners' Fourth Quarter 2025 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; and our Chief Operating Officer, Ben Vaughan. Also with us today is Dave Joynt, a Managing Partner; and Udhay Mathialagan, Head of our Global Data Center businesses.

I'll begin the call today by highlighting our results for 2025, followed by a recap of our record year of capital recycling. I'll then hand the call over to Udhay who will elaborate on our approach to AI infrastructure investing and how we have been able to turn sector tailwinds into durable value for unit holders.

Finally, Sam will provide an update on our recent investments before concluding with an outlook of the 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 risks, and future results may differ materially. For further information on known risk factors, I would encourage you to review our latest annual report on Form 20-F which is available on our website.

2025 was another strong year for Brookfield Infrastructure. Our key accomplishments include exceeding our capital recycling target of $3 billion. investing approximately $2.2 billion of equity into growth initiatives and completing approximately $16 billion of financings to further derisk our operating company balance sheets.

From a results perspective, we generated FFO comes from operations of $2.6 billion during 2025. Normalized for the impact of asset sales and foreign exchange, FFO increased 10% compared to 2024 in line with our target and reflective of our operational performance and the strength of our business. This result includes record FFO during the fourth quarter of $0.87 per unit.

Given this performance, a conservative ratio for the year of 66% and a strong outlook for 2026, I'm pleased to report that the Board of Directors have approved a quarterly distribution increase of 6% to $1.82 per unit, on an annualized basis. This marks the 17th consecutive year of distribution increases of at least 5%.

I'll now go through [indiscernible] the base business continued to perform well during the year. driven by inflation indexation across the portfolio and the contribution of roughly $500 million of capital commissioned into rate base over the last 12 months.

Moving on to our Transport segment. FFO totaled $1.1 billion, in line with the prior year after normalizing from $1.8 billion of capital recycling initiatives. The loss of earnings from these sales was partially offset by higher revenues across our transportation networks, particularly in our rail and toll road segments where volumes and rates grew on average by 2% and 3%, respectively.

Our Midstream segment generated FFO of $668 million for the year, representing a 7% year-over-year increase. This growth reflects higher volumes and activity levels across our midstream assets particularly at our Canadian natural gas gathering and processing operations and our recently acquired U.S. refined products pipeline system.

Lastly, FFO from our data segment was $502 million a step change increase over 50% compared to the prior year period. The increase is attributable to several new investments completed over the last 12 months, the most recent being our U.S. bulk fiber network, which is now fully contributing to earnings. -- the fourth quarter. In addition, we achieved strong organic growth across our data storage business, which included the commissioning of 220 megawatts of capacity at our hyperscale data center megawatts of new billings at our U.S. retail colocation data center operations and income generated by our global data center developers. Our global data center platform now has development potential approximately 3.6 gigawatts, including contracted capacity of over 2.3 gigawatts today.

Before turning it over to Udhay, I would like to briefly touch on our record liquidity which totaled $6 billion at the end of 2025 and included just under $3 billion at the corporate level. Contributing to this strong position was a record $3.1 billion in asset sale proceeds raised in 2025. We believe that the elevated pace of capital recycling will continue into the year ahead.

We already have 2 transactions secured that crystallize attractive returns. The first which is we agreed to sell the largest of 4 concessions within our Brazilian electricity transmission operations. We expect proceeds of approximately $150 million net to BIP generating an attractive IRR of 45% and over 8x multiple capital. closing for the transaction is expected at the end of the first quarter in 2026.

Secondly, we formed a capital partnership for a portfolio of stabilized and under construction data centers in North America. Proceeds from the sale are expected to be used to support the buildout of our powered land bank within the business.

That concludes my remarks for this morning. I'll now pass the call over to Udhay.

Thank you, David, and good morning, everyone. AI is justifying dominating headlines with many bold predictions ranging from data centers and space to breakthrough in quantum computing that could one day redefine how the world operates. At the same time, many are questioning the merits of the magnitude and velocity of capital flowing into AI and where the demand will materialize at a level that justifies this spending. The sheer scale of investment underway to build the physical backbone that makes AI possible is staggering.

In 2025 alone, corporates invested approximately $500 billion into AI-related infrastructure, with capital investment over the next 2 years expected to rise further. Much of this build-out is fundamental to the development of AI, enabling power intensive workloads to run reliably, securely and at scale in well-connected locations. The reality is driving a sustained wave of investment into the backbone infrastructure that enables AI, including data centeric capacity, good resiliency, power generation and transmission. The sector remains exposed to overbuilding, technological change and disruption.

With capital moving quickly, not all participants will be rewarded and there will be mistakes made. Our approach is designed to protect against such exuberance. Brookfield Infrastructure is applying a prudent risk-focused approach to participating in the build-out of AI infrastructure, maintaining strict guardrails to safeguard our capital.

First, our development projects are underpinned by long-term contracts with favorable terms. We do not build speculatively and earn an attractive return within the initial contract period, mitigating technology risk. Second -- the second guardrail is that we selectively focus on the strongest investment-grade counterparties was some of the largest, well-capitalized and most profitable technology companies in the world.

Third, we concentrate on top-tier workload agnostic locations for our data centers. that can support the full spectrum of demand, reducing the risk of the single theme exposure and increases the durability of demand through cycles. The fourth is our disciplined strategy, we are deliberate in how much land and powered shelves we control and develop.

We have created a self-funding model that provides funding for future development and locks in attractive developed economics. -- as well as reduces the size of our platform while maintaining the benefits of scale. And fifth, we've matched the capital structure to the tenor of the contracted cash flows with a focus on preserving flexibility and ensuring that we can finance growth responsibly.

To illustrate the benefits of our approach during 2025, we experienced exceptional demand at our data center platforms, securing record growth, commercialization, capital recycling and capital markets activities. For example, at our U.S. core location data center business, we experienced 11 consecutive quarters of record bookings, and it's now fully utilized across several markets.

During the quarter, we signed several large contracts at a data center in Illinois, achieving 100% occupancy and adding approximately $45 million of annual EBITDA on a run rate basis commencing later this year.

Without investing any further equity, we acquired and added a 40 site data center portfolio at January 2024 to our existing business and subsequently increased EBITDA from a combined base of approximately $200 million to approximately $500 million on a contracted basis. The exciting part that the growth journey is expected to continue, led by high returning under-roof densification and in-footprint expansion capacity, which total over 600 megawatts of identified growth potential.

Across our global data center platform, we achieved a significant lease-up of our land bank during the fourth quarter, which is expected to be commissioned over the next 3 years. We executed agreements for approximately 800 megawatts of capacity predominantly in North America. The vast majority of these leases are with investment-grade customers and underpinned by long-term contracts.

Since acquiring our North American and European platforms, our adherence to the guardrails outlined above has allowed us to maintain a consistent greenfield data center yield on cost. In 2025, we partnered on almost 850 megawatts of stabilized and operating sites in North America and Europe, crystallizing developer premiums and demonstrating strong demand.

Taken together, we hope these examples highlight both the strength of demand we are seeing and importance of disciplined execution converting demand into durable returns.

As AI workloads scale, the value well-located powered infrastructure intensifies. In this environment, scale, reliability and access to capital are differentiating factors to counterparties and we believe our global operating capabilities and long-standing relationships benefit us.

Our risk-focused approach and strict adherence to guardrails will enable us to continue investing in the core infrastructure needed to deliver AI at scale while protecting our downside.

That concludes my remarks for this morning, and I will now pass the call over to Sam.

All right. Thank you, David, That was great, and good morning, everyone. For my remarks today, I'm going to discuss some of our strategic initiatives and then conclude with an outlook for the year ahead. In 2025, transaction activity accelerated and as a result, we deployed approximately $1.5 billion into new investments. We expect this momentum to carry into 2026 based on our robust pipeline of new investment opportunities that continues to be diversified across sectors and geographies.

During the quarter, we completed the inaugural project under the framework agreement with Bloom Energy, installing 55 megawatts of behind-the-meter power for a data center site in the United States. We have since secured additional projects under the framework for several hyperscaler customers, bringing the total to approximately 230 megawatts of power generation. These additional projects have contract terms of at least 15 years in length. BIP's total equity investment associated with these projects to date is expected to be approximately $50 million and fully deployed by mid-2027.

Also during the quarter, we closed the acquisition of a South Korean industrial gas business which is the leading supplier of industrial gases to investment-grade semiconductor manufacturers in the country. The total equity purchase price is $125 million for our share. And on January 1, we closed the acquisition of a leading railcar leasing platform in partnership with a best-in-class railcar lessor. The business is highly cash generative, providing stable cash flows that are supported by a diversified and large investment-grade customer base. BIP's total equity consideration is approximately $300 million.

Now turning to our growth outlook. We see a highly constructive backdrop for infrastructure in 2026. The asset class has a long history of delivering resilience growing cash flow through a variety of market environments and is squarely positioned at the center of 3 powerful structural themes, which we've talked about quite a bit in the past, digitalization, decarbonization and deglobalization.

Together, these forces are driving an infrastructure investment super cycle that is broadening in both scope and scale. We have entered 2026 from a position of considerable strength as well. Our base business is delivering resilient growing cash flows, and we have clear visibility into a multiyear runway of organic growth and capital deployment.

In addition, the rapid build-out of AI-related infrastructure is materially expanding our opportunity set across data centers, power and network connectivity. As a scaled global owner and operator of critical infrastructure, we are well placed to deploy capital into these teams at attractive risk-adjusted -- these factors, combined with a stable interest rate and foreign exchange backdrop, position us well to return to our 10% or higher per unit growth target in 2026 and beyond.

So that concludes my remarks. I'll now pass it back over to Liz to open up the line for Q&A.

[Operator Instructions] Our first question comes from the line of Maurice Choy with RBC Capital Markets.

I'll just ask one question, but I'll admit it is a multipart question on data centers and data infrastructure. Udhay in your prepared remarks, you highlighted how your contract approach aims to mitigate technology risk. Can you elaborate a little bit more on that? And also what risk do you think is underappreciated by the market.

And my quick follow-up is going to be on returns. Obviously, I would expect the returns are superior to the 12% to 15% target range. So maybe you could help us understand a little better how much more better, even if it's just a range, driving some factors for us to consider and quantify these premium returns?

Hi, Maurice, it's Sam here. Maybe I'll start off with the returns. And then I'll have Udhay talk about the contract items and the risk that you also asked. So on the return front, I'll keep it high level and simple. But in essence, we develop new data centers at a yield the cost anywhere on average between 9% and 10%. And and we monetize them at cap rates actually 5.5% and 6% on average. And so that gives us a rough development profit 10 basis points.

And with leverage in the development, 70% range, that pencils into equity returns if we do everything right. into high teens or 20s. And I think that is a profitable industry. So that's the rough pull, and I think we'll leave it on that from returns perspective?

And then maybe I'll throw it over to Udhay to answer your first 2 questions.

Sure. Thanks, Sam. Look, I think taking a step back, the basis of pretty much all our data center businesses is around providing the core infrastructure and staying out of the real -- the technology that our tenants, our customers use. And so my earlier remarks around being managing the technology risk is really around the way the environment within the data centers are being designed for longer-term use and for changes that are happening at the compute infrastructure level. That predominantly translates into how power and cooling works in the data centers.

So by making sure we've got very long-term contracts, so let's say, 15-year contracts, which are very specific in terms of what we deliver, we're staying completely out of any technology change that could take place in that 15-year period at a customer's sort of end. And in this -- in case it necessitates any change in the underlying infrastructure, then those as specific changes that are not to our cost at that point in time. So that was the underlying sort of comment around how we're managing our -- the committed cash flows, I guess, over that period of time. in terms of technology risk.

Our next question comes from the line of Devin Dodge with BMO Capital Markets.

All right. Maybe to the extent that you're able, can you provide some additional color for the transaction where KKR acquired a stake and portfolio of data centers from Compass. And just trying to get a sense for how many assets are included, the timing? It sounds like it might be phased into that partnership and maybe the net proceeds to BIP. .

Dan, it's Sam here. I can't really speak to the details of it because we don't get into those level of granularity on specific transactions that are private -- what I can tell you is that -- and we mentioned this earlier in the call, we've -- we effectively entered into JV arrangements with a number of institutional investors, which I would include KKR in that group across not just North America, but Europe as well. totaling about 850 megawatts.

And effectively, the way that the intense work is these are, for the most part, passive vehicles in the sense that we retain operational control of the assets and retain a significant ownership stake to have alignment with our partners. And so we've done this, as I said, in markets, and it's kind of part of our playbook to recycle capital from developments to crystallize some profits to reinvest back in the business. So we can fund future growth.

Okay. Okay. Second question for Brookfield's is a $10 billion AI infrastructure fund. I believe BIP is 1 of the pools of capital that could be used to meet Brookfield's commitment. I was just wondering if you could provide a framework or thoughts on what types of investments made by the fund may be suitable or not suitable for BIP? .

Devin, so that's correct. So BIP is one of the entities that will fund opportunities that come from that strategy. And I think the way to think about it is transactions that have the profile that we have in our flagship funds. So returns that are let's say, 12% and higher in sectors that are suited for BIP things that are outside of renewable energy and investments that probably don't have a development profile that's too, too long.

If the development cycle is excessively long, then that may not make it appropriate for a bit. But otherwise, I think keeping in mind for pool construction objectives for BIP. If it's in the data center sector, if it's gas-related if it's utility related, those are all sectors and if the returns fit, then we would invest through BIP for those type of transactions.

Our next question comes from Cherilyn Radbourne with TD Cowen.

Thanks very much, and good morning. On the data center side, I did want to ask if you could talk about how you think about sovereigns versus hyperscalers of counterparties. And how you think the mix of your basket of counterparties could end up between those 2 groups?

Hi, Cherilyn, that's great to have you on the call. So maybe I'll touch on this and Udhay, can add anything else you'd like to. I think we like both of the counterparties because it gives diversity. One of the things that serves us well across all our business is diversity of counterparties. And obviously, the hyperscalers will amazing credits, are few in number and have similar exposures to AI and other data-related cash flows and sovereign nation diversifies from those risks.

It also -- the other reason we've been focused on some of these sovereign AI factories is because we think it gives us a differentiated strategy than many others who are just focused on building the large mega sites for the hyperscalers. Here, we can on a more bespoke basis to assist sovereign nations to build ecosystems in their countries. The challenge with it is that governments tend to move a bit slower with than corporates.

And so the time to market can sometimes be a bit longer. But as far as what the mix will be, that's a little bit too hard for me to predict at this stage. I mean we'd love to have a broad base of both hyperscalers and sovereign credit. But it's a little premature for me to speculate on that.

That's helpful color. And then more of a straight-up question for David. Can you give us a sense of what we can expect from inflation indexation across your various geographies in 2026?

Look, I think as we look forward, the 2 biggest drivers of growth from an organic perspective in 2016 will be the inflation indexation you highlighted as well as a significant commissioning of CapEx out of our backlog. As you've seen, it's a record level now. On the inflation front, I'd say in OECD markets, we're probably averaging between 2% and 3% on our escalators.

And then on the emerging markets, it ranges depending on which metric you're looking at. But I'd say between India and Brazil as the 2 biggest emerging market exposures we have inflation pass-through in -- it's probably also in the 2% to 4% depending on the metric. So I think it's more manageable, still above probably 25, 50 basis points above our historical averages that you would have observed, but certainly not as elevated that you saw in 2022.

Our next question comes from Robert Hope with Scotiabank.

Can we dive a little bit deeper into the data operations capital backlog? It looks like it's up just over $1 billion versus Q3 with about $900 million of that driven by the hyperscale backlog -- so can you maybe dive a little bit deeper into what is driving the significant increase in Q4 as well as kind of what is the outlook and how large can this get?

I can start and Udhay or Sam can jump in. Look, I think, Rob, you certainly pointed out. I think across the data segment, the data center platform had the most growth. We've also onboarded the bulk fiber backlog and order book in hot wire that we acquired in the fall. So those are another key driver in the increase in the last half of the year.

But on data center itself, I think it's a little chunky in terms of when we sign new on. And as we highlighted this quarter, we had significant momentum on the leasing activity. So there was about 100 megawatts signed globally. When we sign those contracts, that's effectively when we'll put in the backlog associated with those. And so up until then, as you heard through our call, there's very little investment until a contract is signed. And then at that point, we then effectively consider the project FID and adds into our backlog. And so as you heard, it's probably a mixture of North American, European as well as a few in Asia Pacific that drove those -- those signings drove the addition to backlog.

And then maybe sticking with data centers. So $3.9 billion of the backlog relates to Intel. Can you update us in terms of timing, how you're thinking about cash flow and returns there and any potential follow-on investments?

Ben, do you want to give an update on the in-service date for the Intel facility?

Yes, sure. So for the Intel facility, our JV has 2 fabs and 1 of which has its in-service date. So it's now producing wafers, which is great. And the second fab is making good progress towards completion. So the actual underlying operations our JV and the construction activity is progressing very well for Intel.

Next question comes from Robert Catellier with CIBC Capital Markets.

You seem to have a pretty high level of conviction in the capital recycling, having just come off a record year and you're also continuing to make new investments. But I'm curious about the rate of commissioning capital from the backlog in 2016, given this is an important part of the capital allocation process -- so wondering if you could maybe quantify and characterize what you see coming in the next couple of years there relative to $1.5 billion commissioned in 2025.

Rob, it's David here. I can give you some color on the shape of that commissioning. I think I'd split our backlog into 2 various components. As you heard from the previous question, there's an Intel component which is about $3.9 billion in the number. We'd expect that to commission from our earnings profile in the back half of 2026.

The other -- the balance of our backlog would be diversified across our utilities transport midstream and data businesses. And typically, as you've heard, it's a 3-year outlook. So those projects tend to be smaller, lower, shorter development cycles and build cycles. So I'd expect roughly 1/3 of that backlog, which should be close to $1.5 billion to come in online 2026 as well throughout the year. It is -- I wouldn't say there's a chunky element to it. It's pretty -- it will be pretty smooth across our utilities and our data centers driving the bulk of that.

Right. So exing out Intel, which is obviously a unique investment. You're really looking at about $1.5 billion-ish a year then. Is that...

What goes to our backlog, excluding Intel is $5.3 billion. And so assuming average of 3 years, you're looking close to $1.75 billion probably and the $1.5 billion to $2 billion.

Okay. Excellent. And then my other question was just what are your views on the Canada, Alberta MOU as it relates to energy development. It looks like there's a momentum building towards a bolder energy strategy here. So I'm curious how it impacts how you manage your midstream investments in Canada. So do you hang on for more growth -- or does this derisk the asset to a point where you might consider more asset sales?

Robert. Look, look, I think it's -- it's too early to say whether or not the MOU is going to have any material impact on the growth trajectory of our businesses. Irregardless of that, though, we've already have plenty of growth in the -- there's been significant producer expansions underway, which has led to some additional tie-ins particularly in our IPL facility IPO network. And we've recently undertaken a number of growth initiatives North River.

In terms of our plans to monetize the businesses, I think we have business plans in place for each of the businesses that we're looking to continue to develop. And I guess the only thing that would accelerate monetizations would be market conditions to the extent that they to us bringing some or part of these businesses to the market. We might look at that. So I appreciate some of that it's very loose.

But I think the takeaway is that the businesses today operate in a very strong environment. And with the added push by the federal government with the provincial government to encourage further growth in the sector. We think that's only helpful to our businesses and makes them more attractive to potential buyers on Yes, I totally agree with you. I think it's too early, and I too would want to say a couple of more cards slipped on how they have a MOU plays out and if they achieve the milestones as intended. So thanks for your answers.

Our next question comes from the line of Frederic Bastien with Raymond James.

During your Investor Day, you noted that Brookfield Ad form partnerships to build 7 AI factories totaling 6 gigawatt of compute capacity. Can you provide an update on how that's going and whether you get more developments to announce soon?

Fred, maybe I'll tackle that and Udhay might add some further comments, but I think the answer is relatively short. We continue to progress all those very initiatives. And today, we have discussions underway with probably 5, at least in Europe. -- some in North America as well as some of the Middle East and one actually in Oceana.

So basically, across the globe, as I mentioned I think it was Cherilyn, the -- it -- these discussions do take time, and we're probably a little disappointed that they haven't gone a little faster given the importance that each of the put towards these initiatives.

Nonetheless, I think we're hopeful that during the year, we'll have 1 or 2 of these progressed. And I think the only thing that I would caution you is that they tend to be smaller than some of the mega sites that you see announced with the hyperscalers. So most of these are anywhere between as small as 50 megawatts up to as much as maybe 250 in phases. Nonetheless, those are still represent meaningful dollars, and we're pretty excited to see it through.

And I guess your relationship with Bloom Energy is still fairly young. You've committed to delivering just under 300 megawatts of power generation. I think your original agreement was to -- was for up to 1 gigawatt of behind-the-meter power generation is. Are you comfortable that you will see through this agreement all the way to that 1 gigawatt?

Obviously, we'd be speculating on the future, so it's hard to predict. But at the moment, with the level of demand that they're seeing and the amount of developments underway, I feel pretty optimistic that we'll get to that and maybe even above that level. There's no doubt there's for Bloom at the moment.

So I mean your relationship obviously is strong and growing, obviously. .

Yes. Yes, it is.

That concludes today's question-and-answer session. I'd like to turn the call back to Sam Pollock for closing remarks.

All right. Thank you, Liz, and thank you, everyone, for joining the call this morning. With you've all had a good start to the year, and we look forward to providing our first quarter results at the end of April. Thank you, and take care.

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

Good day, and thank you for standing by. Welcome to the Brookfield Infrastructure Partners L.P. Q3 2025 Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

I would now like to hand the conference over to your speaker today, David Krant, Chief Financial Officer.

Thank you, Josh, and good morning, everyone. Welcome to Brookfield Infrastructure Partners' Third Quarter 2025 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, as well as Ben Vaughn and Dave Joynt, who will be available for the question-and-answer portion of the call. .

I'll begin today with a discussion of our third quarter 2025 financial and operating results, followed by a discussion of our financing activity and strong balance sheet position. I'll then hand the call over to Sam, who will provide an update on our strategic initiatives and conclude with outlook for the 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 risks, and future results may differ materially. For further information on known risk factors, I would encourage you to review our latest annual report on Form 20-F, which is available on our website.

Brookfield Infrastructure had another solid quarter, achieving strong financial results and executing on our strategic initiatives. Beginning with our financial and operating results, we generated third quarter funds from operations, or FFO, of $654 million or $0.83 per unit. This was 9% higher compared to the previous year, driven primarily by strong organic growth, highlighting the financial strength and stability of our base business. These results were delivered despite FFO contributions for following a year of record asset sales and only a partial contribution from the new investments we've made.

Turning to our results by segment. Our Utilities generated FFO of $190 million, slightly ahead of the prior year. Results benefited from inflation indexation in addition to contributions from over $450 million of capital added to the rate base. The strong underlying performance was partially offset by higher borrowing costs and the sale of our Mexican regulated natural gas transmission business in the first quarter of this year.

Moving to our Transport segment. FFO was $286 million for the quarter. Headline results are lower than last year due to the sale of our interest in our Australian export terminal, DBI, and the sell-down of stabilized containers within our global intermodal logistics business. After adjusting for these capital recycling initiatives, our results were slightly ahead of the prior year.

The solid underlying performance reflected strong volumes across our networks and rate increases on our rail networks and toll roads.

Our Midstream segment generated FFO of $156 million, representing a 6% increase over the same period last year. We experienced strong customer activity levels and asset utilization across our portfolio, particularly at our Canadian diversified midstream operation. Notably, we completed the acquisition of Colonial Enterprises this quarter. The partial earnings contributions were offset by the lost income associated with the sale of our U.S. gas pipeline in the second quarter of this year.

Lastly, FFO from our Data segment was $138 million, representing a step change increase of over 60% compared to the prior year. The increase is driven by a full quarter contribution from the tuck-in acquisition of a tower portfolio in India completed last year as well as strong organic growth across our data storage businesses. This growth included income earned by our developers, the commissioning of 80 megawatts of capacity at our hyperscale data centers and 45 megawatts of new billings initiated at our U.S. retail colocation data center operation.

Before turning the call over to Sam, I'd like to provide an update on recent financing activity. Debt capital markets remained favorable during the quarter, with significant new issuance activity and further tightening in credit spreads. During the period, we completed financings to enhance our liquidity, support growth initiatives and refinance near-term maturities. This included a $700 million corporate issuance of medium-term notes in September. The issuance had a weighted average interest rate of approximately 4% and was priced at the tightest credit spread in our history.

As a result of our proactive approach to refinancing, less than 1% of our nonrecourse debt is maturing over the next 12 months. We maintain a well-laddered maturity profile with a weighted average maturity of approximately 7 years. Our balance sheet remains well capitalized with liquidity at the end of the third quarter totaling $5.5 billion, which includes $2.5 billion at the corporate level and over $1.4 billion in cash across our operating businesses. This strong liquidity position positions us with the confidence to pursue a variety of growth opportunities as they arise.

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

Great. Thank you, David, and good morning, everyone. For my remarks today, I'm going to provide an update on our transaction activity, and then, I'll conclude with an outlook for our business.

Now, starting with investments. We've already met our deployment objective for the year, securing 6 new investments totaling over $1.5 billion. This quarter, we secured 3 new investments across diverse regions and sectors, whereby BIP will deploy approximately $225 million in total.

The first investment is a $1.3 billion enterprise value New Zealand natural gas infrastructure operations. The business primarily operates a leading gas transmission, distribution and storage business that is comprised of regulated and long-term contracted revenues with inflation taxation. This value-based acquisition is highly cash generative, resulting in a short payback period of approximately 7 years. We expect the transaction to close in the second quarter of next year, subject to customary regulatory approvals.

The second acquisition is a $1 billion enterprise value company that is a South Korean industrial gas business that supplies industrial gases to industry-leading and investment-grade semiconductor manufacturers. The majority of the business is underpinned by 20-year minimum take or pay off take agreements with significant cost pass-throughs. This transaction is expected to close later this quarter.

And then lastly, we've secured our first AI-related project under a newly established $5 billion framework agreement with Bloom Energy to install up to 1 gigawatt of behind-the-meter power solutions for data centers and AI factories. This project provides a hyperscale customer with 55 megawatts of behind-the-meter power for an AI data center in the United States.

Now, with respect to capital recycling, the momentum in our asset sales program has continued. During the quarter, we progressed a number of initiatives, and we've now generated over $3 billion in proceeds for the year and are on track to achieve a further $3 billion over the next 12 to 18 months. One of the most significant asset sales completed in mid-October was the parcel sale of our North American gas storage platform and what is the largest IPO in the TSX since May of 2022. In total, we raised CAD 810 million, and BIP's share of the net proceeds from the offering was approximately USD 230 million. Since the formation of Rockpoint, which is our natural gas business, which was done through a series of acquisitions, EBITDA has grown by more than 4x, driven by operational improvements and favorable market fundamentals. As a result of various strategic initiatives, which enhance the stability and quality of earnings, along with the sale of 2 noncore assets in 2023, we have now realized a 3.2x multiple on our invested capital while continuing to own a significant interest in the business.

Now, the outlook for Brookfield Infrastructure for the balance of the year and looking into next year remains favorable. As mentioned at our recent Investor Day in September, we believe BIP is at an inflection point in its growth profile. Each of our new investments this year is expected to deliver returns above our 12% to 15% target range, and it's backed by credible business plans that support potential upside returns over 20%. We also have a robust pipeline of new investment opportunities across each of our existing segments driven by the long-term megatrends that we've talked about many times in the past of digitalization, deglobalization and decarbonization.

We're also seeing a significant new growth vertical emerging from the rapid build-out of AI infrastructure, a $7 trillion opportunity set that remains in its early stages and continues to expand. We expect to deploy up to $500 million annually into AI-related infrastructure in the coming years with AI factories and behind-the-meter power solutions, representing a natural compelling extension of our investment activities. These growth factors paired with a macroeconomic backdrop that is trending very favorably, set the stage for BIP's FFO per unit growth to inflect higher.

So that concludes my remarks, and I'll pass it back to Josh to open the line for Q&A.

[Operator Instructions] Our first question comes from Maurice Choy with RBC Capital Markets.

If I could just start off with the capital deployment opportunities, it is clear that data infrastructure and energy had been quite thematic of late, and that's consistent with your Brookfield day messaging. Just your thoughts on the rising competition for these types of assets. And if you could break it down, whether that be types of subsectors within a new vertical or even geographically? What does that mean to your ability to source these opportunities?

Maurice, this is Sam. I'll tackle that one. I think what we've -- what we flagged at Investor Day, and I guess, I think we've talked about for a number of years now, is that we have seen a significant increase in the number of opportunities to deploy capital, particularly in the data sector and in sectors impacted by digitalization.

And you're right that there's always -- there are new players who are competing for those opportunities with us. And frankly, over the last 15, 20 years, we've seen new entrants into the Infrastructure sector. We remain confident that because we have a global franchise and access to the most significant amounts of capital of any player that we remain with a distinct advantage in sourcing the best opportunities to deploy capital. And in sectors and regions where capital is plentiful, we'll avoid entering into those cost of capital shootouts and look for areas where capital is more scarce or where people are looking for partners that they can rely on and have trust in to be long-term counterparties. And those are the things that I think, historically have made us successful.

And I think today, many of the large tech companies who are making significant investments in the many billions of dollars, they're looking for players like us that they can have confidence in to deliver the projects and be there for them through thick and thin. So I know that was probably a bit of a general answer to your question, but I think, hopefully, you get the tone that, yes, there are new players; however, the opportunity set is still very large and our specific expertise and skill sets position us to get the best returns and not be competed down to the lowest common denominator, which is, I think, what you're worried about. And I don't think that's an issue.

That's great color. If I could just finish off with the question about the LP unit repurchases and the establishment of the ATM program for the BIPC shares. I wanted to get your view about the timing of any action, and also, what does success for both these 2 actions and programs look like in your view? How do you measure that? Over what time period would you measure that? And conversely, what would be an unsuccessful outcome?

Maurice, it's David. I can start. Look, I think at this point, as you would have seen in our release, it's something we're contemplating at this time. We still have, obviously, filings to do to be in a position to execute the program. So I'll just caveat with that first. I think the key point, and I don't think we'll get into measuring success or failure of the program. I think what we're looking to do and one of our objectives has been to increase the liquidity of BIPC. And I think that is, in essence, what the announcement today will look to do if we go ahead with it. And I think we -- given the success we've had on the capital recycling front, we don't need the capital. So issuing BIPC under an ATM on its own isn't helpful to the business, so we felt pairing it potentially with an NCIB would be a way to avoid any dilution to our existing shareholders and to our business. And so I think that was the ultimate intent of the program if we do decide to go ahead with it.

And maybe just a quick follow-up. And maybe this is also somewhat related to the float of the BIPC shares is the secondary target also to perhaps tighten up the spread between the 2 securities?

Yes, Maurice. Look, we obviously don't know what will happen. So that would be purely speculative I think at this stage. We're just focused on the objective that Dave mentioned, and we'll see what happens.

Our next question comes from Devin Dodge with BMO Capital Markets.

I wanted to start with Rockpoint. With the IPO now obviously completed, should we expect that to pursue more exits via the public markets going forward? Are there for the midstream assets or across the broader portfolio? Or was Rockpoint more of a one-off?

Devin, it's Sam here. Look, we've always had the public market as a potential exit strategy. We did do it with DBI a number of years ago. I think we just considered as 1 of the tools in our toolkit to monetize assets. And for a period of time, there wasn't the market conditions that allow for good execution of IPOs. I think that has changed. And to the extent that the market remains open, then we would very much look at it as a potential option. It doesn't change, though our views on favoring 1 or the other. It's really about execution, maximizing value and basically position the companies themselves for future growth and success. So we weigh all those factors, and we were thrilled with the outcome that we had, and we think Rockwood is going to be an amazing company in the Canadian markets for a long period of time. .

Okay. Second question, I wanted to ask about CenterSquare. Look, lots of progress after combining a Volcan Xtera, and there were some more sites added more recently. Just wondering what's the investment basis from here? Is this a platform that you're going to continue to add scale? Is there more proven opportunities? Or has a lot of the heavy lifting already been done?

Again, I'll start, and I don't know, Ben might jump in as well. Look, I think we're just at the beginning. I think this is an unbelievable business, and the opportunities haven't been more favorable since we've owned it, which is -- it sounds crazy given how well it's done. I think we've increased EBITDA there 4x over the last number of years through acquisitions and leasing of space. But what's really exciting is the fact that many of these sites, which are legacy telco sites, are significantly overpowered, and we have a tremendous number of under-roof expansion opportunities that have built multiples in the 3 or 4 times, which is just unheard of in this sector. So we're going to take advantage of that.

I think the capital deployment opportunity in the business, Dave, correct me if I am wrong, is in order of magnitude of $300 million to $400 million over the next couple of years of CapEx. And so you can kind of do the math on how much EBIT that can drive. In fact, the opportunity may even be bigger than that, I'm probably understating it. But suffice it to say, and I know I'm running on here, the company is incredibly well positioned. It's unique in the market in the sense that there's not really many others who are serving that smaller 1 to 5-megawatt demand from customers. And I think this -- the explosion in AI inference and agent models is going to provide us tons of customers, along with the corporate customers. So it's a great story, and I think there's lots more to come.

[Operator Instructions] Our next question comes from Patrick Sullivan with TD Cowen.

Can you just talk about the level of market interest you saw in the stabilized data center portfolio that you monetized during the quarter? I guess, how are you making decisions on the size of the portfolios you're bringing to market right now?

Yes, I can start, and it's David here. And just to make -- I'll repeat the question, I think it's around the sizing of our stabilized data center program and how we determine what to bring to market. Look, I think this was just the first of hopefully several programs that we undertake over the next few years. Data for -- in Europe had probably the largest operating portfolio of data centers when we acquired it. So it was a logical candidate to be the first for our capital recycling initiatives within it. .

As you would have seen, it was over 200 megawatts of operating sites. They weren't all commissioned, so we still have some build-out to complete. So think of it as a bit more of a program where over time, we'll continue to execute on the sites as we commission them. But essentially, we were able to identify the program in terms of the perimeter of assets that we felt would be out of revenue generating today or generated in the next 6 to 12 months. And we felt that for -- it was about $1.4 billion equity check. We thought that was the right size in the market in Europe to target financial investors to come in and partners to join us to own these types of assets. And we're seeing significant demand for this return profile in the market. So as I said, Europe will be the first of our programs, and we'll look to replicate that in other markets as well.

Yes. The only thing I'd add is we've returned capital 2 ways. One is through issuance of ABS securities, which we do very programmatically almost monthly, it feels like, but let's just say, quarterly as the facilities get established. And then similarly, we'll -- our goal would be to -- as facilities get completed to programmatically sell down pieces of the equity quarterly or semi-annually, as they get built because that's that will be what the profile will look like over the next number of years.

Okay. Great. And then, I guess more on data center stuff. So like in a recent Brookfield podcast on the Data4 deal, you discussed that Europe has 1 of the largest infrastructure gaps relative to the other regions and essentially no sovereign compute. And you've made some announcements related to these sovereign compute opportunities. But can you just talk about some of the differences between that sovereign compute opportunity set versus the more hyperscale AI lab driven opportunity set that we see in the United States. Is there anything there to contrast and compare between the two?

Yes. Look, I think the -- I think they're both very exciting. For us, we've had a focus on the sovereign compute primarily because, as I kind of alluded to in some earlier answers, it's a way to use our particular skill set to create bilateral transactions in the sector, where we can come up with more complex solutions for governments to bring all the various players together to solve what for them is a sovereign issue in a sense that they want to retain data as well as AI capabilities in their home markets. and not be dependent on just all the U.S. hyperscalers. And so it really is a distinct market. Obviously, we still focus on servicing our hyperscale customers, but we thought we could create kind of a niche market for ourselves working with -- today, it's probably 6 or 7 sovereign nations on building smaller, but more dedicated facilities for their home needs.

And we're excited about the progress we've made. The only drawback to it is often dealing with sovereigns tends to be a bit slower. And the investment cycle has probably taken longer than we might have thought initially. But we're excited about the projects we're working on, and we hope to have announcements in the coming quarters.

I would now like to turn the call back over to Sam Pollock for any closing remarks.

All right. I guess that -- it looks like there's 1 more question we can take.

One moment for questions. Our next question comes from Frederic Bastien with Raymond James.

Appreciate it. Guys, are you able to quantify the organic growth rates your various data businesses are enjoying. And how would these be tracking versus your underwriting assumptions?

We're happy to start, it's David here. I think -- look, I think the overarching team across the data businesses and maybe we'll stick to towers and transmission and then data centers are 2 separate categories. I'd say on the transmission and tower side, I'd say are -- I would say that's a much more predictable, stable execution of our backlog there. We are building out towers for our customers in France, in Germany, some in India as well in terms of rooftops and antenna. So I'd say that the case there is much more predictable. And I'd say it's slightly ahead of underwriting, but generally in line. So that's going well. .

When we bought these hyperscale platforms, we underwrote a land bank that they had in place, and we've executed and continue to actually that on schedule and on pace. And I think we're excited about what the next, call it -- what we call the shadow backlog looks like in these businesses, where we could see up to a gigawatt across the globe of new projects coming in the coming years. And that is something we never underwrote. So the pace of growth and organic growth in those businesses will be dramatic. Like the percentage, I don't think is that meaningful because it's coming from such a small base in these platforms, but that's what you're starting to see come through the numbers. I think in the last year alone, Fred, we've commissioned 175 megawatts across the globe, which is pretty impressive.

That's great color. Just building on that, you flagged some promising AI factory opportunities shaping up for a bit during your Investor Day. And I was wondering if these are along the lines of the partnership you signed with Bloom Energy to install BTM solutions? Or do they vary depending on the partnership you're pursuing?

Brad, look, as you can imagine, they vary. I think there are some that are very similar to the Bloom Energy arrangement, where we're facilitating capital needs for a number of the data center and hyperscaler companies to finance all the capital that they need to put into these data centers. But then, obviously, building out AI factories is going to be a different type of arrangements, and we expect that probably to be the majority of what we do in our AI activities.

Okay. So I think that's probably it. I'm glad we got Fred in there. So yes, thank you, operator, Josh, for today, and thank you to everyone on the call for joining us. I know this is our last call before the end of the year, so on behalf of everyone here at Brookfield Infrastructure, we'd like to wish you a healthy and happy upcoming holiday season. And we look forward to providing you more updates on the fourth quarter and year-end results early in the new year. So take care. Thanks. .

This concludes the conference. Thank you for your participation. You may now disconnect.