Good day, and thank you for standing by. Welcome to the Brookfield Infrastructure Partners 4th Quarter 2025 Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, David Krent, Chief Financial Officer. Please go ahead.

Thank you, Liz, and good morning, everyone. Welcome to Brookfield Infrastructure Partners' fourth quarter 2025 earnings call. As introduced, my name is David Krent, and I'm the Chief Financial Officer of Brookfield Infrastructure. I'm joined today by our Chief Executive Officer, Sam Pollack, and our Chief Operating Officer, Ben Vaughn. Also with us today is Dave Joint, a managing partner, and Uday Macialagan, 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 Uday, 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 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 20S, 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 financing to further de-risk our operating company balance sheets. From a results perspective, we generated FFO, or funds from operations, of $2.6 billion during 2025. Normalized for the impact of asset sales and foreign exchange, FFO increased to 10% compared to 2025. 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 pay ratio for the year of 66% and a strong outlook for 2026, I am pleased to report that the Board of Directors has 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 our comment year over year. 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 for $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% per spectrum. Our midstream segment generated an 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 operation 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 in the fourth. 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 centers, 200 megawatts of new billings at our U.S. retail co-location data center operation, and income generated by our global data center developers. Our global data center platform now has development potential consisting of approximately 3.6 gigawatts, including contracted capacity of over 2.3 gigawatts today. Before turning it over to Ude, I would like to briefly touch on our record liquidity, which totals $6 billion at the end of 2025 and included just under $3 billion at the corporate level. A 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 two transactions secured that crystallize attractive returns. The first, which is we agreed to sell the largest of four concessions within our Brazilian electricity transmission operation. We expect proceeds of approximately $150 million net to BIF, generating an attractive IRR of 45% and over eight times multiple of 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 this sale are expected to be used to support the build out of our powered land bank. That concludes my remarks for this morning. I'll now pass the call over to Ude.

Thank you, David, and good morning, everyone. AI is a justifiably dominating headlines with many bold predictions ranging from data centers in 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 whether demand will materialize at a level that justifies the spending. The sheer scale of investment underway to build a 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 two 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 center capacity, grid 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. The second guide rail is that we selectively focus on the strongest investment-grade counterparties who are 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 setters that can support the full spectrum of demand, reducing the risk of the single-team exposure and increases the durability of demand through cycles. The fourth is our discipline strategy. We are deliberate in how much land and powered shells we control and develop. We have created a self-funding model that provides funding for future development and locks in attractive develop economics, as well as reduces the size of our platform while maintaining the benefits of scale. And fifth, we match 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. co-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 setter portfolio in 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 totaled 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 three 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're seeing and importance of disciplined execution converting demand into durable returns. As AI workloads scale, the value of 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 longstanding 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, Hirey. 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 1st, we closed the acquisition of a leading rail car leasing platform in partnership with a best-in-class rail car lesser. 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 resilient, growing cash flows through a variety of market environments and is squarely positioned at the center of three 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 clearer visibility into a multi-year runway of organic growth and capital deployment. In addition, the rapid build-out of AI-related infrastructure is materially expanding our opportunities 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 themes at attractive risk-adjusted returns. 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.

As a reminder, if you'd like to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Thank you. Our first question comes from the line of Maurice Choi with RBC Capital Markets.

Thank you, and good morning, everyone. I'll just ask one question, but I'll admit it is a multi-part question on data centers and data infrastructure. Ude, 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, or even some factors for us to consider and quantify these premium returns.

Hi, I'm Morris. It's Sam here. Maybe I'll start off with the returns, and then I'll have Uday 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, you know, we develop new data centers that yield the cost anywhere on average between 9% and 10%. And we monetize them, you know, at, you know, cap rates between 5.5% and 6% on average. And so that gives us, you know, a rough, you know, development profit of 300 to 400 basis points. And, you know, with leverage in the, you know, development, you know, 70% range, you know, that pencils into equity returns, if we do everything right, into high teens or 20s. And I think that's a profitable industry. So that's the rough fall, and I think we'll leave it on that from a returns perspective. And then maybe I'll throw it over to Uday to answer your first two questions.

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, you know, the technology that our tenants, our customers use. And so my earlier remarks around 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 setters. 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, if in case it necessitates any change in the underlying infrastructure, then those are 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, you know, the committed cash flows, I guess, over that period of time in terms of technology risk.

Understood. Thank you very much.

Thanks, Mark. Our next question comes from the line of Devin Dott with DMO Capital Markets.

All right. Thank you. Good morning. Maybe to the extent that you're able, can you provide some additional color for the transaction where KKR acquired a stake in a portfolio of data centers from Compass?

And just trying to get a sense for, you know, how many assets are included, the timing.

It sounds like it might be phased into that partnership and maybe the net proceeds to BIP.

Hi, David. 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 in nature. But what I can tell you is that, you know, and we mentioned this earlier in the call, you know, we've effectively entered into JB arrangements with a number of institutional investors, which, you know, I would include KKR in that group, across not just North America, but Europe as well, totaling about 850 megawatts. And effectively, you know, the way these arrangements work is these are, for the most part, passive vehicles in the sense that we retain operational control of the assets and we, you know, retain a significant ownership stake to have alignment with our partners. And so we've done this, as I said, in all our 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, thanks for that. The second question, for Brookfield is a ten billion dollar AI infrastructure fund. I believe BIP is one of the pools of capital that could be used to meet Brookfield's commitment. I'm 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.

Yeah, hi, Devin. So that's correct. So BIP is one of the entities that will fund opportunities that come from that strategy. And, you know, I think the way to think about it is transactions that have the profile that we have in our flagship fund, so returns that are, let's say, 12% and higher in SEC are suited for BIP, So things that are, say, outside of renewable energy, and investments that, you know, probably don't have a development profile that's too, too long. You know, if the development cycle is excessively long, then that may not make it appropriate for BIP. But otherwise, I think, you know, keeping in mind, you know, corporal 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, you know, we would invest through BIP for those type of transactions.

Okay, good color. Appreciate it. I'll turn it over.

Our next question comes from Sherrilyn Radborn with TD Cowan.

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 as counterparties and how you think the mix of your basket of counterparties could end up between those two groups.

Hi, Sherrilyn. It's great to have you on the call. Well, so maybe I'll touch on this, and Uday can add anything else he'd like to. I think we like both of the counterparts because it gives diversity. You know, one of the things that serves us well across all our business is diversity of counterparties and obviously, you know, the hyperscalers, well, amazing credits. are few in number and have similar exposures, you know, to AI and other data-related cash flows, and, you know, sovereign nations, you know, diversifies from those risks. It also – the other reason, you know, we've been focused on some of these sovereign AI factories is because, you know, we think it gives us a differentiated strategy than many others who are just focused on building the large, you know, mega sites for the hyperscalers. Here, you know, we can work on a more bespoke basis to assist, you know, sovereign nations build ecosystems in their countries. The challenge with it is that governments tend to move a bit slower 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 credits, but it's a little premature for me to speculate on that.

That's helpful, Culler. 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?

Hi, Sherilyn. Look, I think as we look forward, the two biggest drivers of growth from an organic perspective in 26 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, you know, 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 is the two 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. It's still above, you know, probably 25, 50 basis points above our historical averages that you would have observed, but certainly not as elevated as you saw in 2022.

That's all for me.

Thank you.

Our next question comes from Robert Hope with Scotiabank.

Thank you. Can we dive a little bit deeper into the data operations capital backlog? Looks like it's up just over a billion dollars 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 a significant increase in Q4, as well as kind of what is the outlook and how large can this get.

And who they are, Sam, can jump in. Look, I think, Rob, you certainly pointed it 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 Hotwire 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 centers itself, I think it is a little chunky in terms of when we sign new contracts. And as we highlighted this quarter, we had significant momentum on the leasing activity. So there was about 800 megawatts signed globally. When we sign those contracts, that's effectively when we'll put in the backlog associated with those projects. 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, you know, the project FID, and it adds into our backlog. And so, you know, as you heard, it's probably a mixture of North American, European, as well as a few in Asia Pacific that drove those signings, drove the addition to backlogging.

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

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

Yeah, sure. So for the Intel facility, our JV has two fabs, and one of which has reached its in-service So it's now producing wafers, which is great. And the second fab is making good progress towards completion.

So the actual underlying operations that underpin our JV in the construction activity is progressing very well thank you next question comes from Robert Cotillier with CIBC capital markets hey good morning everyone 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 and 26 given this you know it's a important part of the capital allocation process so wondering if you You could maybe quantify and characterize what you see coming in the next couple of years there, you know, relative to 1.5 commissioned in 2025.

Hey, Rob. Yeah, it's David here. I can give you some color on the shape of that commissioning. I think I'd split our backlog into two 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 balance of our backlog would be diversified across our utilities, transport, midstream, and data businesses. And typically, as you've heard, it's a three-year outlook. So those projects tend to be smaller, lower, shorter development cycles and build cycles. So I'd expect roughly a third of that backlog, which would be be close to a billion and a half 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'll be pretty smooth across our utilities and our data centers driving right so you know x-ing out Intel which is obviously a unique investment you're really looking about one and a half billion ish a year then is that three billion yeah so assuming an average of three years you're looking close to one 7.75 probably, but yeah, and the one and a half to two.

Okay, excellent. And then my other question was just what are your views on the Canada-Alberta MOU as it relates to energy development? You know, it looks like there's a, you know, 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 de-risk the assets to a point where you might consider more asset sales?

Hi, Robert. Look, I think 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 had plenty of growth in the business. You know, there's been significant, you know, producer expansions underway, which has led to some additional tie-ins, particularly in our IPL facility, IPL network. And, you know, we've recently undertaken a number of growth initiatives with 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 are receptive 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, you know, the federal government, you know, along with the provincial government to encourage, you know, further growth in the sector. You know, we think that's only helpful to our businesses and makes them more attractive to potential buyers down the road.

Yeah, I totally agree with you. I think it's too early, and I, too, would want to see a couple more cards left on how they have MOU plays out. and if they, you know, achieve the milestones as intended. So thanks for your answers. Thank you.

As a reminder, if you'd like to ask a question at this time, please press star 11 on your touchtone phone. Our next question comes from the line of Frederick Bastion with Raymond James.

Good morning. During your investor day, you noted that Brookfield had formed partnerships to build seven AI factories totaling six gigawatts compute capacity. Can you provide an update on how that's going and whether you get more developments to announce soon?

Hey, Fred, maybe I'll tackle that, and Udi might add some further comments. But I think the answer is relatively short. You know, we continue to progress all those, you know, various initiatives. And, you know, today we have discussions underway with probably, you know, five at least in Europe, you know, some in North America, as well as some of the Middle East, and one actually in Oceania. So basically across the globe, as I mentioned to, I think it was Sherrilyn, you know, 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 nations puts towards these initiatives. Nonetheless, I think we're hopeful that during the year we'll have, you know, one or two of these progressed. And, you know, I think the only thing that I would, you know, caution you is that they tend to be smaller than some of the, you know, mega sites that you see announced with the hyperscalers. So, you know, most of these are, you know, anywhere between, you know, as small as, you know, 50 megawatts up to as much as maybe 250, you know, in phases. Nonetheless, those still represent meaningful dollars, and we're pretty excited to see it through.

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

Obviously, you'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, you know, the amount of, you know, developments underway, you know, I feel pretty optimistic that we'll get to that and maybe even above that level. There's no doubt there's tons of momentum for Bloom at the moment.

Awesome. And your relationship, obviously, is strong and growing, obviously.

Yes, it is.

Yeah, that's where I was going. Thanks, Sam. Appreciate it.

No, thank you, Fred.

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

All right. Thank you, Liz, and thank you, everyone, for joining the call this morning. We hope you 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.