Brookfield Infrastructure Partners L.P. (BIP) Earnings

Management highlights

**Capital Recycling and Asset Monetization Progress** - 2026 year-to-date asset sale proceeds total nearly $1.2 billion, with public markets now serving as an increasingly effective exit channel that expands the buyer pool, crystallizes value, retains upside participation, and supports value maximization alongside private sales. - Recent completed monetizations include the $1.2 billion gross proceeds IPO of the U.S. co-location data center operation, where Brookfield retains 64% ownership; a 7% interest sell-down in the Indian Telecom Tower portfolio; a further 14% exit in the Indian gas transmission operation; a majority interest sale of a contracted container portfolio; and small proceeds from the North American rail car leasing platform. - Multiple additional sale processes are underway, putting the firm on track to meet its 2026 full-year capital recycling target. **New Investment and AI Infrastructure Growth** - Over $800 million in new investment has been secured/deployed in the first half of 2026, including the pending acquisition of Clarus (New Zealand's leading gas infrastructure utility) and an increased equity commitment to the Bloom Energy Framework. - AI infrastructure momentum is accelerating, with the firm's AI factory strategy gaining global traction: it was selected by the U.S. Department of Energy to develop a 1.2+ gigawatt AI data center campus in Kentucky; it is the exclusive capital partner for a 200 megawatt sovereign AI compute development project in South Korea with NABIR and NVIDIA; and the Bloom Energy behind-the-meter power framework was expanded fivefold from $5 billion to $25 billion in total CapEx, creating a large pipeline of future projects for hyperscale customers. - The firm only commits material capital to AI projects once commercial arrangements are finalized and risk-adjusted return targets are met. **Corporate Simplification Initiative** - The firm plans to simplify its corporate structure by converting BIP and BIPC into a single publicly traded corporation, Brookfield Infrastructure Partners Inc. - The simplified structure is expected to improve trading liquidity, increase demand from index funds and ETFs, expand access to investors that prefer traditional corporate structures, and be tax-deferred for U.S. and Canadian investors with no meaningful transaction costs. - Special meetings for unitholders/shareholders are scheduled for October 14, 2026, with completion expected in Q4 2026, expected to drive long-term value for all security holders. **Overall Position** - The firm enters the second half of 2026 in a strong position, with resilient operating performance, a healthy balance sheet, and significant asset sale proceeds that provide flexibility to pursue high-quality growth opportunities.

Guidance

- The 10% YoY FFO growth achieved in Q2 2026 is aligned with the firm's long-term growth target, and organic growth remains within the stated 6% to 9% target range. - The firm maintains its 2026 full-year capital recycling target, with ongoing sale processes giving management confidence the target will be met. - For AI infrastructure investment, the firm reaffirms its prior projection of deploying $300 to $500 million of equity annually in this space; deployment of large-scale AI factory capital is expected to be back-end loaded, with significant spending coming 2+ years from now rather than in the next 12 months. - Corporate simplification remains on track to be completed in Q4 2026 as planned.

Segment performance

Overall firm Funds From Operations (FFO) for Q2 2026 was $702 million (89 cents per unit), a 10% increase year-over-year (YoY), matching the firm's long-term growth target. The breakdown by segment is as follows: - Utility segment: FFO of $196 million, a 5% YoY increase. Growth was driven by inflation indexation, new rate base capital commissioning, and contributions from the acquired South Korean industrial gas business, partially offset by lost earnings from completed asset sales. - Transport segment: FFO of $311 million, a 7% YoY increase after normalizing for capital recycling activity. Growth came from broad-based volume gains of 3% to 7% across rail, port, and toll road operations, plus contributions from the newly acquired North American rail car leasing platform, partially offset by lost earnings from prior-year asset sales. - Midstream segment: FFO of $183 million, a 17% YoY increase. Strong organic growth from high asset utilization and elevated commodity pricing at the Canadian diversified midstream business, plus contributions from the newly acquired U.S. refined products pipeline system, fully offset lost earnings from the prior-year sale of a U.S. gas pipeline. - Data segment: FFO of $154 million, a 36% YoY increase. Growth was driven by contributions from the U.S. bulk fiber network acquired in September 2025, income from data center development projects, and initial contributions from the Intel semiconductor foundry construction partnership in Arizona.

Risks & headwinds

- Forward-looking statements are inherently subject to known and unknown risks that may cause actual future results to differ materially from projected outcomes, with additional risk factor detail available in the firm's most recent Form 20F annual report. - Near-term capital market volatility and pullbacks may create uncertainty for public market exit processes and AI project financing, though the firm maintains it can access alternative private sale channels. - Growing NIMBY (not in my backyard) pushback against new data center developments, particularly in the U.S. with increasing pushback emerging in Europe and Canada, centered on concerns around water consumption, rising local electricity rates, and noise, which may delay or prevent the development of some planned AI data center projects. - Large-scale sovereign AI factory projects have longer development timelines due to governance requirements, which may delay capital deployment and revenue generation relative to quicker private sector projects.

Analyst Q&A

• Q: With market anxiety growing over AI data center capex and the timing of payoffs, how does BIP maintain its investment guardrails, and are you seeing degradation of contract terms in this space? /

  A: Management reports no reduction in demand from large, top-tier hyperscale customers, who focus on long-term AI growth trends rather than short-term capital market volatility. BIP only invests in projects with high-quality counterparties that can secure required project debt, so it avoids lower-quality projects that other market participants pursue. No degradation of contract terms is seen; commercial terms remain strong, with development yields holding at high single digits to low double digits, annual escalators now at the higher end of the historical 2-3% range (2.5-3%), and customers increasingly accepting 20-year initial lease terms that improve developer returns.

• Q: How large is the long-term AI factory opportunity, and what is the expected timing of equity deployment for secured projects? /

  A: Management estimates that over 100 gigawatts of incremental AI-related power load will be required over the next decade, with a single 1.2 gigawatt campus requiring up to $100 billion in total private capital for the data center, compute, and supporting power generation. BIP holds large, zoned sites for AI factories across the U.S., Canada, Europe, and South Korea, positioning it as a leading partner for governments and technology firms. Significant equity deployment for large AI factories is expected to be back-loaded over a 3-5 year timeframe, with most large capital outlays coming in a couple of years rather than the next 12 months.

• Q: There is growing local pushback against new data center development in the U.S. How is BIP addressing this? /

  A: Management confirms that NIMBY pushback is most prevalent in the U.S. and growing in Europe and Canada, driven largely by false narratives around water consumption, rising local electricity rates, and noise. The industry is developing targeted solutions to address these concerns, including closed-loop water cooling that minimizes water use, structures that are neutral or positive for local electricity rates, and noise mitigation. BIP's operating businesses are industry leaders on these issues, and the firm focuses its development on geographies where local communities welcome investment.

• Q: Are AI opportunities progressing in line with prior projections, and are any pockets of the value chain accelerating? /

  A: Overall progress is largely in line with prior projections from last year's Investor Day, though the pace of framework announcements has been slightly faster than expected. The firm remains on track to hit its target of $300-$500 million in annual AI infrastructure equity deployment. BIP is seeing strong progress across all three core AI value chain verticals: AI factory development, compute services, and behind-the-meter power solutions, with adjacent opportunities also emerging across the firm's existing business segments. The firm will provide a more detailed update at its September 2026 Investor Day.