Infratil Limited (IFT) Earnings Call Transcript & Summary

Welcome, everyone. I'd like to begin today by acknowledging the Gadigal people of the Eora Nation, the traditional custodians of Tallawallada, who we meet today and pay my respects to elder's past, present and emerging. I also extend my respect to all Aboriginal and Torrest Strait lenders with us today. Welcome. I'm Alison Gerry. I'm the Chair of Infratil, and it is lovely to see so many of you in the room today. It is a great room. We may be missing the views of the Harbour Bridge, but I'm sure we will adjust to that. It was also great to see many of you at our work on drinks last night. For those of you who may not yet be investors in Infratil, I thought I'd start with this map, which shows the global diversity of our asset portfolio. Some of those dots may look like they are in the Pacific Ocean, but they're actually in New Zealand. We do receive feedback that Infratil can be complex to understand, given the number of assets, and we're working on addressing that by refining our portfolio. We also acknowledge that TV investors have had an advantage. They've had 32 years to get to know us. So in the spirit of trans-Tasman cooperation, we've decided to hold our Investor Day for the third time in a row in Sydney. One of the great things about Infratil as you have a great bunch of Kiwis in the room today, including many of our New Zealand investors who are happy to promote our Australian businesses and also impact their knowledge. But Infratil would really welcome more of you to join our success story and be supporters of Infratil as shareholders. You can't -- you might be able to see from the slide, I can't quite see the angle of that, but hopefully, it shows you that more than half of our portfolio is now based in Australia. CDC is our standout business, and they have had a stellar year, and we're going to hear more from the team later today. Moving to our Board. We have 6 of the Infratil directors with us today in the room. So please do feel free to introduce yourselves to ask or ask us questions in the break. And I might just get the Infratil directors who are here to stand up so you can spot them. Great. We have got Anne, Andrew, Kirsty, Brad, Jason is here somewhere. But Paul Gough, our London-based director, can't make it today and also our newly appointed director, Tiffany Fuller also has a previous commitment. Peter Springford retired 3 weeks ago at our Annual Shareholder Meeting after almost a decade on the Infratil Board. Both Tiffany and Brad are Australian-based directors, and we're really looking forward to having their perspectives around the Board table. This slide is a summary of what the Board calls our strategic KPI dashboard, and it illustrates the key areas that the Board is actively monitoring. First and foremost, and you've heard me say this many times before, our cornerstone goal is to deliver shareholder returns between 11% and 15% per annum after fees and taxes over a 10-year period, and this is based on share price growth and assumes that dividends are reinvested. We're really proud to have delivered more than 18% per annum returns over the 32 years since betas inception and our performance compares favorably to listed infrastructure companies that we have been shaped against across multiple time frames. And I might draw your attention to a recent executive summary of a report that the Infratil Board has commissioned on a benchmarking exercise that you might like to have a look at. It makes for great reading. Another measure that we follow closely is our calculated net asset value or NAV per share after fees. And we know there is typically a discount to NAV because market views on value can differ from the independent or market-based values that we use for our portfolio companies, and we're seeing a little bit of that in the fleet for sure. But we also know that we can do more to house markets understands the value in the longer-dated antral valuations.. This is a large reason for us being here today who can hear directly from us and hear from our portfolio of companies as to what we see ahead of us. We're also continuing to enhance our disclosures. CDCs shift to reporting on leasable and future contracted capacity is a good example of that. But we're always happy to hear from you as to -- are there any other areas for improvement. We know investors are cognizant of active and sector concentration risk, particularly with CDC's strong growth. And the Board monitors this risk, and we've seen quite a bit of time pretesting CDC's valuation. Last December, Infratil received it to inaugural BBB+ credit rating from S&P Global Ratings, which we're really pleased with and a little bit surprised us. But the rating recognized the strength, quality and resilience in our businesses and has provided us with very clear credit metrics for us to operate with them. ESG reporting is another focus area because decisions grounded and responsible stewardship are part of creating long-term value and managing risk. And we're very pleased with being recognized as leaders this year and various external assessments, particularly I think it was Morningstar Sustainalytics. Finally, on the slide, portfolio company relationships and resourcing are an area we're paying closer to pension to, greater collaboration between our portfolio companies is something that could unlock more synergies and value. and you're going to hear more about that today. Turning to the agenda. We want to stay to be interactive and help everyone's understanding. So there's going to be lots of opportunities for presenters to ask questions throughout the day. Jason is going to kick things off with an update on Infratil's portfolio strategy. We're then going to hear from the Morrison team of Paul Newfield and Will Smales, on how Morrison's own growth supports Infratil through asset management and new opportunities. After morning tea, the Longroad Energy team will give us an update on how they're moving to capture value from the exceptional demand for energy in the United States. We'll break for launch, followed by [indiscernible] one update on the New Zealand telco market. And we've got Nick Judd, our incoming newly appointed CEO, who's going to give us his perspective. The CDC team will then take us into the fast-paced world of server centers, and we all know we could spend many hours on this topic, but we're aiming to wrap up at the latest at 3:30. So with that, I'd like to hand over to Jason.

Good morning, everybody. Good to see you all. Thank you for coming along. We've been looking forward to this. What a time to be alive, right? I feel like when I get down from the stage, it probably will have changed again. But if you like me thought you're in an alternate reality or woke up and we're dreaming, seeing the President calling Jensen Huang on stage at the all-in conference yesterday morning, you'll be as excited as I have to find our way tonight. I think I should thank you for being here rather than the all-in conference. Maybe we should move it and go there next year because it seems to be the center of our world at the moment. But we are much more modest than that. We do have things to say about AI slowdown. And actually, the thing I was most prepared to talk about, which we should still talk about, I think it is probably more meaningful is rising long-term real rates, which particularly relevant for long-term contracted infrastructure like the stuff we build. But let's get going. I wanted to start with a couple of introductions or 3 actually, and then I'll get on to the portfolio strategy update on those fun topics I mentioned. We made some recent changes in the kind of executive structure, I guess, at Infratil at the start of the year. The idea was really to create dedicated roles focused on execution across what is now quite a big distributor portfolio, finance, which has become bigger as well and also investment. And so we have Andy Carroll, who was CFO. I'm getting an echo here, who is CFO, who's moving into the COO role. And his job really is to set and reset the priorities across the group and then ensure that they're executed in kind of the right sequence, which is a material drop now. And then we have Matt Ross, who is Deputy CFO, and we slated he can step up into the CFO role, which means we don't miss a beat in that seat because he has a long history with longer than both Andy and I actually. And then lastly, we created this new role, which Lee Coker took focused on investment and his job is to curate the pipeline of both internal and external investment and reinvestment opportunities. So as a board, as a leadership team, we can rank those next to each other, put those next to our funding availability and come up with clear direction back to our teams and our portfolio companies about how we want to allocate ultimately finance the capital. So those people are around the room, they are versatile players and coaches. They draw extensively on the larger and deep Morrison team to actually get that done with these guys alongside me and a few other people are the kind of fulcrum points of all that. So if you see them around they're important people, if you've got investment ideas, frannkly, you got other questions about the other guys. So now strategy. So last year, we put up this slide, which showed our portfolio strategy divided over 3 pillars. You have cash flow and then mature and future growth. And the 3, I think, key takeaways that we wanted you to get last year were this idea that we saw going forward, focusing on a smaller number of scaled maturing growth engines as in Longroad data centers and renewables, in particular, which would be supported by divestments of these core assets, ones that we couldn't see scaling in our portfolio, both to create that refinement, but also the funding required to fund their growth, which is a big question on people's mind. So that's point one. Point two really was that we saw the pathway to getting our operating cash flow back in balance to make the dividend sustainable. It's an important piece, I think, of the frit story. We're not necessarily trying to grow it, but I think making it sustainable over the long term has been an ambition, and I think we've made good progress on that over the year as well. So focus, divestments, done cash flow kind of 3. And then what do we see during the year? We obviously saw progress on divestments of $600 million done on the last of that first batch still ongoing and then announcing that further divestments were on the horizon as all another $1 billion we talked about at the full year. So that continues. We saw good progress on the operating cash flow metric with excellent products from one indeed, and they'll talk more about their pathway to making that sort of level of distribution sustainable. And then obviously, we have great progress from CDC and longer. And the CDCs in particular on the operating cash flow metric makes it such a shorter route to free cash flow being available from them for reinvestment or distribution. But really underpins the main theme that we're seeing continue from last year into the years ahead that's driving our portfolio level thinking, which is this. So I think everybody is seeing and maybe we can flip through this. But we're seeing surging token demand all around the world, driven by the capabilities of the model is getting better and better for coding, cybersecurity, all these sorts of things. And then in parallel token costs falling as open source models become available and people are able to shift their workloads as they get comfortable with where the frontier is at on to more optimized systems to enable them to generate the that are more cheaper, which again drives more adoption, more token demand, and so it goes. There's no doubt modal competition that's intensifying with that theme, the frontier is challenged to keep pushing the frontier to keep being the first point that people go to, to decide how they're going to implement AI. But there seems to be very real benefits that enterprises are experiencing. We're adopting it in the areas that I talked about and more that continue to drive the system over time. And Pat now is a good time to pause on this AI slowdown ideas. I mean, even with where the models are at today, their capability, that on its own will continue to require significant investment in infrastructure to serve that capability across all enterprises you can make use of them. We're not even using all of that yet today as well. And I saw overnight, Satya Nadella, Microsoft's CEO, was saying more or less this at the all-in comp as well. Even if you pause the frontier, which is obviously pushing out in all directions, actually serving up and making use of exactly what we have now, will continue to require significant investment, particularly because of the next feature that I wanted to talk about more today anyway, which is the supply constraints that are in the system for building the infrastructure to serve these workloads. And they just do all across the team and all across the kind of supply chain and things like semiconductors, I think, are well understood and obviously, a big trade over the last few years. But the thing that we see as staying constrained for a longer period of time is the delivery of power at scale to these data centers. And that's because these power systems take a long time to build, and they always have. It takes a long time to deal with the grid to get your projects approved. There are all sorts of nuances to getting financed and built. And sometimes they run late. So our central thesis is that at layer and at the data center layer, that is a 2-year, 3-year lead time piece of infrastructure. And much was talking about this last night, you don't stop that now, right, because the frontier might be flying to where it's going to push out by a few months by a year. You actually have to build now in order to be able to deliver that capacity in 2 or 3 years' time. And this is why, right? So you see massive demand infliction for data center capacity growth. And then this chart in the middle is pretty interesting. I think it's a Goldman Sachs one, which shows even with what we're expecting to build today in the U.S. on the power side, they're still projecting an 80 gigawatt shortfall of power or the sector in 2030. To give you a sense of that, I think I was talking to Paul Gaynor last night, the best year that U.S. renewables industry has ever had is 40 gigawatts. So that shortage isn't going to go away. It's going to be short. And it's going to be short whether the models move the frontier or not because we still haven't got enough infrastructure to serve out what we've got to everybody who could benefit from it. Is our core kind of belief that is driving our portfolio thinking. In that sort of environment, the sort of second box on the right here. We believe that existing platforms with long, strong track record in developing responsibly in this space, which is an increasingly important requirement for having a long-term business with advantage access to supply chain and suppliers with big pipelines of projects that can be connected in any time frame. We've talked in the past in the U.S. about interconnection time lines being 5, 7 years. And we are developing projects now that we're putting into connection queue literally that long ago. So unless you have been in this game for a long time, you're not going to get your projects developed. And it's giving that way in data centers, too, I think. Those sorts of platforms in a scarce environment are going to be well placed to obviously deliver good capacity. But I think also at least maintain strong returns on equity in the space. as delivery costs continue to change as this long-term interest rate theme plays out and whichever way it plays out. And this is where we see the returns generally sitting from our research at Morrison, you probably got your own. But you see this trend of expanding returns on equity, EBITDA per dollar of CapEx as you move right along the AI infrastructure value chain. Certainly, as you move to the right, well in excess of an investment-grade cost of capital. But what you also see is as you're on the kind of, in my view, right, probably lift on yours at the neo cloud end of the circle. You get shorter tenor basically, shorter duration of contracting, which obviously goes with a shorter asset life and then you're getting higher returns. But in general, on the other end of the AI value chain, which is where we are at the moment, you're getting long contracted duration cash flows with good margins over your cost of capital that are very attractive, I think, to us as an investor who is targeting that sort of 15-plus zone. And so it should be no surprise that we see a real advantage position for our existing businesses to continue to develop, both in those verticals, if you like, in the value chain as we are today, but also to continue to build an adjacent options around each of the verticals as we see some of them converging. So there's kind of 3 areas here I want to differ. One is at that power and data center level, the 2 columns on the left. There's all those adjacent options that each of those businesses can, and I'm sure we'll be looking at, and you'll hear some of it today. If you're at the energy level, you can run more merchant capacity. And so if you're worried that power prices and interest rates are going to go up and your long-term contracts, are going to be stuck because you've got a fixed revenue line, then you can start running more merchant capacity, more firming in storage and capture more of those -- more of that kind of in contracted period return increase to balance your portfolio. You can look at transmission extensions, which definitely the Longroad team will be looking at. And then on the connectivity side, we have on fiber out and the fiber and connectivity space. On the data center side, we think about geographic diversification lot, and I'll show you how we're thinking about that just in a minute. And then there are lots of different sovereign applications. I point before, we don't have the infrastructure to see about everything we've got today. A lot of the stuff still needs to be built in a lot of countries and our existing position for all the reasons I talked about before, gives us an advantage, a reason to win in those spaces, I think. A super interesting part, I think, just for now or most immediate really, is this idea of integrating power and data centers together, which I think I talked about at the full year. And you've seen the first example of that within the group with CDC and contact entering -- announcing a joint venture to explore developing their site in Taranaki, which has been a fantastic way to think about how can we reuse existing infrastructure. In fact, can we sit a data center in a place where it already had an industrial use. And how can we already have a strong story about where the additional power is going to come from to power. So I would see more of those ideas as needing to be on our radar over time and a great opportunity for the Longroad team as well. We've also looked at their own pipeline, and we'll talk about how they see this developing in the U.S., which is a real theme. But it doesn't end here, and this will change over time. So think about as kind of the most near-term focus at that end of the value chain. But as this story rolls out, there will be more opportunities to the right and some of them we are seeing already. So Infratil has had a great history, I think, of buying incumbent businesses, transforming them and then deciding whether you're a long-term holder or not. And we're seeing the ability to use AI and deploy it at scale with an existing businesses that have strong defensive characteristics as ways of creating returns that you wouldn't necessarily ordinarily expect out of these businesses. One end is a very large example of that, and you've been hearing about their AI transformation story and they've reviewed a couple of other ideas this year with the owned fiber and [indiscernible] as ways to kind of optimize your return out of and optimize the way people think about them. Health care is very much live in this space as a major thing there, driving productivity. We would expect to see more opportunities like that in the future as well. That Infratil is still very interested in addressing. It's definitely part of our DNA and part of what differentiates us. It will just be finding the right time when the capital is available. And when the opportunity presents itself to do it, but I would definitely put that on the radar as a theme well within our capabilities long term. And then as you roll out into the future, physical AI is still a big focus area for us. We've been talking about automated logistics and things like that for a couple of years now, and this seems to be even closer and closer. And Will is going to talk about a couple of ideas. Morrison has been interesting at a scale. That's a bit small for Infratil now, but certainly we'll get the benefit of learning from those has more scale opportunities in this space come out. So the big thing is not everything is AI, but we have an advantaged position to build out into the AI infrastructure and beyond value chain, starting from our strong bases in momentum in power and data centers. And so you can see this expressed in the portfolio proportion. This is an updated version. I was showing CDC in the portfolio, the energy businesses and the others. And you can see on the right, I talked about geographic diversity, pretty good diversity actually in the energy space and as a thought on our mind in the data center space as well. So clicking on data centers. Rick will talk a lot about this as his team later on. But we see strong growth but also strong downside protection in the space. And we see them as being well positioned to address adjacent options. So at the bottom there, you've got a graph that's showing the sort of proportion of the independent valuation today that is sits in existing operating data centers or contracted data centers that we are in the process of building the CDCs and the process of building. And you see over half of that valuation is really an existing operating businesses. So if you stop doing any more business today, you're still on a path to over $2 billion of EBITDA and an incredibly strong operating free cash flow, if you're not investing at all, which I think is a great downside predicted position to be in. And Greg will talk about how they continue there, but really a highly differentiated platform on multiple metrics to be well positioned to continue to develop at attractive returns on equity, supported by a strong funding platform. Kao is there, they've had their own strong growth, different business, but actually addressing an interesting slightly different niche from CDC provided some geographic diversity as well and some good prospects ahead. And then on the energy side, clearly, the U.S. part of the business is accelerating the most strongly. And again, strong downside protection, I think, in this business as well with more than 50% well over actually of that business represented in existing assets that are long-term contracted or assets that we're building now that are long-term contract. And in this is -- the contracts are comprehensive, right? You've got a long-term contract over 17 years on average. It's covering 96% of your revenue, and the counterparties are plus rated on average on the other side of these. That creates an incredible base from which the business can grow in all environments. They're seeing strong growth and acceleration as well of the row and a little bit of an upgrade from entertain terms of what their outlook is. On the other renewable energy businesses, we see those as developing longer-dated options in exactly the same place over time. So they are adjacent to Longroad as the kind of core, if you like, and creating longer-term options as different markets catch up with the U.S. on developing their AI infrastructure over time. And there's a good spot to talk about the whole real rate thing. So probably in the portfolio, the long row valuation is the most sensitive to long-term raising real rates, particularly if that is persistent and the reasons to believe that could be. To give you a sense of that on the operating -- and this is because on the operating side of the business, you've got these long-term contracts, right, and the freights go up, you can't really do anything about creating more revenue very easily. There are some ways -- to give you a sense of that, I think 50 basis points increase in risk-free rate is about $160 million impact on the Opco valuation. So it's about a 4% movement in the valuation. So it's pretty tough to give you a sense, it's probably also about 1/3 to half of the year's work on the development side of the business. So you can work really hard and do what you said you were going to do. And then bits on the rate and your valuation plan. So that ends a little bit what it is. I mean there are 2 counterbalances to that are natural within the business. One is theoretically, if interest rates remain higher for longer, then the merchant power price should increase as well because the cost of all the kit that's been gone on the system is going to be high. Unfortunately, that takes a long time to come through merchant curve and long term to turn up in your valuation. But that is in theory what should happen, which is why I said, well, maybe you should run more merchants now to enable you to capture that earlier to help counterbalance long-term rates to say, end up being [indiscernible] higher, which is something I know on the team's mind and on -- also our mind as well. And the other counterbalance is that on the development side of the business, we've seen for a long time that you were able to capture cost increases in the development side of the business through increasing PPA prices, particularly cost increases that are pervasive across the industry. So everybody is facing a particular change, interest rates in this case is actually one of the biggest development costs. And so that picked up in PPA basis. So while it hits your back book, your Opco certainly before merchant cares come up. On the development side of the business, you shouldn't see that impact at all. This is a feature for the CDC valuation as well as you look at it. But because they're developing at, as you saw on my return slide at higher returns on equity, there's a lot more headroom for that development side of the business to counteract this thing. But it's definitely something to be aware of. We don't know whether long-term rates will be higher for longer either. In some ways, in this scenario, the kind of AI ended of the portfolio will be going great guns, but it will all need power. So somebody will need to figure out how to make that kind of work. And all that contracted capacity that I talked about looks like this if you roll forward a couple of 3 years. So in the middle of there, you've got our updated guidance for FY '27. If you take into account CDC's contracted earnings at -- the team are working hard to deliver the data centers in order to make that real. And then you take account of what Longroad is predicting will be their kind of in-year returns in 2029. You can see that CDC and Longroad on its own, our share of the EBITDA will be as big as everything that we're generating this year. So it's a high visibility to a very material increase in the in-year EBITDA of the group, as big as it is today just from those 2 businesses based on what have contracted today. This is an update of the funding slide we showed last year, and we show now showing the impact of divestments and also reinvestments in the period, showing our funding flexibility continues to be good. And obviously, there will be future divestments in there, and we continue to enjoy benefits of our credit rating to enable us to deepen the funding that's available as well for what's the hit. We'll continue to do that. Okay. So what does that mean for my pillars, Jason? A little bit, I think. This is kind of a reversion of it. So you remember, Pillar 1 is the cash flow generated. I think we're thinking more about that as having sufficient cash generation across the business. And this represents that CDC is a growth platform, but also has the ability to pay more cash flow through to the group to meet the needs that I talked about before. So it's sufficient cash generation. So just really a subtle change. But I think the lines we're blurring between 1 and 2, so we as well address that to keep this current. Biggest change really is in Pillar 2, where we see scaled growth engines and their adjacent options. So should think about Longroad, for example, and then you have adjacent opportunities in geographic diversification. So the smaller businesses that are generating long-term options. But then there are also these options that we talked about upper advances positions like where power and data centers can work together. So a joint venture between a CDC and a contact. And there are lots of those things, all that whole list that we put up on the screen are the types of things that we think are worth spending our time on leveraging our advantage position to get into versus going and looking for too hard, Pillar 3 just now. Pillar is still there. It's our future options and emerging sectors. Today, I would say that's probably the health care idea. That definitely was the way we thought about it going in. Obviously, one of those businesses is in the sales process now. And we also have clear vision, which we haven't talked about before, which is a venture capital investment in prettily a number of years ago now. And the idea is it gives us line of sight on to new technological innovations that are difficult as an infrastructure manager of that's happening in the venture capital space. And I think that investment and maybe others like it are becoming more and more relevant as we try and figure out what is beyond this kind of next frontier of AI, what are the new business models that actually we should be considering as future infrastructure. I'm not saying I'm going to do it, but it's an important thing to -- I think it's an important differentiator of Infratil that we're able to do participate in that venture capital sector. This one happens to be in the U.S. and try and look ahead to what could sit well alongside a portfolio founded on power data centers and the adjacent options around them. Everything else stays the same. We're still fundamentally thematically driven long-term societal needs that we want to be able to deliver as Infratil and Morrison team. It has to have infrastructure characteristics. The long-term contracted cash flows are going to be a big part of the portfolio forever. We still need to have strong capital discipline. So although I'm talking about longer-dated options in our offshore renewables assets, they don't get a free pass. It's not a free ride to create options for 2040, 2050. We have to do our jobs to allocate the right amount of capital to the right prospects. Not all of them will come off, but we're conscious that, that is very important. And we haven't changed our target return nor our desire to continue to beat the heck out of it as best we can for you as investors. So let me finish. One of the key messages that I hope you've taken away today, we still feel the portfolio is incredibly well positioned to build out around an incredibly strong core in the AI infrastructure space. We got a nice upgrade from CDC team today. I'll let talk to that. We have good funding capacity now and a pathway to continue to improve that as the investment opportunities emerge. And I would really say we're going to be focused around adjacencies a lot. We're going to continue to scan for that third sector. It could be a big scale one we can transform, could be some of the exciting ideas we are talking about, but we'll be very careful on that, I think, as a team while we finish the job in and around the core sectors, but it will happen maybe longer term. And we're super excited. I think the world has changed though stood up here. change tomorrow night. But who knew what a fantastic time to be alive and what a fascinating space for us all to be involved in. So thank you for coming. Thank you for your attention. I hope you have an interesting day, and I might see you right at the end of it.

Good morning, everyone. I want to give you a quick update on the Morrison business. Obviously, we're a private business, not a listed business, so there's less known about us, but the relationship between us and Infratil is so critical for both of us. We wanted to give you an update on what we have been up to. The picture that will pop up here in a moment is a great way to tell the Infratil story and the Morrison story in one page. This is the [indiscernible] wind farm with the Infratil Board standing in front of it in the late 1990s. Anyone who has a long memory will know David Newman was tall, but he wasn't that tall. So there's a little bit of a story here about scale, also obviously about Board diversity. I think we've come -- made some progress on Infratil Board. But to go back to scale, when this wind farm was completed in the late '90s, it was the largest wind farm in the Southern Hemisphere. And those are Vestas V47s for the tech out there, massive 660-kilowatt equipment, and there were 23 of them. So it's about 30 megawatts there, second -- our first largest wind farm in the Southern Hemisphere at the time. You'll hear about [indiscernible] today that the Longroad team are working on. That's 90 to 100x the size of this. But obviously, some time has passed. And if you think about that, that sums up the Infratil Morrison model, right? We try to be early ahead of the market. When you find a great space, you build advantage in it and when you find a great team, you back then, and then you grow scale. And over time, you get bigger and you diversify not just the gender mix of your board, but also the set of options that you can bring into a portfolio. So keep that in mind as we go through a few slides about our business. This is a regular slide I've put up the last couple of years, just to give you an update on a few key numbers. The most important is the one Alison mentioned earlier. The track record that is still 18% per annum net returns for now 32 years. So that is ultimately all that matters and everything else we talk about is just the ingredients to that. In terms of Morrisons business, just to give you a sense of our growth, we're about [ NZD 60 billion ] of AUM now. So that's grown 25% in the last year. To be honest, that we're a bit flattered by the weakness of the New Zealand dollar. Our assets are a lot in U.S. dollars, AUD, euro these days. But good growth across the portfolio. The team today, I think on the slide, we have 225, probably if we did a headcount, that will be 230. We were -- I think when we put up this slide last year, we're about 215. So net increase 10 to 15 people. But underneath that, there's actually something really interesting going on, which links back to Jason's points about AI really. Ultimately, and I'm sure you're seeing this in your own businesses, the ability to analyze publicly available data is rapidly becoming a commodity. And so where real value accrues is secrets, private information, wisdom, the ability to make judgment calls about that private information and influence the ability to actually make real-world change in businesses. And what that means for our team is much more focused on doing what -- Morrison always started like grab really, really senior operators from industry, don't just build the business with finance jobs and use those people to fundamentally support, grow, transform the businesses that you invest in. And we'll talk a bit later about a few of the folks that have joined. Other important number on that page is one about alignment. So Morrison on its balance sheet owns over NZD 500 million of Infratil equity as of a few weeks ago. I'm not sure what that number is today with the movement in the share price, but it will be back there soon if it's dropped below. And that's just what our balance sheet owns. Obviously, you see the disclosures from the Morrison family from [indiscernible] from me. You don't see them from everyone in the team, but a lot of us also invest directly. That's really important because that performance number is driven by having an owner's mindset. And so us always thinking of every Infratil dollar as our own. Importantly, that applies to Morrison as well. So almost all of our staff and their families have their wealth and their future generations of family wealth tied up in Morrison and Infratil equity. And that really does make all the difference when you're asking people to go the extra mile and really think long term about the business. So if you do the math, it's on average just through our Morrison balance sheet ownership over $2 million of equity per employee and then you add to that the direct holdings of the team. So that owner's mindset is super important. I know there's been a few questions about the partnership we announced a little while ago with Sumi. So I don't want to touch that on that because, obviously, that is the first time we have stepped away from this model of Deloitte Morrison Trust, the founders and the family being the only shareholder and the team being the only shareholders and Morrison. So first of all, who is Sumitomo Mitsui Trust Bank. There's a lot of different consumer Sumimoto and Mitsui out there in the world. So we should be clear about who we're talking about. They are the biggest trust bank in Japan. They're the #1 gatekeeper to the Japanese corporate pension fund market. And what's the partnership? They have appointed Morrison as their preferred global manager for infrastructure. Why did they do it? Why did we do it? Actually, the same story for both of us. Japan has gone through 3 decades of deflation and negative real rates. And all of a sudden, it has flipped to the other side. And so capital is being mobilized by the way, is the second biggest pension market in the world. So our massive capital pool is being mobilized towards higher returning, more actively managed assets, but also with downside protection and inflation protection infrastructure. So really interesting for them, really interesting for us. I think really interesting for Infratil as well if you think you now have preferred access with the best gatekeeper to this joint capital pool. That should, over time, increase our access to capital for Infratil and for all the Morrison clients. Also, there's an amazing thing going on in Japan right now with positive real rates. Balance sheets of the corporates are under pressure to get efficient. And so you are seeing a lot of corporate carve-out activity embedded infrastructure assets being pulled out. The only way really to access that is to have a really trusted relationship with those organizations and that is what Sumi has, plus transformation capability, infrastructure investment capability, which is what Morrison has. So don't expect overnight results. That's not the nature of Japan. And also for Infratil, obviously, we have an incredibly high performance targets. So even in a rising rate environment, not every deal we see in Japan is going to be right for Infratil, but I do think it's really interesting. Most importantly, there is no change to the control of Morrison. And in fact, as part of this, we have locked in, I would say, in perpetuity, certainly as long as any of us are around the idea that Deloitte Morrison Trust left behind by our founder, plus the team will have positive control Morrison. But we will have one of the very senior executives of Sumi join our Board, which will be great just to keep driving the strategic benefits and alignment. So happy to answer any questions people have in the break about that, but I did want to share it. Last point I'll make before I hand over to Will Smales, it's about people. Where do we invest as we get a stronger balance sheet, a bigger business. We invested primarily in talent and in investing in our own products and being glad recipients and the Board decide to pay us performance fees and script, having a balance sheet that can happily accept that. So on the talent side, I'll touch on a few important additions since we spoke last year. Brendan Scollins has joined us as Head of North America, the role previously held by [indiscernible]. Perry has moved to a different role still in New York, running our global capital formation. Brendan, you'll see from his bio has been Global Head of Infrastructure at one of our global -- digital infrastructure at one of our global competitors and previously Head of U.S. TMT and another competitor. So great track record, great ability to invest and grow, particularly our digital infrastructure business in the U.S. Gianfranco Saladino, classic European, Italian lives in Switzerland, educated in Germany and previously ran the European value-add strategy for another of our competitors. So really adding more of that language breadth capability. And Todd Win actually came with great references from our friends at Longroad, a guy who has been a Chief Executive at another major U.S. renewable developer adding to our operating capability. So think of him like you all know [ Deion Campbell ], most of you know Don Campbell, like getting the Deion Campbell of the U.S. to support us there. I won't talk about all of the nonexec appointments, but we keep trying to add more perspectives and insight around the boards of our portfolio companies, but also around Morrison. So the one I will mention is those in Sydney, Kurt will be down here next week and so later and time them let us know. Kurt is the foundation member of our Morrison Advisory Board. He was back in [indiscernible], if you remember those days, he was Obama's Asia SAR. And then the last white house, he was the [indiscernible] responsible for into Pacific region. Right now, whether you like it or not, geopolitics is about the most important thing in the world of investment, so fantastic to get his perspectives. I won't talk about everyone on these pages, but you'll have the slides available. Lastly, to talk about a few Morrison people who are in the room today who aren't speaking, but so you get a chance to say hello to them. You don't necessarily hello to Philippa Harford. You probably remember her well, former CFO of Infratil. The reason I want to talk about Philippa is she's an operating partner at Morrison, sits on some really important boards for Infratil. Great example of the magic of this model like how do you -- in a normal corporate, the number of really senior execs you can have is constrained by the org structure. What we can do for Infratil is hold on to amazing talent and apply them to the businesses where you need them. We can have kind of a surfit of capability and senior executive talent. So great to have Philippa around and please grab her in the breaks if you'd like to get an update on the businesses she's involved with. Grace is an unfamiliar face. I might ask Grace to stand up if you don't mind, just everyone sees you. She's wearing a bright red jacket so everyone can find there. Grace this year, I've been with us a number of years, but this year became our Head of Australia and New Zealand as Peter Coman transferred up to Europe. Grace is a very long-term infrastructure investor and a wonderful person to know. She runs our investment team across Australia and New Zealand. And lastly, Clayton, who a lot of you will know, I'll finish on Clayton because I started on the picture of [indiscernible] Wind Farm. Clayton is kind of the bookend of that story. Clayton's career started out in Trustpower, the folks who built that first giant wind farm. When we created Tilt out of Trustpower, Clayton moved to Melbourne and became the Chief Development Officer. When Tilt was priced out of our hands by a great offer, we managed to hold on to Clayton and Deon within Morrison. He then went into Manawa with a really important job to do transforming that business and then driving the sale of that through to Comtech. So if you think about that long span of our involvement, like 1994 in Trustpower, Clayton wasn't quite involved right back then, but all the way through, that shows the way we try and transform these businesses build. When you hear about what we're doing between Longroad and CDC, I think that gives you another example of how we can step in, but also goes back to Lloyd Morrison, who was on that first picture. One of the first things Lloyd said to me is I'm a magpie for talent. And so when you meet an amazing executive, you hold on to them and you work out how you can apply them and you work out how you can give them an incredible career path. They couldn't have an ordinary corporate working around the world on your portfolio. So grab these guys on the break. I'm going to hand over to Will, who will talk a little bit more about investment activity. You can tell Will has been living in the U.S. by the size of his coffee. You can tell Will has been living in the U.S. by the size of his coffee.

Good morning, everyone, [Foreign Language] as we now say at Morrison. I'm Will Smales, and yes, the clue is in the coffee. That's a large McDonald's regular coffee. The line at Starbucks is too long. So I went to the second best. So I'm Chief Investment Officer at Morrison for the last 5 years have been based in New York, now relocated back to Sydney, but obviously spending a lot of time across Morrison's business globally. I always start with -- and by the way, I'm going to speak today to keep up I'm going to start with the purpose. So to invest wisely in ideas that matter, and that's Lloyd Morrison's Founder, to invest wisely is hopefully intuitive for all of us in the room, but what that is, is a very well-developed rigorous investment process where we say, no, almost everything we see. And I'll talk about later when I represent some of those statistics that we review on behalf of Infratil. But importantly, on that purpose, what are the ideas that matter. The ideas that matter, remember, are the businesses and assets that have infrastructure characteristics that come together against the investment themes that we're prosecuting and importantly, underpin the wealth and prosperity of society into the future. And that purpose hasn't changed as Morrison and Infratil has scaled. What has changed is the capability Paul was referring to, to apply against that purpose. And it's important to work out, so what does investing wisely and creating value for Infratil mean in the current environment. We are against this incredible sort of AI transformation backdrop. And I was in Texas the week before last and often one of the largest data center conferences. And my experience of the day sort of sums up where we are in the world. So as I walked into the Marriott in Downtown Austin, protesters were barricading the entrance to the conference center. And they were videoing every participant entering the conference center. On that same day in Austin, they were the leaders of some of the largest data center business in the United States in front of the Texas Center trying to explain their obligations on social responsibility, social license. At the same time, that day, I had ridden in a robotaxi to the hotel looking at the door cyber cabs, starting to roll out on the streets of Austin ahead of their launch in a couple of days' time. So that would sort of explain that in Texas, which is becoming one of the largest data center markets, certainly in the U.S. and definitely the world, we've got social license pushback. We've got protest, yet we've got autonomous physical AI rolling out in front of our eyes. So that is the context of what we're dealing with. And as investment professionals, we've got to navigate through that. And investing wisely means having conviction in the trend. So we've got to be brave and bold and allocate capital and take risk. But we also need to be really, really careful and make sure we can pick through the height and constantly check ourselves and say, what could slow down this massive trend. And then the final point -- if you think about what are the trends underlying this, if you think about energy, we often with the AI height, we forget that there was still this massive underlying trend around energy transformation. So decarbonization of our electricity system and rise of electrification full stop. That trend is going on unabated, even underlying where the AI trend is driving things. The same is true on compute. So we're hearing a lot with CDC that we're deploying GPUs on behalf of training and inference workloads. But the reality is we still had strong underlying cloud demand already happening within CDC and that trend hasn't slowed either. So it's order -- it's important to pick through all of this. And then the point Jason made is against this backdrop and these incredible trends, we've got a massive head start. We've got really scaled positions for Infratil with amazing management teams who are able to access this trend and do it with an information advantage. So when the Longroad team think about deploying capital against the new renewable development opportunity or Greg is thinking about in capital against a new data center, the expertise, the information, the use of experience they have to decide to allocate capital at the right time is huge. It is very hard from someone from the outside to compete against that. And that's why we're so advantaged in Infratil. And by the way, through all that, we are still finding really, really exciting ideas, which could become 2 or 3 ideas for Infratil. Last year, I laid out the investment process for Morrison. Again, this will not change. The important point to remember is the way we work at Morrison is it's an end-to-end process. So the same people who are thinking about what's on the horizon, what investment should we make are the one [indiscernible] to those opportunities, executing those opportunities, participating in the asset management, then ensuring that company plays a role -- the right role in an Infratil portfolio or another portfolio of Morrisons. That sort of accountability end-to-end is really, really important. I do want to talk about asset management, and what is asset management. First and foremost, our objective is to make sure that we are supporting the development of highly capable, independent companies that are invested by Infratil. And how do we do that? We do that through governance. So we are applying best practice governance. We're making sure we're governing these entities properly. We're making sure that we're working with the existing management teams to make sure they've got the right capability around the table in the odd instance where we're talking about changing senior management. That is the role of the Board and the shareholders. But importantly, we're sitting together as shareholders, with management and the Board the green strategy in setting the risk profile for these entities, primarily, that's what asset management is. But we all know that the businesses that Infratil Morrison invest in are at different stages of development. And importantly, Morrison is like a backstop. So if you've got bursty demand, you're wanting to do a big refinancing, you wanting to undertake a piece of strategic M&A often those capabilities aren't embedded in a portfolio company. And quite rightly, so be they may only be doing one of those transactions once every few years. But those capabilities are within Morrison and they're on call to all of our portfolio companies. And that's a really important element of asset management. The other piece is what Paul mentioned, a deep bench of operating expertise. So when we're trying to work out what our cybersecurity setting [indiscernible] portfolio company that capability probably exists in Morrison or it exists in another portfolio company. So our job is to bring to bear the Morrison expertise but also to coordinate across the portfolio. Yes, some big numbers under there. So Morrison today is managing 32 assets. Not all of those are Infratil assets, but the network, the experts, the capability is available to every invite asset. And here are some -- a couple of really, really good examples, and you'll hear from the one on New Zealand team later. But when we made the investment in Vodafone New Zealand 7 years ago, we were doing that on the basis of 2 very basic underwrites. One, we could separate out what was a subsidiary of Vodafone Plc and stand up an independent proudly New Zealand telecommunications company. And by investing in the network, we would create a leading platform in New Zealand to then drive a series of cost efficiencies in that business. That is what we underwrite with the original investment. And I think management and the Board and the Morrison people have done a wonderful job executing on that. But we also knew that there were huge amounts of infrastructure sitting within New Zealand. And you can see it there. So first, the tower to separate it and so you'll hear from the EonFiber folks identifying the fiber assets within New Zealand. And then we recently announced Aramco idea. The you can pull your radio access network resources, drastically reduce your future CapEx expenditure and still deliver a better outcome for New Zealanders. Yes. That's a really good example of how relentless asset management drives those outcomes. Those outcomes are really, really hard for management to achieve and they're really, really hard for owners and boards to achieve. The beauty of Morrison is we're able to align our collective efforts and achieve some of these things. Jason referred a little bit to any time. So this is the idea that you could take capability out of Qscan and RxANZ and bring it together and create a brand-new teleradiology business. And what does that mean? It's this idea that you can decouple the service of reading a scan. You can make that highly automated driven by AI, and you can scale it globally without needing the machines. Now creating that business, and there's some folks in the room who actually made that happen is really, really hard work. And day 1, you start with a really, really small business. So you're only going to expend that time, effort and energy to carve out that business and create that platform if you believe in the long-term value that, that can deliver to Infratil. So Morrison should be eking out in every corner of Infratil's portfolio value, applying sort of extra resource to creating that and then delivering that. And then importantly, we'll hear later how by connecting CDC with Contact, connecting Longroad and CDC together, we're hopefully able to unlock other opportunities in the portfolio. That collectively is a series of examples of asset management. Right. So if you go back to that process slide, remember, right at the front is this idea that we're conducting research to identify what the new ideas that matter. I showed this slide last year, and you wouldn't be surprised that in the last 12 months, we've produced a huge amount of internal research. And that research is available to the Infratil Board. We share that information with the Infratil Board. And very importantly, what that research does is it helps us position and curate a pipeline early. And this is a snapshot. And by the way, there's way more actually than 200 opportunities over the last 12 months. But you can see the geographic diversity. You can see the increasing role of North America in our pipeline. You can see the split by sector. But then importantly, on the right, we've listed some of the ideas that have been driven by research that are now starting to show up as opportunities in our pipeline. Some of the words the autonomous mobility, sovereign AI, digital registries. These ideas are starting to fill up the pipeline, which means we're more likely to see them as high conviction investment opportunities. And if you remember, I said we mostly say no to everything. This is a bit of a snapshot of what it looked like for Infratil over the last 12 months. So we delved deeply into 20 opportunities for Infratil. And anytime radiology, which was an internally generated opportunity was the only new investment opportunity. That is success. Actually, that is success. It is absolutely okay for Infratil, for us for Infratil to spend a whole year, look at 200 opportunities and invest in nothing. In fact, you should be really pleased we're doing that because we're looking at a huge selection of opportunities and being very, very selective. But we did invest in some great ideas this year at Morrison, and you can have both a great idea and the idea not being right for Infratil. And as Jason mentioned, some of these ideas are very early stage, so not relevant or important to the context of a very large Infratil portfolio. But I'll talk through them quickly, some of these ideas, and it will give you a feel for the types of thematics that Morrison is thinking about. So Polaris, so this is a dedicated cold storage platform based out of Singapore. The trends we're backing there are food security. Singapore is an island nation that imports all of its food. It is incredibly important for the government to have security of food supply. That needs to be refrigerated in a lot of instances. So long-term high-quality counterparties contracting that capacity. And then the ability to expand that platform in a highly constrained, geographically constrained market, coupled with the rising demand for specialist pharmaceutical products that need to be refrigerated. So that's a trend we had observed for a while. There are research papers we produced, and we found an opportunity, we executed on that opportunity. Phil, similar point. So this is a greenfield platform in the United States. In the United States, as there are -- is in Australia and New Zealand, incredible pressure on the pharmacy supply chain, particularly for pharmacists. So pharmacists are incredibly highly trained individuals. They're trained for 6, 7 years. In the United States, a lot of them spending time at the back of the pharmacy fulfilling scripts. Those scripts can now be fully automated. So they can be done in a centralized facility by robots, counting pills, putting labels on bottles, putting them in a paper bag and then dispatch them back to the pharmacy or to your home. So in the United States, some of the largest chains like Walgreens, CVS have the scale and capital to build those automated facilities, but even they struggle in certain regions of the United States. What we're introducing is a shared infrastructure model. So Morrison will build and own the centralized fulfillment facilities and make them available to all participants in the market. So again, greenfield platform, really excited, backing that physical AI automation trend. And Orange, that's the JV in France. So this is the recognition that nations must have GPU capacity onshore. You need GPU capacity to process your sovereign workloads. But importantly, you need that capacity to be made available to create an AI ecosystem in your country. We partnered with the largest telco in the region to build sovereign AI capacity in that region. Again, a much smaller scale platform. And in case you hadn't noticed, Infratil has huge exposure to this trend. So it didn't need additional exposure in this format. And finally, -- it is a pretty exciting time. And Jason mentioned it, but the way we're thinking about this current AI trend that's washing over the world is what are the enduring constraints in the system and mostly their physical constraints and infrastructure-like constraints. And Jason talked about power. Connection to power, we think is the most enduring constraint. So we are spending a lot of time thinking about in our existing platforms or new platforms, how we do that. If you go -- the other interesting thing, if you think about the second one, sort of AI-driven productivity and transformation, we have learned a lot with the One New Zealand experience, and it will be great to hear the executives talk about that. But where you see Morrison or Infratil's name associated with complex operating businesses, this is what we're up to. We're taking a view that AI can dramatically reduce operating complexity and basically shrink the business down to the core infrastructure embedded infrastructure. And where you have large-scale platforms with embedded infrastructure and a shrunk complexity, you get really great enduring investment thematics. So where you see our name associated with that, that's what we're trying to do. Finally, on the right, physical AI. We've barely touched the applications of AI in the modern world. Yes, we've seen displacement of a few software engineers or increased productivity of a few software engineers. The next wave that's going to come through the economy is physical AI and how we position to provide that will be critical. And Morrison is already, if you think about that pipeline I showed you, thinking about many physical AI infrastructure investment opportunities. Thank you.

We do have 5 minutes for questions, which can either cover the Morrison piece or if there's anything around Jason's introduction, we might hold the specific company pieces till when the investee companies actually present because they're going to obviously talking about things in more detail. So maybe at a sort of capital allocation level. So...

First question for me, just on how you think about the portfolio in terms of -- The data center assets, once they become mature or once become developed, like do you want to hold these for maturity? Or do you think the success over the years has been monetizing these assets? Is that going to be a story that will play out in the next 5 years from, do you think? Or will you hold them?

It's definitely an option. I mean, Greg has talked about this before, anyway talking about it, but today, it's sort of easier said than done, finding the right way to do that. for our customers, for the team in terms of operating them and then obviously, from a capital allocation efficiency perspective. But that is definitely a work stream that's going on, and that technology is sort of being invented around us. I would repeat what I said before is we don't need to invent it, but it's definitely something that we should keep an eye on just portfolio mix exactly.

Yes, Jason, it's Phil Campbell here from UBS. Just wanted to get a bit of a clarification just on the change to the Pillar 1 of the cash flow, sufficiently cash flow generative, it would be quite good to get your views on what that actually means.

Well, we've got -- what do we need a year, Andy, like 400, keep the lights on. So basically, we need to across the portfolio, a steady stream of kind of 400 and one is providing nearly half of that, get a good chunk out of the airport. We do get a bit out of Contact Energy, obviously, which is in the energy spot and then the balance really from -- across the portfolio, but clearly line of sight to CDC doing that. Is that kind of what you're -- I think I only put those to there because that's kind of their primary role, but it comes across the portfolio, which is kind of why I made it a principle rather than there are only these 2 ones in the box, we're curing it from across the platform.

It's Owen Birrell from RBC. I just wanted to touch on something that kind of made a small entry into one of those slides around the $1 billion worth of potential divestments because we talked about all the assets you have, and it seems like you quite -- it appeared on those slides, you're quite wedded to them. Just wanted to get a sense as to how you guys are thinking about that $1 billion of divestments. Is it existing assets? Or is it spin-offs of parts of existing assets such as the tower sale going forward? Like how should we think about that?

Yes. I think -- thank you for asking the question because I didn't mean to put everything there in the portfolio for ever. I'm just trying to give you a sense of where they sit. So there will be elements of spinouts of existing assets that have been talked about as well. We're obviously midstream on, I guess, roughly half our health care portfolio, probably our view hasn't changed on that. in terms of future optionality. So it will be a bit of both. Nothing has really changed there. I think what I was more trying to signal is there's a bit more tolerance for smaller scale, longer-dated options in and around our core pillars. And so we were reflecting asking Galileo to get up to $3 billion or EUR 3 billion in 3 to 5 years in that market is unrealistic. But then you sort of say, well, do I want to be completely out of the European market with options in the part of the AI value chain that seems to be the most scarce and enduring forever? Or would you go out and then buy back in? So like we should think about that a little bit harder, I think. So more tolerance in and around the core pillars, I think, for starting smaller scale. And even some of the adjacencies, right, to transmission or something Again, if it's related, it's not dragging too much in and around our core pillars, maybe you are right to start smaller and build up in and around those core pillars. I think if you're a future option, a genuine future option is probably a little bit less flexibility.

Grant from Jarden. Question around CDC and contact. CDC's strength is obviously building data centers and that -- with that comes the contracted demand that we will focus on. Why would you dilute that by moving into something where the power supplier gets a share of that IP?

You came out the CDC team version of that. Maybe to zoom out just from that particular idea. I think there will need to be clear advantages for the data center operator to do that. There will be things like speed to power that is consistent with the kind of social license requirements that we've talked about as well. So I think that will be case by case, looking at situations where you can get there faster at a scale than maybe you could otherwise with a strong social license story. So individual situations. And then really, it just comes up to the dynamic at the time as well.

I think it's also within those JVs, right, Jason within those JVs, we're also thinking about how each party then gets value from that. And depending on what the party brings, probably determine what they will receive out of that JV. So as we go through those setups, we're thinking very....

Way that you're getting a fair share of the benefits of that particular site. I think...

Demand is running so far ahead of what you can supply at, you'll keep looking at those sort of opportunities.

I think we should. Like one of my reflections on that AI value chain where you come up with the returns is that we're selling a power cheap. -- like if that is really the key gate, why are they not similar to further up the chain, particularly when you go all the way to the right, right, and you see the crazy returns you get from using that power. So I think that will shift naturally over time. But at this point, why shouldn't power more in this environment? I don't know.

Steve Hudson from Macquarie. Just 2 for me, just following on from that question. Is it grid connection? Or is it electrons, green electrons that's sort of really the enabler now for data centers. And I was sort of interested in all 3 of your touch points there.

Look, I think it's going to be both, right, as social license stuff comes to the fore everywhere. And clearly, there is an issue of transmission that probably creates the obvious constraint physical constraint. But unless you come with a good power story, which I think was probably the advantage of the Comtech JV in particular, it's not a sustainable business model. I think I don't know.

No, I agree with that. I think the grid connection is a somewhat binary outcome. You must have a grid connection to be able to stand up your data center apart from the odd behind-the-meter stuff. I think the green election thing then becomes what is the cost of your electricity and how much are you being asked to contribute to that cost of a supplier. So that for me is more a variable, whereas the actual connection to the grid is a hard constraint that you've got to overcome. So in that sense, the grid connection in my mind is comes first, and it's probably more important. Having said that, we still need to secure green electrons as well.

So your 4 fathers had it right in the '80s, really, given the sort of DNA of the company.

Yes, I want a bit.

I want a bit. And just interested in your comments on infrastructure. And I think, Jose, you sort of said -- it's downside protection and inflation protection. Of all of your assets, which actually provides the inflation protection best? Because I was a little bit surprised with what you said about Longroad because presumably -- sorry, I'm answering my own question here, but presumably, some of those PPAs are indexed in the same way that the contract...

Indexation anymore. You have CPA linkage and a bunch of escalators in data center contracts. It's all in the bell already, right? So change the assumption, you'll get a different outcome still. The airport is the best inflation-protected assets, it's not very hard to figure that out the way the regulated asset base works. So that's one is actually not bad because you can reprice more often. And as long as your market structure keeps right in the consumer side of mobile in New Zealand, it is -- market structure is good. So yes, I would start -- I -- in my head, I go airport wine and then data centers with limits. The other thing to think about is half of the valves of the data centers and the energy businesses is development, and you can recapture all that inflation in your new developments as well. So...

Suraj Nebhani from Citigroup. Just one question for you, Jason. You mentioned in the presentation around interest rates impact on Longroad. My understanding is NAV growth is a big part of the story for Infratil as you grow the value of the businesses. How do you think about that with higher interest rates? And I guess a follow-on to that is why are the return requirements not changing if your funding costs are going up?

I think part of the answer -- maybe to answer your last question first is the hurdle is pretty high anyway. It's pretty clear between that and long-term interest rates. And we're not -- we're in private markets really. You can't just change on the fly. So there's value, I think, in just keeping it clear with your teams what your absolute return we've had this out of the back of COVID when interest rates were flying all over the place as well, inflation expectations are flying all over the place. I think on -- in terms of the NAV with real interest rates, you're just going to have this headwind for your existing long-dated contracted assets, which is half of data centers, half of Longroad. And then you're going to have to catch up through the price at which you pay at which you sell your new developments, which is basically the other half of the business. So I mean, I think of it as actually reasonably balanced for the defensive and the aggressive at the end of the day. It's kind of interesting, right? If AI slows down, then I think there's every reason to think real rates are pretty low. And so 50% of your valuation is now, that could easily become 75%, right? So -- but then if it charges hard, then actually 40% of the in development, this is AI charges hard, but that pushes long-term growth higher, which means long-term real rates are higher is kind of thesis. If that's true, then the DevCo looks pretty undervalued to me because your DevCo will run harder. You'll be able to -- for all the reasons I talked about with these physical constraints, you'll probably capture more. So I think it's kind of difficult right with a snapshot. But either way, you should have these counterbalancing forces in the well. But as long as we continue to execute well and as long as we're right on the physical constraints and as long as demand continues, which are all the things we talked about today, there's every reason to find your way back to kind of the central course that we're.

And we've been running against this headwind for a while now. So I mentioned sort of 30-plus assets across Morrison, almost all of them are doing regular independent valuations. So we have a very good view of how valuers are thinking about risk-free rates. So obviously, this trend of rising rates has been a headwind for a while in all of our independent valuations. I guess the point, Jason and I -- we're seeing like when does this let up? Like when do we actually see valuations from a risk-free rate position stabilizing. And I think we're all on edge at the moment in terms of what we're seeing in long-term treasuries.

If you think about what's really going on there, right, it is we've gone from a world where there was too much capital chasing enough assets to one where actually the world is quite capital short. And increasingly so, the way governments are going plus AI CapEx boom. So I think when you hear from the Longroad guys and they talk about their recent acquisitions, that shows the advantage of having operating capability and flexibility to act across the Morrison business. We've probably seen in that renewable space the attractiveness of the opportunity set in U.S. renewables just kind of go through the roof as rates have risen and you've had people being capital constrained. So I think that's the other half of it right like how can you access speed.

Yes, from your platforms when the world becomes capital short.

Break there, but thank you, guys. We're going to have a half an hour break and then start back just after quarter 2. So thank you. While we have the Longroad team come up, I was reflecting in our recent Investor Relations travels, we've been in the U.S. and Asia over the last probably 4 to 6 weeks. What's been really interesting is historically, and it's just the nature of the business and where the growth has been -- there's a lot of talk about data centers. We probably spend 90% of our time talking about the data center industry and obviously, CDC. What's interesting in the last sort of 2 to 3 months is that's now been balanced out by people wanting to talk about power and the access to power. And that's regionally and it's globally. And obviously, we've got -- we're pretty excited about the business, which isn't a new business. It's 10 years old next month, I think October 4. And these guys are sort of acquired achievers within the portfolio, and they've got probably an incredible position in the U.S. So I welcome them. I do want to acknowledge Michael Alvarez, who's sitting at the back there. We normally have him up here somehow he's managed to get out of it this year, but please ask him at lunchtime or any time during a break because there's a wealth of knowledge and experience.

So thanks, Paul. Okay. Thanks, [indiscernible]. Good morning, everybody. We're going to try not to be quiet this morning, Mark. We've been quiet achievers, but we're going to hopefully make some noise today. I do want to introduce my colleagues, Pete Keel and Charles Spiliotis as well as Flesh just mentioned Michael, and then Jeremy Law is here, too. He's our new COO. I'll talk a little bit about that in a second. But thank you, Allison. Thank you, Infratil Board. Thank you, Jason, for inviting us back for another tour of duty here in Sydney. It's beautiful to be here. We're really happy with the progress we've made over the last 12 months. We're going to go into some details. We actually have a pretty solid slide deck for you all to go through. So we'll give you some color on what's happening in the market, what's happening with some of the challenges and opportunities in the U.S. We'll talk about our business, our outlook for really kind of to the end of the decade to end of 2029. We are turning 10 years old, believe it or not, in a couple of weeks. So I look around the room, and we weren't invited to this 9 years ago. We didn't make the cut. But we've made a lot of progress. We're super supportive and very happy with Infratil as our investor. We've also had great support from NZ Super Fund and more recently from MEAG. So we're really, really excited about the next 10 years. But it's given us a little bit of time to reflect on where the business is going. And we've been -- and I'll talk a little bit about that, but we call it next gen, the next gen of Longroad. So 10 years down, 10 years to go, a long way to go. But I think the general theme of NextGen is what you think worked well for you over the last 10 years. It's probably not going to work that well for you for the next -- sorry, for the previous 10 years, it's not going to work that well for the next 10 years. So we've been trying to embrace that, reinvent ourselves, a little bit of a management team shakeup, and we're trying to get -- make sure that Longroad is ready and built for the future. So again, let me kick in and let you know what's happening in our business. So market demand, Jason talked about it this morning. Charles has some slides, but a really generational opportunity in the power business and the renewable business in the U.S. Think about anywhere from 150 to 190 gigawatts of installed capacity between '27 and '29. So that's an unbelievable market dynamic that we haven't had since we started Longroad. We are really happy to update our guidance. I'm going to talk a little bit about that on the following couple of pages. We're increasing our gigawatt target 25% and our EBITDA target quite a bit more. In order to do this growth -- to hit this growth curve, we need capital. We're really happy that Infratil invested in our internal round in March that they reported out on that earlier this year. And that capital has us funded into 2027. And then we're also starting an external capital raise in a couple of weeks where we're going to try and find the next block of capital that's going to fund us to the end of the decade, maybe roughly $750 million to $1 billion of capital. The renewable business remains challenging. There's all sorts of issues. I'd say the top 3 friction points right now in our business, regulatory that has a lot to do with tariffs, executive orders, that have not a lot of definition. What do we do with this? We don't know what this means. So there's definitely some regulatory friction. The cost curve has gone up everywhere, right? Inflation is real. It's gone -- panels are more expensive, batteries are more expensive. EPC costs are more expensive. Interest rates, we'll talk about. So the whole cost structure is going up. But luckily, because of this market demand, we feel like we're getting a fair bit of relief from the PPA counterparties. The one other thing that Charles will talk about a little bit is interconnection queues that are pretty remarkably long. So that's another point of friction. One of the places where we made a lot of progress over the last 12 months is on our digital infrastructure strategy. It's a little bit adjacent business from our core business of renewable power, but there's a lot of overlap. And I don't want to steal Charles' thunder, but we have roughly 10 gigawatts of data center opportunities that are adjacent plays with our existing portfolio. And then I touched on this management team. This is the next-gen thing. If you look at that logo there, how creative is that, right? It's see the 10 long road, 10. So that's just what a bunch of finance and engineer guys can come up with. But you can see it a decade down the road. So this is this next-gen concept and ability to refresh our management team. We spent the last 18 months thinking about succession. -- and at the request of our very diligent Board of Directors. And we put a lot of effort into it and a lot of thought into it. And we made an announcement in July about kind of the next generation of leadership. So we're really, really happy with where it came out. It was a ton of work that everybody put into it. Okay. So on the guidance. If you look at -- so last year, the gray bars are what we told you last year. And we didn't tell you anything about 2029 last year because we didn't know. But assume that we were going up 1.5 gigawatts a year, so 10 to 11.5. You can see that the number went from -- if you imply that 11.5 gigawatts in 2029, are now -- our guidance is now over 14 gigawatts. Last year, we told you at the end of '25, we were going to be at 5.5 gigawatts. We came in a little bit below that at 5.3. The project that we thought we were going to close in December actually ended up closing in March. So it just slipped a little bit. We're on track for hitting 7 gigawatts by the end of this year, just a little bit under that. We've had a few assets that have kind of swapped in and out. The blue bar is what we have. We have a fair bit of work to do for the rest of the year, but we expect to basically hit our targets. One of the things that we're -- I'm going to talk about a little bit is this -- and I know Paul talked about it, the Amuagosa acquisition. And that's really the main driver for us revising our guidance upward. So we used to talk about doing 1.5 gigawatts a year. We're now averaging 2.5 gigawatts a year. So that might not sound like a lot to you guys, but it's a big lift. So we're really happy with where the guidance is at this point. And on the run rate EBITDA, same story. The numbers are a little bit different. You can see, again, we told you at the end of -- we told you last year, at the end of '25, we'd be at 380. We're actually at $410. We're going to outperform our expectation a little bit this year, mostly due to asset mix. And then you can see we get to $1.2 billion of EBITDA in -- by the end of 2029. So that's a pretty sizable business. This is this kind of -- again, I'm trying to get everybody to think about next gen. We're not this start-up little company anymore. This is a really big company. Pete is going to talk about what does that mean? When we're at $1.2 billion of EBITDA, what does that mean for our financial stability, future? What kind of options do we have at that point? Okay. What have we been up to? So we put 2 projects online so far this year. Like I said, we've got another 1.1 gigawatts to go. I mentioned the Infratil $300 million equity raise. We have a 36 gigawatt platform that does not include the data center business. That's just our core business of wind, solar and storage. One of the things that's become like remarkable -- if you asked me 10 years ago, how much do you think you have invested in your pipeline, I'd probably say, I don't know, $250 million. We have $1 billion invested in our go-forward pipeline. So that just goes to the scale. Pete is going to talk about scale, making sure the business has scale and having our -- having access to our operating portfolio gives us the ability to finance some of that a lot more efficiently. But $1 billion of -- so we've got $1 billion of forward of development capital working on deals that are out into 2032, 2033. One of the big questions last year was OB3 and actually came out in a very constructive way for us. One of the things that came out of that was the rules around tax credit qualifying or safe harboring our projects. You can see we've got 15 gigawatts of projects safe harbored. You ask, hey, if you're only trying to go from 7 to 14, that's 7 gigawatts, why do you have 15 gigawatts? And the reason is we're not exactly sure if projects are going to fall into 2029 or 2030. And therefore, you have to almost overprocure to make sure that you've got coverage in the instance that it slips from 29 to '30. And then the digital infrastructure pipeline, I don't want to, again, steal Charles's thunder, but we've been spending a lot of time on it. We've been learning a lot about the data center business. And there's these 2 businesses, the power business and the data center business, are inextricably linked, and there's no question about that. And I'll talk a little bit more about the Ammeragosa acquisition on the following pages. As you can see, it's a big one, 2.8 gigawatts of solar and storage in Nevada. I'll give you some more details in a second. Here are some pictures of projects that we put into service, 1,000 miles. This is in Texas, but it's not an ERCOT. It's an SPP. And then Sun Pond is the fourth -- some of you have heard of SunStreams. Some of you have been to SunStream. And this is the fourth installment of our SunStream strategy. So it's been a great way to grow off of that initial investment. This is what we've done so far this year. Fremont is a project. This is the one that slipped from '25 into '26. a nice little deal in Utah with UAMPS, which is a conglomeration of municipalities in Utah. And then Milford Transmission. So this is a project that we've -- I'm sure you guys have heard of Fervo. Fervo is a geothermal company that actually has their first big power station right next to our wind farm in Utah. And they are -- we are actually selling them transmission services so that they can evacuate their geothermal power into markets West, so into California and other parts of WEC. So it's been a -- this is a good example of playing offense. Again, we have this -- we have a pretty sizable portfolio, 35 projects -- and one of the things we're trying to be a little bit more thoughtful about is how do we leverage our existing portfolio. You're going to see that in Vivid color when we talk about the digital infrastructure strategy. But this is another great example of basically leveraging our existing assets on this transmission deal. And here's what we have left for the rest of 2026. Notch Peak is a project in Utah. Again, it's same kind of strategy as leveraging. It's actually at the northern terminus of this transmission asset I just mentioned. We actually acquired that project from another developer and then we've contracted with an existing relationship that we have, Southern California Public Power Authority. So we hope to get that deal closed pretty soon. Rosemary is a nice little deal in Fresno County, selling power to AVA, which is a community choice aggregator in the East Bay of San Francisco. Raven is a small deal. This is -- I would call this more of an experiment for us. It's an experiment that we thought about kind of rolling up these small distributed assets. I think financially, we did fine on this deal. But in terms of the roll-up strategy, it didn't really make a whole lot of sense for us, just given the scale, right, 31 megawatts. And look, we're trying to do 2.5 gigawatts a year. And you can't -- you just can't get the bang for the buck on the human resources side. And then Milford Transmission 2, this is a further expansion of the deal I just mentioned on with Vrbo. -- again, leveraging excess capacity that we have in the transmission line so that they can evacuate power to Points West. And then finally, Amagosa. So Amuagosa is just if you're in Las Vegas, it's probably an hour drive to the Northwest. It's very adjacent. It's kind of across the state line from Death Valley in Area 51 for those people who have that kind of interest. It's an interesting deal. This deal was actually initially developed by NV Energy. NV Energy is the utility in Nevada, and it's a subsidiary of Berkshire Hathaway. They were developing it on the back of a pretty big transmission build-out that they're building kind of a north-south link called GreenLink and Ammeragos is like right in the middle of it. And it is a hugely important project for them. But from a regulatory point of view, they could not actually end up owning this project. So they decided to put it out to market to the developer market, and we participated in an RFP and we're successful. So there's still a lot of work to do with Amereigosa. I think just a couple of points to make. Number one, what's driving the Nevada growth is data centers. Nevada, NV Energy receiv something like 20 gigawatts of interest for new data centers. So from a siting point of view, Nevada has a lot of advantages. And you can see the demand. I think the system is only 15 or 16 gigawatts in Nevada. So they got almost as many -- more than their entire installed capacity in terms of interest in data centers. So having energy and renewable energy in this project is a hugely important factor for NV Energy. The other interesting thing is that the project comes with a PPA, actually 2 PPAs is 2 phases. And in the PPA, there's an indexation mechanism for the world without tax credits and the world with tax credits. So if the project is -- right now, the projects are expected to qualify for tax credits in '29 and '30. But if one of the phases slips, there's actually a mechanism prebuilt into the PPA that provides a higher price so that we have -- so that we can actually build the project. So that just gives you a sense of how critical this project is to NV Energy. And it gives us also a lot of comfort that it's not going to -- we're talking about pretty substantial development dollars at risk. And we want to make sure that at the end of the road, there's going to be something to actually build. So this gives us the comfort to do it. So we're really, really happy with it. I'm going to turn it over to Charles to talk about the market.

Hi, everybody. We've been doing this a long time. The team here, obviously, we've been at Longroad for 10 years, as Paul said, before that, a company called First Wind. I think something that we're pretty excited about is what you see on this slide for the balance of that time, right, it's been a renewable energy development in the U.S. has been a highly politicized investment, highly environmentally driven, right? If you were a proponent, that just meant that you're one of these Democrats wasting money, tax credits, right, all these sorts of things. I think that's a pretty -- it's a pretty tough characterization. But that, nonetheless, was certainly evident as we went through our lives and you went through -- you operate in different states and different regions that have very different opinions about what we're doing. I think this slide captures a real significant shift that we're all extremely excited about, which is while there's still politicization as we see in Washington, it's a much different feeling when there's such significant demand for new energy in the U.S. driven, of course, by by the digital build-out, onshoring, manufacturing, electrification of vehicles and everybody wants to ensure that we are ahead in the AI rates and that we have the infrastructure required to sort of retain the position that we have. That's a pretty huge shift for what we're doing on a daily basis, right? We're out in a lot of rural communities. We're out in a lot of places where historically, there's just been real challenges. And now it feels much different. There's just like a real significant shift in the way that we talk about what we're doing, grid reliability, right, need to get the electrons online to support hyperscalers, support new manufacturing across the U.S. And that feels sort of really satisfying, I think, for the people up there doing this who feel like we're doing really important work. Here's some of the growth. Yes, I think we talked the sort of theme of several of these next slides is the U.S. is a big place. We are doing a lot. And you see up there in terms of 3% annual electricity market growth, somewhere in the 2% to 3% across basically all expert analyses on what we can expect driven by some of the items -- some of the sectors that I mentioned before. The numbers today are actually relatively small, right, in sort of installed base of data centers in the U.S. and the growth is significant. We talk all the time about hyperscalers, but you can see right here, about 78 gigawatts by 2030 of demand outside of the hyperscalers, right, give sort of a sense of the size of the opportunity. We're looking today at $40 billion, $50 billion per gigawatt of digital investment. So sort of the scale at which load is growing in the U.S. is pretty amazing when we consider basically we did this for the first 20 years with no load growth, right? And we are almost entirely building new renewables in order to take coal offline. And it's a very different goal today. There we go. That's still happening. Coal is still not economic in the U.S. and never will be. There will not be a new coal plant built in the U.S. Only the pace at which they are retired is really the only thing that folks in Washington and elsewhere, state-level administrations can control to a certain extent, but sort of the inevitable is happening, and it's just how quick across the country those plants are retired and replaced by renewables. Here's the numbers on gigawatts. So right, just to scale the market. I'm going to slightly increase the numbers Jason said earlier, but about 60 gigawatts of new generation built in the U.S. last year, about 90% of that is renewables. So somewhere in the 55 gigawatt range. It's where all the money is going. It's where all the opportunity is if you want to build new infrastructure fast at economic rates. And I think the numbers here are pretty staggering, 70 gigawatts, right, is a number that I think I don't think a lot of us would have believed a few years ago. But incredibly -- incredible opportunity for us, the market dynamic sort of all the way across the country. For now, a lot of it is in certain places where trying to take advantage of the tax credit before 2030, right? So certain markets that certainly are focused on locking in lower prices for the grid, local grid or elsewhere. And then some markets that just have incredible load growth and they need the power really at whatever price it requires so long as it's fast. Here is the challenge slide that Paul alluded to before. So there's a lot of challenges in our business. It's always been highly volatile, right? Washington has always had a pretty big impact on what we're doing in some way or other. Now we have tariffs. That's sort of that's sort of a new one in terms of the way we've been planning, right? We had it since the first Trump administration to some extent, it's always been more manageable. The volatility is really the hard part, right? So we're trying to buy equipment, trying to build really long-lived assets. It's taking longer to acquire the equipment, as Jason talked about the supply chain challenges, things like that. A pretty big shift we've had in terms of what we -- what Jason was talking about earlier in terms of locking in the revenue, right? You still have all this volatility on the cost side. It's been a pretty big shift in terms of when we are actually locking in those power contracts, right? When we were doing this 10 years ago, used to want to sign the PPA as quickly as possible, invest as little money as possible, sign the PPA and then go invest aggressively to get projects built. That's sort of the opposite of what we're doing today, right? We're out there investing in interconnection positions and land, trying to find the best sites that we possibly can, knowing that if we do that, we develop the best projects that there will be a revenue contract at the end, and we'll be able to manage the cost side and be able to guarantee that, that is a profitable project. So it's a very different dynamic for us. We've been able to manage it, I think, well with a lot of our OEM relationships, right? So for solar, we've gotten up here and talked about before. We have about 3.5 gigawatts under our frame agreement, still kind of fixed price locked in, not subject to the tariff regime. That's a pretty big advantage we have today. There's a lot more domestic manufacturing in the U.S. than there was 3 or 4 years ago, right? That has been a real change. That's on panel side, battery side, new cell manufacturing. There's a lot of opportunity for folks like us. And a lot of it is at the scale we're operating at, right? So very difficult if you're a small developer to go out there and lock in a lot of these costs at scale. both because manufacturers want to talk to the end users, the ones who are going to own the asset for the long term, who can do really large volume. So that's been, I think, a real competitive advantage of ours. Build costs are going up, right? All this stuff is -- labor is a huge input cost, right? Construction competing for the same labor that the data center folks are, lots of commodity price increase, tariffs, of course. But the PPA market has been receptive, right? Prices are still at a very competitive level. point I just mentioned earlier, right, we're able to sort of lock in a lot of these issues before we signed that PPA. And it's been -- it's only moved one way over the last several years, but we've had pretty good success in terms of optimizing to provide the best value to ratepayers while still building economic projects. The last one is the interconnection queue. It's one you hear about a lot. I think this is why we feel so positive about our development pipeline and positioning. We've invested in our interconnection queue for a long time. I think in many places in the U.S., 7 to 10 years is not unusual, right, nowadays. So we have a 35 gigawatt pipeline, which I'll talk more about. That's a lot of investment that's happened over the last 5 to 10 years. right, in terms of trying to get us to a place where we have these positions. We have competitive advantage. We're always doing a ton of analysis around where we see new transmission investments happening, where we can position ourselves best. We have a really strong interconnection team. A lot of the tools that are available to us now, AI and others can only help us create leverage for us to accelerate, do better analysis, find more opportunities. So it's expensive. It takes a long time, but it's another reason that having a bigger platform is really advantageous. This is another -- the U.S. is a big market slide. So on the left hand here is kind of corporate PPAs first half of this year in the U.S. versus the the rest of the world. There's a lot of activity. And you can see in 2025, right, 66 gigawatts of corporate PPAs signed, which is a pretty staggering number. Some of those are shorter dated, some of those are longer dated. But in terms of the continued demand, hyperscalers and non-hyperscalers, right, that trend has certainly not slowed, and it looks like 2026 is going to be similar, especially as certain folks are trying to lock in renewables while the tax credit is still available to them. Here's the lowest cost source of new generation slide, which is renewables is incredibly competitive. the speed point, I think we've already made, we can move faster than most of our competition. But despite a lot of the friction and sort of tariff-driven skewing of the economics, it continues to be incredibly competitive product. And as we start to plan for post 2030, which is when the tax credit for solar and wind expires and largely today expect it not to be renewed. This is the unsubsidized slide that we really view as incredibly important, right? Because I just mentioned 7 to 10 years, right? So we're making new investments today for 2035 projects, right, 2033 projects. We need to feel comfortable that we're competitive in those projects. So some of what you see here is some of the benefits of the technology improvements. The battery storage is probably the one with the most room to grow. On the solar side, we will see continued efficiency of the technology. But in terms of the shape of battery storage is it still has significant gains, we think, to be made in terms of competitiveness, cost and long-term durability. So that solar PV plus storage utility is really where we're focused. And we think it can be competitive with gas for the long term, which is really the -- it's really what we're competing against in most of these applications, gas takes longer. It's gotten much more expensive, right? Cost of new gas plant has probably doubled over the last 3 or 4 years. We've seen inflation as well, as we've already mentioned. But when you think about the speed factor, when you think about sort of the lower risk nature of it, we're feeling really well positioned. And this slide is showing sort of the point that I already made, right? The right-hand side here, California, Arizona and ERCOT. So markets where we are focused, we feel really good about our competitiveness. That lowest unsubsidized LCOE analysis is, of course, across the whole country. where our pipeline is most heavily focused is the Western U.S. and in particular, the Southwestern U.S., which has the best solar resource in the country as the sort of most available land, right? So you can build a really large scale. And so a place like Arizona, which has, call it, the best solar resource in the U.S. has a battery storage tax credit, which lasts for another decade, right? So that's sort of -- you're sort of getting a bit of a soft landing, as we say, with the battery storage credit extending for that time period. And so in Arizona, in California, right, a solar plus storage product will be incredibly price competitive for a long time, we believe. And the sort of charts here on the right, I think, illustrate it. I already talked about the best outlook and why we feel really good about the declining cost curve there and technological investment and improvement that's happening, a lot of domestic manufacturing and domestic investment in the battery supply chain. And in terms of the markets, West is where we're heavily focused. MISO and SPP are sort of growth markets for us where we see a ton of the data center demand and relatively underbuilt in terms of the wave of renewables. And so we continue to make investments there, some of the projects that Paul highlighted earlier. So we see a lot of opportunity in those markets. This is getting back to the plan that we have here. 2025, we're about 1.5 gigawatts, 2026 and 2027, right, similar numbers. Trying to illustrate here that we have a lot -- we have a big pipeline. We have a lot of coverage on our pipeline. And so even though we say we have a 1.6 gigawatt goal for next year, we have 7 gigawatts of potential projects, right? Our business is highly volatile. Things generally take longer than you think they should, longer than you think they would. And so we need to have a lot of options in order to make sure that we can hit those targets. You expect you have the best project and you bid the PPA and you miss, next RFP is a year away, right? So I think for us, it just goes back to why we feel really good about that $1 billion that we spent investing in our pipeline and creating options all over the country to try to create real diversity and ensure that we can grow at the rates that we hope to grow at. You see the step-up that Paul mentioned in 2028 and 2029, that's on the back of the Amargosa project that Paul went through. Okay. Digital infrastructure. I'm trying to remember if we sort of teased this at all last year, this is the first time, I'm not sure. We're pretty excited about this opportunity. I'm personally spending a lot of time on it, right? So I think if you look around Longroad's portfolio and where we view sort of exciting opportunities, we have 6 gigawatt going quickly to 7 gigawatt here operating fleet, which means that in those 7 gigawatts, we've been doing business in these places for a long time. We have relationships with landowners. We have relationships with the interconnecting utility in most of these places, we have growth already planned or place or we would like to expand or grow or find other ways to do more in these places. We have familiarity with the permitting regime and probably local relationships. So that's sort of the most obvious, right? It's like we have this operating fleet at 7 gigawatts today. It's going to be 14 gigawatts in 3 years, and there's a whole lot of options in there to leverage the work that we're already doing and find ways to invest in digital infrastructure. It's really two ways that we can do that. One is it's probably three ways we can do that. There's obviously co-locating a campus with our renewables which is certainly what we're doing in a lot of places. There's the opportunity to do smaller scale, right? So when we talk about -- when Will is up there talking about the folks out in Austin protesting, right? They're probably not going to protest at a solar site that's already 5,000 acres, and we're using the same footprint, and we're adding relatively modestly with no permitting requirements and no real interconnection requirements, right? So those are pretty, we think, interesting opportunities because of the speed and the relatively low friction of investing in smaller scale. We think the U.S., the opportunity set at the smaller scale is really interesting because it's really hard to build these 1 gigawatt, 2 giga right? Elon wants to build 10 gigawatts and beam it up from the moon and do all sorts of stuff. That stuff is really hard, and that's where you get all the attention on are we -- are you increasing our power prices? How much water are you using? Are you compensating us with your property taxes enough or all you guys in Silicon Valley getting too rich. But the -- at the smaller scale, it's a really productive use already on the land. It increases property tax for the region without any real incremental infrastructure at scale. So we think that's a really interesting opportunity. And it's -- I think the third one beyond the co-located and we'll bring Google and we'll bring hyperscalers and we'll bring Neo clouds and invest aggressively together is just that we really see as an opportunity to drive new renewables, right? So in a lot of places, beyond, we'll partner with a hyperscaler and they want 500 more megawatts, and we'll build 500 more megawatts. We're also seeing opportunities within our portfolio where somebody is building a data center in SPT, maybe it's in the same state, maybe it's one state away, but they need a whole bunch of renewable capacity in order to sort of make it work, right? So could you build some battery storage and sell us the capacity rights for that battery storage over the long term? That's a pretty interesting opportunity that probably wouldn't have existed because the utility is probably not going to contract for that directly. And that's an opportunity that probably didn't exist a few years ago. There's also -- so in several markets like that, like in Arizona has a similar program, right? They know that everyone who wants to build large-scale data center, of which there are a lot, is not going to be able to co-locate a gigawatt of solar and a gigawatt gas plant and whatever else they need. And so they have sort of a subscription model where you can go and find Longroad and say, "Hey, Longroad, can you build your solar and storage projects in a slightly different part of the grid?" And we'll connect you with the data center developer and all of a sudden, you can accelerate what you're doing, you can do more faster. And it's advantageous for the data center developer, advantageous for us and it's advantageous for rate payers. So we're pretty excited about these opportunities. I do feel like it's changing every day, as we said, right, by the time I finish this talk, right? There'll be some other development item in one of our markets that I missed. But we see just an incredible amount of opportunity, and it just goes to like we have been investing in these options for a long time. We've spent -- in the case of Milford, we've spent 20 years there, right? We spent 20 years there, and we have plans to build new stuff each of the next 3 or 4 years, right? And that new stuff is solar and battery storage and transmission and digital infrastructure. And I think it just goes to -- it's a very long-term business. You have to invest and you have to create options and let those options grow. Here's a little highlight of what we see as the current footprint. The yellow dots are the operating fleet expansions and the green are kind of greenfield opportunities where we have already contemplated renewables, but we haven't built anything there yet. And we have a lot of opportunities that we view as pretty mature. on the left-hand side of the page, you see there in green are the grid load, the potential compute. And then in black, we show sort of the expansion of renewables that we hope will help drive that growth. So I feel like I went a long time. I'm going to hand it over to Pete. Great stage. Thank you.

All right. Thanks, everybody. So what I want to do is build on what Paul and Charles talked about here, but really from a financial perspective and maybe help you connect a few dots in terms of how to value the company. It's always a question that we get, JP and Matt in flesh. So I'll see if I can help you with that. But just to get into it a little bit, so Longroad is an integrated developer, renewable -- integrated developer, independent power producer in the renewable space. With -- I'd like to think of it as an option on digital infrastructure. And so what I mean by that is our base plan, we're going to double the company over the next 3, 3.5 years. That excludes anything that we do on digital infrastructure, right? So that would all be incremental growth. And it's a really kind of nice option on the pipeline, the portfolio, the asset base, the capabilities of the team, all those things. So down below the holding company, we've got an Opco, 6.9 gigawatts by year-end 2026. And that is going to produce about $540 million of run rate EBITDA. I'm going to talk about run rate EBITDA. It's a question we get a lot, right? And what is that? So we'll get into that. And Jason talked about the contracted nature of the cash flows. I think something to touch on there, right, as we talk about interest rates. And how does that impact that? And isn't it kind of bad to have all those contracted cash flows there in a market where interest rates are going up? I mean we certainly don't think so. And one of the offsets to that is just what are the residual value of these assets look like. These are 40-year plus assets, and we're contracted for the first, on average, 20 years. And so you've got a lot of recontracting available to you. And if rates are up, then power prices are up, and that is a nice offset. Now that's a long way off. I get that, but that is some offset to what you're seeing in the sort of the existing asset base. And then on the development side of the business. And maybe you could segue to that. In a higher rate environment, provided that the PPA prices move with that, right, and we're still kind of able to make the math work and there's still demand at that higher level. Now you've got upside, right, on refinancing that you didn't have before. If you create these deals in a low interest rate environment, all the sort of the upside is kind of sucked out of it on the front end. The game used to be in the super -- in the ultra low rate environment, build a project at 11% levered return. But nobody wants to hold it at 11%. So exit it at 9% or 8% and make that spread. And now you brought profit in on the front end, but it has to be a develop-to-flip model because it's not interesting for an investor like Infratil to own that asset. But now all that lifts, right, and now we can generate levered returns on the build and hold in the mid-teen range, maybe a little bit higher than that. Now you've got an asset that you can hold as well. And you've also got a ton of refi upside in the future. So I think that's the silver lining to a higher interest rate environment. And we got into this business 20 years ago. And I remember because I got my first mortgage back then, 30-year mortgage. And it was 6.6%. I thought I got a good deal. And now the world is going crazy because mortgages are back at that level. But really, it's just kind of getting things back to normal. Bottom of the page here, the investor base. So we're excited that Infratil is now our largest investor. They've been with us since the beginning. They've been incredible partners. It's been 10 years. We're looking forward to the next 10 years, Jason. The equity part of the -- that's only -- the equity piece, right, that Infratil piece, that bottom line, that's the most important part of the capital stack, but it's actually the smallest. So we do about 90% plus other people's money, OPM, we call it, right, where we're bringing in other investors into the project to finance these deals. And you've got to have access to that capital. That's just how the market works in the U.S. And if you're good at raising this capital, and we are, then you're as competitive as the biggest guy and you're certainly more competitive than the small guys. The products are on the kind of left side of the page here, tax equity. That's a way to monetize tax credits. I'll talk a little bit more about that. And then the right side is the debt part of the capital stack. And then the middle is the opportunity to sell down assets at the project level. We've done a lot of that historically. We'll probably do it here and there in the future. But the base plan that we've laid out has us retaining ownership of 100% of the projects for the next 3 years. So we'll see how it goes. This is a tool, but it's a tool that we don't have in the base plan at the moment because we've got a plan that assumes we retain ownership of all of the assets. The other thing to mention here back to the rates and the rate environment is what's our exposure to interest rates when you look at this kind of 90% piece of the cap stack, right? So everything on the operating and construction portfolio is hedged, from a rate perspective, and it's hedged over the duration of the debt. So we put a piece of debt on. It typically amortizes -- it's scheduled to amortize off over the life of the PPA, power purchase agreement. So you kind of lining up my contracted revenues with my debt and you get those things to fade away together. The rate is hedged for that entire period of time. And we hedge that at financial close start of construction, right? So you take that risk away for the operating and the construction fleet. The development side, it's a little trickier. It's harder to get a rate offset in place on a development asset. But we've got -- we found a product we really like, deal contingent hedge, where once we get a PPA in most cases, we're able to lock in our interest rate as well and kind of take that risk away, right? So once we kind of get that PPA and that revenue line is locked, then we're trying to lock in all of our input costs with cost of capital being the biggest one. That's how we manage that. All right. Let's get into the business a little bit more and the numbers on a kind of a detailed level. So run rate EBITDA, $540 million of run rate EBITDA on our operating and construction fleet, that 6.9 gigawatt fleet. What is run rate EBITDA? Why do you guys keep talking about this? Really simply, it's the annualized EBITDA or unlevered cash flows that our operating and in construction projects create. Very simply put, it excludes tax credits that have been allocated to tax equity. So we get -- when you look at kind of our value stream, and I use that word intentionally as opposed to our revenue stream, our value stream. We are paid for producing electron or capacity, the ability to produce an electron like in a battery. We receive revenue, cash revenue for that from whoever the counterparty is, our customer. On top of that, we qualify for a federal investment tax credit or production tax credit as the case may be. And that's an incremental stream of value. Now I'm sure there'll be some Q&A at the end about how does this business perform after that's gone. And I think those are good questions, and we're happy to talk about it, and we should. But let's just stick with the kind of the here and now and understanding those sort of two components. So here, I'm only showing the -- that kind of that revenue side of it, right, the cash flow side of it. And we'll do $540 million run rate on the 6.9 gigawatt fleet. But the calendar year, this calendar year, we're going to do $290 million. So a pretty big difference. And why is that difference? Well, you can see the sort of the components and you start to put this stuff into annualized revenues, and you can see how it stacks up. So we got to get full year of production on our existing fleet. Some of those operating projects are -- were only partial year this year. They're going to be full year next year. We've got projects that are in construction. We've got projects that are going to go into construction between now and the year-end. And you got to capture the true earning value of all those assets to really start to apply kind of multiples that make sense of the business. Here's another look at it. So $540 million again of run rate EBITDA for our 6.9 gigawatt Opco. And -- but if you look at how that comes on over time, calendar year 2026, we're going to do $290 million. It actually takes 3 years for all this to come online. But the value has been crystallized today. Like if we went to JV and said, here's our growth plan, he'd be like, get out here. That's -- this stuff is all done. This is not the growth plan. This is like this is growth that you've achieved because it's just a matter of time before these projects come online. And why is that? When we get through the development cycle and we get to the start of construction, that's the big derisking event. That's the big derisking event. At the start of construction, the risk is kind of out of the asset. And a great evidence of that is at the start of construction, we'll put in place nonrecourse construction loans that convert into term loans where lenders are coming in for 90% of our cost at SOFR plus 150 basis points, and there are only recourses to the asset. That's it if things go wrong. And so that's how well structured these deals are from a risk perspective that you can source that kind of capital, put all the recourse on the asset. And that's why the market in the U.S. doesn't really perceive and that's why we, as managers don't really perceive a lot of risk in the construction cycle. It's a lot of work, and we don't take that for granted. We've got to execute. But from a risk perspective, it's a totally different thing from a development project. Okay. So that's the Opco. Let's talk about the Devco side of the business. Here's a slide that Charles showed you before. He showed you in megawatts, I'm showing you in dollars and give you a sense of the capital needs of the business, and I want to talk about how we're going to fund it. 2026 is -- that goes to the operating and construction portfolio. So that's kind of part of that 6.9 gigawatts. And we've got a little bit of work to do between now and year-end to get all the remaining gigawatts on board. It's about 1.1 gigawatts left to go. But that stuff is kind of in the bag. And that's sort of easy for me to say, I'm down here in Sydney, drinking flatlights and the team back in U.S.A. is drinking McDonald's coffee, and they're like working their tails off, right, to get that stuff done. But they're really just in the final throws of getting the project financing documents in place. So it's a lot of work, again, but it's pretty low-risk work. So now '27, '28, '29. That's about a $10.8 billion CapEx program excludes data centers that we've got in front of us. And most of that is going to be sourced with third-party debt, tax equity. We've got an expansion of the existing holding company debt facility. And then there's an equity component. We need about $800 million of equity if we're going to retain ownership of all this. Some of that we have today, most of that, we're going to go and get as part of this capital raise that Paul mentioned. Here's another look at kind of sources and uses, how to fund the business. But I want to talk about this one in the context of tax equity and tax credits because I'm to try to help everyone connect the dots in terms of value, okay? So $10.8 billion of CapEx, tax credits allocated to tax equity will fund about $5 billion of that, so 40%, 45%. Those tax credits are incremental to EBITDA. So when you say, okay, tax credit over here, I got tax equity over here, I think of tax credit as kind of the asset, the value stream, you think of tax equity is kind of the liability and they offset. And now I'm left with a net CapEx number of $5.8 million. And how do I pay for that? I pay for that with EBITDA with unlevered cash flows that the assets are generating, and that's also higher in my return on equity. So if I kind of piece it all together, at the end of the decade, $1.2 billion of EBITDA and $8 billion of net debt. I take away tax credits that are allocated to tax equity. I take away both of those things. And I've got an apples-to-apples comparison. The net debt number has been adjusted to say, here's what the debt balance is going to be at the end of construction. Once the dust has settled on everything, this is what we expect the debt balance to be. And I can start to do some math, and I can apply a multiple to EBITDA to get to enterprise value. And I've got a net debt number that makes sense that's apples-to-apples with EBITDA, and I can back that off to get to equity value. And if you looked at these numbers a year ago and you compare them to where we are today and you held your multiples constant, we've got an equity value that is about 50% higher than what we talked about with you here last year. And so it's really fun to come down here and report those kind of results and report this sort of business model and business plan that we put together. We're going to double the size of the company in the next 3 years. We've got data center upside on that. And we've got an incredible team to deal with. So we're really excited about the opportunity. I think one of the things that we are most excited about when we think about the sort of the vision, the mission for the company is really to be part of the solution, right? When you look at the U.S. and the need for electricity in the U.S. and to be able to deliver that to our customers in a competitive way and for the sort of the greater good, right, in terms of those electrons being renewable. And that's a real kind of motivator for the entire team. So with that, we have for questions.

Can you just go back to that slide where you sort of talked about the amount of projects you have, say, for next year versus what you'll actually deliver? Like can you just talk us through sort of what goes into selecting the projects that you go forward and why some of them fail or don't sort of [indiscernible] the construction hurdle?

Yes. What was the slide that you want to meet...

Charles coverage? Yes. I mean, for the most part, it's not that they're going to go away. It's that they're going to be pushed out. I mean that's generally the case. And the revenue contract is certainly a big piece of it. The interconnection time line is also a significant piece of it. So we talked a little bit about the interconnection challenges. It's a moving target we have in the U.S. Obviously, a lot of generation in the queues, a lot of generation once to get online. problems you have that is an ongoing battle is several projects in one part of SPP, [indiscernible] a market. They apply to come online. They're all 300 or 500 megawatts. We get the transmission upgrades required from the utility, and that number is too big, one or two or three or four of those projects is dropping out. Two drop out, maybe you don't need as much transmission upgrade or maybe you do, and it's just split between two parties. So some of those and then like how long does it take for the utility to build those upgrades. The supply chain stuff we talked about has meant that a lot of the utilities are taking a lot longer to enable the upgrades that are required to bring on the new generation. So most of it is timing. And I would say those are the two biggest reasons why a project might hit that kind of blue area versus one that's going to be pushed off. It's generally those two.

I think a good example this year, like this current -- what happened in 2026 is we had a project in California that was in our plan up until maybe 3 or 4 months ago. And it became very clear that we were not going to get to the finish line with the counterparty by the end of the year, the revenue counterparty. So we shook our portfolio around and like what else is in there that we can do? And is there anything that we can bring forward? And what we're bringing forward is a project in Hawaii that's been under development for a fairly long time. It's got a PPA. We're just waiting for kind of one little permit that we think we can get before the end of the year. So that's the kind of bingo that we're -- or the juggling that we're doing to make sure that we continue to hit the numbers.

Can you hear me? With this capital raise of $750 million going external, I'm just interested on what sort of pricing you'd be putting on that. When I reference that to your March independent valuator update movement to the June one, where your independent valuation went down 4%, I take it rates are rising. But since March, you guys have doubled your cadence of build-out. Does that imply that the independent valuator is seeing your new build regime as NPV 0?

Well, I think we're going to find out what the market thinks of the value when we go to market. And so that will be a great external value point. The independent valuator has their approach. It might -- it's probably a little bit different from how we think about the world. But one piece of light I'll. Shed on that is the independent valuator heavily discounts the pipeline. And so they probably -- these Amargosa projects, for example, they probably value those at $50 million, just off the top of my head, but not much, right, relative to what those things are going to be worth once we get those in the ground. So I wouldn't sort of read too much into that and their approach other than just know that the new growth is heavily discounted under the way that the appraiser approaches things.

Suraj Nebhani, Citigroup. Just one quick question for Charles on the data center plans. Can you just touch on what's likely to come up near term? And I guess a related question is on the levelized cost of energy slide. I noticed the combined cycle gas turbine costs were lower than solar and battery. We are seeing a lot more of those projects going up as well. How do you think about the competitiveness there for renewables?

Yes. I mean I'll start with the LCOE one. So I mean, I think the point that I tried to make, right, this is the whole country. So I think that's one important point, right, the sort of average of the whole country for the most part, like the places that we're operating in, let's just use Arizona, right? That will be on the very low end of the solar side. And battery storage side, we expect the cost curve to continue to come down. So -- and then you look at the gas combined cycle side, $51, that's probably like Texas or Alabama, right only, like not places necessarily that we are competing in, in order for them to build that cheaply, right, because there are costs associated, like higher costs associated with a lot of the places that we're operating in, right, like higher labor costs, higher transmission costs, et cetera. Obviously, places like California, which is not going to build a lot of new gas or Hawaii to Paul's point. So yes, it's very different. U.S. is a big place. Every state is a little different. And so I think it's hard to generalize in that respect, but we feel really good about the competitiveness of the markets we're investing most heavily in. And then sorry, your first data center point question was? Yes, maybe just go to the last of my slides, Pete. Yes. So like the ones -- I mean, Texas has been the most aggressive place, right, the most activity. Obviously, we have -- one of these is a large operating campus where we feel like we have an advantage. The second one is not an operating project, but a late-stage ready to build, I'll call it, a development project. So it has solar ready to build, it has battery ready to build. It has gas basically on-site, ready to build if you want to build gas there. So Texas, I think from a speed perspective, is -- continues to be an incredibly efficient place. Permitting requirements are effectively nil, right? Like you're sort of -- it's permitted by right. So you don't have a lot of the same restrictions as you have in other places. Obviously, the PUC is trying to weigh in on the ridiculous amount of data centers in the queue. So there'll be some external factors affecting things. Utah, I think we're excited about because like I made the point earlier, right, we've been in Milford for 20 years. Our landowner for the other dot there is the largest landowner in the state, a lot of sort of political advantages, and we feel like it's really well cited. So we'll see. I mean there's a lot of dots on here. I could be surprised, right? There's some dots on here that are really large. So you talk to some -- the SpaceXs of the world, some of these guys are Google like they want really, really big, right? So certain places sort of are more likely to be able to build really, really big and maybe explore some of the fully behind-the-meter opportunities, right, which are less common, but growing as these things happen. So I'll probably be wrong no matter what I say, but I think that gives you a little bit of sense of how we think about it.

Yes. Do you mind if I do one quick one for Charles, one quick one for Peter. Charles, just to follow up on the 5 gigawatts of near-term data center opportunity. Just can you dig into the potential economics a little bit more, like specifically, would you still need to buy or lease the land? And like what sort of CapEx per megawatt or total CapEx is it for the 5? And then -- sorry, the last one is like what sort of yield on cost are you going to get on that CapEx? Maybe I'll just quickly follow on for Peter, if that's all right. Like just looking at your long-term projection, that $1.2 billion EBITDA versus the $14, you're kind of implying like 80,000 per kilowatt, I think, in terms of the yield. And just thinking back to what Jason was saying earlier in terms of trying to PPAs going up and you guys trying to go more towards merchant. I'm just wondering, is that conservatism? Or is that like that Amargosa asset mix that's bringing it down? Or like -- because you're kind of assuming no increase in yield in future?

Sure. Yes. I mean in terms of the way we think about it, the scope that we would likely have, I think we're thinking $3 million to $10 million per megawatt is probably the portion that we would be responsible for, and that's incremental to the renewables, hopefully driving incremental renewables and/or battery storage as well. So 3 to 10 out of 40 to 50, which is what we sort of think about for a large-scale campus today. Obviously, we're not buying chips in that example. And then a lot of the other HVAC cooling sort of stuff that is cost intensive.

Yes. So we don't focus too much on EBITDA per megawatt as a metric. We focus really on -- I think because our mind is really on the asset by asset level. And what do we need to earn on any particular asset, and they're all unique. Some have lower cost profile, higher generation, but maybe in a market where power prices are lower, some of the opposite of that, Hawaii would be the extreme example of high power prices, but high input costs. And so what we're trying to do is really put deals together that work and some might be much higher kind of dollar per megawatt EBITDA. Some are going to be a fair amount lower. We're targeting per unit profitability at $250 a kilowatt. So that's really what we kind of drive the team toward. Historically, we've targeted $200 a kilowatt. Jason gave us a hard time about that because we kept outperforming it. And it's like you can only get away with underpromising and overdelivering for so long before...

9 years...

But that's really how we sort of manage the business. And then whatever falls out in terms of dollars per megawatt of EBITDA is really just sort of a consequence or an output. It's not really a driver.

Okay. Jason talked earlier about taking more merchant risk. Can you talk to that specifically around the appetite for that? And then secondly, the adjunct to that is what it means for funding structures for development.

The second part was for funding.

Yes. So you're taking merchant risk rather than a PPA your capital stack and potential amount of equity required.