BAM - Q4 2025 Letter to Shareholders

BAM - Q4 2025 Letter to Shareholders

Overview

We delivered strong earnings in the fourth quarter, further accelerating the momentum that has been building throughout 2025 and into 2026. We finished the year with earnings, capital raising, deployment, and monetizations at all-time highs.

We raised $35 billion in the quarter, our strongest fundraising quarter ever, bringing the total for the year to $112 billion across more than 50 different funds in the market. Demand was broad-based across strategies and geographies, underscoring the durability of our franchise and the scope of our investment capabilities in today’s environment.

Combined with strong capital deployment of $13 billion in the quarter and $66 billion for the full year, our fee-bearing capital (FBC) base grew to $603 billion, up 12% over the last twelve months. We generated a record $867 million, or $0.53 per share, of fee-related earnings (FRE) and $767 million, or $0.47 per share, of distributable earnings (DE) in the fourth quarter, representing increases of 28% and 18%, respectively, over the prior year period. This brought FRE and DE for the full year to $3.0 billion, or $1.84 per share, and $2.7 billion, or $1.65 per share, respectively.

Market Environment and 2026 Outlook

As we start 2026, global economic conditions remain strong, supporting a broadly constructive investment environment. Stabilized interest rates, resilient economic growth, tight credit spreads, and improved global M&A activity are contributing to confidence across markets. Capital from growing allocations and a widening spectrum of investors is increasingly gravitating toward real assets, where stable cash flows, inflation protection, and downside resilience are very attractive. These forces are driving deal activity across private markets and reinforcing the opportunity set of high-quality, long-duration assets that generate stable cash flows and attractive risk-adjusted returns.

Powerful, structural mega-trends continue to drive long-term investment demand, and the same themes that have driven deployment in recent years will continue to drive investment for years to come. Digitalization is accelerating the need for data, connectivity, and AI infrastructure. De-globalization is reshaping supply chains and increasing demand for localized, resilient industrial and logistics assets. Growing power demand remains a key global priority, requiring large investment to participate in the generational buildout of power generation and energy transition solutions to support sustainable growth. Together, these trends represent multi-trillion-dollar investment opportunities globally and support our deep investment pipeline. With these dynamics, disciplined and patient capital deployment remains critical. Our long-standing focus on investing in high-quality and critical assets and businesses that form the backbone of the global economy continues to guide our strategy.

With this as a backdrop, a step change in growth is emerging across our infrastructure and private equity platforms. We enter 2026 with strong fundraising momentum, having recently launched the seventh vintage of our flagship private equity fund and we are preparing to launch the sixth vintage of our flagship infrastructure fund. Similar to our recent power and real estate flagships, we expect both to represent our largest vintages ever.

In infrastructure, we see significant growth opportunities. The upcoming launch of this next flagship will build on the strong performance and expanding opportunity set of prior vintages. At the same time, the recent launch of our AI Infrastructure Fund will anchor our $100 billion AI Infrastructure Program and is supported by founding partners NVIDIA and KIA. The buildout of AI infrastructure is one of the largest infrastructure investment cycles in history, driving unprecedented demand for power, data centers, compute infrastructure, and grid modernization. Given the concurrence of strong investor demand, the scale of the current opportunity set, and having all of our infrastructure funds in the market this year, infrastructure will be a significant contributor to our growth in 2026 and 2027.

Within private equity, we are at a similar inflection point. The recent launch of our seventh flagship vintage addresses the strong client demand for large-scale, operations-oriented investments at this point in the cycle, while our complementary funds in market—including our financial infrastructure fund, middle east partners fund, and recently launched private equity wealth vehicle—further extend our reach into market segments where operational expertise, capital intensity, and sector specialization create durable competitive advantages.

Taken together, the breadth of these platforms, the depth of our operating capabilities, and the convergence of powerful secular tailwinds reinforce our confidence in the acceleration of growth across both infrastructure and private equity over the long term.

At the same time, momentum continues to build across credit and private wealth. Within insurance, Brookfield Wealth Solutions’ (BWS) pending acquisition of Just Group will result in an expanded asset management mandate and accelerate organic growth in the U.K. for BWS. Within private wealth, our recent launch of both our private equity and asset-based finance funds represents an important step in the continued expansion of our private wealth platform. These strategies broaden access for individual investors to our private equity capabilities and support the long-term growth of our private wealth channel as we continue to build further durable, recurring sources of capital. We are also acquiring the remaining stake in Oaktree that we do not already own, which will enable us to enhance collaboration across our credit business and strengthen our ability to continue delivering long-term value for our clients.

With constructive market conditions, more sources of funding than ever, and strengthening deal flow, we are well positioned to raise and deploy capital at scale and to deliver durable, long-term value for our clients and partners. Taken together, these factors position us for one of the strongest years in our history.

Reflecting these supportive tailwinds and our strong growth outlook for 2026 and beyond, we are pleased to announce that our Board of Directors approved a 15% increase in our dividend, representing $2.01 per share on an annualized basis.

Diversification and Resiliency of BAM’s Cash Flows

Over the past decade, we have scaled our business to better serve our clients—expanding our capabilities to meet their demands, broadening the solutions we can offer, and increasing the scale at which we can invest. As the opportunity set for real assets and credit has expanded, we have meaningfully increased the number of strategies we offer and the breadth of clients we serve. At the center of this success is our disciplined investing approach. By taking a long-term, intentional approach to broadening the platform, we have built a business that can raise capital more consistently and deliver an earnings profile that is more predictable, more resilient, and better positioned to grow across economic cycles.

Today, essentially all of our distributable earnings are fee-related—the lowest-risk and most stable form of earnings for our industry. Further, more than 95% of our fee-related revenues are generated from capital we manage on a long-term or perpetual basis, providing exceptional durability and visibility into future earnings.

But the strength of our earnings model extends beyond capital duration. It is reinforced by the breadth of our platform and the diversification we have built across asset classes, products, clients, and geographies. This diversity provides multiple paths to deploy and capitalize in any market condition, ensuring that one segment or another is always growing rapidly, while also supporting consistent performance across market environments.

One of the most significant changes over the past decade has been the expansion of the types of assets we invest in. Ten years ago, we had our standalone infrastructure, private equity and real estate businesses. Since that time, we have built new platforms in transition and credit. In some cases, we built organically—transition was first incubated within infrastructure, but after separating it out as its own asset class, and combined with our legacy as a leading renewables investor, it has grown into one of the largest global platforms with over $140 billion of assets under management. In other cases, we partnered and acquired complementary capabilities, most notably with Oaktree in 2019, along with additional partner managers since then, to create one of the largest and most comprehensive credit platforms in the industry. Importantly, no single business contributes more than one-third of our fee-related revenues.

This balance matters. Different businesses respond differently across economic cycles, interest-rate environments, and capital markets. By ensuring that no one area dominates our earnings base, we reduce reliance on any single asset class and can continue to grow through a wide range of environments.

We have also meaningfully broadened our product offerings. In 2016, we had just four products in the market. This year, we will be fundraising across nearly 60 funds and strategies. With more products in market at any given time, fundraising is now more diversified and consistent, enabling steadier inflows from quarter to quarter and aligning capital with opportunity as market conditions evolve, while serving clients with solutions tailored to their specific investment objectives.

Client and channel diversification further reinforces stability. We now have relationships with more than 2,500 institutional clients globally, representing more than tenfold growth over the past decade. Alongside this institutional base, we can now also raise capital across other channels. Our private wealth platform today serves nearly 70,000 clients across multiple strategies and has become an increasingly recurring source of capital. Our insurance solutions business has grown from inception during the pandemic into a platform managing over $100 billion of fee-bearing capital on behalf of nearly 800,000 policyholders, providing long-duration capital that is well aligned with our investment horizons. Our public affiliates add another important dimension, providing permanent capital and a connection to public markets that complements private fundraising. This breadth is unmatched on a global basis and is a key differentiator of our business.

Our platform is also truly global. We raise and deploy capital across more than 50 countries. This matters because economic, political, and market conditions rarely move in sync. Geographic diversification allows us to continue raising capital when certain investor groups are more cautious and shift deployment to regions with more attractive opportunity sets.

Taken together, this diversification has produced what we set out to build: a stable, resilient earnings model designed to perform well in different market environments and grow across cycles. Looking ahead, individual investors—through private wealth, insurance, annuities, and retirement solutions—will represent an even larger and more balanced share of our capital formation over time. These are long duration, repeat sources of capital that should further enhance earnings visibility, reduce cyclicality, and support durable long-term value creation for our shareholders.

Private Equity Is Evolving — Operators Will Lead the Next Chapter

Our private equity business was born out of our long-standing approach to owning and operating real assets that form the backbone of the global economy. For more than four decades, we have focused on acquiring and operating industrial and essential-service businesses—companies that produce, move, and support the critical systems underpinning economic activity. Our owner-operator mindset distinguishes us and shapes how we invest, manage risk, and create value.

Private equity has entered a new era focused on returns that are driven by margin expansion, not multiple expansion. Financial engineering is no longer a viable source of value creation as it now faces headwinds from normalized funding costs, slower monetizations, and buyers discounting forward growth. That shift plays directly to our strengths. Performance will no longer rely on rolling the dice on the broader market, but on rolling up sleeves and improving operational efficiency—an approach that has always been core to our DNA. Half of the value we have generated in our private equity investments has come from operational improvements, a real differentiator for our franchise, and a consistent strategy to maximize value.

A recent investment that illustrates our approach is Chemelex, the global leader in electric heat-trace systems—mission-critical technology used across industrial facilities, energy infrastructure, data centers, and commercial real estate to ensure fluids, pipes, and equipment operate safely and reliably. While essential to operations, Chemelex’s products represent a small portion of customer costs, creating strong customer loyalty, recurring aftermarket revenues, and highly predictable cash flows.

Despite its market leadership and decades-long track record of innovation, Chemelex was treated as a non-core division by prior owners, resulting in underinvestment and limited strategic focus. This created an opportunity for us to acquire a high-quality industrial business at an attractive entry point; exactly the type of situation where our operational expertise can drive value. Since acquiring the business, we have established Chemelex as an independent company, built out its leadership team and core functions, and implemented targeted operational initiatives. In 2025, we delivered over $20 million of EBITDA improvements through pricing, procurement, plant upgrades, and efficiency initiatives, driving over 15% growth year-over-year. Looking ahead, our value-creation plan reflects our broader playbook: driving operational excellence, investing in end-markets and supporting continued innovation through R&D.

The mission-critical and long-duration, recurring cash flow nature of our portfolio companies makes them inherently more resilient, easier to underwrite, and consistently attractive to investors seeking predictability and downside protection. As a result, even as many private equity managers have stepped back, we have remained active—raising capital, deploying into high-quality opportunities, and returning over $10 billion of capital to clients over the past two years.

The macro environment is improving, deal activity is accelerating, and industrial businesses are being reshaped by two powerful forces: deglobalization and AI-enabled productivity. Supply chains are being re-wired, manufacturing capabilities are being re-evaluated, and companies are under pressure to modernize operations and adopt digital and AI tools at scale. This environment rewards operators capable of driving real change inside businesses, rather than those reliant on leverage or market beta.

This strengthening sentiment is also reflected in our listed entity’s share price, which is up more than 50% over the last twelve months and contributed to performance fees in the quarter. Against this backdrop, we also launched the next vintage of our flagship private equity fund. This is an important milestone and a meaningful driver of future earnings growth. Backed by a 25-year track record that includes 25% gross IRRs and 19% net IRRs, among the strongest in the industry, and a strategy well aligned with current market conditions, we expect this to be our largest private equity fund to date.

With operators defining the next chapter of private equity, our global, diversified, and operationally focused platform is built for this environment, positioning us to lead the next chapter of private equity and drive meaningful growth in the years ahead.

Management Succession — A Message from Bruce

As part of a long-planned leadership transition, the Brookfield Asset Management Board today announced the appointment of Connor as CEO, effective immediately. I will continue as Chair of the Board for BAM, in addition to my role as CEO of Brookfield Corporation. Connor will continue in his role as CEO of our renewable energy business, supported by a deep bench of talent in that business.

This appointment is the next step in the succession process we started four years ago to prepare the generation of leaders who will guide the company for the next 20+ years. It is firmly rooted in Brookfield’s distinctive culture, which emphasizes collaboration, fosters innovation and entrepreneurial spirit, and maintains a strong sense of discipline. These core values will continue to shape the company’s future, ensuring sustained growth and success under Connor’s leadership.

As I have said before, I have never been more excited about the prospects for our business than I am now. I intend to help in any way I can, focusing my energy where I can be most useful—and I will stay fully invested in Brookfield. Our entire senior team is thrilled to work with Connor as he assumes this role and takes Brookfield to new levels of success.

Closing

We remain committed to being a world-class asset manager by investing our capital in high-quality assets that earn solid, attractive returns, while emphasizing downside protection. The primary objective continues to be to generate increasing cash flows on a per-share basis, and to distribute that cash to you by dividend or share repurchases.

Thank you for your interest in Brookfield, and please do not hesitate to contact any of us should you have suggestions, questions, comments, or ideas you wish to share.

Sincerely,

Bruce Flatt
Chairman of the Board

Connor Teskey
Chief Executive Officer

February 4, 2026

 

BEP.UN - Q4 2025 Letter to Unitholders

BEP.UN - Q4 2025 Letter to Unitholders

2025 was a very strong year for Brookfield Renewable. We achieved this in a period of significant change for the broader sector and delivered our strongest financial results ever. More importantly, we positioned the business for a period of outsized earnings growth.

Energy demand continues to accelerate, driven by the multi-decade trends of electrification and reindustrialization. This has been further amplified by AI in recent years. As a result, we are well positioned to extend our leadership position in delivering the large‑scale, reliable and secure energy solutions that the market demands today.

Our scale and global pipeline in the lowest cost, quick-to-market technologies, complemented by our baseload capabilities in hydro, nuclear and batteries, is strengthening our partnerships with both governments and the largest corporate buyers of power. It is also leading to new unique, large-scale partnerships that should deliver meaningful cash flow growth and value over the long term.

In October, Westinghouse entered into a transformational strategic partnership agreement with the U.S. Government to deliver new nuclear reactors utilizing Westinghouse technology in America. Since signing the binding term sheet, the focus has been on advancing towards execution of orders for long-lead time items for the AP1000, Westinghouse's best-in-class proprietary large scale reactor technology.

Earlier this year, we signed a first of its kind Hydro Framework Agreement ("HFA") with Google to deliver up to 3,000 megawatts of hydro capacity. The agreement reflects the accelerating demand for energy from hyper-scalers and their increasing focus on securing scale, baseload power to support their growth as a complement to low-cost solar and wind capacity. With the largest privately owned hydro portfolio in the U.S., complemented by our large fleet of wind and solar assets, we are uniquely positioned to provide tailored around-the-clock clean energy solutions to meet the needs of the hyper-scalers.

In addition to these previously announced partnerships, we are also progressing bilateral discussions on a 1,000+ megawatt battery installation, partnering with a sovereign wealth fund. The development is expected to enhance the reliability of their country's electricity grid and will be one of the largest energy storage projects globally. The partnership is being advanced on the basis that the facilities will be fully contracted with long-term, fixed-price storage services agreements backed by the local government, a development and contracting approach consistent with how we build out other technologies.

Alongside these meaningful, new partnerships, we also executed on our growth plans over the past year, commissioning a record ~8,000 megawatts of new generation across our key markets and acquiring businesses that further enhance our cash flows. This includes the privatization of Neoen, successfully executing the carve out of Geronimo Power, and increasing our stake in Isagen, a business that has been one of our best performing investments since we initially acquired it about a decade ago.

At the same time, we continue to scale our asset recycling program, generating a record $4.5 billion ($1.3 billion net to Brookfield Renewable) in proceeds at returns exceeding our targets and reinforcing asset recycling as a durable and accretive source of capital for our business.

As we look ahead to 2026 and beyond, the growth prospects of Brookfield Renewable have never been stronger. With our global operating fleet, deep commercial and development capabilities and differentiated access to scale capital, we are well positioned to grow our cash flows by 10%+ and our value by 12 to 15% per unit on an annual basis over the long-term.

Supported by strong financial performance, robust liquidity, and our positive outlook for the business, we are pleased to announce an over 5% increase in our annual distribution to $1.57 per unit. This builds on our track record of delivering at least 5% annual distribution growth per year since Brookfield Renewable was publicly listed in 2011.

Additional highlights for the year include:

• Generating strong FFO of $1,334 million, or $2.01 per unit, up 10% year-over-year benefiting from solid operating performance, growth from development activities, accretive acquisitions, and capital recycling.
• Advancing commercial initiatives securing favorable long-term contracts for over 9,000 megawatts of generation capacity across our operating fleet.
• Commissioning ~8,000 megawatts of new capacity, more than double the capacity we delivered only three years prior, and are on track to reach a ~10,000-megawatt run rate per annum by 2027.
• Deploying or committing to deploy $8.8 billion ($1.9 billion, net to Brookfield Renewable) into growth, further diversifying our business and positioning ourselves to capture increasing demand.
• Reaching agreements to sell assets generating a record $4.5 billion ($1.3 billion, net to Brookfield Renewable) delivering ~2.4x our invested capital and returns above the high end of our target range, while generating substantial capital to reinvest into accretive growth.
• Strengthening our best-in-class balance sheet, executing over $37 billion of financings and finishing the year with $4.6 billion of available liquidity, positioning the business to opportunistically deploy capital at strong risk adjusted returns.

Welcome To The Energy Addition

To meet growing demand we are adding more new energy capacity to electricity grids than ever before, a dynamic that is accelerating the transition of global capacity to renewables.

Only a couple of years ago, the backdrop for investment into new energy capacity was mostly focused on transitioning away from carbon intensive generation in a world with only modest increases or even flat energy demand growth. Today, with demand across most developed markets increasing at a pace not seen in decades, the environment has significantly shifted—we are not only transitioning carbon intensive generation, but adding a substantial amount of net new generation to meet accelerating demand from electrification, resurgent industrial activity, and AI.

This substantial shift is driving a pivot from incremental upgrades to grids around the world to large-scale expansion, prioritizing fast-to-deploy renewables, scale baseload generation, and capacity to maintain grid reliability. All of this is driving an expanding opportunity set that will require development of many technologies over the medium term.

To meet the demand, solar and onshore wind will be needed for their speed to market and low cost, hydro and nuclear for their scale baseload characteristics, natural gas for its flexibility, and, increasingly, battery storage solutions for enhanced reliability. In addition, in certain markets where grid connection queues are constraining the ability to deliver new capacity over the medium term, we will see more behind-the-meter generation solutions, including distributed generation, fuel cells, small modular nuclear reactors and new gas generation.

In this environment, where demand is increasingly driven by the need for incremental generation and capacity, clean energy technologies are well positioned to meet the majority of this demand, due to their position as the lowest cost and fastest to deploy solutions. As a result, as this generational build-out continues, clean energy solutions are accounting for a rapidly growing share of global electricity generation.

Our business sits at the epicenter of this significant and growing opportunity set, and in turn, we have been focused on expanding our operating fleet, development pipeline and capabilities to position us to do more with the largest buyers of power globally.

We are scaling our development of low-cost, fast to market solar and onshore wind to meet accelerating demand for power.

This past year we brought online ~8,000 megawatts of new renewable capacity and expect to deliver a run-rate of ~10,000 megawatts per year by 2027, while continuing to employ our derisked approach to development focused on securing long-term contracts concurrent with financing and EPC contracts. In the past 12 months, we have grown our advanced development pipeline by over 25% to ~84,000 megawatts of projects which have either secured or are in the late stages of securing land, permits and grid connection.

In the U.S., where we see among the strongest demand growth for electricity and approximately half of our current operating business and pipeline sit, we further cemented our leadership position with our acquisition of Geronimo Power, adding a 3,200-megawatt portfolio of operating and in development renewable assets, as well as an over 30,000-megawatt pipeline. We also executed a tuck in acquisition of a ~300-megawatt portfolio of under construction solar projects in PJM to develop and contract to a technology hyper-scaler.

We have been an owner and operator of hydro for decades. Today, we have one of the largest operating portfolios globally – an increasingly strategic and valuable asset class.

The value that operating hydro provides is increasingly recognized by the broader market. Its flexibility, dispatchable baseload generation and the system stability it can deliver are in greater demand today than ever before. Over the past year, we have executed three 20-year power purchase agreements with hyper-scalers in the U.S., a first for our hydro portfolio, and signed the HFA with Google to deliver up to 3,000 megawatts of hydro generation. Our hydro assets are adding value through increased cash flows and via our ability to up-finance these assets and fund further growth across our business.

This year we also increased our ownership in Isagen, our Colombian hydro platform, further expanding our exposure to a large-scale, de-risked, and strategically important infrastructure business in a market experiencing strong energy demand growth.

We have always viewed our hydro portfolio as highly strategic and will continue to evaluate opportunities to acquire assets that complement our franchise and strengthen our position in this increasingly valuable segment of the market.

Through Westinghouse, the world's leading nuclear technology platform, we are uniquely positioned to help drive the global build-out of next-generation nuclear reactors and deliver scale baseload power.

New nuclear capacity is increasingly in demand to meet surging power needs. This is reflected in the restarts of previously closed or partially developed plants in the U.S., and reinforced by the landmark agreement with the U.S. Government to deploy new nuclear reactors utilizing Westinghouse technology. Nuclear's exceptional energy density, long asset life, and ability to provide continuous baseload power at scale is highly effective at meeting the emerging requirements in the market today.

Westinghouse's strategic partnership with the U.S. Government should create significant value for the business and Brookfield Renewable with the development of new AP1000 reactors, and once operational, through the provision of fuel and maintenance services by Westinghouse over the reactors' lifetimes. Beyond the direct financial impact, a commitment of this magnitude to Westinghouse serves as a powerful catalyst for the broader nuclear sector, by providing the long-term demand certainty needed to unlock supply chain investment, reducing future costs, and accelerating new reactor development globally. This positions Westinghouse to expand the deployment of its technology well beyond this initial order, to both governments and corporates in the U.S. and internationally.

Battery storage is becoming increasingly critical to enhancing reliability and the stability of global power grids. With our acquisition of Neoen, we are now a leader in this essential technology.

Battery costs have come down an astonishing almost 95% since 2010 and are following a very similar path to that of solar panels approximately a decade ago. As this price trend continues and demand for storage grows to support increasingly strained grids, we expect to see more opportunities to deploy battery technology on a contracted basis at our target returns. Notably, we see opportunities in Europe where there is strong renewables penetration, and in the Middle East, where peak energy demand is becoming more difficult to meet.

With our acquisition of Neoen, we significantly expanded our battery capabilities and pipeline and expect to quadruple our battery storage operating capacity in the next three years to over 10,000 megawatts. We are also currently advancing a first-of-its-kind opportunity through Neoen, where we are progressing a 1,000+ megawatt battery energy storage system in partnership with a sovereign wealth fund. We expect to deliver on the first phase of this project in 2027 and the second phase in 2028.

Taken together, we are contributing significantly to the transition and addition of energy globally and creating tremendous value for our business along the way.

Demand is rising across all our major markets, requiring rapid additions of renewable capacity, flexible large-scale baseload power and battery storage for enhanced reliability. Backed by long-term partnerships with the world's largest corporate buyers of power and governments, we are delivering more new generation capacity than ever before and are well positioned to continue meeting this need with our diversified global platform, deep development pipeline, operational expertise, and the scale capital required to support the global energy market.

Our Capital Recycling Continues To Scale

In the past year alone, we sold $4.5 billion of assets ($1.3 billion net to Brookfield Renewable) generating returns above our underwriting targets. We continue to see strong demand from private investors for de-risked, cash flowing operating assets like those we operate and develop. These provide enhanced returns for a similar risk profile and duration when compared to traditional fixed income.

Our 2025 capital rotation was highlighted by the sale of a major North American distributed energy platform that we built through M&A and organic development since acquiring the initial assets in 2017. We will retain approximately half of the development business and pipeline, maintaining exposure to growth of this platform going forward. Recently, we also sold an aggregate 50% interest in a portfolio of non-core hydro assets and a portfolio of operating wind and solar assets in the U.S., crystalizing our value creation activities and generating proceeds to redeploy into further growth.

Another highlight for our capital recycling program was at Neoen, where we sold $1 billion worth of solar, wind and storage assets in our first year of ownership, up from almost no sales previously and consistent with our plans at acquisition. This demonstrates how we can rotate capital on an accelerated and accretive basis.

Looking ahead, we expect to continue scaling our capital recycling program in an increasingly more programmatic and recurring manner. We recently agreed to sell a two-thirds stake in a large portfolio of recently built operating wind and solar projects in the U.S., each of which was developed by one of our development platforms. The initial sale is expected to generate ~$860 million (~$210 million net to Brookfield Renewable) in proceeds, immediately delivering strong returns and scale capital for our business to redeploy into growth. We are actively progressing the sale of the remaining minority stake in the portfolio. The closing of this transaction is subject to customary closing conditions, with closing expected to occur in the first half of 2026.

The transaction also contemplates a framework for potential future sales of an additional up to $1.5 billion of assets that meet certain criteria to the same buyers. This framework will de-risk our business plan for our development platforms and represents a new reliable and ongoing source of capital recycling, whereby we can crystallize gains in our development businesses and provide a new and accretive source of capital to fund future growth. We are currently progressing a number of similar initiatives of meaningful scale across our global platform.

Operating Results Were Strong

We generated FFO of $1,334 million, or $2.01 per unit, up 10% year-over-year. The strong results reflect the benefits of our increasingly diverse business, growth from development activities, accretive acquisitions and successful capital recycling. Building on our strong 2025, we continue to target 10%+ FFO per unit growth.

Our hydroelectric segment delivered strong FFO of $607 million, up 19% year-over-year on the back of higher revenue from commercial initiatives, stronger generation in Canada and Colombia, and gains on the sale of non-core assets that we executed during the year. We continue to see accelerating demand for our hydro generation, notably from hypers-calers, who are signing long term contracts at strong pricing to support their increasing power demand.

Our wind and solar segments generated a combined $648 million of FFO, benefiting from our diversified global operating fleet, development activities and acquisitions of Neoen, Geronimo Power and our investment in a portfolio of contracted, operating offshore wind assets in the U.K. This growth was offset by gains on sale recorded in last year's results, including the sale of Saeta and the partial disposition of Shepherds Flat.

Our distributed energy, storage, and sustainable solutions segments contributed $614 million of FFO, up almost 90% from the prior year driven by growth through development, the acquisition of Neoen, the strong performance of Westinghouse on the back of continued momentum in the nuclear sector and a gain on the sale of our North American distributed generation business.

Balance Sheet & Liquidity

We finished the year with $4.6 billion of available liquidity and recently reaffirmed our BBB+ investment grade rating with three major rating agencies, underscoring the strength of our sector leading balance sheet.

In October, Brookfield Asset Management closed fundraising of its second global transition fund, raising a record $20 billion of capital. This record fundraise and our strong liquidity positions Brookfield Renewable to opportunistically make meaningful investments across a deep pipeline of scale growth opportunities, with our access to capital serving as a differentiator to invest in the largest, most attractive opportunities where there is less competition.

During the year, our business successfully completed over $37 billion in financings, a record for our business, extending maturities and optimizing our capital structure. This past quarter was highlighted by a repricing of the Term Loan B facility at Westinghouse, where Westinghouse reduced its interest costs by almost $9 million annually with potential for further savings should they achieve a ratings improvement in that business due to the recent partnership with the U.S. Government. We also completed a refinancing of our New York hydro portfolio in December, extending maturities at the lowest spread we have ever achieved in the U.S. The refinancing of our hydro portfolio reflects exceptionally strong lender demand for these assets and resulted in approximately $250 million of up-financing proceeds, bringing total up-financing proceeds to over $2.2 billion this year.

Also this past quarter, we completed a $650 million bought-deal equity raise and concurrent private placement, and subsequent to year-end we opportunistically issued C$500 million of 30-year notes at 5.2%, achieving our lowest spread ever for a corporate financing. These offerings further strengthened our balance sheet and provide substantial liquidity for the business to capitalize on the expanding opportunity set ahead, particularly in essential baseload and grid-stabilizing technologies, including hydro, nuclear, and storage.

Outlook

We entered 2026 well positioned to deliver on our growth plans and generate significant value for investors. We remain focused on our goal of delivering 12-15% long-term total returns for investors while remaining disciplined allocators of capital, leveraging our strengths to access unique opportunities in the most attractive technologies and regions.

On behalf of the Board and management, we thank all our unitholders and shareholders for their ongoing support and look forward to updating you on our progress throughout the year.

Sincerely,

Connor Teskey
Chief Executive Officer
January 30, 2026

BIP.UN - Q4 2025 Letter to Unitholders

BIP.UN - Q4 2025 Letter to Unitholders

Overview

2025 was another strong year for Brookfield Infrastructure. The business generated funds from operations (FFO) for the year of $3.32 per unit. Normalized for the impact of asset sales and foreign exchange, our per unit growth was 10%, in line with our target and reflective of our operational performance and the strength of our business. We executed on our strategic initiatives, generating record proceeds from asset sales to selffund our new investments that are expected to generate returns exceeding our targets.

Our key accomplishments for the year are summarized below:

• Achieved our capital recycling objective of $3 billion for 2025 and have already made progress towards 2026’s target of $3 billion.
• Invested approximately $2.2 billion of equity into growth initiatives, including $1.5 billion in five new investments diversified by sector and region.
• Executed agreements for several behind the meter (BTM) power projects totaling approximately 230 MW of capacity under our framework agreement to install up to 1 GW of power solutions to data centers and artificial intelligence (AI) factories.
• Took advantage of strong capital markets to complete $16 billion of financings.
• Ended the year with record liquidity totaling $6 billion, including just under $3 billion at the corporate level.

Supported by a conservative payout ratio of 66% and strong outlook for the business, the Board of Directors approved a quarterly distribution increase of 6% to $0.455 per unit during 2026, or $1.82 per unit on an annualized basis. This marks the 17th year of consecutive distribution increases of at least 5%.

Stock Market Performance

2025 was a solid year for our trading price in an environment that continued to be dominated by interest rate dynamics and shifting macroeconomic expectations. After two years of rapid monetary tightening, major central banks moved into a measured easing cycle. In the U.S., the Federal Reserve reduced policy rates three times during the year, supporting both “risk-on” assets and income-oriented equities.

Against this backdrop, our partnership units generated a mid-teen total return for 2025, broadly in line with leading global listed infrastructure indices. Our corporate shares performed particularly well, producing a high-teens total return over the same period and outperforming equity benchmarks. We believe the performance gap between our two securities primarily reflects differences in shareholder base and index inclusion, as well as tax preferences and relative trading liquidity. As a reminder, these securities are structured to be economically equivalent, providing exposure to a highly diversified portfolio of infrastructure assets.

While macroeconomic factors will always influence our trading price in the short term, we believe the market continues to underappreciate the resiliency of our business and the depth of our embedded growth potential. Over 60% of our FFO is generated by businesses at the center of the digitalization megatrend, including our data, midstream and utility platforms, and this exposure is increasing as we execute on a substantial backlog of organic growth projects and invest in the global megatrend to build the global backbone of AI.

Our focus remains on extending our track record of executing a full-cycle investment strategy: being disciplined in the acquisition of high quality assets, enhancing their value through operational improvements and crystalizing value by recycling capital into new opportunities at attractive returns. This approach has supported approximately mid-teens annualized total returns for our investors since inception. Over time, we are confident that the strength of our underlying business, our exposure to long-term themes and our commitment to growing the distribution by 5% to 9% annually will be reflected in our trading price.

Annualized Total Returns

As of December 31, 2025	1-Year	3-Year	Since Inception*
BIP (NYSE)	15%	9%	14%
BIP (TSX)	10%	10%	19%
BIPC (NYSE)	18%	10%	18%
BIPC (TSX)	13%	10%	15%
Alerian MLP Index	10%	20%	8%
S&P Utilities Index	16%	10%	8%
Dow Jones Global Infrastructure Index**	15%	12%	6%

Includes dividend reinvestment

*BIP (NYSE) and U.S. index data since January 2008; BIP (TSX) as of September 2009; BIPC as of spin-off on March 31, 2020

** DJBGICU Index and excludes dividend reinvestment

Operating Results

BIP generated FFO of $2.6 billion or $3.32 on a per unit basis in 2025. This was 10% above our normalized FFO and a 6% increase in total compared to 2024. Organic growth for the year was at the high end of our target range, driven by elevated levels of inflation in the countries where we operate, stronger volumes across our critical infrastructure networks and the commissioning of over $1.5 billion of new capital projects from our backlog. In addition, we completed over $1.1 billion of new acquisitions during 2025 that partially contributed to earnings, the impact of which was more than offset by earnings foregone from over $3 billion of asset sales completed during the year.

Utilities

The utilities segment generated FFO of $786 million, which on a comparable basis was up 7% year over year. The base business continued to perform well during the year, driven by inflation indexation across the portfolio and the contribution of approximately $500 million of capital commissioned into rate base over the last twelve months. Results also partially benefited from our acquisition of a South Korean industrial gas business that closed in December, and together with the strong base business performance, more than offset the loss of earnings from the sale of our Mexican regulated natural gas transmission pipelines.

Our U.K. regulated distribution business installed a record level of connections during 2025, up 14% from prior year, driven by strong performance across the majority of our utilities. Sales of new air and ground sourced heat products continues to build momentum, with approximately 9,500 sales during the year. This was triple the prior year and further strengthens the business’ value proposition to the market.

Our North American residential decarbonization platform continues to benefit from the implementation of AI within our call centers to drive margin improvements. For example, during the quarter, we deployed an AI solution that handles queries, reasons through complex billing scenarios, and integrates with the call center. This shift enables improved call response and resolution that previously required human escalation. This initiative among others to better utilize AI in our customer interactions has created approximately $10 million in annual value.

Transport

The transport segment generated FFO of $1.1 billion, which was in line with the prior year after normalizing for asset sales and foreign exchange. During the year, we completed capital recycling initiatives totaling approximately $1.8 billion of proceeds. The loss of earnings from these sales was partially offset by higher revenues across our transportation networks, particularly in our rail and toll road segments, where volumes and rates grew by an average of 2% and 3% respectively.

At our Brazilian toll road business, the regulatory environment is improving as the government looks to attract capital to an underinvested sector. As a result, we are in the process of renegotiating several of our toll road concession agreements. During the quarter, we extended the term on one concession agreement by 15 years to 2047, with higher tolls and shared transportation volume exposure. A separate toll concession was brought to auction and will result in the disposition of the concession to a new owner in the first half of this year, resulting in approximately $100 million of proceeds.

Our Australian rail network executed a commercial agreement with a new iron ore customer that commenced in November and has a planned ramp-up to 4.4 million tonnes per year in the first quarter of 2026. The contract backfills volumes from an expired agreement and is expected to contribute approximately $20 million in annual EBITDA over the multi-year contract period.

Midstream

The midstream segment generated FFO of $668 million, representing a 7% year over year increase. This growth reflects higher volumes and activity levels across our midstream assets, particularly at our Canadian natural gas gathering and processing operation and our recently acquired U.S. refined products pipeline system. This contribution more than offsets the loss of earnings from the sale of our U.S. gas pipeline.

Our Canadian diversified midstream business continues to see positive developments across its transportation segment, with the commissioning of a bolt-on pipeline project in the fourth quarter that will contribute approximately C$15 million of run-rate EBITDA. Combined with two other bolt-on projects commissioned earlier in the year, we expect to generate C$80 million in annual EBITDA at a weighted average build multiple of 4x.

Our U.S. refined products pipeline system achieved record utilization of 94% in 2025 due to the execution of operational initiatives, coupled with strong customer demand for our products. Under single ownership for the first time in the company’s history, we are advancing multiple strategic initiatives to optimize the business and generate meaningful value in the years ahead.

Data

The data segment generated FFO of $502 million, representing a step change increase of over 50% compared to the prior year period. The increase is attributable to several new investments completed over the last twelve months, the most recent being our U.S. bulk fiber network, which is now fully contributing to earnings. In addition, we achieved strong organic growth across our data storage business, which included the commissioning of 220 MW of capacity at our hyperscale data centers, 200 MW of new billings at our U.S. retail colocation data center operation and income generated by our global data center developers. Our platform now has development potential of approximately 3.6 GW, including 1.2 GW of operating capacity, a contracted project backlog of 1.1 GW, and a total land bank of 1.3 GW.

Our U.S. bulk fiber network continues to roll out its offering across the U.S., with over 50,000 units closed this quarter, bolstering its contracted backlog to nearly 320,000 units. Conversion of our contracted backlog to billable units is progressing well, with approximately 360,000 units billing at the end of the quarter, which is ahead of our plan.

Our U.S. fiber business is investing up to $300 million of equity to expand its open-access fiber infrastructure into several California markets that cover approximately 240,000 households. The business has been successful in executing construction on time and on budget across its initial markets in Colorado and Minnesota, with approximately 200,000 households passed out of a total of approximately 450,000 identified households.

Strategic Initiatives

Transaction activity accelerated in 2025, with $1.5 billion of new investments. We expect this momentum to carry into 2026 based on a robust pipeline of new investment opportunities that continues to be diversified across sectors and geographies./p>

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

Also during the quarter, we closed the acquisition of a South Korean industrial gas business that is the leading supplier of industrial gases to investment grade semiconductor manufacturers in the country. The total equity purchase price is $500 million (BIP’s share – approximately $125 million).

On January 1, we closed the acquisition of a leading railcar leasing platform in partnership with GATX, a best-in-class railcar lessor. The business is highly cash-generative, providing stable cash flows that are supported by a diversified, and largely investment-grade, customer base. The total equity consideration is approximately $1.2 billion (BIP’s share – approximately $300 million).

Asset sales also accelerated in 2025. We achieved a record $3.1 billion in proceeds raised and we believe that the elevated pace of capital recycling will continue into the year ahead. We have two transactions already secured that crystallize attractive returns, giving us conviction in our ability to realize $3 billion of asset sale proceeds during 2026.

First, we agreed to sell the largest of four concessions within our Brazilian electricity transmission operation that spans over 1,200 kilometers. We expect proceeds of approximately $150 million net to BIP, generating an attractive IRR of 45% and an 8.5x multiple of capital, with closing anticipated in Q1 2026. Following this sale, we will have completed divestments of six of the nine concessions, with the remaining concessions expected to be sold this year.

Second, we partnered on a portfolio of stabilized and under-construction data centers in North America. Proceeds are expected to be used to support the build out of our powered land bank. An initial tranche of assets is expected to close this quarter, with the remaining under-construction projects expected to close on a programmatic basis upon completion over the next two years under a pre-agreed pricing framework.

Capital Markets and Balance Sheet

2025 was an active year for us in the capital markets. Despite periods of volatility, we maintained consistent access to capital. Over the year, we secured commitments totaling approximately $50 billion across our portfolio companies. During the quarter, the following notable initiatives were completed:

• At out U.S. semiconductor manufacturing facility, we took advantage of strong lender demand and attractive credit spreads to opportunistically issue approximately $1.8 billion of bonds. With this issuance, we fully refinanced the remaining bank facilities to establish a permanent capital structure comprised of long-term, fixed rate debt at attractive rates.
• Following the initial public offering of our North American gas storage business in October, we repriced its $1.2 billion term loan, tightening credit spreads by 50 basis points; combined with a 50 basis point tightening we completed earlier this year, we expect to achieve annual interest savings of over $12 million.
• At our U.S. retail colocation data center business, we successfully raised $1.1 billion of investment grade asset-backed securities to fully repay the acquisition credit facility and finance the purchase of a portfolio of data centers across North America. In addition, at our U.S. hyperscale data center business, we successfully raised approximately $325 million of investment grade asset-backed securities to fund contracted growth.
• Within our European telecom towers operation, we completed $5.7 billion in new financings, including a record $2.9 billion investment-grade private placement and a new $2.8 billion seven-year term loan at tighter spreads relative to in-place debt. Proceeds were used to partially repay existing credit facilities and return capital.

Our corporate balance sheet remains well capitalized. As a result of our proactive financing and risk management initiatives, our capital structure is more than 90% fixed rate, with an average term of eight years. Our maturity profile is well-laddered with approximately 5% of our non-recourse debt maturing in 2026 and no corporate debt maturities until 2027.

During the fourth quarter, we established an at the market equity program for BIPC and commenced share issuances under the program opportunistically. In total we raised approximately $40 million, issuing 833,000 shares to repurchase BIP units on a 1-for-1 basis.

Turning Tailwinds into Durable Value

AI is justifiably dominating headlines, with many bold predictions ranging from data centers in space to breakthroughs in quantum computing that could one day redefine how the world operates. At the same time, many are questioning the merits of the magnitude and velocity of capital flowing into AI, and whether demand will materialize at a level that justifies the spending, particularly given the perception of outsized risk associated with the ability to monetize AI.

The sheer scale of investment underway to build the physical backbone that makes AI possible is staggering. In 2025 alone, corporates invested approximately $500 billion, including more than $350 billion from five U.S.-based hyper-scalers, into AI-related infrastructure in the form of chips, servers, and data centers. Looking ahead, 2026 and 2027 capital investment is expected to rise further, with over $1 trillion of estimated capital spend identified.

Much of this buildout is fundamental to the development of AI, enabling power-intensive workloads to run reliably, securely, and at scale, in well-connected locations. That reality is driving a sustained wave of investment into the backbone infrastructure that enables AI, including data center capacity, grid resiliency, power generation and transmission. The sector remains exposed to overbuilding, technological change and disruption as large language models improve and compute requirements and capabilities evolve. With capital moving quickly, not all participants will be rewarded and there will be mistakes made.

Our approach is designed to protect against such exuberance. Brookfield Infrastructure is applying a prudent, risk-focused approach to participating in the build out of AI infrastructure, maintaining strict guardrails to safeguard capital while still allowing for meaningful upside in this multi-generational investment opportunity

• Contracted: Our development projects are underpinned by long-term contracts with favorable terms. We don’t build speculatively. We pursue land parcels collaboratively with customers, minimizing the drag on development returns as we contract before incurring significant capital spend. Furthermore, we structure our contracts with no cancellation for convenience clauses and a recovery of capital to earn attractive returns within the initial contract period, mitigating technology risk.
• Counterparties: We selectively focus on the strongest, investment-grade counterparties, who are some of the largest, well-capitalized and most profitable technology companies in the world. When deploying smaller workloads, we utilize prepayments and other financial assurances to protect our capital.
• Location: We concentrate on top-tier, workload-agnostic locations for our data centers that can support the full spectrum of demand, inference, content delivery, and cloud services. This reduces the risk of single-theme exposure and increases the durability of demand through cycles.
• Strategy: We are deliberate in how much land and powered shells we control and develop. At our two largest development platforms, we have created a self-funding model that provides funding for future development, returns capital and locks in attractive developer economics that enhance our investment returns. Importantly, it also reduces the size of our platforms while maintaining the benefits of scale and broadening the potential buyer universe at exit.
• Capital structure: We match capital structures to the tenor of contracted cash flows, with a focus on preserving flexibility and ensuring that we can finance growth responsibly. Our growth has been supported by strong and programmatic access to capital markets. Across our U.S. platforms alone, we successfully raised over $4 billion in the securitization market at attractive rates during 2025.

To illustrate the benefits of our approach, during 2025 we experienced exceptional demand at our data center platforms, securing record growth, commercialization, capital recycling, and capital markets activities. Several examples across our data center platforms include:

• Our U.S. colocation data center business has experienced 11 consecutive quarters of record bookings and is now fully utilized across several markets. During the quarter, we signed several large contracts at a data center site in Illinois, achieving 100% occupancy and adding approximately $45 million of annual EBITDA on a run-rate basis commencing later this year. Without investing any further equity, we acquired and added a 40-site data center portfolio in January 2024 to our existing business and subsequently increased EBITDA from a combined base of approximately $200 million to approximately $500 million on a contracted basis. The exciting part is that the growth trajectory is expected to continue, led by high-returning under-roof densification and in-footprint expansion capacity, which total over 600 MW of identified growth potential.
• Across our global data center platform, we achieved a significant lease-up of our land bank during the fourth quarter, which is expected to be commissioned over the next three years. We executed agreements for approximately 800 MW of capacity, predominately in North America. The vast majority of these leases are with investment-grade customers and underpinned by long-term contracts.
• Since acquiring our North American and European platforms, our adherence to the guardrails outlined above has allowed us to maintain a consistent greenfield data center yield-on-cost. In 2025, we partnered on almost 850 MW of stabilized and operating sites, crystalizing developer premiums and demonstrating strong demand.

Taken together, we hope these examples highlight both the strength of demand we are seeing and the importance of disciplined execution in converting demand into durable returns. As AI workloads scale, the value of well-located and powered infrastructure intensifies. In this environment, scale, reliability, and access to capital are differentiating factors to counterparties, and we believe our global operating capabilities and long-standing relationships benefit us. Our risk-focused approach and strict adherence to our guardrails will enable us to continue investing in the core infrastructure needed to deliver AI at scale while protecting our downside.

Outlook

Looking ahead to 2026, we see a highly constructive backdrop for infrastructure. The asset class has a long history of delivering resilient, growing cash flows through a variety of market environments and is now squarely positioned at the center of three powerful structural themes: digitalization, decarbonization and de-globalization. Together, these forces are driving an infrastructure investment super cycle that is broadening in both scope and scale. As investors continue to increase their allocations to the sector, we expect substantial capital to be deployed into the essential networks and assets that underpin the global economy.

We have entered 2026 from a position of considerable strength. Our base business is delivering resilient, growing cash flows, and we have clear visibility into a multi‑year runway of organic growth and capital deployment. In addition, the rapid build out of AI‑related infrastructure is materially expanding our opportunity set across data centers, power and network connectivity. As a scaled, global owner and operator of critical infrastructure, we are well-placed to deploy capital into these themes at attractive risk‑adjusted returns. These factors, combined with a stable interest rate and foreign exchange backdrop, position us well to return to our 10%+ per unit growth target in 2026.

Our proven capital recycling program gives us the flexibility to fully self-fund the growth we see ahead. With sale processes already launched across multiple segments and a deep pipeline of new investment opportunities, we are looking forward to what is shaping up to be an even more active year for our business.

On behalf of the Board and management, thank you to our unitholders and shareholders for their ongoing support.

Sincerely,

Sam Pollock
Chief Executive Officer
January 29, 2026